NEUBERGER & BERMAN EQUITY TRUST, 485BPOS, 1995-12-15

NEUBERGER & BERMAN EQUITY TRUST
485BPOS, 1995-12-15

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<PAGE>

As filed with the Securities and Exchange Commission on December 15, 1995
1933 Act Registration No. 33-64368
1940 Act Registration No. 811-7784

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]

Pre-Effective Amendment No. [_____] [_____]

Post-Effective Amendment No. [ 8 ] [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]

Amendment No. [ 6 ] [ X ]
(Check appropriate box or boxes)

NEUBERGER & BERMAN EQUITY TRUST
(Exact Name of the Registrant as Specified in Charter)
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
(Address of Principal Executive Offices)

Registrant's Telephone Number, including area code: (212) 476-8800

Lawrence Zicklin, President
Neuberger & Berman Equity Trust
605 Third Avenue, 2nd Floor
New York, New York 10158-0180

Arthur C. Delibert, Esq.
Kirkpatrick & Lockhart LLP
South Lobby - 9th Floor
1800 M Street, N.W.
Washington, D.C. 20036-5891
(Names and Addresses of agents for service)

Approximate Date of Proposed Public Offering: Continuous

It is proposed that this filing will become effective:

_____ immediately upon filing pursuant to paragraph (b)
__X__ on December 15, 1995 pursuant to paragraph (b)
_____ 60 days after filing pursuant to paragraph (a)(1)
_____ on __________ pursuant to paragraph (a)(1)
_____ 75 days after filing pursuant to paragraph (a)(2)
_____ on __________ pursuant to paragraph (a)(2)

Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended, and filed the notice required
by such Rule for its 1995 fiscal year on October 24, 1995.
<PAGE>

Neuberger & Berman Equity Trust is a "master/feeder fund." This
Post-Effective Amendment No. 8 includes a signature page for the master
fund, Equity Managers Trust, and appropriate officers and trustees
thereof.
Page _______ of _______
Exhibit Index Begins on
Page _______
<PAGE>

NEUBERGER & BERMAN EQUITY TRUST

CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 8 ON FORM N-1A

This post-effective amendment consists of the following papers and
documents:

Cover Sheet

Contents of Post-Effective Amendment No. 8 on Form N-1A

Cross Reference Sheet

Neuberger & Berman Focus Trust
Neuberger & Berman Genesis Trust
Neuberger & Berman Guardian Trust
Neuberger & Berman Manhattan Trust
Neuberger & Berman Partners Trust

Part A - Prospectus

Part B - Statement of Additional Information

Neuberger & Berman Guardian Trust

Part A - Prospectus

Part B - Statement of Additional Information

Neuberger & Berman NYCDC Socially Responsive Trust

Part A - Prospectus

Part B - Statement of Additional Information

Part C - Other Information

Signature Pages

Exhibits
<PAGE>

NEUBERGER & BERMAN EQUITY TRUST
POST-EFFECTIVE AMENDMENT NO. 8 ON FORM N-1A

Cross Reference Sheet

This cross reference sheet relates to the Prospectus
and Statement of Additional Information for
Neuberger & Berman Focus Trust, Neuberger & Berman Genesis Trust,
Neuberger & Berman Guardian Trust, Neuberger & Berman Manhattan Trust, and
Neuberger & Berman Partners Trust

<TABLE>
<CAPTION>
Form N-1A Item No. Caption in Part A Prospectus
------------------ ----------------------------

<S> <C> <C>
Item 1. Cover Page Front Cover Page

Item 2. Synopsis Expense Information; Summary

Item 3. Condensed Financial Financial Highlights; Performance
Information Information
Item 4. General Description of Investment Program; Description of
Registrant Investments; Special Information Regarding
Organization, Capitalization, and Other
Matters

Item 5. Management of the Fund Management and Administration; Other
Information; Back Cover Page
Item 6. Capital Stock and Other Front Cover Page; Dividends, Other
Securities Distributions, and Taxes; Special
Information Regarding Organization,
Capitalization, and Other Matters

Item 7. Purchase of Securities Shareholder Services; Share Information;
Being Offered Management and Administration

Item 8. Redemption or Repurchase Shareholder Services; Share Information
Item 9. Pending Legal Not Applicable
Proceedings

Caption in Part B
Form N-1A Item No. Statement of Additional Information
------------------ -----------------------------------
Item 10. Cover Page Cover Page

Item 11. Table of Contents Table of Contents

Item 12. General Information and Organization
History
<PAGE>

Caption in Part B
Form N-1A Item No. Statement of Additional Information
------------------ -----------------------------------

Item 13. Investment Objectives Investment Information; Certain Risk
and Policies Considerations
Item 14. Management of the Fund Trustees And Officers

Item 15. Control Persons and Control Persons and Principal Holders of
Principal Holders of Securities
Securities

Item 16. Investment Advisory and Investment Management and Administration
Other Services Services; Trustees And Officers; Distribution
Arrangements; Reports To Shareholders;
Custodian And Transfer Agent; Independent
Auditors/Accountants
Item 17. Brokerage Allocation Portfolio Transactions

Item 18. Capital Stock and Other Investment Information; Additional Redemption
Securities Information; Dividends and Other Distributions
Item 19. Purchase, Redemption Distribution Arrangements; Additional Exchange
Information; Additional Redemption Information

Item 20. Tax Status Dividends and Other Distributions; Additional
Tax Information

Item 21. Underwriters Investment Management and Administration
Services; Distribution Arrangements
Item 22. Calculation of Performance Information
Performance Data

Item 23. Financial Statements Financial Statements

</TABLE>
<PAGE>

Prospectus and Statement of Additional Information
for Neuberger & Berman Guardian Trust
<TABLE>
<CAPTION>

Form N-1A Item No. Caption in Part A Prospectus
------------------ -----------------------------

Item 1. Cover Page Front Cover Page

Item 2. Synopsis Expense Information; Summary

Item 3. Condensed Financial Financial Highlights; Performance
Information Information

Item 4. General Description of Investment Program; Description of
Registrant Investments; Special Information Regarding
Organization, Capitalization, and Other
Matters

Item 5. Management of the Fund Management and Administration; Directory;
Back Cover Page

Item 6. Capital Stock and Other Front Cover Page; Dividends, Other
Securities Distributions, and Taxes; Special
Information Regarding Organization,
Capitalization, and Other Matters

Item 7. Purchase of Securities How to Buy Shares; Share Information;
Being Offered Management and Administration

Item 8. Redemption or Repurchase How to Sell Shares; Share Information

Item 9. Pending Legal Not Applicable
Proceedings

Caption in Part B
Form N-1A Item No. Statement of Additional Information
------------------ -----------------------------------

Item 10. Cover Page Cover Page

Item 11. Table of Contents Table of Contents

Item 12. General Information and Not Applicable
History

Item 13. Investment Objectives Investment Information; Certain Risk
and Policies Considerations

Item 14. Management of the Fund Trustees And Officers
<PAGE>

Caption in Part B
Form N-1A Item No. Statement of Additional Information
------------------ -----------------------------------

Item 15. Control Persons and Control Persons and Principal Holders of
Principal Holders of Securities
Securities

Item 16. Investment Advisory and Investment Management and Administration
Other Services Services; Trustees And Officers;
Distribution Arrangements; Reports To
Shareholders; Custodian And Transfer Agent;
Independent Auditors

Item 17. Brokerage Allocation Portfolio Transactions

Item 18. Capital Stock and Other Investment Information; Additional
Securities Redemption Information; Dividends and Other
Distributions

Item 19. Purchase, Redemption Distribution Arrangements; Additional
Redemption Information

Item 20. Tax Status Dividends and Other Distributions;
Additional Tax Information

Item 21. Underwriters Investment Management and Administration
Services; Distribution Arrangements

Item 22. Calculation of Performance Information
Performance Data

Item 23. Financial Statements Financial Statements

</TABLE>
<PAGE>

Prospectus and Statement of Additional Information
for Neuberger & Berman NYCDC Socially Responsive Trust
<TABLE>
<CAPTION>

Form N-1A Item No. Caption in Part A Prospectus
------------------ ----------------------------

<S> <C> <C>
Item 1. Cover Page Front Cover Page

Item 2. Synopsis Expense Information; Summary

Item 3. Condensed Financial Information Financial Highlights; Performance Information
Item 4. General Description of Investment Program; Description of Investments;
Registrant Special Information Regarding Organization,
Capitalization, and Other Matters

Item 5. Management of the Fund Management and Administration; Directory; Back
Cover Page
Item 6. Capital Stock and Other Front Cover Page; Dividends, Other
Securities Distributions, and Taxes; Special Information
Regarding Organization, Capitalization, and
Other Matters

Item 7. Purchase of Securities Being How to Buy and Sell Shares; Share Information;
Offered Management and Administration

Item 8. Redemption or Repurchase How to Buy and Sell Shares; Share Information
Item 9. Pending Legal Proceedings Not Applicable

Form N-1A Item No. Caption in Part B
------------------ Statement of Additional Information
-----------------------------------

Item 10. Cover Page Cover Page

Item 11. Table of Contents Table of Contents

Item 12. General Information and History Not Applicable

Item 13. Investment Objectives and Investment Information; Certain Risk
Policies Considerations

Item 14. Management of the Fund Trustees And Officers

Item 15. Control Persons and Principal Control Persons and Principal Holders of
Holders of Securities Securities
<PAGE>

Form N-1A Item No. Caption in Part B
------------------ Statement of Additional Information
-----------------------------------

Item 16. Investment Advisory and Other Investment Management and Administration
Services Services; Trustees And Officers; Distribution
Arrangements; Reports To Shareholders;
Custodian And Transfer Agent; Independent
Accountants

Item 17. Brokerage Allocation Portfolio Transactions

Item 18. Capital Stock and Other Investment Information; Additional Redemption
Securities Information; Dividends and Other Distributions

Item 19. Purchase, Redemption Distribution Arrangements; Additional
Redemption Information

Item 20. Tax Status Dividends and Other Distributions; Additional
Tax Information

Item 21. Underwriters Investment Management and Administration
Services; Distribution Arrangements

Item 22. Calculation of Performance Data Performance Information

Item 23. Financial Statements Financial Statements

</TABLE>
<PAGE>

Part C

Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Post-Effective Amendment
No. 8.
<PAGE>

<PAGE>

PROSPECTUS
December 15, 1995

NEUBERGER&BERMAN
EQUITY TRUST -SM-

NEUBERGER&BERMAN
FOCUS TRUST

NEUBERGER&BERMAN
GENESIS TRUST

NEUBERGER&BERMAN
GUARDIAN TRUST

NEUBERGER&BERMAN
MANHATTAN TRUST

NEUBERGER&BERMAN
PARTNERS TRUST

No Sales Charges
No Redemption Fees
No 12b-1 Fees

<PAGE>
Neuberger&Berman

EQUITY TRUST

No-Load Equity Funds

- ----------------------------------------------------------------------

Neuberger&Berman FOCUS TRUST Neuberger&Berman MANHATTAN TRUST
Neuberger&Berman GENESIS TRUST Neuberger&Berman PARTNERS TRUST
Neuberger&Berman GUARDIAN TRUST

YOU CAN BUY, OWN, AND SELL FUND SHARES ONLY THROUGH AN ACCOUNT WITH A PENSION
PLAN ADMINISTRATOR, BROKER-DEALER, OR OTHER INSTITUTION (EACH AN "INSTITUTION")
WHICH PROVIDES ACCOUNTING, RECORDKEEPING, AND OTHER SERVICES TO INVESTORS AND
WHICH HAS AN ADMINISTRATIVE SERVICES AGREEMENT WITH NEUBERGER&BERMAN MANAGEMENT
INCORPORATED ("N&B MANAGEMENT").

- ----------------------------------------------------------------------

EACH OF THE ABOVE-NAMED FUNDS (A "FUND") INVESTS ALL OF ITS NET INVESTABLE
ASSETS IN ITS CORRESPONDING PORTFOLIO (A "PORTFOLIO") OF EQUITY MANAGERS TRUST
("MANAGERS TRUST"), AN OPEN-END MANAGEMENT INVESTMENT COMPANY MANAGED BY N&B
MANAGEMENT. EACH PORTFOLIO INVESTS IN SECURITIES IN ACCORDANCE WITH AN
INVESTMENT OBJECTIVE, POLICIES, AND LIMITATIONS IDENTICAL TO THOSE OF ITS
CORRESPONDING FUND. THE INVESTMENT PERFORMANCE OF EACH FUND DIRECTLY CORRESPONDS
WITH THE INVESTMENT PERFORMANCE OF ITS CORRESPONDING PORTFOLIO. THIS
"MASTER/FEEDER FUND" STRUCTURE IS DIFFERENT FROM THAT OF MANY OTHER INVESTMENT
COMPANIES WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN PORTFOLIOS OF SECURITIES.
FOR MORE INFORMATION ON THIS UNIQUE STRUCTURE THAT YOU SHOULD CONSIDER, SEE
"SUMMARY" ON PAGE 3, AND "SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS" ON PAGE 25.

Please read this Prospectus before investing in any of the Funds and keep it
for future reference. It contains information about the Funds that a prospective
investor should know before investing. A Statement of Additional Information
("SAI") about the Funds and Portfolios, dated December 15, 1995, is on file with
the Securities and Exchange Commission. The SAI is incorporated herein by
reference (so it is legally considered a part of this Prospectus). You can
obtain a free copy of the SAI by calling N&B Management at 800-877-9700.

PROSPECTUS DATED DECEMBER 15, 1995

MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S> <C>
SUMMARY 3
The Funds and Portfolios;
Risk Factors 3
Management 5
The Neuberger&Berman Investment Approach 5

EXPENSE INFORMATION 7
Shareholder Transaction Expenses for Each Fund 7
Annual Fund Operating Expenses 7
Example 9

FINANCIAL HIGHLIGHTS 10
Focus Trust 11
Genesis Trust 12
Guardian Trust 13
Manhattan Trust 14
Partners Trust 15

INVESTMENT PROGRAMS 18
Focus Portfolio 18
Genesis Portfolio 19
Guardian Portfolio 20
Manhattan Portfolio 20
Partners Portfolio 21
Short-Term Trading; Portfolio Turnover 21
Borrowings 22
Other Investments 22

PERFORMANCE INFORMATION 23
Total Return Information 24

SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS 25
The Funds 25
The Portfolios 26

SHAREHOLDER SERVICES 28
How to Buy Shares 28
How to Sell Shares 28
Exchanging Shares 29

SHARE INFORMATION 30
Share Prices and Net Asset Value 30

DIVIDENDS, OTHER DISTRIBUTIONS, AND TAXES 31
Distribution Options 31
Taxes 31

MANAGEMENT AND ADMINISTRATION 33
Trustees and Officers 33
Investment Manager, Administrator,
Distributor, and Sub-Adviser 33
Expenses 35
Transfer Agent 37

DESCRIPTION OF INVESTMENTS 38

USE OF JOINT PROSPECTUS AND STATEMENT OF ADDITIONAL
INFORMATION 41

OTHER INFORMATION 42
Directory 42
Funds Eligible For Exchange 42
</TABLE>

<PAGE>
SUMMARY

The Funds and Portfolios; Risk Factors

- ----------------------------------------------------------------------

Each Fund is a series of Neuberger&Berman Equity Trust (the "Trust") and
invests in a corresponding Portfolio that, in turn, invests in securities in
accordance with an investment objective, policies, and limitations that are
identical to those of the Fund. This is sometimes called a master/feeder fund
structure, because each Fund "feeds" shareholders' investments into its
corresponding Portfolio, a "master" fund. The structure looks like this:

-------------------------
Shareholders
-------------------------
(down arrow) BUY SHARES IN
-------------------------
Funds
-------------------------
(down arrow) INVEST IN
-------------------------
Portfolios
-------------------------
(down arrow) INVEST IN
-------------------------
Stocks & Other Securities
-------------------------

The trustees who oversee the Funds believe that this structure may benefit
shareholders; investment in a Portfolio by investors in addition to a Fund may
enable the Portfolio to achieve economies of scale that could reduce expenses.
For more information about the organization of the Funds and the Portfolios,
including certain features of the master/feeder fund structure, see "Special
Information Regarding Organization, Capitalization, and Other Matters" on page
25. An investment in any Fund involves certain risks, depending upon the types
of investments made by its corresponding Portfolio. For more details about each
Portfolio, its investments and their risks, see "Investment Programs" on page 18
and "Description of Investments" on page 38.

The following table is a summary highlighting features of the Funds and their
corresponding Portfolios. You may want to invest in a variety of Funds to fit
your particular investment needs. Of course, there can be no assurance that a
Fund will meet its investment objective.

3
<PAGE>

<TABLE>
<CAPTION>
NEUBERGER&BERMAN INVESTMENT PORTFOLIO
EQUITY TRUST STYLE CHARACTERISTICS
<S> <C> <C>
GUARDIAN TRUST Broadly diversified, A growth and income fund that
large-cap value fund. invests in stocks of
Relatively low portfolio established, high-quality
turnover. companies that are not well
followed on Wall Street or
are temporarily out of favor.

FOCUS TRUST Large-cap value fund, more Invests in common stocks
concentrated portfolio than selected from 13 multi-
Guardian. Relatively low industry sectors of the
portfolio turnover. economy. To maximize
potential return, the
Portfolio normally makes at
least 90% of its investments
in not more than six sectors
believed by the portfolio
managers to be undervalued.

GENESIS TRUST Broadly diversified, Invests in stocks of
small-cap value fund. companies with small market
Relatively low portfolio capitalizations (usually up
turnover. to $750 million). Portfolio
manager seeks to buy the
stocks of strong companies
with a history of solid
performance and a proven
management team, which are
selling at attractive prices.

MANHATTAN TRUST Broadly diversified, medium- Invests in securities
to large-cap growth fund. believed to have the maximum
Relatively low portfolio potential for long-term
turnover. capital appreciation.
Portfolio manager follows a
"growth at a reasonable
price" philosophy and
searches for financially
sound, growing companies with
a special competitive
advantage or a product that
makes their stocks
attractive.

PARTNERS TRUST Broadly diversified, medium- Seeks capital growth through
to large-cap value fund. an approach that is intended
Moderate portfolio turnover. to increase capital with
reasonable risk. Portfolio
managers look at
fundamentals, focusing
particularly on cash flow,
return on capital, and asset
values.
</TABLE>

4
<PAGE>
Management

- ----------------------------------------------------------------------

N&B Management, with the assistance of Neuberger&Berman, L.P.
("Neuberger&Berman") as sub-adviser, selects investments for the Portfolios. N&B
Management also provides administrative services to the Portfolios and the Funds
and acts as distributor of Fund shares. See "Management and Administration" on
page 33. If you want to know how to buy and sell shares of the Funds or exchange
them for shares of other Neuberger&Berman Funds-SM- made available through an
Institution, see "Shareholder Services -- How to Buy Shares" on page 28,
"Shareholder Services -- How to Sell Shares" on page 28, "Shareholder
Services -- Exchanging Shares" on page 29, and the policies of the Institution
through which you are purchasing shares.

The Neuberger&Berman Investment Approach

- ----------------------------------------------------------------------

While each Portfolio has its own investment objective, policies, and
limitations, each Portfolio is managed using one of two basic investment
approaches -- value and growth.

A value-oriented portfolio manager buys stocks that are selling for less than
their perceived market value. These include stocks that are currently
under-researched or are temporarily out of favor on Wall Street.

Portfolio managers identify value stocks in several ways. One of the most
common identifiers is a low price-to-earnings ratio -- that is, stocks selling
at multiples of earnings per share that are lower than that of the market as a
whole. Other criteria are high dividend yield, a strong balance sheet and
financial position, a recent company restructuring with the potential to realize
hidden values, strong management, and low price-to-book value (net value of the
company's assets).

While a value approach concentrates on undervalued securities in relation to
their fundamental economic value, a growth approach seeks out stocks of
companies that are projected to grow at above-average rates and may appear
poised for a period of accelerated earnings.

The growth portfolio manager is willing to pay a higher share price in the
hopes that the stock's earnings momentum will carry the stock's price higher. As
a stock's price increases based on strong earnings, the stock's original price
appears low in relation to the growth rate of its earnings. Sometimes this
happens when a particular company or industry is temporarily out of favor with
the market or under-researched. This strategy is called "growth at a reasonable
price."

Neuberger&Berman believes that, over time, securities that are undervalued
are more likely to appreciate in price and be subject to less risk of price
decline than

5
<PAGE>

securities whose market prices have already reached their perceived economic
value. This approach also contemplates selling portfolio securities when they
are considered to have reached their potential.

In general, Neuberger&Berman FOCUS, Neuberger&Berman GENESIS,
Neuberger&Berman GUARDIAN, and Neuberger&Berman PARTNERS Portfolios adhere to a
value-oriented investment approach. Neuberger&Berman MANHATTAN Portfolio places
a greater emphasis on finding securities whose measures of fundamental value are
low in relation to the growth rate of their future earnings and cash flow, as
projected by the portfolio manager, and that Portfolio is therefore willing to
invest in securities with prices that are somewhat higher multiples of earnings.

6
<PAGE>
EXPENSE INFORMATION
This section gives you certain information about the expenses of each Fund
and its corresponding Portfolio. See "Performance Information" for important
facts about the investment performance of each Fund, after taking expenses into
account.

Shareholder Transaction Expenses for Each Fund

- ----------------------------------------------------------------------

As shown by this table, there are no transaction charges when you buy or sell
Fund shares.

<TABLE>
<S> <C>
Sales Charge Imposed on Purchases NONE
Sales Charge Imposed on Reinvested Dividends NONE
Deferred Sales Charges NONE
Redemption Fees NONE
Exchange Fees NONE
</TABLE>

Annual Fund Operating Expenses
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

- --------------------------------------------------------------------------------

The following table shows annual Total Operating Expenses for each Fund,
which are paid out of the assets of the Fund and which include the Fund's pro
rata portion of the Operating Expenses of its corresponding Portfolio. These
expenses are borne indirectly by Fund shareholders. Each Fund pays N&B
Management an administration fee, based on the Fund's average daily net assets.
Each Portfolio pays N&B Management a management fee, based on the Portfolio's
average daily net assets; a pro rata portion of this fee is borne indirectly by
the corresponding Fund. Therefore, the table combines management and
administration fees. The Funds and Portfolios also incur other expenses for
things such as accounting and legal fees, maintaining shareholder records, and
furnishing shareholder statements and Fund reports. "Operating Expenses" exclude
interest, taxes, brokerage commissions, and extraordinary expenses. The Funds'
expenses are factored into their share prices and dividends and are not charged
directly to Fund shareholders. For more information, see "Management and
Administration" and the SAI.

<TABLE>
<CAPTION>
NEUBERGER&BERMAN MANAGEMENT AND 12B-1 OTHER TOTAL OPERATING
EQUITY TRUST ADMINISTRATION FEES* FEES EXPENSES EXPENSES*
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FOCUS TRUST 0.00% None 1.02%* 1.02%
GENESIS TRUST 0.90%+ None 0.53% 1.43%+
GUARDIAN TRUST 0.84% None 0.10% 0.94%
MANHATTAN TRUST 0.60% None 0.52% 1.12%
PARTNERS TRUST 0.63% None 0.34% 0.97%
</TABLE>

*(REFLECTS N&B MANAGEMENT'S EXPENSE REIMBURSEMENT UNDERTAKING DESCRIBED BELOW)

+(REFLECTS N&B MANAGEMENT'S WAIVER OF CERTAIN MANAGEMENT FEES DESCRIBED BELOW)

7
<PAGE>

Total Operating Expenses for each Fund have been restated based upon current
administration fees for the Fund and management fees for its corresponding
Portfolio and the current expense reimbursement undertaking (and, in the case of
Neuberger&Berman GENESIS Trust, the current fee waiver). "Other Expenses" are
based on each Fund's and Portfolio's expenses for the past fiscal year. The
trustees of the Trust believe that the aggregate per share expenses of each Fund
and its corresponding Portfolio will be approximately equal to the expenses the
Fund would incur if its assets were invested directly in the type of securities
held by its corresponding Portfolio. The trustees of the Trust also believe that
investment in a Portfolio by investors in addition to a Fund may enable the
Portfolio to achieve economies of scale which could reduce expenses. The
expenses and returns of other funds that may invest in the Portfolios may differ
from those of the Funds.

Five mutual funds that are series of Neuberger&Berman Equity Funds ("N&B
Equity Funds") and are administered by N&B Management, each of which has a name
similar to a Fund and the same investment objective, policies, and limitations
as that Fund ("Sister Fund"), also invest in the five corresponding Portfolios.
The previous table reflects N&B Management's voluntary undertaking until
December 31, 1996, to reimburse each Fund for its Operating Expenses and its pro
rata share of its corresponding Portfolio's Operating Expenses so that each
Fund's expense ratio per annum will not exceed the expense ratio per annum of
its Sister Fund by more than 0.10% of the Fund's average daily net assets. A
Fund's per annum "expense ratio" means the sum of the Fund's Total Operating
Expenses and its pro rata share of its corresponding Portfolio's Total Operating
Expenses, divided by that Fund's average daily net assets for the year. The
expense ratios of the Sister Funds of Neuberger& Berman FOCUS Trust,
Neuberger&Berman GENESIS Trust, Neuberger&Berman GUARDIAN Trust,
Neuberger&Berman MANHATTAN Trust and Neuberger&Berman PARTNERS Trust are
anticipated to be, respectively, 0.92%, 1.33%, 0.84%, 1.02%, and 0.87% per annum
of such Sister Fund's average net assets. Based on those expectations, the
expense ratios for Neuberger&Berman FOCUS Trust, Neuberger&Berman GENESIS Trust,
Neuberger&Berman GUARDIAN Trust, Neuberger&Berman MANHATTAN Trust and
Neuberger&Berman PARTNERS Trust are not anticipated to exceed 1.02%, 1.43%,
0.94%, 1.12%, and 0.97% per annum, respectively. The above ratios reflect N&B
Management's voluntary agreement to waive a portion of the management fee borne
directly by Neuberger&Berman GENESIS Portfolio and indirectly by
Neuberger&Berman GENESIS Trust to reduce that fee by 0.10% per annum of the
average daily net assets of Neuberger&Berman GENESIS Portfolio. Absent the
reimbursement and fee waiver, Management and Administration Fees would be 0.93%,
1.25%, 0.86%, 0.94%, and 0.90% per annum, and Other Expenses would be 1.57%,
0.53%, 0.10%, 0.52%, and 0.34% per annum, of the average daily net assets of
Neuberger&Berman FOCUS Trust, Neuberger&Berman GENESIS Trust, Neuberger&

8
<PAGE>

Berman GUARDIAN Trust, Neuberger&Berman MANHATTAN Trust, and Neuberger& Berman
PARTNERS Trust, respectively; Total Operating Expenses would be 2.50%, 1.78%,
0.96%, 1.46%, and 1.24% per annum of the average daily net assets of
Neuberger&Berman FOCUS Trust, Neuberger&Berman GENESIS Trust, Neuberger& Berman
GUARDIAN Trust, Neuberger&Berman MANHATTAN Trust, and Neuberger& Berman PARTNERS
Trust, respectively (or slightly higher if permitted by state securities
authorities).

Example

- ----------------------------------------------------------------------

To illustrate the effect of Operating Expenses, let's assume that each Fund's
annual return is 5% and that it had Total Operating Expenses described in the
table above. For every $1,000 you invested in each Fund, you would have paid the
following amounts of total expenses if you closed your account at the end of
each of the following time periods:

<TABLE>
<CAPTION>
NEUBERGER&BERMAN 1 3 5 10
EQUITY TRUST YEAR YEARS YEARS YEARS
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
FOCUS TRUST $10 $32 $56 $125
GENESIS TRUST $15 $45 $78 $171
GUARDIAN TRUST $10 $30 $52 $115
MANHATTAN TRUST $11 $36 $62 $136
PARTNERS TRUST $10 $31 $54 $119
</TABLE>

The assumption in this example of a 5% annual return is required by
regulations of the Securities and Exchange Commission applicable to all mutual
funds. THE INFORMATION IN THE TABLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES OR RATES OF RETURN; ACTUAL EXPENSES OR RETURNS MAY BE
GREATER OR LESS THAN THOSE SHOWN, AND MAY CHANGE IF EXPENSE REIMBURSEMENTS
CHANGE.

9
<PAGE>
FINANCIAL HIGHLIGHTS

Selected Per Share Data and Ratios

- ----------------------------------------------------------------------

The financial information in the following tables is for each Fund as of
August 31, 1995 and prior periods. This information has been audited by the
Funds' respective independent auditors/accountants. You may obtain, at no cost,
further information about the performance of the Funds in their annual report to
shareholders. The annual report contains the auditors'/accountants' reports.
Please call 800-877-9700 for a free copy and for up-to-date information. Also,
see "Performance Information."

10
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman

Focus Trust(1)

- --------------------------------------------------------------------------------

The following table includes selected data for a share outstanding
throughout each year 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>
PERIOD
FROM
AUGUST 30,
YEAR ENDED AUGUST 31, 1993(2)
TO AUGUST
1995 1994 31, 1993
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Year $ 11.36 $ 10.03 $10.00
---------- ---------- ----------
Income from Investment Operations
Net Investment Income .05 .05 --
Net Gains or Losses on Securities
(both realized and unrealized) 3.05 1.31 .03
---------- ---------- ----------
Total from Investment Operations 3.10 1.36 .03
---------- ---------- ----------
Less Distributions
Dividends (from net investment income) (.05) (.02) --
Distributions (from capital gains) -- (.01) --
---------- ---------- ----------
Total Distributions (.05) (.03) --
---------- ---------- ----------
Net Asset Value, End of Year $ 14.41 $ 11.36 $10.03
---------- ---------- ----------
Total Return+ +27.44% +13.58% +0.30%(3)
---------- ---------- ----------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 14.5 $ 1.6 --
---------- ---------- ----------
Ratio of Expenses to Average Net Assets(4) .96% .85% .92%(5)
---------- ---------- ----------
Ratio of Net Income to Average Net Assets(4) .67% .92% .05%(5)
---------- ---------- ----------
</TABLE>

SEE NOTES TO FINANCIAL HIGHLIGHTS

<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman

Genesis Trust
- --------------------------------------------------------------------------------

The following table includes selected data for a share outstanding
throughout each year 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>
YEAR ENDED PERIOD FROM
AUGUST 31, AUGUST 26, 1993(2)
1995 1994 TO AUGUST 31, 1993
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Year $ 10.59 $ 10.05 $10.00
-------- -------- ------
Income from Investment Operations
Net Investment Income (Loss) (.01) (.01) --
Net Gains or Losses on Securities
(both realized and unrealized) 2.08 .56 .05
-------- -------- ------
Total from Investment Operations 2.07 .55 .05
-------- -------- ------
Less Distributions
Distributions (from capital gains) (.01) (.01) --
-------- -------- ------
Net Asset Value, End of Year $ 12.65 $ 10.59 $10.05
-------- -------- ------
Total Return+ +19.51% +5.47% +0.50%(3)
-------- -------- ------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 30.6 $ 3.1 --
-------- -------- ------
Ratio of Expenses to Average Net Assets(4) 1.42% 1.36% 1.51%(5)
-------- -------- ------
Ratio of Net Income (Loss) to Average Net
Assets(4) (.24%) (.21%) (.44%)(5)
-------- -------- ------
</TABLE>

SEE NOTES TO FINANCIAL HIGHLIGHTS

<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman

Guardian Trust
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
YEAR ENDED PERIOD FROM
AUGUST 31, AUGUST 3, 1993(2)
1995 1994 TO AUGUST 31, 1993
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Year $11.27 $10.27 $10.00
------ ------ ------
Income from Investment Operations
Net Investment Income .13 .09 --
Net Gains or Losses on Securities
(both realized and unrealized) 2.55 .99 .27
------ ------ ------
Total from Investment Operations 2.68 1.08 .27
------ ------ ------
Less Distributions
Dividends (from net investment income) (.12) (.07) --
Distributions (from capital gains) -- (.01) --
------ ------ ------
Total Distributions (.12) (.08) --
------ ------ ------
Net Asset Value, End of Year $13.83 $11.27 $10.27
------ ------ ------
Total Return+ +24.01% +10.57% +2.70%(3)
------ ------ ------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $683.1 $ 75.8 --
------ ------ ------
Ratio of Expenses to Average Net Assets(4) .90% .80% .81%(5)
------ ------ ------
Ratio of Net Income to Average Net Assets(4) 1.35% 1.50% 1.00%(5)
------ ------ ------
</TABLE>

SEE NOTES TO FINANCIAL HIGHLIGHTS

<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman

Manhattan Trust
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
YEAR ENDED PERIOD FROM
AUGUST 31, AUGUST 30, 1993(2)
1995 1994 TO AUGUST 31, 1993
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Year $10.37 $10.01 $ 10.00
------ ------ ------
Income from Investment Operations
Net Investment Income -- .01 --
Net Gains or Losses on Securities
(both realized and unrealized) 2.67 .36 .01
------ ------ ------
Total from Investment Operations 2.67 .37 .01
------ ------ ------
Less Distributions
Dividends (from net investment income) (.01) (.01)
Distributions (from capital gains) (.04) -- --
------ ------ ------
Total Distributions (.05) (.01) --
------ ------ ------
Net Asset Value, End of Year $12.99 $10.37 $ 10.01
------ ------ ------
Total Return+ +25.90% + 3.70% + 0.10%(3)
------ ------ ------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 35.6 $ 12.1 --
------ ------ ------
Ratio of Expenses to Average Net Assets(4) 1.06% .96% 1.04%(5)
------ ------ ------
Ratio of Net Income (Loss) to Average Net Assets(4) (.03%) .16% 5.48%(5)
------ ------ ------
</TABLE>

SEE NOTES TO FINANCIAL HIGHLIGHTS

<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman

Partners Trust
- --------------------------------------------------------------------------------

The following table includes selected data for a share outstanding
throughout each year 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>
YEAR ENDED PERIOD FROM
AUGUST 31, AUGUST 30, 1993(2)
1995 1994 TO AUGUST 31, 1993
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Year $10.54 $10.01 $ 10.00
------ ------ ------
Income from Investment Operations
Net Investment Income .05 .03 --
Net Gains or Losses on Securities (both realized and
unrealized) 2.19 .53 .01
------ ------ ------
Total from Investment Operations 2.24 .56 .01
------ ------ ------
Less Distributions
Dividends (from net investment income) (.02) (.01) --
Distributions (from capital gains) (.08) (.02) --
------ ------ ------
Total Distributions (.10) (.03) --
------ ------ ------
Net Asset Value, End of Year $12.68 $10.54 $ 10.01
------ ------ ------
Total Return+ +21.52% + 5.61% + 0.10%(3)
------ ------ ------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 61.3 $ 4.7 --
------ ------ ------
Ratio of Expenses to Average Net Assets(4) .92% .81% .84%(5)
------ ------ ------
Ratio of Net Income to Average Net Assets(4) .81% .47% 2.65%(5)
------ ------ ------
</TABLE>

SEE NOTES TO FINANCIAL HIGHLIGHTS

<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS

1)Prior to January 1, 1995, the name of Neuberger&Berman FOCUS Trust was
Neuberger&Berman Selected Sectors Trust.

2)The date investment operations commenced.

3)Not annualized.

4)After reimbursement of expenses by N&B Management. Had N&B Management
not undertaken such action the annualized ratios to average daily net assets
would have been:

<TABLE>
<CAPTION>
PERIOD FROM
NEUBERGER&BERMAN YEAR ENDED AUGUST 31, AUGUST 30, 1993
FOCUS TRUST 1995 1994 TO AUGUST 31, 1993
<S> <C> <C> <C>
----- ----- -----
Expenses 2.50% 2.50% 2.50%
----- ----- -----
Net Investment Loss (.87%) (.73%) (1.53%)
----- ----- -----

PERIOD FROM
NEUBERGER&BERMAN YEAR ENDED AUGUST 31, AUGUST 3, 1993
GUARDIAN TRUST 1995 1994 TO AUGUST 31, 1993
<S> <C> <C> <C>
----- ----- -----
Expenses .96% 1.52% 2.50%
----- ----- -----
Net Investment Income (Loss) 1.29% .78% (.69%)
----- ----- -----
<CAPTION>

PERIOD FROM
NEUBERGER&BERMAN YEAR ENDED AUGUST 31, AUGUST 30, 1993
MANHATTAN TRUST 1995 1994 TO AUGUST 31, 1993
<S> <C> <C> <C>
----- ----- -----
Expenses 1.46% 2.50% 2.50%
----- ----- -----
Net Investment Income (Loss) (.43%) (1.38%) 4.02%
----- ----- -----
<CAPTION>

PERIOD FROM
NEUBERGER&BERMAN YEAR ENDED AUGUST 31, AUGUST 30, 1993
PARTNERS TRUST 1995 1994 TO AUGUST 31, 1993
<S> <C> <C> <C>
----- ----- -----
Expenses 1.24% 2.50% 2.50%
----- ----- -----
Net Investment Income (Loss) .49% (1.22%) .99%
----- ----- -----
</TABLE>

After reimbursement of expenses by N&B Management as described in Note B of
Notes to Financial Statements and the waiver of a portion of the Portfolio's
management fee as described in Note B of Notes to Financial Statements of
Neuberger& Berman GENESIS Portfolio. Had N&B Management not undertaken such
action the annualized ratios to average daily net assets would have been:

<TABLE>
<CAPTION>
NEUBERGER&BERMAN PERIOD FROM
YEAR ENDED AUGUST 31, AUGUST 26, 1993
GENESIS TRUST 1995 1994 TO AUGUST 31, 1993
<S> <C> <C> <C>
----- ----- -----
Expenses 1.78% 2.50% 2.50%
----- ----- -----
Net Investment Loss (.60%) (1.35%) (1.43%)
----- ----- -----
</TABLE>

5)Annualized.

16
<PAGE>

6)Because each Fund invests only in its corresponding Portfolio and that
Portfolio (rather than the Fund) engages in securities transactions, no Fund
calculates a portfolio turnover rate. The portfolio turnover rates for each
Portfolio were as follows:

<TABLE>
<CAPTION>
YEAR ENDED AUGUST PERIOD FROM
31, AUGUST 2, 1993
1995 1994 TO AUGUST 31, 1993
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Neuberger&Berman FOCUS Portfolio 36% 52% 4%
--------- --------- -------------------
Neuberger&Berman GENESIS Portfolio 37% 63% 3%
--------- --------- -------------------
Neuberger&Berman GUARDIAN Portfolio 26% 24% 3%
--------- --------- -------------------
Neuberger&Berman MANHATTAN Portfolio 44% 50% 3%
--------- --------- -------------------
Neuberger&Berman PARTNERS Portfolio 98% 75% 8%
--------- --------- -------------------
</TABLE>

+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of each Fund during each year
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
N&B Management had not reimbursed certain expenses. For Neuberger&Berman
GENESIS Trust, total return would have been lower if N&B Management had not
waived a portion of the Portfolio's management fee.

17
<PAGE>
INVESTMENT PROGRAMS

The investment policies and limitations of each Fund and its corresponding
Portfolio are identical. Each Fund invests only in its corresponding Portfolio.
Therefore, the following shows you the kinds of securities in which each
Portfolio invests. For an explanation of some types of investments, see
"Description of Investments" on page 38.

Investment policies and limitations of the Funds and Portfolios are not
fundamental unless otherwise specified in this Prospectus or the SAI. While a
non-fundamental policy or limitation may be changed by the trustees of the Trust
or of Managers Trust without shareholder approval, the Funds intend to notify
shareholders before making any material change to such policies or limitations.
Fundamental policies may not be changed without shareholder approval.

The investment objectives of the Funds and Portfolios are not fundamental.
The Funds have undertaken to a state securities commission that they will seek
shareholder approval before changing any investment objective. The Funds have
also undertaken not to change their investment objective without 30 days' prior
notice to shareholders. There can be no assurance that the Funds or Portfolios
will achieve their objectives. Each Fund, by itself, does not represent a
comprehensive investment program.

Additional investment techniques, features, and limitations concerning the
Portfolios' investment programs are described in the SAI.

Neuberger&Berman Focus Portfolio

- ----------------------------------------------------------------------

The investment objective of Neuberger&Berman FOCUS Portfolio and
Neuberger&Berman FOCUS Trust is to seek long-term capital appreciation.

Neuberger&Berman FOCUS Portfolio invests principally in common stocks
selected from the following 13 multi-industry sectors of the economy:

<TABLE>
<S> <C> <C>
/ / Autos & Housing / / Health Care / / Technology
/ / Consumer Goods & Services / / Heavy Industry / / Transportation
/ / Defense & Aerospace / / Machinery & Equipment / / Utilities
/ / Energy / / Media & Entertainment
/ / Financial Services / / Retailing
</TABLE>

To maximize potential return, the Portfolio normally makes at least 90% of
its investments in not more than six sectors it identifies as undervalued. Where
a particular industry may fall within more than one sector, N&B Management uses
its judgment and experience to determine the placement of that industry within a
sector. The Portfolio uses the value-oriented investment approach to identify
stocks believed to be undervalued, including stocks that are temporarily out of
favor in the market. The Portfolio then focuses its investments in the sectors
in which the undervalued stocks are clustered. These sectors are believed to
offer the greatest potential for capital

18
<PAGE>

growth. This investment approach is different from that of most other mutual
funds that emphasize sector investment. Those funds either invest in only a
single economic sector or choose a number of sectors by analyzing general
economic trends. Further information on the Portfolio's securities holdings and
their allocation by sector is included in the Fund's annual report to
shareholders, which is available at no cost upon request. The sectors are more
fully described in the SAI.

The Portfolio may be affected more by any single economic, political, or
regulatory development than a more diversified mutual fund. The risk of decline
in the Portfolio's asset value due to an adverse development may be partially
offset by the value-oriented investment approach. To further reduce this risk,
the Portfolio may not (1) invest more than 50% of its total assets in any one
sector, (2) as a fundamental policy, concentrate 25% or more of its total assets
in the securities of companies having their principal business activities in any
one industry, or (3) invest more than 5% of its total assets in the securities
of any one company.

Neuberger&Berman Genesis Portfolio

- ----------------------------------------------------------------------

The investment objective of Neuberger&Berman GENESIS Portfolio and
Neuberger&Berman GENESIS Trust is to seek capital appreciation.

Neuberger&Berman GENESIS Portfolio invests principally in common stocks of
companies with small market capitalizations ("small-cap companies"). Market
capitalization means the total market value of a company's outstanding common
stock. The Portfolio regards companies with market capitalizations of up to $750
million as small-cap companies. There is no necessary correlation between market
capitalization and the financial attributes -- such as levels of assets,
revenues, or income -- commonly used to measure the size of a company.

Studies indicate that the market values of small-cap company stocks, such as
those included in the Russell 2000 Index and the Wilshire 1750 or quoted on
Nasdaq, have a cyclical relationship with larger capitalization stocks. Over the
last 30 years, small-cap company stocks have outperformed larger capitalization
stocks about two-thirds of the time, even though small-cap stocks have usually
declined more than larger capitalization stocks in declining markets. There can
be no assurance that this pattern will continue.

Small-cap company stocks generally are considered to offer greater potential
for appreciation than securities of companies with larger market capitalization.
Most small-cap company stocks pay low or no dividends, and the Portfolio seeks
long-term appreciation, rather than income. Small-cap company stocks also have
higher risk and volatility, because most are not as broadly traded as stocks of
companies with larger capitalization and their prices thus may fluctuate more
widely and abruptly. Small-cap company securities are also less researched and
often overlooked and undervalued in the market.

19
<PAGE>

The Portfolio tries to enhance the potential for appreciation and limit the
risk of decline in the value of its securities by employing the value-oriented
investment approach. The Portfolio seeks securities that appear to be
underpriced and are issued by companies with proven management, sound finances,
and strong potential for market growth. To reduce risk, the Portfolio
diversifies its holdings among many companies and industries. The Portfolio
focuses on the fundamentals of each small-cap company, instead of trying to
anticipate what changes might occur in the stock market, the economy, or the
political environment. This approach differs from that used by many other funds
investing in small-cap company stocks, which often buy stocks of companies they
believe will have above-average earnings growth, based on ANTICIPATED FUTURE
developments. In contrast, the Portfolio's securities are generally selected in
the belief that they are currently undervalued, based on EXISTING conditions.

The Portfolio generally expects to be almost fully invested in small-cap
stocks, but it may invest up to 15% of its total assets in securities of
companies whose market capitalizations exceed $750 million.

Neuberger&Berman Guardian Portfolio

- ----------------------------------------------------------------------

The investment objective of Neuberger&Berman GUARDIAN Portfolio and
Neuberger&Berman GUARDIAN Trust is to seek capital appreciation and,
secondarily, current income.

Neuberger&Berman GUARDIAN Portfolio invests primarily in a large number of
common stocks of long-established, high-quality companies. The Portfolio uses
the value-oriented investment approach in selecting securities. Thus, N&B
Management looks for such factors as low price-to-earnings ratios, strong
balance sheets, solid management, and consistent earnings. The Portfolio
diversifies its holdings among many different companies and industries.

Neuberger&Berman GUARDIAN Trust, its Sister Fund and the Sister Fund's
predecessor have paid their shareholders an income dividend every quarter and a
capital gain distribution every year since the predecessor's inception in 1950.
Of course, this past record does not necessarily predict the Fund's future
practices.

Neuberger&Berman Manhattan Portfolio

- ----------------------------------------------------------------------

The investment objective of Neuberger&Berman MANHATTAN Portfolio and
Neuberger&Berman MANHATTAN Trust is to seek capital appreciation without regard
to income.

Neuberger&Berman MANHATTAN Portfolio generally invests in securities of
medium- to large-capitalization companies believed to have the maximum potential
for long-term capital appreciation. It does not seek to invest in securities
that pay

20
<PAGE>

dividends or interest, and any such income is incidental. The Portfolio expects
to be almost fully invested in common stocks, often of companies that may be
temporarily out of favor in the market.

The Portfolio's growth investment program involves greater risks and share
price volatility than programs that invest in more conservative securities.
Moreover, the Portfolio does not follow a policy of active trading for
short-term profits. Accordingly, the Portfolio may be more appropriate for
investors with a longer-range perspective. The Portfolio uses a "growth at a
reasonable price" investment approach. When N&B Management believes that
particular securities have greater potential for long-term capital appreciation,
the Portfolio may purchase such securities at prices with relatively higher
multiples to measures of economic value (such as earnings or cash flow) than
other Portfolios. In addition, the Portfolio focuses on companies with strong
balance sheets and reasonable valuations relative to their growth rates. It also
diversifies its investments into many companies and industries.

Neuberger&Berman Partners Portfolio

- ----------------------------------------------------------------------

The investment objective of Neuberger&Berman PARTNERS Portfolio and
Neuberger&Berman PARTNERS Fund is to seek capital growth.

Neuberger&Berman PARTNERS Portfolio invests principally in common stocks of
medium- to large-capitalization established companies, using the value-oriented
investment approach. The Portfolio seeks capital growth through an investment
approach that is designed to increase capital with reasonable risk. Its
investment program seeks securities believed to be undervalued based on strong
fundamentals, including low price-to-earnings ratios, consistent cash flow, and
the company's track record through all parts of the market cycle.

The Portfolio considers additional factors when selecting securities,
including ownership by a company's management of the company's stock and the
dominance of a company in its particular field.

Short-Term Trading; Portfolio Turnover

- ----------------------------------------------------------------------

Although the Portfolios do not purchase securities with the intention of
profiting from short-term trading, each Portfolio may sell portfolio securities
when N&B Management believes that such action is advisable. The portfolio
turnover rates for each Portfolio are set forth under "Notes to Financial
Highlights." It is anticipated that the annual turnover rate of Neuberger&Berman
MANHATTAN Portfolio and of Neuberger&Berman PARTNERS Portfolio in some fiscal
years may exceed 100%. Turnover rates in excess of 100% may result in higher
transaction costs (which are borne directly by the Portfolio) and a possible
increase in short-term capital gains (or losses). See "Dividends, Other
Distributions, and Taxes" on page 31 and the SAI.

21
<PAGE>
Borrowings

- ----------------------------------------------------------------------

Each Portfolio has a fundamental policy that it may not borrow money, except
that it may (1) borrow money from banks for temporary or emergency purposes and
not for leveraging or investment and (2) enter into reverse repurchase
agreements for any purpose, so long as the aggregate amount of borrowings and
reverse repurchase agreements does not exceed one-third of the Portfolio's total
assets (including the amount borrowed) less liabilities (other than borrowings).
None of the Portfolios expects to borrow money. As a non-fundamental policy,
none of the Portfolios may purchase portfolio securities if its outstanding
borrowings, including reverse repurchase agreements, exceed 5% of its total
assets.

Other Investments

- ----------------------------------------------------------------------

For temporary defensive purposes, each Portfolio may invest up to 100% of its
total assets in cash and cash equivalents, U.S. Government and Agency
Securities, commercial paper and certain other money market instruments, as well
as repurchase agreements collateralized by the foregoing.

22
<PAGE>
PERFORMANCE INFORMATION

The performance of the Funds is commonly measured as TOTAL RETURN. TOTAL
RETURN is the change in value of an investment in a fund over a particular
period, assuming that all distributions have been reinvested. Thus, total return
reflects dividend income, other distributions, and variations in share prices
from the beginning to the end of a period.

An average annual total return is a hypothetical rate of return that, if
achieved annually, would result in the same cumulative total return as was
actually achieved for the period. This smooths out variations in performance.
Past results do not, of course, guarantee future performance. Share prices may
vary, and your shares when redeemed may be worth more or less than your original
purchase price.

The Funds commenced operations in August 1993, and their first fiscal year
ended August 31, 1993. The following table shows the average annual total
returns for the period ended August 31, 1995 (the most recent fiscal year-end of
the Funds), of a 1-year, 5-year, and 10-year investment in each Fund since its
inception and, for periods prior to each Fund's inception, each Sister Fund and
its predecessor. The table also shows a comparison with the S&P 500 Index for
each Fund (except Neuberger& Berman GENESIS Trust, which is compared with the
Russell 2000 Index), and its respective Sister Fund and Sister Fund's
predecessor. The S&P 500 Index is the Standard & Poor's 500 Composite Stock
Price Index, an unmanaged index generally considered to be representative of
overall stock market activity. The Russell 2000 is an unmanaged index of the
securities of the 2,000 issuers having the smallest capitalization in the
Russell 3000 Index, representing about 7% of the Russell 3000's total market
capitalization. Please note that indices do not take into account any fees and
expenses of investing in the individual securities they track, and that
individuals cannot invest directly in any index. Further information regarding
the Funds' performance is presented in their annual report to shareholders,
which is available without charge by calling 800-877-9700.

23
<PAGE>
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS

ENDED AUGUST 31, 1995

<TABLE>
<CAPTION>
NEUBERGER&BERMAN SINCE INCEPTION
EQUITY TRUST 1 YEAR 5 YEARS 10 YEARS INCEPTION DATE
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOCUS TRUST +27.44% +19.19% +15.09% +12.05% 10/19/55
GUARDIAN TRUST +24.01% +20.14% +15.66% +13.10% 6/1/50
MANHATTAN TRUST +25.90% +17.11% +15.02% +17.70% 3/1/79+
PARTNERS TRUST +21.52% +16.06% +14.44% +17.70% 1/20/75+
S&P 500 +21.42% +15.13% +15.17% N/A N/A
GENESIS TRUST +19.51% +17.35% N/A +12.61% 9/27/88
RUSSELL 2000 +20.83% +19.01% N/A N/A N/A
</TABLE>

+THE DATES WHEN N&B MANAGEMENT BECAME INVESTMENT ADVISER TO THE PREDECESSORS OF
THE SISTER FUNDS.

Prior to November 1991, the investment policies of the predecessor of
Neuberger&Berman FOCUS Trust's Sister Fund required that a substantial
percentage of its assets be invested in the energy field; accordingly,
performance results prior to that time do not necessarily reflect the level of
performance that might have been achieved had the Fund's current policies been
in effect during that period. Had N&B Management not waived certain fees and
reimbursed certain expenses since August 1993, the total returns of the Funds
would have been lower. The total returns for periods prior to the Funds'
inception, would have been lower had they reflected the higher fees of the Funds
as compared to those of the Sister Funds and their predecessors.

The Funds commenced operations in August 1993. The following table lets you
take a closer look at how each Fund and the respective Sister Fund and its
predecessor performed year by year, in terms of an annual per share total return
for each calendar year (ending December 31). Please note that the above chart
reflects information for periods ended on the Funds' last fiscal year-end (that
is, as of August 31, 1995).

TOTAL RETURN FOR CALENDAR YEARS ENDED DECEMBER 31

<TABLE>
<CAPTION>
NEUBERGER&BERMAN
EQUITY TRUST 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOCUS TRUST +4.8% +22.4% +10.1% +0.6% +16.5% +29.8% -5.9% +24.7% +21.1% +19.6% +0.9%
GUARDIAN TRUST +7.3 +25.0 +11.9 -1.0 +28.0 +21.5 -4.7 +34.3 +19.0 +13.5 +1.5
MANHATTAN TRUST +7.1 +37.1 +16.8 +0.4 +18.3 +29.1 -8.1 +30.9 +17.8 +10.0 -3.4
PARTNERS TRUST +8.0 +29.9 +17.3 +4.3 +15.5 +22.8 -5.1 +22.4 +17.5 +15.5 -1.0
S&P 500 +6.2 +31.6 +18.6 +5.2 +16.5 +31.6 -3.1 +30.3 +7.6 +10.0 +1.4
GENESIS TRUST N/A N/A N/A N/A N/A +17.3 -16.2 +41.6 +15.6 +14.4 -1.7
RUSSELL 2000 N/A N/A N/A N/A N/A +16.3 -19.5 +46.0 +18.4 +18.9 -1.8
</TABLE>

TOTAL RETURN INFORMATION. You can obtain current performance information
about each Fund by calling N&B Management at 800-877-9700.

24
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS

The Funds

- ----------------------------------------------------------------------

Each Fund is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated as of May 6, 1993. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has six separate series. The Trust and each Fund described
herein commenced operations in August 1993. Another series, Neuberger&Berman
NYCDC Socially Responsive Trust, commenced business in March 1994. Each Fund
invests all of its net investable assets in its corresponding Portfolio, in each
case receiving a beneficial interest in that Portfolio. 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.

DESCRIPTION OF SHARES. Each Fund is authorized to issue an unlimited number
of shares of beneficial interest (par value $0.001 per share). Shares of each
Fund represent equal proportionate interests in the assets of that Fund only and
have identical voting, dividend, redemption, liquidation, and other rights. All
shares issued are fully paid and non-assessable, and shareholders have no
preemptive or other right to subscribe to any additional shares.
SHAREHOLDER MEETINGS. The trustees of the Trust do not intend to hold annual
meetings of shareholders of the Funds. The trustees will call special meetings
of shareholders of a Fund only if required under the 1940 Act or in their
discretion or upon the written request of holders of 10% or more of the
outstanding shares of that Fund entitled to vote.

CERTAIN PROVISIONS OF TRUST INSTRUMENT. Under Delaware law, the shareholders
of a Fund will not be personally liable for the obligations of any Fund; a
shareholder is entitled to the same limitation of personal liability extended to
shareholders of corporations. To guard against the risk that Delaware law might
not be applied in other states, the Trust Instrument requires that every written
obligation of the Trust or a Fund contain a statement that such obligation may
be enforced only against the assets of the Trust or the Fund and provides for
indemnification out of the Trust or Fund property of any shareholder
nevertheless held personally liable for Trust or Fund obligations, respectively.

25
<PAGE>
The Portfolios

- ----------------------------------------------------------------------

Each Portfolio is a separate series of Managers Trust, a New York common law
trust organized as of December 1, 1992. Managers Trust is registered under the
1940 Act as a diversified, open-end management investment company. Managers
Trust has six separate Portfolios. The assets of each Portfolio belong only to
that Portfolio, and the liabilities of each Portfolio are borne solely by that
Portfolio and no other.

FUNDS' INVESTMENTS IN PORTFOLIOS. Each Fund is a "feeder fund" that seeks to
achieve its investment objective by investing all of its net investable assets
in its corresponding Portfolio, which is a "master fund." The Portfolio, which
has the same investment objective, policies, and limitations as the Fund, in
turn invests in securities; its corresponding Fund thus acquires an indirect
interest in those securities. Historically, N&B Management, which is the
administrator of each Fund and the investment manager of each Portfolio, has
sponsored, with Neuberger&Berman, traditionally structured funds since 1950.
However, it has operated 12 master funds and 20 feeder funds since August 1993
and now operates 21 master funds and 30 feeder funds. This "master/feeder fund"
structure is depicted in the "Summary" on page 3.

Each Fund's investment in its corresponding Portfolio is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in a Portfolio. The five Sister Funds that are series
of N&B Equity Funds invest all of their respective net investable assets in the
five Portfolios described herein. Four mutual funds that are series of
Neuberger&Berman Equity Assets ("N&B Equity Assets") are expected to begin
operations in 1996. These series will invest all of their respective net
investable assets in four Portfolios of Equity Managers Trust. The shares of
each series of N&B Equity Funds (but not of N&B Equity Assets) are available for
purchase by members of the general public. Each Portfolio may also permit other
investment companies and/or other institutional investors to invest in the
Portfolio. All investors will invest in a Portfolio on the same terms and
conditions as a Fund and will pay a proportionate share of the Portfolio's
expenses. The Trust does not sell its shares directly to members of the general
public. Other investors in a Portfolio (including the series of N&B Equity
Funds) that might sell shares to members of the general public are not required
to sell their shares at the same public offering price as a Fund, could have a
different administration fee and expenses than a Fund, and (except N&B Equity
Funds) might charge a sales commission. Therefore, Fund shareholders may have
different returns than shareholders in another investment company that invests
exclusively in the Portfolio. Information regarding any fund that may invest in
a Portfolio in the future will be available from N&B Management by calling
800-877-9700.

The trustees of the Trust believe that investment in a Portfolio by a series
of N&B Equity Funds or N&B Equity Assets or other potential investors in
addition to a Fund may enable the Portfolio to realize economies of scale that
could reduce its operating

26
<PAGE>

expenses, thereby producing higher returns and benefitting all shareholders.
However, a Fund's investment in its corresponding Portfolio may be affected by
the actions of other large investors in the Portfolio, if any. For example, if a
large investor in a Portfolio (other than a Fund) redeemed its interest in the
Portfolio, the Portfolio's remaining investors (including the Fund) might, as a
result, experience higher pro rata operating expenses, thereby producing lower
returns.

Each Fund may withdraw its entire investment from its corresponding Portfolio
at any time, if the trustees of the Trust determine that it is in the best
interests of the Fund and its shareholders to do so. A Fund might withdraw, for
example, if there were other investors in a Portfolio with power to, and who did
by a vote of all investors (including the Fund), change the investment
objective, policies, or limitations of the Portfolio in a manner not acceptable
to the trustees of the Trust. A withdrawal could result in a distribution in
kind of securities (as opposed to a cash distribution) by the Portfolio. That
distribution could result in a less diversified portfolio of investments for the
Fund and could affect adversely the liquidity of the Fund's investment
portfolio. If the Fund decided to convert those securities to cash, it usually
would incur brokerage fees or other transaction costs. If a Fund withdrew its
investment from a Portfolio, the trustees would consider what action might be
taken, including the investment of all of the Fund's net investable assets in
another pooled investment entity having substantially the same investment
objective as the Fund or the retention by the Fund of its own investment manager
to manage its assets in accordance with its investment objective, policies, and
limitations. The inability of the Fund to find a suitable replacement could have
a significant impact on shareholders.

INVESTOR MEETINGS AND VOTING. Each Portfolio normally will not hold meetings
of investors except as required by the 1940 Act. Each investor in a Portfolio
will be entitled to vote in proportion to its relative beneficial interest in
the Portfolio. On most issues subjected to a vote of investors, a Fund will
solicit proxies from its shareholders and will vote its interest in the
Portfolio in proportion to the votes cast by the Fund's shareholders. If there
are other investors in a Portfolio, there can be no assurance that any issue
that receives a majority of the votes cast by Fund shareholders will receive a
majority of votes cast by all Portfolio investors; indeed, if other investors
hold a majority interest in a Portfolio, they could have voting control of the
Portfolio.

CERTAIN PROVISIONS. Each investor in a Portfolio, including a Fund, will be
liable for all obligations of the Portfolio. However, the risk of an investor in
a Portfolio incurring financial loss on account of such liability would be
limited to circumstances in which the Portfolio had inadequate insurance and was
unable to meet its obligations out of its assets. Upon liquidation of a
Portfolio, investors would be entitled to share pro rata in the net assets of
the Portfolio available for distribution to investors.

27
<PAGE>
SHAREHOLDER SERVICES

How to Buy Shares

- ----------------------------------------------------------------------

YOU CAN BUY AND OWN FUND SHARES ONLY THROUGH AN ACCOUNT WITH AN INSTITUTION
WHICH PROVIDES ACCOUNTING, RECORDKEEPING, AND OTHER SERVICES TO INVESTORS AND
WHICH HAS AN ADMINISTRATIVE SERVICES AGREEMENT WITH N&B MANAGEMENT. N&B
Management and the Funds do not recommend, endorse, or receive payments from any
Institution. N&B Management compensates Institutions for services they provide
under an administrative services agreement. N&B Management does not provide
investment advice to any Institution or its clients or make decisions regarding
their investments.

Each Institution will establish its own procedures for the purchase of Fund
shares in its account, including minimum initial and additional investments for
shares of each Fund and the acceptable methods of payment for shares. Shares are
purchased at the next price calculated on a day the New York Stock Exchange
("NYSE") is open, after a purchase order is received and accepted by an
Institution. Prices for Fund shares are usually calculated as of 4 p.m. Eastern
time. Your Institution may be closed on days when the NYSE is open. As a result,
the prices for Fund shares may be significantly affected on days when you have
no access to your Institution. The Funds will not issue a certificate for your
shares.

Other Information:

/ / An Institution must pay for shares it purchases in U.S. dollars.

/ / Each Fund has the right to suspend the offering of its shares for a
period of time. Each Fund also has the right to accept or reject a
purchase order in its sole discretion, including certain purchase orders
using an exchange of shares. See "Shareholder Services -- Exchanging
Shares."

How to Sell Shares

- ----------------------------------------------------------------------

You can sell (redeem) all or some of your Fund shares only through an account
with an Institution. Each Institution will establish its own procedures for the
sale of Fund shares. Shares are sold at the next price calculated on a day the
NYSE is open, after a sales order is received and accepted by an Institution.
Prices for Fund shares are usually calculated as of 4 p.m. Eastern time. Your
Institution may be closed on days when the NYSE is open. As a result, the prices
for Fund shares may be significantly affected on days when you have no access to
your Institution.

Each Fund has reserved the right, if conditions exist which make cash
payments undesirable, to honor any request for a redemption by making payments
in securities valued in the same way as they would be valued for purposes of
computing that Fund's net asset value per share. If payment is made in
securities, an Institution may incur

28
<PAGE>

brokerage expenses or other transaction costs in converting those securities
into cash and will be subject to fluctuation in the market prices of those
securities until they are sold.

Other Information:

/ / Redemption proceeds will be paid to Institutions as agreed with each
Fund, but in any case within three calendar days (under unusual
circumstances a Fund may take longer, as permitted by law).

/ / Each Fund may suspend redemptions or postpone payments on days when the
NYSE is closed (besides weekends and holidays), when trading on the NYSE
is restricted, or as permitted by the Securities and Exchange Commission.

Exchanging Shares

- ----------------------------------------------------------------------

Through an account with an Institution, you may be able to exchange shares of
a Fund for shares of another Neuberger&Berman Fund.-SM- Each Institution will
establish its own exchange policy and procedures for its accounts. Shares are
exchanged at the next price calculated on a day the NYSE is open, after an
exchange order is received and accepted by an Institution.

/ / Shares can be exchanged only between accounts registered in the same
name, address, and taxpayer ID number of the Institution.

/ / An exchange can be made only into a fund whose shares are eligible for
sale in the state where the Institution is located.

/ / An exchange may have tax consequences.
/ / Each Fund may refuse any exchange orders from any Institution if for any
reason they are not deemed to be in the best interests of the Fund and
its shareholders.
/ / Each Fund may impose other restrictions on the exchange privilege, or
modify or terminate the privilege, but will try to give each Institution
advance notice whenever it can reasonably do so.

29
<PAGE>
SHARE INFORMATION

Share Prices and Net Asset Value

- ----------------------------------------------------------------------

Each Fund's shares are bought or sold at a price that is the Fund's net asset
value ("NAV") per share. The NAVs for each Fund and its corresponding Portfolio
are calculated by subtracting liabilities from total assets (in the case of a
Portfolio, the market value of the securities the Portfolio holds plus cash and
other assets; in the case of a Fund, its percentage interest in its
corresponding Portfolio, multiplied by the Portfolio's NAV, plus any other
assets). Each Fund's per share NAV is calculated by dividing its NAV by the
number of Fund shares outstanding and rounding the result to the nearest full
cent. Each Fund and its corresponding Portfolio calculate their NAVs as of the
close of regular trading on the NYSE, usually 4 p.m. Eastern time, on each day
the NYSE is open. Each Portfolio values securities (including options) listed on
the NYSE, the American Stock Exchange, or other national securities exchanges or
quoted on Nasdaq, and other securities for which market quotations are readily
available, at the last sale price on the day the securities are being valued. If
there is no sale of such a security on that day, that security is valued at the
mean between its closing bid and asked prices. The Portfolios value all other
securities and assets, including restricted securities, by a method that the
trustees of Managers Trust believe accurately reflects fair value.

30
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS,
AND TAXES

Each Fund distributes substantially all of its share of any net investment
income (net of the Fund's expenses), net realized capital gains, and net
realized gains from foreign currency transactions earned or realized by its
corresponding Portfolio, normally in December. Investors who are considering the
purchase of Fund shares in December should take this into account because of the
tax consequences of such distributions. In addition, Neuberger&Berman GUARDIAN
Trust distributes substantially all of its share of Neuberger&Berman GUARDIAN
Portfolio's net investment income, if any, at the end of each calendar quarter.

Distribution Options

- ----------------------------------------------------------------------

REINVESTMENT IN SHARES. All dividends and other distributions paid on shares
of a Fund are automatically reinvested in additional shares of that Fund, unless
an Institution elects to receive them in cash. Dividends and other distributions
are reinvested at the Fund's per share NAV, usually as of the date the dividend
or other distribution is payable.

DISTRIBUTIONS IN CASH. An Institution may elect to receive dividends in
cash, with other distributions being reinvested in additional Fund shares, or to
receive all dividends and other distributions in cash.

Taxes

- ----------------------------------------------------------------------

Each Fund intends to continue to qualify for treatment as a regulated
investment company for federal income tax purposes so that it will be relieved
of federal income tax on that part of its taxable income and realized gains that
it distributes to its shareholders.

An investment has certain tax consequences, depending on the type of account
in which you invest. IF YOU HAVE AN ACCOUNT UNDER A QUALIFIED RETIREMENT PLAN OR
AN INDIVIDUAL RETIREMENT ACCOUNT, TAXES ARE DEFERRED.

TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax and
may also be subject to state and local income taxes. Distributions are taxable
when
they are paid, whether in cash or by reinvestment in additional Fund shares,
except that distributions declared in December to shareholders of record on a
date in that month and paid in the following January are taxable as if they were
paid on December 31 of the year in which the distributions were declared.

31
<PAGE>

long-term capital gain, no matter how long you have owned your shares.
Distributions of net capital gain may include gains from the sale of portfolio
securities that appreciated in value before you bought your shares. Every
January, each Fund will send each Institution that is a shareholder therein a
statement showing the amount of distributions paid in the previous year.

TAXES ON REDEMPTIONS. Capital gains realized on redemptions of Fund shares,
including redemptions in connection with exchanges to other Neuberger&Berman
Funds,-SM- are subject to tax. A capital gain (or loss) is the difference
between the amount paid for shares (including the value of any dividends and
other distributions that were reinvested) and the amount received when shares
are sold.

When an Institution sells shares, it will receive a confirmation statement
showing the number of shares sold and the price. Every January, Institutions
will also receive a consolidated transaction statement for the previous year.
Each Institution annually will send investors in its accounts statements
showing distribution and transaction information for the previous year.

The foregoing is only a summary of some of the important tax considerations
affecting each Fund and its shareholders. See the SAI for additional tax
information. There may be other federal, state, local, or foreign tax
considerations applicable to a particular investor. Therefore, investors should
consult their tax advisers.

32
<PAGE>
MANAGEMENT AND ADMINISTRATION

Trustees and Officers

- ----------------------------------------------------------------------

The trustees of the Trust and the trustees of Managers Trust, who are
currently the same individuals, have oversight responsibility for the operations
of each Fund and each Portfolio, respectively. The SAI contains general
background information about each trustee and officer of the Trust and of
Managers Trust. The trustees and officers of the Trust and of Managers Trust who
are officers and/or directors of N&B Management and/or partners of
Neuberger&Berman serve without compensation from the Funds or the Portfolios.
The trustees of the Trust and of Managers Trust, including a majority of those
trustees who are not "interested persons" (as defined in the 1940 Act) of any
Fund, have adopted written procedures reasonably appropriate to deal with
potential conflicts of interest between the Trust and Managers Trust, including,
if necessary, creating a separate board of trustees of Managers Trust.

Investment Manager, Administrator,
Distributor, and Sub-Adviser

- ----------------------------------------------------------------------

N&B Management serves as the investment manager of each Portfolio, as
administrator of each Fund, and as distributor of the shares of each Fund. N&B
Management and its predecessor firms have specialized in the management of
no-load mutual funds since 1950. In addition to serving the five Portfolios, N&B
Management currently serves as investment manager of other mutual funds.
Neuberger&Berman, which acts as sub-adviser for the Portfolios and other mutual
funds managed by N&B Management, also serves as investment adviser of three
investment companies. The mutual funds managed by N&B Management and
Neuberger&Berman had aggregate net assets of approximately $11.4 billion as of
September 30, 1995.

As sub-adviser, Neuberger&Berman furnishes N&B Management with investment
recommendations and research without added cost to the Portfolios.
Neuberger&Berman is a member firm of the NYSE and other principal exchanges and
acts as the Portfolios' principal broker in the purchase and sale of their
securities. Neuberger&Berman and its affiliates, including N&B Management,
manage securities accounts that had approximately $37.6 billion of assets as of
September 30, 1995. All of the voting stock of N&B Management is owned by
individuals who are general partners of Neuberger&Berman.

The following is information about the individuals who are primarily
responsible for day-to-day management of the Portfolios:

Neuberger&Berman FOCUS Portfolio and Neuberger&Berman GUARDIAN
Portfolio -- Kent C. Simons and Lawrence Marx III. Mr. Simons and Mr. Marx are
Vice Presidents of N&B Management and general partners of Neuberger&Berman.

33
<PAGE>

Mr. Simons has had responsibility for Neuberger&Berman FOCUS Portfolio and
Neuberger&Berman FOCUS Trust's Sister Fund's predecessor since 1988 and for
Neuberger&Berman GUARDIAN Portfolio and Neuberger&Berman GUARDIAN Trust's Sister
Fund's predecessor since 1983. Mr. Marx has had those responsibilities since
1988.

Neuberger&Berman GENESIS Portfolio -- Judith M. Vale. Ms. Vale, who has been
a member of the Small Cap Group of Neuberger&Berman since 1992 and a Vice
President of N&B Management since November 1994, has been primarily responsible
for the day-to-day management of the Neuberger&Berman GENESIS Portfolio since
February 1994. Ms. Vale was a portfolio manager for another investment
management group from 1990 to 1992, and was a senior fund analyst at another
prominent investment adviser from 1987 to 1990.

Neuberger&Berman MANHATTAN Portfolio -- Mark R. Goldstein and Susan Switzer.
Mr. Goldstein is a Vice President of N&B Management and a general partner of
Neuberger&Berman. Previously he was a securities analyst and portfolio manager
with that firm. He has had responsibility for Neuberger&Berman MANHATTAN
Portfolio and Neuberger&Berman MANHATTAN Trust's Sister Fund's predecessor since
June 1992. Ms. Switzer has been an Assistant Vice President of N&B Management
since March 1995 and a portfolio manager of Neuberger&Berman since January 1995.
Ms. Switzer was a research analyst and assistant portfolio manager for another
money management firm from 1989 to 1994.

Neuberger&Berman PARTNERS Portfolio -- Michael M. Kassen and Robert I.
Gendelman. Mr. Kassen is a Vice President of N&B Management and a general
partner of Neuberger&Berman. He has had responsibility for Neuberger&Berman
PARTNERS Portfolio and Neuberger&Berman PARTNERS Trust's Sister Fund's
predecessor since June 1990. Mr. Kassen was an employee of N&B Management from
1990 to December 1992. Mr. Gendelman is a senior portfolio manager for
Neuberger& Berman and an Assistant Vice President of N&B Management. Mr.
Gendelman has had responsibility for Neuberger&Berman PARTNERS Portfolio since
October 1994. He was a portfolio manager for another fund manager from 1992 to
1993 and was managing partner of an investment partnership from 1988 to 1992.

Neuberger&Berman acts as the principal broker for the Portfolios in the
purchase and sale of portfolio securities and in the sale of covered call
options, and for those services receives brokerage commissions. In effecting
securities transactions, each Portfolio seeks to obtain the best price and
execution of orders. For more information, see the SAI.
The partners and employees of Neuberger&Berman and officers and employees of
N&B Management, together with their families, have invested over $100 million of
their own money in Neuberger&Berman Funds.-SM-

34
<PAGE>

To mitigate the possibility that a Portfolio will be adversely affected by
employees' personal trading, the Trust, Managers Trust, N&B Management, and
Neuberger& Berman have adopted policies that restrict securities trading in the
personal accounts of portfolio managers and others who normally come into
possession of information on portfolio transactions.

Expenses

- ----------------------------------------------------------------------

N&B Management provides investment management services to each Portfolio that
include, among other things, making and implementing investment decisions and
providing facilities and personnel necessary to operate the Portfolio. N&B
Management provides administrative services to each Fund that include furnishing
similar facilities and personnel for the Fund and performing accounting,
recordkeeping, and other services for Institutions and their accounts. For such
administrative services, each Fund pays N&B Management a fee at the annual rate
of 0.40% of that Fund's average daily net assets. With a Fund's consent, N&B
Management may subcontract to third parties, including Institutions, some of its
responsibilities to that Fund under the administration services agreement and
may compensate third parties that provide such services. For investment
management services, each Portfolio (except Neuberger& Berman GENESIS Portfolio)
pays N&B Management a fee at the annual rate of 0.55% of the first $250 million
of that Portfolio's 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. Neuberger&Berman GENESIS Portfolio pays N&B Management a fee for
investment management services at the annual rate of 0.85% of the first $250
million of that Portfolio's average daily net assets, 0.80% of the next $250
million, 0.75% of the next $250 million, 0.70% of the next $250 million, and
0.65% of average daily net assets in excess of $1 billion.

During their 1995 fiscal years, each Fund accrued administration fees, and a
pro rata portion of the corresponding Portfolio's management fees, as an
annualized percentage of average daily net assets, as follows:

<TABLE>
<S> <C>
Neuberger&Berman FOCUS Trust 0.93%
Neuberger&Berman GENESIS Trust 1.25%
Neuberger&Berman GUARDIAN Trust 0.86%
Neuberger&Berman MANHATTAN Trust 0.94%
Neuberger&Berman PARTNERS Trust 0.90%
</TABLE>

See "Expense Information -- Annual Fund Operating Expenses" for anticipated
fees for the current fiscal year.

Each Fund bears all expenses of its operations other than those borne by N&B
Management as administrator of the Fund and as distributor of its shares. Each

35
<PAGE>

Portfolio bears all expenses of its operations other than those borne by N&B
Management as investment manager of the Portfolio. These expenses include, but
are not limited to, for the Funds and Portfolios, legal and accounting fees and
compensation for trustees who are not affiliated with N&B Management; for the
Funds, transfer agent fees, and the cost of printing and sending reports and
proxy materials to shareholders; and for the Portfolios, custodial fees for
securities.

During their 1995 fiscal years, each Fund bore Total Operating Expenses as an
annualized percentage of its average daily net assets (after taking into
consideration N&B Management's expense reimbursement for each Fund and N&B
Management's waiver of a portion of the management fee borne indirectly by
Neuberger&Berman GENESIS Trust), as follows:

<TABLE>
<S> <C>
Neuberger&Berman FOCUS Trust 0.96%
Neuberger&Berman GENESIS Trust 1.42%
Neuberger&Berman GUARDIAN Trust 0.90%
Neuberger&Berman MANHATTAN Trust 1.06%
Neuberger&Berman PARTNERS Trust 0.92%
</TABLE>

N&B Management has voluntarily undertaken until December 31, 1996, to
reimburse each Fund for its Operating Expenses and its pro rata share of its
corresponding Portfolio's Operating Expenses so that each Fund's expense ratio
per annum will not exceed the expense ratio per annum of its Sister Fund by more
than 0.10% of the Fund's average daily net assets. A Fund's per annum "expense
ratio" means the sum of the Fund's Total Operating Expenses and its pro rata
share of its corresponding Portfolio's Total Operating Expenses, divided by that
Fund's average daily net assets for the year. The expense ratios of the Sister
Funds of Neuberger&Berman FOCUS Trust, Neuberger&Berman GENESIS Trust,
Neuberger&Berman GUARDIAN Trust, Neuberger&Berman MANHATTAN Trust and
Neuberger&Berman PARTNERS Trust are anticipated to be, respectively, 0.92%,
1.33%, 0.84%, 1.02%, and 0.87% per annum of such Sister Fund's average net
assets. Based on those expectations, the expense ratios for Neuberger&Berman
FOCUS Trust, Neuberger&Berman GENESIS Trust, Neuberger&Berman GUARDIAN Trust,
Neuberger&Berman MANHATTAN Trust and Neuberger&Berman PARTNERS Trust are not
anticipated to exceed 1.02%, 1.43%, 0.94%, 1.12% and 0.97% per annum,
respectively. The above ratios reflect N&B Management's voluntary agreement to
waive a portion of the management fee borne directly by Neuberger&Berman GENESIS
Portfolio and indirectly by Neuberger& Berman GENESIS Trust to reduce that fee
by 0.10% per annum of the average daily net assets of Neuberger&Berman GENESIS
Portfolio. The effect of reimbursement or a waiver by N&B Management is to
reduce a Fund's expenses and thereby increase its total return.

36
<PAGE>
Transfer Agent

- ----------------------------------------------------------------------

The Funds' transfer agent is State Street Bank and Trust Company ("State
Street"). State Street administers purchases, redemptions, and transfers of Fund
shares with respect to Institutions and the payment of dividends and other
distributions to Institutions. The main office of State Street is located at 225
Franklin Street, Boston, MA 02110. All correspondence should be addressed to the
Neuberger&Berman Funds, Institutional Services, 605 Third Avenue, 2nd Floor, New
York, NY 10158.

37
<PAGE>
DESCRIPTION OF INVESTMENTS

In addition to common stocks and other securities referred to in "Investment
Programs" herein, each Portfolio may make the following investments, among
others, individually or in combination, although it may not necessarily buy all
of the types of securities or use all of the investment techniques that are
described. For additional information on the following investments and on other
types of investments which the Portfolios may make, see the SAI.

ILLIQUID SECURITIES. Each Portfolio may invest up to 10% of its net assets
(5% in the case of Neuberger&Berman GENESIS Portfolio) in illiquid securities,
which are securities that cannot be expected to be sold within seven days at
approximately the price at which they are valued. Due to the absence of an
active trading market, a Portfolio may experience difficulty in valuing or
disposing of illiquid securities. N&B Management determines the liquidity of the
Portfolios' securities, under supervision of the trustees of Managers Trust.
Securities that are freely tradeable in their country of origin or in their
principal market are not considered illiquid securities even if they are not
registered for sale in the U.S.

RESTRICTED SECURITIES AND RULE 144A SECURITIES. Each Portfolio may invest in
restricted securities and Rule 144A securities. Restricted securities cannot be
sold to the public without registration under the Securities Act of 1933 ("1933
Act"). Unless registered for sale, these securities can be sold only in
privately negotiated transactions or pursuant to an exemption from registration.
Restricted securities are generally considered illiquid. Rule 144A securities,
although not registered, may be resold to qualified institutional buyers in
accordance with Rule 144A under the 1933 Act. Unregistered securities may also
be sold abroad pursuant to Regulation S under the 1933 Act. N&B Management,
acting pursuant to guidelines established by the trustees of Managers Trust, may
determine that some restricted securities are liquid.

FOREIGN SECURITIES. Each Portfolio may invest up to 10% of the value of its
total assets in foreign securities. Foreign securities are those of issuers
organized and doing business principally outside the U.S., including non-U.S.
governments, their agencies, and instrumentalities. The 10% limitation does not
apply to foreign securities that are denominated in U.S. dollars, including
American Depositary Receipts ("ADRs"). Foreign securities (including those
denominated in U.S. dollars and ADRs) are affected by political or economic
developments in foreign countries. Foreign companies may not be subject to
accounting standards or governmental supervision comparable to U.S. companies,
and there may be less public information about their operations. In addition,
foreign markets may be less liquid or more volatile than U.S. markets and may
offer less protection to investors. Investments in foreign securities that are
not denominated in U.S. dollars (including those made through ADRs) may

38
<PAGE>
be subject to special risks, such as governmental regulation of foreign exchange
transactions and changes in rates of exchange with the U.S. dollar, irrespective
of the performance of the underlying investment.
COVERED CALL OPTIONS. Each Portfolio may try to reduce the risk of
securities price changes (hedge) or generate income by writing (selling) covered
call options against securities held in its portfolio having a market value not
exceeding 10% of its net assets and may purchase call options in related closing
transactions. The purchaser of a call option acquires the right to buy a
portfolio security at a fixed price during a specified period. The maximum price
the seller may realize on the security during the option period is the fixed
price; the seller continues to bear the risk of a decline in the security's
price, although this risk is reduced by the premium received for the option.

The primary risks in using call options are (1) possible lack of a liquid
secondary market for options and the resulting inability to close out options
when desired; (2) the fact that the skills needed to use options are different
from those needed to select a Portfolio's securities; (3) the fact that,
although use of these instruments for hedging purposes can reduce the risk of
loss, they also can reduce the opportunity for gain, by offsetting favorable
price movements in underlying investments; and (4) the possible inability of a
Portfolio to sell a security at a time that would otherwise be favorable for it
to do so, or the possible need for a Portfolio to sell a security at a
disadvantageous time, due to its need to maintain "cover" in connection with its
use of these instruments. Options are considered "derivatives."

SHORT SALES AGAINST-THE-BOX. Each Portfolio may make short sales
against-the-box, in which it sells securities short only if it owns or has the
right to obtain without payment of additional consideration an equal amount of
the same type of securities sold. Short selling against-the-box may defer
recognition of gains or losses to a later tax period.

REPURCHASE AGREEMENTS/SECURITIES LOANS. In a repurchase agreement, a
Portfolio buys a security from a Federal Reserve member bank or a securities
dealer and simultaneously agrees to sell it back at a higher price, at a
specified date, usually less than a week later. The underlying securities must
fall within the Portfolio's investment policies and limitations. Each Portfolio
also may lend portfolio securities to banks, brokerage firms, or institutional
investors to earn income. Costs, delays, or losses could result if the selling
party to a repurchase agreement or the borrower of portfolio securities becomes
bankrupt or otherwise defaults. N&B Management monitors the creditworthiness of
sellers and borrowers.
OTHER INVESTMENTS. Although each Portfolio invests primarily in common
stocks, when market conditions warrant it may invest in preferred stocks,
securities convertible into or exchangeable for common stocks, U.S. Government
and Agency Securities, investment grade debt securities, or money market
instruments, or may retain assets in cash or cash equivalents.

39
<PAGE>

U.S. Government securities are obligations of the U.S. Treasury backed by the
full faith and credit of the United States. U.S. Government Agency Securities
are issued or guaranteed by U.S. Government agencies or instrumentalities; by
other U.S. Government-sponsored enterprises, such as the Government National
Mortgage Association, Federal National Mortgage Association, Federal Home Loan
Mortgage Corporation, Student Loan Marketing Association, and Tennessee Valley
Authority; and by various federally chartered or sponsored banks. Some U.S.
Government Agency Securities are supported by the full faith and credit of the
United States, while others may be supported by the issuer's ability to borrow
from the U.S. Treasury, subject to the Treasury's discretion in certain cases,
or only by the credit of the issuer. U.S. Government Agency Securities include
U.S. Government mortgage-backed securities. The market prices of U.S. Government
securities are not guaranteed by the Government and generally fluctuate with
changing interest rates.

"Investment grade" debt securities are those receiving one of the four
highest ratings from Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's ("S&P"), or another nationally recognized statistical rating organization
("NRSRO") or, if unrated by any NRSRO, deemed comparable by N&B Management to
such rated securities ("Comparable Unrated Securities") under guidelines
established by the trustees of Managers Trust. The value of fixed income
securities in which a Portfolio may invest is likely to decline in times of
rising interest rates. Conversely, when rates fall, the value of a Portfolio's
fixed income investments is likely to rise.

Neuberger&Berman PARTNERS Portfolio may invest up to 15% of its net assets in
debt securities rated below investment grade or Comparable Unrated Securities.
Such securities, as well as those rated by Moody's in its fourth highest
category (Baa) or Comparable Unrated Securities, may be considered predominantly
speculative, although, as debt securities, they generally have priority over
equity securities of the same issuer and are generally better secured. Debt
securities in the lowest rating categories may involve a substantial risk of
default or may be in default. Changes in economic conditions or developments
regarding the individual issuer are more likely to cause price volatility and
weaken the capacity of the issuer of such securities to make principal and
interest payments than is the case for higher grade debt securities. An economic
downturn affecting the issuer may result in an increased incidence of default.
The market for lower-rated securities may be thinner and less active than for
higher-rated securities. Neuberger&Berman PARTNERS Portfolio will invest in such
securities only when N&B Management concludes that the anticipated return to the
Portfolio on such an investment warrants exposure to the additional level of
risk. A further description of Moody's and S&P's ratings is included in the
Appendix to the SAI.

40
<PAGE>
USE OF JOINT PROSPECTUS AND STATEMENT
OF ADDITIONAL INFORMATION

Each Fund and its corresponding Portfolio acknowledges that it is solely
responsible for all information or lack of information about that Fund and
Portfolio in this Prospectus or in the SAI, and no other Fund or Portfolio is
responsible therefor. The trustees of the Trust and of Managers Trust have
considered this factor in approving each Fund's use of a single combined
Prospectus and combined SAI.

41
<PAGE>
OTHER INFORMATION

DIRECTORY
INVESTMENT MANAGER, ADMINISTRATOR,
AND DISTRIBUTOR

Neuberger&Berman Management Incorporated
605 Third Avenue 2nd Floor
New York, NY 10158-0180

SUB-ADVISER
Neuberger&Berman, L.P.
605 Third Avenue
New York, NY 10158-3698

CUSTODIAN AND TRANSFER 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 10158-0180
800-877-9700

LEGAL COUNSEL

Kirkpatrick & Lockhart LLP
1800 M Street, NW
Washington, DC 20036-5891

FUNDS ELIGIBLE FOR EXCHANGE
EQUITY TRUST

Neuberger&Berman Focus Trust
Neuberger&Berman Genesis Trust
Neuberger&Berman Guardian
Trust
Neuberger&Berman Manhattan
Trust
Neuberger&Berman Partners Trust
EQUITY ASSETS

Neuberger&Berman Socially
Responsive Trust

INCOME TRUST
Neuberger&Berman Ultra Short
Bond Trust
Neuberger&Berman Limited
Maturity Bond Trust
Neuberger&Berman Government
Income Trust

Neuberger&Berman, Neuberger&Berman Management Inc., and the above named Funds
are service marks of Neuberger&Berman Management Inc.
- -C- 1995 Neuberger&Berman Management Inc.

42
<PAGE>

NEUBERGER&BERMAN MANAGEMENT INC.

605 THIRD AVENUE 2ND FLOOR
NEW YORK, NY 10158-0180
SHAREHOLDER SERVICES
800.877.9700

THIS WRAPPER IS NOT PART OF THE PROSPECTUS.
PRINTED ON RECYCLED PAPER
[LOGO] WITH SOY BASED INKS NBEP0001295

<PAGE>

________________________________________________________________________

NEUBERGER & BERMAN EQUITY TRUST AND PORTFOLIOS

STATEMENT OF ADDITIONAL INFORMATION

DATED DECEMBER 15, 1995

Neuberger & Berman Neuberger & Berman
Manhattan Fund Genesis Fund
(and Neuberger & Berman (and Neuberger & Berman
Manhattan Portfolio) Genesis Portfolio)

Neuberger & Berman Neuberger & Berman
Focus Fund Guardian Fund
(and Neuberger & Berman (and Neuberger & Berman
Focus Portfolio) Guardian Portfolio)

Neuberger & Berman
Partners Trust
(and Neuberger & Berman Partners Portfolio)

No-Load Mutual Funds
605 Third Avenue, 2nd Floor, New York, NY 10158-0180
Toll-Free 800-877-9700
________________________________________________________________________

Neuberger & Berman MANHATTAN Trust, Neuberger & Berman
GENESIS Trust, Neuberger & Berman FOCUS Trust, Neuberger & Berman GUARDIAN
Trust, and Neuberger & Berman PARTNERS Trust (each a "Fund") are no-load
mutual funds that offer shares pursuant to a Prospectus dated December 15,
1995. The above-named Funds invest all of their net investable assets in
Neuberger & Berman MANHATTAN Portfolio, Neuberger & Berman GENESIS Port-
folio, Neuberger & Berman FOCUS Portfolio, Neuberger & Berman GUARDIAN
Portfolio, and Neuberger & Berman PARTNERS Portfolio (each a "Portfolio"),
respectively.

AN INVESTOR CAN BUY, OWN, AND SELL FUND SHARES ONLY THROUGH
AN ACCOUNT WITH A BROKER-DEALER, PENSION PLAN ADMINISTRATOR, OR OTHER
INSTITUTION (EACH AN "INSTITUTION") THAT PROVIDES ACCOUNTING,
RECORDKEEPING, AND OTHER SERVICES TO INVESTORS AND THAT HAS AN
ADMINISTRATIVE SERVICES AGREEMENT WITH NEUBERGER & BERMAN MANAGEMENT
INCORPORATED ("N&B MANAGEMENT").

The Funds' Prospectus provides basic information that an
investor should know before investing. A copy of the Prospectus may be
obtained, without charge, from Neuberger & Berman Management Incorporated,
Institutional Services, 605 Third Avenue, 2nd Floor, New York, NY 10158-
0180, or by calling 800-877-9700.

<PAGE>

This Statement of Additional Information ("SAI") is not a
prospectus and should be read in conjunction with the Prospectus.

No person has been authorized to give any information or to
make any representations not contained in the Prospectus or in this SAI in
connection with the offering made by the Prospectus, and, if given or
made, such information or representations must not be relied upon as
having been authorized by a Fund or its distributor. The Prospectus and
this SAI do not constitute an offering by a Fund or its distributor in any
jurisdiction in which such offering may not lawfully be made.
<PAGE>

TABLE OF CONTENTS

Page

INVESTMENT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Investment Policies and Limitations . . . . . . . . . . . . . 1
Mark R. Goldstein, Portfolio Manager of Neuberger & Berman
MANHATTAN Portfolio . . . . . . . . . . . . . . . . . . 6
Judith M. Vale, Portfolio Manager of Neuberger & Berman
GENESIS Portfolio . . . . . . . . . . . . . . . . . . . 6
Kent C. Simons and Lawrence Marx III, Portfolio Managers of
Neuberger & Berman FOCUS and Neuberger & Berman
GUARDIAN Portfolios . . . . . . . . . . . . . . . . . . 7
Michael M. Kassen and Robert I. Gendelman, Portfolio Managers
of Neuberger & Berman PARTNERS Portfolio . . . . . . . . 8
Additional Investment Information . . . . . . . . . . . . . . 9
Neuberger & Berman FOCUS Portfolio - Description of Economic
Sectors. . . . . . . . . . . . . . . . . . . . . . . . . 20

PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . 23
Total Return Computations . . . . . . . . . . . . . . . . . . 23
Comparative Information . . . . . . . . . . . . . . . . . . . 25
Other Performance Information . . . . . . . . . . . . . . . . 26

CERTAIN RISK CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . 27

TRUSTEES AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . 27

INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES . . . . . . . . . . . . 34
Investment Manager and Administrator . . . . . . . . . . . . . 34
Sub-Adviser . . . . . . . . . . . . . . . . . . . . . . . . . 37
Investment Companies Managed . . . . . . . . . . . . . . . . . 38
Management and Control of N&B Management . . . . . . . . . . . 41

DISTRIBUTION ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 42

ADDITIONAL EXCHANGE INFORMATION . . . . . . . . . . . . . . . . . . . . . 43

ADDITIONAL REDEMPTION INFORMATION . . . . . . . . . . . . . . . . . . . . 44

DIVIDENDS AND OTHER DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . 45

ADDITIONAL TAX INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . 46
Taxation of the Funds . . . . . . . . . . . . . . . . . . . . 46
Taxation of the Portfolios . . . . . . . . . . . . . . . . . . 47
Taxation of the Funds' Shareholders . . . . . . . . . . . . . 50

PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . . 57

REPORTS TO SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . 57

- i -
<PAGE>

Page

ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

CUSTODIAN AND TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . 57

INDEPENDENT AUDITORS/ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . 58

LEGAL COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES . . . . . . . . . . . 58

REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 62

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER . . . . . . . 64

Appendix B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
PERFORMANCE DATA . . . . . . . . . . . . . . . . . . . . . . . 67

Appendix C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
THE ART OF INVESTMENT: A CONVERSATION WITH ROY NEUBERGER . . 68

- ii -
<PAGE>

INVESTMENT INFORMATION

Each Fund is a separate series of Neuberger & Berman Equity
Trust ("Trust"), a Delaware business trust that is registered with the
Securities and Exchange Commission ("SEC") as an open-end management
investment company. Each Fund seeks its investment objective by investing
all of its net investable assets in a Portfolio of Equity Managers Trust
("Managers Trust") that has an investment objective identical to, and a
name similar to, that of the Fund. Each Portfolio, in turn, invests in
accordance with an investment objective, policies, and limitations
identical to those of its corresponding Fund. (The Trust and Managers
Trust, which is an open-end management investment company managed by N&B
Management, are together referred to below as the "Trusts.") Prior to
January 1, 1995, the names of Neuberger & Berman FOCUS Trust and Neuberger
& Berman FOCUS Portfolio were Neuberger & Berman Selected Sectors Trust
and Neuberger & Berman Selected Sectors Portfolio, respectively.

The following information supplements the discussion in the
Prospectus of the investment objective, policies, and limitations of each
Fund and Portfolio. The investment objective and, unless otherwise
specified, the investment policies and limitations of each Fund and
Portfolio are not fundamental. Although any investment policy or
limitation that is not fundamental may be changed by the trustees of the
Trust ("Fund Trustees") or of Managers Trust ("Portfolio Trustees")
without shareholder approval, each Fund intends to notify its shareholders
before changing its investment objective or implementing any material
change in any non-fundamental policy or limitation. The fundamental
investment policies and limitations of a Fund or a Portfolio may not be
changed without the approval of the lesser of (1) 67% of the total units
of beneficial interest ("shares") of the Fund or Portfolio represented at
a meeting at which more than 50% of the outstanding Fund or Portfolio
shares are represented or (2) a majority of the outstanding shares of the
Fund or Portfolio. This vote is required by the Investment Company Act of
1940 ("1940 Act") and is referred to in this SAI as a "1940 Act majority
vote." Whenever a Fund is called upon to vote on a change in a
fundamental investment policy or limitation of its corresponding
Portfolio, the Fund casts its votes thereon in proportion to the votes of
its shareholders at a meeting thereof called for that purpose.

INVESTMENT POLICIES AND LIMITATIONS

Each Fund has the following fundamental investment policy, to
enable it to invest in its corresponding Portfolio:

Notwithstanding any other investment policy of the Fund, the
Fund may invest all of its investable assets (cash,
securities, and receivables relating to securities) in an
open-end management investment company having substantially
the same investment objective, policies, and limitations as
the Fund.

All other fundamental investment policies and limitations and
the non-fundamental investment policies and limitations of each Fund and
<PAGE>

its corresponding Portfolio are identical. Therefore, although the
following discusses the investment policies and limitations of the
Portfolios, it applies equally to their corresponding Funds.

Except for the limitation on borrowing and the limitation on
ownership of portfolio securities by officers and trustees, any investment
policy or limitation that involves a maximum percentage of securities or
assets will not be considered to be violated unless the percentage
limitation is exceeded immediately after, and because of, a transaction by
a Portfolio.

The Portfolios' fundamental investment policies and
limitations are as follows:

1. Borrowing. No Portfolio may borrow money, except that
a Portfolio may (i) borrow money from banks for temporary or emergency
purposes and not for leveraging or investment and (ii) enter into reverse
repurchase agreements for any purpose; provided that (i) and (ii) in
combination do not exceed 33-1/3% of the value of its total assets
(including the amount borrowed) less liabilities (other than borrowings).
If at any time borrowings exceed 33-1/3% of the value of a Portfolio's
total assets, that Portfolio will reduce its borrowings within three days
(excluding Sundays and holidays) to the extent necessary to comply with
the 33-1/3% limitation.

2. Commodities. No Portfolio may purchase physical
commodities or contracts thereon, unless acquired as a result of the
ownership of securities or instruments, but this restriction shall not
prohibit a Portfolio from purchasing futures contracts or options
(including options on futures contracts, but excluding options or futures
contracts on physical commodities) or from investing in securities of any
kind.

3. Diversification. No Portfolio may, with respect to 75%
of the value of its total assets, purchase the securities of any issuer
(other than securities issued or guaranteed by the U.S. Government or any
of its agencies or instrumentalities) if, as a result, (i) more than 5% of
the value of the Portfolio's total assets would be invested in the
securities of that issuer or (ii) the Portfolio would hold more than 10%
of the outstanding voting securities of that issuer.

4. Industry Concentration. No Portfolio may purchase any
security if, as a result, 25% or more of its total assets (taken at
current value) would be invested in the securities of issuers having their
principal business activities in the same industry. This limitation does
not apply to securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities.

5. Lending. No Portfolio may lend any security or make
any other loan if, as a result, more than 33-1/3% of its total assets
(taken at current value) would be lent to other parties, except, in

- 2 -
<PAGE>

accordance with its investment objective, policies, and limitations, (i)
through the purchase of a portion of an issue of debt securities or (ii)
by engaging in repurchase agreements.

6. Real Estate. No Portfolio may purchase real estate
unless acquired as a result of the ownership of securities or instruments,
but this restriction shall not prohibit a Portfolio from purchasing
securities issued by entities or investment vehicles that own or deal in
real estate or interests therein or instruments secured by real estate or
interests therein.

7. Senior Securities. No Portfolio may issue senior
securities, except as permitted under the 1940 Act.

8. Underwriting. No Portfolio may underwrite securities
of other issuers, except to the extent that a Portfolio, in disposing of
portfolio securities, may be deemed to be an underwriter within the
meaning of the Securities Act of 1933 ("1933 Act").

The following non-fundamental investment policies and
limitations apply to all Portfolios:

1. Borrowing. No Portfolio may purchase securities if
outstanding borrowings, including any reverse repurchase agreements,
exceed 5% of its total assets.

2. Lending. Except for the purchase of debt securities
and engaging in repurchase agreements, no Portfolio may make any loans
other than securities loans.

3. Investments in Other Investment Companies. No
Portfolio may purchase securities of other investment companies, except to
the extent permitted by the 1940 Act and in the open market at no more
than customary brokerage commission rates. This limitation does not apply
to securities received or acquired as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.

4. Margin Transactions. No Portfolio may purchase
securities on margin from brokers or other lenders, except that a
Portfolio may obtain such short-term credits as are necessary for the
clearance of securities transactions. Margin payments in connection with
transactions in futures contracts and options on futures contracts shall
not constitute the purchase of securities on margin and shall not be
deemed to violate the foregoing limitation.

5. Short Sales. No Portfolio may sell securities short
unless it owns, or has the right to obtain without payment of additional
consideration, securities equivalent in kind and amount to the securities
sold. Transactions in forward contracts, futures contracts and options
shall not constitute selling securities short.

- 3 -
<PAGE>

6. Ownership of Portfolio Securities by Officers and
Trustees. No Portfolio may purchase or retain the securities of any
issuer if, to the knowledge of N&B Management, those officers and trustees
of Managers Trust and officers and directors of N&B Management who each
owns individually more than 1/2 of 1% of the outstanding securities of
such issuer, together own more than 5% of such securities.

7. Unseasoned Issuers. No Portfolio may purchase the
securities of any issuer (other than securities issued or guaranteed by
domestic or foreign governments or political subdivisions thereof) if, as
a result, more than 5% of the Portfolio's total assets would be invested
in the securities of business enterprises that, including predecessors,
have a record of less than three years of continuous operation.

8. Puts, Calls, Straddles, or Spreads. No Portfolio may
invest in puts, calls, straddles, spreads, or any combination thereof,
except that each Portfolio may (i) write (sell) covered call options
against portfolio securities having a market value not exceeding 10% of
its net assets and (ii) purchase call options in related closing transac-
tions. The Portfolios do not construe the foregoing limitation to pre-
clude them from purchasing or writing options on futures contracts or from
purchasing securities with rights to put the securities to the issuer or a
guarantor.

9. Illiquid Securities. No Portfolio may purchase any
security if, as a result, more than 10% (5% in the case of Neuberger &
Berman GENESIS Portfolio) of its net assets would be invested in illiquid
securities. Illiquid securities include securities that cannot be sold
within seven days in the ordinary course of business for approximately the
amount at which the Portfolio has valued the securities, such as
repurchase agreements maturing in more than seven days.

10. Foreign Securities. No Portfolio may invest more than
10% of the value of its total assets in securities of foreign issuers,
provided that this limitation shall not apply to foreign securities
denominated in U.S. dollars, including American Depositary Receipts
("ADRs").

11. Oil and Gas Programs. No Portfolio may invest in
participations or other direct interests in oil, gas, or other mineral
leases or exploration or development programs, but each Portfolio may
purchase securities of companies that own interests in any of the
foregoing.

12. Real Estate. No Portfolio may purchase or sell real
property (including interests in real estate limited partnerships, but
excluding readily marketable interests in real estate investment trusts
and readily marketable securities of companies that invest in real
estate); provided that no Portfolio may purchase any security if, as a
result, more than 10% of its total assets would be invested in securities
of real estate investment trusts.

- 4 -
<PAGE>

In addition to the foregoing non-fundamental investment
policies and limitations, which apply to each Portfolio, the following
non-fundamental investment policies and limitations apply to the indicated
Portfolios:

13. Investments in Any One Issuer (Neuberger & Berman
GENESIS, Neuberger & Berman FOCUS, and Neuberger & Berman GUARDIAN
Portfolios). None of these Portfolios may purchase the securities of any
one issuer (other than securities issued or guaranteed by the U.S.
Government or any of its agencies or instrumentalities) if, as a result,
more than 5% of the Portfolio's total assets would be invested in the
securities of that issuer.

14. Warrants (Neuberger & Berman GENESIS, Neuberger &
Berman FOCUS, and Neuberger & Berman GUARDIAN Portfolios). None of these
Portfolios may invest more than 5% of its net assets in warrants,
including warrants that are not listed on the New York Stock Exchange
("NYSE") or American Stock Exchange ("AmEx"), or more than 2% of its net
assets in such unlisted warrants. For purposes of this limitation,
warrants are valued at the lower of cost or market value, and warrants
acquired by a Portfolio in units or attached to securities may be deemed
to be without value.

15. Pledging (Neuberger & Berman GENESIS and Neuberger &
Berman GUARDIAN Portfolios). Neither of these Portfolios may pledge or
hypothecate any of its assets, except that (i) for Neuberger & Berman
GENESIS Portfolio, this limitation does not apply to the deposit of
portfolio securities as collateral in connection with short sales against-
the-box, and the Portfolio may pledge or hypothecate up to 15% of its
total assets to collateralize a borrowing permitted under fundamental
policy 1 above or a letter of credit issued for a purpose set forth in
that policy and (ii) each Portfolio may pledge or hypothecate up to 5% of
its total assets in connection with its entry into any agreement or
arrangement pursuant to which a bank furnishes a letter of credit to
collateralize a capital commitment made by the Portfolio to a mutual
insurance company of which the Portfolio is a member.

16. Sector Concentration (Neuberger & Berman FOCUS
Portfolio). This Portfolio may not invest more than 50% of its total
assets in any one economic sector.

Each Portfolio, as an operating policy, does not intend to
invest in futures contracts and options thereon during the coming year.

MARK R. GOLDSTEIN, PORTFOLIO MANAGER OF NEUBERGER & BERMAN MANHATTAN
PORTFOLIO

Neuberger & Berman MANHATTAN Portfolio's objective is capital
appreciation, without regard to income. "The Portfolio differs from the
other Portfolios in its willingness to invest in stocks with

- 5 -
<PAGE>

price/earnings ratios or price-to-cash-flow ratios that are reasonable
relative to a company's growth prospects and that of the general market,"
says Mark Goldstein, its portfolio manager. Mr. Goldstein has
consistently followed this approach as a portfolio manager at N&B
Management. He looks for stocks of financially sound companies with a
special market capability, a competitive advantage or a product that makes
them particularly attractive over the long term, but likes to purchase
them at a reasonable price relative to their growth rates. Mr. Goldstein
calls this approach "GARP" -- growth at a reasonable price. "An investor
shouldn't try to beat the market by trading funds like stocks. The
hardest thing to do -- but the best thing to do -- is to put in some money
when the market is down and keep it there. That's how one really builds
wealth over the long term -- a mutual fund is a great long-term
investment."

"We view value both on a relative and an absolute basis, so
we may buy stocks with somewhat above-market historical growth rates," Mr.
Goldstein explains. "We also tend to stay more fully invested when we
think the market is attractive for quality growth companies. But we will
get out of stocks and into cash when we think there are no reasonable
values available."

JUDITH M. VALE, PORTFOLIO MANAGER OF NEUBERGER & BERMAN GENESIS PORTFOLIO

The predecessor of Neuberger & Berman GENESIS Fund (which,
like Neuberger & Berman GENESIS Trust, invests all its net investable
assets in Neuberger & Berman GENESIS Portfolio) was established in 1988.
A long-term growth fund dedicated to small capitalization stocks
(companies with total market value of outstanding capital stock of less
than $750 million), Neuberger & Berman GENESIS Portfolio is devoted to the
same value principles as the other equity funds managed by N&B Management.
"Neuberger & Berman GENESIS Portfolio buys stocks that we believe are
currently undervalued, unlike small capitalization stock funds offered by
many other firms, which look for companies whose earnings reflect future
developments," says its portfolio manager Judith Vale.

"Many people think that small capitalization stock funds are
predominantly invested in high-risk, high-tech companies. Not Neuberger &
Berman GENESIS Portfolio. We look for the same fundamentals in small
capitalization stocks as our other funds look for in stocks of larger
companies. We stick to the areas we understand. I'm looking for the most
persistent earnings growth at the lowest multiple." Ms. Vale looks for
well-established companies with entrepreneurial management and sound
finances. She also looks for catalysts to exposing value, such as
management changes and new product lines. Often, these are firms that
have suffered temporary setbacks or undergone a restructuring.

Why a small capitalization stock fund? Research has
demonstrated that, over the last 30 years, smaller capitalization stocks

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<PAGE>

as a group have outperformed larger capitalization stocks two-thirds of
the time.1/ Ms. Vale points out, "This Portfolio offers the ability to
share in the growth potential of small capitalization stocks."

KENT C. SIMONS AND LAWRENCE MARX III, PORTFOLIO MANAGERS OF NEUBERGER &
BERMAN FOCUS AND NEUBERGER & BERMAN GUARDIAN PORTFOLIOS

These Portfolios are managed by two veterans of N&B Manage-
ment who have consistently followed their value-oriented philosophy over
many years: Kent Simons and Larry Marx.

Neuberger & Berman FOCUS Portfolio's investment objective is
long-term capital appreciation. Like the other Portfolios that use a
value-oriented investment approach, it seeks to buy undervalued securities
that offer opportunities for growth, but then focuses its assets in those
sectors where undervalued stocks are clustered. "We begin by looking for
stocks that are selling for less than we think they're worth, a 'bottom-up
approach'" says Mr. Simons. "More often than not, such stocks are in a
few economic sectors that are out of favor and are undervalued as a group.
I think 90% of cheap stocks deserve to be cheap. My job is to find the
10% that don't."

"We don't pick sectors for Neuberger & Berman FOCUS Portfolio
based on our perception of how the economy is going to do. Nor do we
engage in making economic or currency predictions. We look for stocks
with either low relative or low absolute valuations," explains Mr. Marx.
"Often, these stocks will be found in a particular sector, but we didn't
start out being bullish on that sector. It's just where we happened to
find the values. We find that if one company comes under a cloud, it
tends to happen to its whole industry. If an investment manager rotated
the sectors in a portfolio by buying sectors when they are undervalued and
selling them when they become fully valued, the manager would be able to
achieve above-average performance."

Neuberger & Berman GUARDIAN Portfolio subscribes to the same
stock-picking philosophy followed since 1950, when Roy R. Neuberger
founded the predecessor of Neuberger & Berman GUARDIAN Fund, which, like
Neuberger & Berman GUARDIAN Trust, invests all its net investable assets
in Neuberger & Berman GUARDIAN Portfolio.

1/ Source: Ibbotson and Sinquefield.

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<PAGE>

have paid a dividend every quarter and a capital gain distribution every
year since 1950. Of course, there can be no assurance that this trend
will continue.

Both Mr. Simons and Mr. Marx place a high premium on being
knowledgeable about the companies whose stocks they buy for Neuberger &
Berman GUARDIAN Portfolio. That knowledge is important, because sometimes
it takes courage to buy stocks that the rest of the market has forsaken.
Says Mr. Marx, "We're usually early in and early out. We'd rather buy an
undervalued stock because we expect it to become fairly valued than buy
one fairly valued and hope it becomes overvalued. We like a stock 'under
a rock' or with a cloud over it; you are not going to get great companies
at great valuations when the market perception is great."

"People who switch around a lot are not going to benefit from
our approach. They're following the market -- we're looking at
fundamentals."

MICHAEL M. KASSEN AND ROBERT I. GENDELMAN, PORTFOLIO MANAGERS OF NEUBERGER
& BERMAN PARTNERS PORTFOLIO

"Neuberger & Berman PARTNERS Portfolio's objective is capital
growth," say its portfolio managers Michael Kassen and Robert Gendelman.
"We want to make money in good markets and not give up those gains during
rough times."

"Our investors seek consistent performance and have a
moderate risk tolerance. They do know, however, that stock investments
can provide the long-term upside potential essential to meeting their
long-term investment goals, particularly a comfortable retirement and
planning for a college education."

"We look for stocks that are undervalued in the marketplace
either in relation to strong current fundamentals, such as low price-to-
earnings ratios, consistent cash flow, and support from asset values, or
in relation to the growth of their future earnings, as projected by N&B
Management. If the market goes down, those stocks we elect to hold,
historically, go down less."

The co-portfolio managers monitor stocks of medium- to large-
sized companies that often are not closely scrutinized by other investors.
The managers research these companies in order to determine if they will
produce a new product, become an acquisition target, or undergo a
financial restructuring.

What else catches Mr. Kassen's and Mr. Gendelman's eyes? "We
like managements that own their own stock. These companies usually seek
to build shareholder wealth by buying back shares or making acquisitions
that have a swift and positive impact on the bottom line."

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<PAGE>

To increase the upside potential, the managers zero in on
companies that dominate their industries or their specialized niches.
Their reasoning? "Market leaders tend to earn higher levels of profits."

Neuberger & Berman PARTNERS Portfolio invests in a wide array
of stocks, and no single stock makes up more than a small fraction of the
Portfolio's total assets. Of course, the Portfolio's holdings are subject
to change.

Additional Investment Information

Some or all of the Portfolios, as indicated below, may make
the following investments, among others, although they may not buy all of
the types of securities or use all of the investment techniques that are
described.

Repurchase Agreements (All Portfolios). Repurchase
agreements are agreements under which a Portfolio purchases securities
from a bank that is a member of the Federal Reserve System or from a
securities dealer that agrees to repurchase the securities from the
Portfolio at a higher price on a designated future date. Repurchase
agreements generally are for a short period of time, usually less than a
week. No Portfolio may enter into a repurchase agreement with a maturity
of more than seven days if, as a result, more than 10% (5% in the case of
Neuberger & Berman GENESIS Portfolio) of the value of its net assets would
then be invested in such repurchase agreements and other illiquid
securities. A Portfolio may enter into a repurchase agreement only if
(1) the underlying securities are of the type that the Portfolio's
investment policies and limitations would allow it to purchase directly,
(2) the market value of the underlying securities, including accrued
interest, at all times equals or exceeds the value of the repurchase
agreement, and (3) payment for the underlying securities is made only upon
satisfactory evidence that the securities are being held for the
Portfolio's account by its custodian or a bank acting as the Portfolio's
agent.

Securities Loans (All Portfolios). In order to realize
income, each Portfolio may lend portfolio securities with a value not
exceeding 33-1/3% of its total assets to banks, brokerage firms, or
institutional investors judged creditworthy by N&B Management. Borrowers
are required continuously to secure their obligations to return securities
on loan from the Portfolio by depositing collateral in a form determined
to be satisfactory by the Portfolio Trustees. The collateral, which must
be marked to market daily, must be equal to at least 100% of the market
value of the loaned securities, which will also be marked to market daily.
N&B Management believes the risk of loss on these transactions is slight
because, if a borrower were to default for any reason, the collateral

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<PAGE>

should satisfy the obligation. However, as with other extensions of
secured credit, loans of portfolio securities involve some risk of loss of
rights in the collateral should the borrower fail financially.

Restricted Securities and Rule 144A Securities (All
Portfolios). Each Portfolio may invest in restricted securities, which
are securities that may not be sold to the public without an effective
registration statement under the 1933 Act or, if they are unregistered,
may be sold only in a privately negotiated transaction or pursuant to an
exemption from registration. In recognition of the increased size and
liquidity of the institutional market for unregistered securities and the
importance of institutional investors in the formation of capital, the SEC
has adopted Rule 144A under the 1933 Act. Rule 144A is designed further
to facilitate efficient trading among institutional investors by
permitting the sale of certain unregistered securities to qualified
institutional buyers. To the extent privately placed securities held by a
Portfolio qualify under Rule 144A, and an institutional market develops
for those securities, the Portfolio likely will be able to dispose of the
securities without registering them under the 1933 Act. To the extent
that institutional buyers become, for a time, uninterested in purchasing
these securities, investing in Rule 144A securities could increase the
level of a Portfolio's illiquidity. N&B Management, acting under guide-
lines established by the Portfolio Trustees, may determine that certain
securities qualified for trading under Rule 144A are liquid. Foreign
securities that can be freely sold in the markets in which they are
principally traded are not considered to be restricted. Regulation S
under the 1933 Act permits the sale abroad of securities that are not
registered for sale in the United States.

Where registration is required, a Portfolio may be obligated
to pay all or part of the registration expenses, and a considerable period
may elapse between the decision to sell and the time the Portfolio may be
permitted to sell a security under an effective registration statement.
If, during such a period, adverse market conditions were to develop, the
Portfolio might obtain a less favorable price than prevailed when it
decided to sell. To the extent privately placed securities, including
Rule 144A securities, are illiquid, purchases thereof will be subject to
each Portfolio's 10% (5% in the case of Neuberger & Berman GENESIS Port-
folio) limit on investments in illiquid securities. Restricted securities
for which no market exists are priced at fair value as determined in
accordance with procedures approved and periodically reviewed by the
Portfolio Trustees.

Reverse Repurchase Agreements (All Portfolios). In a reverse
repurchase agreement, a Portfolio sells portfolio securities subject to
its agreement to repurchase the securities at a later date for a fixed
price reflecting a market rate of interest; these agreements are
considered borrowings for purposes of the Portfolios' investment policies
and limitations concerning borrowings. While a reverse repurchase
agreement is outstanding, a Portfolio will maintain with its custodian in
a segregated account cash, U.S. Government or Agency Securities, or other

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<PAGE>

liquid, high-grade debt securities, marked to market daily, in an amount
at least equal to the Portfolio's obligations under the agreement. There
is a risk that the contra-party to a reverse repurchase agreement will be
unable or unwilling to complete the transaction as scheduled, which may
result in losses to the Portfolio.

Foreign Securities (All Portfolios). Each Portfolio may
invest in U.S. dollar-denominated securities issued by foreign issuers
(including banks, governments, and quasi-governmental organizations) and
foreign branches of U.S. banks, including negotiable certificates of depo-
sit ("CDs"), bankers' acceptances and commercial paper. These investments
are subject to each Portfolio's quality standards. While investments in
foreign securities are intended to reduce risk by providing further diver-
sification, such investments involve sovereign and other risks, in
addition to the credit and market risks normally associated with domestic
securities. These additional risks include the possibility of adverse
political and economic developments (including political instability) and
the potentially adverse effects of unavailability of public information
regarding issuers, less governmental supervision and regulation of
financial markets, reduced liquidity of certain financial markets, and the
lack of uniform accounting, auditing, and financial standards or the
application of standards that are different or less stringent than those
applied in the United States.

Each Portfolio also may invest in equity, debt, or other
income-producing securities that are denominated in or indexed to foreign
currencies, including (1) common and preferred stocks, (2) CDs, commercial
paper, fixed time deposits, and bankers' acceptances issued by foreign
banks, (3) obligations of other corporations, and (4) obligations of
foreign governments or their subdivisions, agencies, and instrumentali-
ties, international agencies, and supranational entities. Investing in
foreign currency denominated securities includes the special risks asso-
ciated with investing in non-U.S. issuers described in the preceding
paragraph and the additional risks of (1) adverse changes in foreign
exchange rates, (2) nationalization, expropriation, or confiscatory taxa-
tion, (3) adverse changes in investment or exchange control regulations
(which could prevent cash from being brought back to the United States),
and (4) expropriation or nationalization of foreign portfolio companies.
Additionally, dividends and interest payable on foreign securities may be
subject to foreign taxes, including taxes withheld from those payments.
Commissions on foreign securities exchanges are often at fixed rates and
are generally higher than negotiated commissions on U.S. exchanges,
although the Portfolios endeavor to achieve the most favorable net results
on portfolio transactions. Each Portfolio may invest only in securities
of issuers in countries whose governments are considered stable by N&B
Management.

Foreign securities often trade with less frequency and in
less volume than domestic securities and therefore may exhibit greater

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<PAGE>

price volatility. Additional costs associated with an investment in
foreign securities may include higher custodial fees than apply to
domestic custody arrangements, and transaction costs of foreign currency
conversions.

Prices of foreign securities and exchange rates for foreign
currencies may be affected by the interest rates prevailing in other
countries. Interest rates in other countries are often affected by local
factors, including the strength of the local economy, the demand for
borrowing, the government's fiscal and monetary policies, and the
international balance of payments. Individual foreign economies may
differ favorably or unfavorably from the U.S. economy in such respects as
growth of gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency, and balance of payments position.

Foreign markets also have different clearance and settlement
procedures, and, in certain markets, there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Such
delays in settlement could result in temporary periods when a portion of
the assets of a Portfolio are uninvested and no return is earned thereon.
The inability of a Portfolio to make intended security purchases due to
settlement problems could cause the Portfolio to miss attractive
investment opportunities. Inability to dispose of portfolio securities
due to settlement problems could result in losses to a Portfolio due to
subsequent declines in value of the portfolio securities, or, if the
Portfolio has entered into a contract to sell the securities, could result
in possible liability to the purchaser.

In order to limit the risk inherent in investing in foreign
currency denominated securities, a Portfolio may not purchase any such
security if, after such purchase, more than 10% of its total assets (taken
at market value) would be invested in foreign currency denominated securi-
ties. Within that limitation, however, no Portfolio is restricted in the
amount it may invest in securities denominated in any one foreign
currency.

Covered Call Options (All Portfolios). Each Portfolio may
write or purchase covered call options on securities it owns valued at up
to 10% of its net assets. Generally, the purpose of writing and
purchasing these options is to reduce the effect of price fluctuations of
securities held by the Portfolio on the Portfolio's and its corresponding
Fund's net asset values ("NAVs"). Portfolio securities on which call
options may be written and purchased by a Portfolio are purchased solely
on the basis of investment considerations consistent with the Portfolio's
investment objec
tive.

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<PAGE>

When a Portfolio writes a call option, it is obligated to
sell a security to a purchaser at a specified price at any time the
purchaser requests until a certain date, and receives a premium for
writing the call option. So long as the obligation of the call option
continues, the Portfolio may be assigned an exercise notice, requiring it
to deliver the underlying security against payment of the exercise price.
The Portfolio may be obligated to deliver securities underlying an option
at less than the market price, thereby giving up any additional gain on
the security.

Each Portfolio writes only "covered" call options on
securities it owns. The writing of covered call options is a conservative
investment technique that is believed to involve relatively little risk
(in contrast to the writing of "naked" or uncovered call options, which
the Portfolios will not do), but is capable of enhancing the Portfolios'
total return. When writing a covered call option, a Portfolio, in return
for the premium, gives up the opportunity for profit from a price increase
in the underlying security above the exercise price, but conversely
retains the risk of loss should the price of the security decline.

If a call option that a Portfolio has written expires
unexercised, the Portfolio will realize a gain in the amount of the
premium; however, that gain may be offset by a decline in the market value
of the underlying security during the option period. If the call option
is exercised, the Portfolio will realize a gain or loss from the sale of
the underlying security.

When a Portfolio purchases a call option, it pays a premium
for the right to purchase a security from the writer at a specified price
until a specified date. A Portfolio would purchase a call option to
offset a previously written call option.

The obligation under any option terminates upon expiration of
the option or, at an earlier time, when the writer offsets the option by
entering into a "closing purchase transaction" to purchase an option of
the same series. If an option is purchased by the Portfolio and is never
exercised, the Portfolio will lose the entire amount of the premium paid.

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<PAGE>

prior to its expiration only by entering into a closing purchase
transaction with the dealer to whom the Portfolio originally sold the
option. There can be no assurance that the Portfolio would be able to
liquidate an OTC option at any time prior to expiration. Unless a
Portfolio is able to effect a closing purchase transaction in a covered
OTC call option it has written, it will not be able to liquidate
securities used as cover until the option expires or is exercised or until
different cover is substituted. In the event of the counter-party's
insolvency, a Portfolio may be unable to liquidate its options position
and the associated cover. N&B Management monitors the creditworthiness of
dealers with which a Portfolio may engage in OTC options transactions, and
limits the Portfolios' counter-parties in such transactions to dealers
with a net worth of at least $20 million as reported in their latest
financial statements.

The assets used as cover for OTC options written by a
Portfolio will be considered illiquid unless the OTC options are sold to
qualified dealers who agree that the Portfolio may repurchase any OTC
option it writes at a maximum price to be calculated by a formula set
forth in the option agreement. The cover for an OTC call option written
subject to this procedure will be considered illiquid only to the extent
that the maximum repurchase price under the formula exceeds the intrinsic
value of the option.

The premium received (or paid) by the Portfolio when it
writes (or purchases) an option is the amount at which the option is
currently traded on the applicable exchange, less (or plus) a commission.
The premium may reflect, among other things, the current market price of
the underlying security, the relationship of the exercise price to the
market price, the historical price volatility of the underlying security,
the length of the option period, the general supply of and demand for
credit, and the general interest rate environment. The premium received
by the Portfolio for writing an option is recorded as a liability on the
Portfolio's statement of assets and liabilities. This liability is
adjusted daily to the option's current market value, which is the sales
price on the option's last reported trade on that day before the time the
Portfolio's NAV is computed or, in the absence of any trades thereof on
that day, the mean between the closing bid and ask prices.

Closing transactions are effected in order to realize a
profit on an outstanding option, to prevent an underlying security from
being called, or to permit the sale or the put of the underlying security.
If any Portfolio desires to sell a security on which it has written a call
option, it will seek to effect a closing transaction prior to, or
concurrently with, the sale of the security. There is, of course, no
assurance that a Portfolio will be able to effect closing transactions at
favorable prices. If a Portfolio cannot enter into such a transaction, it
may be required to hold a security that it might otherwise have sold, in
which case it would continue to be at market risk on the security.

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<PAGE>

A Portfolio will realize a profit or loss from a closing
purchase transaction if the cost of the transaction is less or more than
the premium received from writing the call option. However, because
increases in the market price of a call option generally reflect increases
in the market price of the underlying security, any loss resulting from
the repurchase of a call option is likely to be offset in whole or in part
by appreciation of the underlying security owned by the Portfolio.

A Portfolio pays brokerage commissions in connection with
purchasing or writing options, including those used to close out existing
positions. These brokerage commissions normally are higher than those
applicable to purchases and sales of portfolio securities.

Forward Foreign Currency Contracts (All Portfolios). Each
Portfolio may enter into contracts for the purchase or sale of a specific
currency at a future date at a fixed price ("forward contracts") in
amounts not exceeding 5% of its net assets. The Portfolios enter into
forward contracts in an attempt to hedge against expected changes in
prevailing currency exchange rates. The Portfolios do not engage in
transactions in forward contracts for speculation; they view investments
in forward contracts as a means of establishing more definitely the effec-
tive return on securities denominated in foreign currencies that are held
or intended to be acquired by them. Forward contract transactions include
forward sales or purchases of foreign currencies for the purpose of pro-
tecting the U.S. dollar value of securities held or to be acquired by a
Portfolio or protecting the U.S. dollar equivalent of dividends, interest,
or other payments on those securities.

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<PAGE>

rise in the U.S. dollar against foreign currencies. However, a hedge or
cross-hedge cannot protect against exchange rate risks perfectly, and, if
N&B Management is incorrect in its judgment of future exchange rate
relationships, a Portfolio could be in a less advantageous position than
if such a hedge had not been established. In addition, because forward
contracts are not traded on an exchange, the assets used to cover such
contracts may be illiquid.

Options on Foreign Currencies (All Portfolios). Each
Portfolio may write and purchase covered call and put options on foreign
currencies, in amounts not exceeding 5% of its net assets. A Portfolio
would engage in such transactions to protect against declines in the U.S.
dollar value of portfolio securities or increases in the U.S. dollar cost
of securities to be acquired, or to protect the U.S. dollar equivalent of
dividends, interest, or other payments on those securities. As with other
types of options, however, writing an option on foreign currency
constitutes only a partial hedge, up to the amount of the premium
received, and a Portfolio could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses.
The risks of currency options are similar to the risks of other options,
discussed herein. Certain options on foreign currencies are traded on the
OTC market and involve liquidity and credit risks that may not be present
in the case of exchange-traded currency options. To the extent a
Portfolio writes options on foreign currencies that are traded on an
exchange regulated by the Commodity Futures Trading Commission ("CFTC")
other than for bona fide hedging purposes (as defined by the CFTC), the
aggregate initial margin and premiums on those positions (excluding the
amount by which options are "in-the-money") may not exceed 5% of the
Portfolio's net assets.

GENERAL CONSIDERATIONS INVOLVING OPTIONS AND FORWARD CONTRACTS
(COLLECTIVELY, "HEDGING INSTRUMENTS")

Risks Involved in Using Hedging Instruments. The primary
risks in using Hedging Instruments are (1) imperfect correlation or no
correlation between changes in market value of the securities held or to
be acquired by a Portfolio and changes in market value of Hedging
Instruments; (2) possible lack of a liquid secondary market for Hedging
Instruments and the resulting inability to close out Hedging Instruments
when desired; (3) the fact that the skills needed to use Hedging Instru-
ments are different from those needed to select a Portfolio's securities;
(4) the fact that, although use of these instruments for hedging purposes
can reduce the risk of loss, they also can reduce the opportunity for
gain, or even result in losses, by offsetting favorable price movements in
hedged investments; and (5) the possible inability of a Portfolio to
purchase or sell a portfolio security at a time that would otherwise be
favorable for it to do so, or the possible need for a Portfolio to sell a
portfolio security at a disadvantageous time, due to its need to maintain
"cover" or to segregate securities in connection with its use of Hedging
Instruments. N&B Management intends to reduce the risk of imperfect
correlation by investing only in Hedging Instruments whose behavior is

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<PAGE>

expected to resemble that of a Portfolio's underlying securities. N&B
Management intends to reduce the risk that a Portfolio will be unable to
close out Hedging Instruments by entering into such transactions only if
N&B Management believes there will be an active and liquid secondary
market. Hedging Instruments used by the Portfolios are generally
considered "derivatives." There can be no assurance that a Portfolio's
use of Hedging Instruments will be successful.

The Portfolios' use of Hedging Instruments may be limited by
the requirements of the Internal Revenue Code of 1986, as amended
("Code"), that apply to each Fund for qualification as a regulated
investment company ("RIC"). See "Additional Tax Information."

Cover for Hedging Instruments. Each Portfolio will comply
with SEC guidelines regarding cover for Hedging Instruments and, if the
guidelines so require, set aside in a segregated account with its
custodian cash, U.S. Government or Agency Securities, or other liquid,
high-grade debt securities in the prescribed amount. Securities held in a
segregated account cannot be sold while the option or forward strategy
covered by those securities is outstanding, unless they are replaced with
other suitable assets. As a result, segregation of a large percentage of
a Portfolio's assets could impede portfolio management or the Portfolio's
ability to meet current obligations. A Portfolio may be unable promptly
to dispose of assets which cover, or are segregated with respect to, an
illiquid option or forward position; this inability may result in a loss
to the Portfolio.

Fixed Income Securities (All Portfolios). While the emphasis
of the Portfolios' investment programs is on common stocks and other
equity securities (including preferred stocks and securities convertible
into or exchangeable for common stocks), the Portfolios may also invest in
money market instruments, U.S. Government or Agency Securities, and other
fixed income securities. Each Portfolio may invest in corporate bonds and
debentures receiving one of the four highest ratings from Standard &
Poor's ("S&P"), Moody's Investors Service, Inc. ("Moody's"), or any other
nationally recognized statistical rating organization ("NRSRO"), or, if
not rated by any NRSRO, deemed comparable by N&B Management to such rated
securities ("Comparable Unrated Securities"). In addition, Neuberger &
Berman PARTNERS Portfolio may invest up to 15% of its net assets in
corporate debt securities rated below investment grade or Comparable
Unrated Securities. The ratings of an NRSRO represent its opinion as to
the quality of securities it undertakes to rate. Ratings are not absolute
standards of quality; consequently, securities with the same maturity,
coupon, and rating may have different yields. The Portfolios rely
primarily on ratings assigned by S&P and Moody's, which are described in
Appendix A to this SAI.

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<PAGE>

Fixed income securities are subject to the risk of an
issuer's inability to meet principal and interest payments on its
obligations ("credit risk") and are subject to price volatility due to
such factors as interest rate sensitivity, market perception of the
creditworthiness of the issuer, and general market liquidity ("market
risk"). Lower-rated securities are more likely to react to developments
affecting market and credit risk than are more highly rated securities,
which react primarily to movements in the general level of interest rates.
Debt securities in the lowest rating categories may involve a substantial
risk of default or may be in default. Changes in economic conditions or
developments regarding the individual issuer are more likely to cause
price volatility and weaken the capacity of the issuer of such securities
to make principal and interest payments than is the case for higher-grade
debt securities. An economic downturn affecting the issuer may result in
an increased incidence of default. The market for lower-rated securities
may be thinner and less active than for higher-rated securities. Pricing
of thinly traded securities requires greater judgment than pricing of
securities for which market transactions are regularly reported. N&B
Management will invest in such securities only when it concludes that the
anticipated return to Neuberger & Berman PARTNERS Portfolio and its
corresponding Fund on such an investment warrants exposure to the
additional level of risk.

Subsequent to its purchase by a Portfolio, an issue of debt
securities may cease to be rated or its rating may be reduced, so that the
securities would not be eligible for purchase by that Portfolio. In such
a case, N&B Management will engage in an orderly disposition of the
downgraded securities to the extent necessary to ensure that the
Portfolio's holdings of such securities will not exceed 5% of its net
assets.

Commercial Paper (All Portfolios). Commercial paper is a
short-term debt security issued by a corporation or bank for purposes such
as financing current operations. The Portfolios may invest only in
commercial paper receiving the highest rating from S&P (A-1) or Moody's
(P-1), or deemed by N&B Management to be of equivalent quality.

Each Portfolio may invest in commercial paper that cannot be
resold to the public without an effective registration statement under the
1933 Act. While restricted commercial paper normally is deemed illiquid,
N&B Management may in certain cases determine that such paper is liquid,
pursuant to guidelines established by the Portfolio Trustees.

Zero Coupon Securities (Neuberger & Berman PARTNERS
Portfolio). This Portfolio may invest up to 5% of its net assets in zero
coupon securities, which are debt obligations that do not entitle the
holder to any periodic payment of interest prior to maturity or that

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<PAGE>

specify a future date when the securities begin to pay current interest.
Zero coupon securities are issued and traded at a discount from their face
amount or par value. This discount varies depending on prevailing
interest rates, the time remaining until cash payments begin, the
liquidity of the security, and the perceived credit quality of the issuer.

The discount on zero coupon securities ("original issue dis-
count") is taken into account by the Portfolio prior to the receipt of any
actual payments. Because Neuberger & Berman PARTNERS Trust must
distribute substantially all of its income (including its pro rata share
of the Portfolio's original issue discount) to its shareholders each year
for income and excise tax purposes (see "Additional Tax Information --
Taxation of the Funds"), the Portfolio may have to dispose of portfolio
securities under disadvantageous circumstances to generate cash, or may be
required to borrow, to satisfy the corresponding Fund's distribution
requirements.

The market prices of zero coupon securities generally are
more volatile than the prices of securities that pay interest periodi-
cally. Zero coupon securities are likely to respond to changes in
interest rates to a greater degree than other types of debt securities
having similar maturities and credit quality.

Convertible Securities (All Portfolios). The Portfolios may
invest in convertible securities. A convertible security entitles the
holder to receive interest paid or accrued on debt or the dividend paid on
preferred stock until the convertible security matures or is redeemed,
converted or exchanged. Before conversion, such securities ordinarily
provide a stream of income with generally higher yields than common stocks
of the same or similar issuers, but lower than the yield on non-
convertible debt. Convertible securities are usually subordinated to
comparable-tier non-convertible securities but rank senior to common stock
in a corporation's capital structure. The value of a convertible security
is a function of (1) its yield in comparison to the yields of other
securities of comparable maturity and quality that do not have a
conversion privilege and (2) its worth if converted into the underlying
common stock.

Convertible securities are typically issued by smaller
capitalization companies whose stock prices may be volatile. The price of
a convertible security often reflects variations in the price of the
underlying common stock in a way that non-convertible debt does not. A
convertible security may be subject to redemption at the option of the
issuer at a price established in the security's governing instrument. If
a convertible security held by a Portfolio is called for redemption, the
Portfolio will be required to convert it into the underlying common stock,
sell it to a third party or permit the issuer to redeem the security. Any

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<PAGE>

of these actions could have an adverse effect on the Portfolio's and the
corresponding Fund's ability to achieve their investment objectives.

Preferred Stock (All Portfolios). The Portfolios may invest
in preferred stock. Unlike interest payments on debt securities,
dividends on preferred stock are generally payable at the discretion of
the issuer's board of directors, although preferred shareholders may have
certain rights if dividends are not paid. Shareholders may suffer a loss
of value if dividends are not paid and generally have no legal recourse
against the issuer. The market prices of preferred stocks are generally
more sensitive to changes in the issuer's creditworthiness than are the
prices of debt securities.

NEUBERGER & BERMAN FOCUS PORTFOLIO - DESCRIPTION OF ECONOMIC SECTORS.

Neuberger & Berman FOCUS Portfolio seeks to achieve its
investment objective by investing principally in common stocks in the
following thirteen multi-industry economic sectors, normally concentrating
at least 90% of its investments in not more than six such sectors:

(1) AUTOS AND HOUSING SECTOR: Companies engaged in design,
production, or sale of automobiles, automobile parts, mobile homes, or
related products ("automobile industries") or design, construction,
renovation, or refurbishing of residential dwellings. The value of
securities of companies in the automobile industries is affected by, among
other things, foreign competition, the level of consumer confidence and
consumer debt, and installment loan rates. The housing construction
industry may be affected by the level of consumer confidence and consumer
debt, mortgage rates, tax laws, and the inflation outlook.

(2) CONSUMER GOODS AND SERVICES SECTOR: Companies engaged in
providing consumer goods or services, including design, processing,
production, sale, or storage of packaged, canned, bottled, or frozen foods
and beverages and design, production, or sale of home furnishings,
appliances, clothing, accessories, cosmetics, or perfumes. Certain of
these companies are subject to government regulation affecting the use of
various food additives and production methods, which could affect
profitability. Also, the success of food- and fashion-related products
may be strongly affected by fads, marketing campaigns, health concerns,
and other factors affecting supply and demand.

(3) DEFENSE AND AEROSPACE SECTOR: Companies engaged in research,
manufacture, or sale of products or services related to the defense or
aerospace industries, including air transport; data processing or
computer-related services; communications systems; military weapons or
transportation; general aviation equipment, missiles, space launch
vehicles, or spacecraft; machinery for guidance, propulsion, or control of
flight vehicles; and airborne or ground-based equipment essential to the
test, operation, or maintenance of flight vehicles. Because these
companies rely largely on U.S. (and foreign) governmental demand for their

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<PAGE>

products and services, their financial conditions are heavily influenced
by defense spending policies.

(4) ENERGY SECTOR: Companies involved in the production,
transmission, or marketing of energy from oil, gas, or coal, as well as
nuclear, geothermal, oil shale, or solar sources of energy (but excluding
public utility companies). Also included are companies that provide
component products or services for those activities. The value of these
companies' securities varies based on the price and supply of energy fuels
and may be affected by international politics, energy conservation, the
success of exploration projects, environmental considerations, and the tax
and other regulatory policies of various governments.

(5) FINANCIAL SERVICES SECTOR: Companies providing financial
services to consumers or industry, including commercial banks and savings
and loan associations, consumer and industrial finance companies,
securities brokerage companies, leasing companies, and insurance
companies. These companies are subject to extensive governmental
regulations. Their profitability may fluctuate significantly as a result
of volatile interest rates, concerns about particular banks and savings
institutions, and general economic conditions.

(6) HEALTH CARE SECTOR: Companies engaged in design, manu-
facture, or sale of products or services used in connection with the
provision of health care, including pharmaceutical companies; firms that
design, manufacture, sell, or supply medical, dental, or optical products,
hardware, or services; companies involved in biotechnology, medical
diagnostic, or biochemical research and development; and companies that
operate health care facilities. Many of these companies are subject to
government regulation and potential health care reforms, which could
affect the price and availability of their products and services. Also,
products and services of these companies could quickly become obsolete.

(7) HEAVY INDUSTRY SECTOR: Companies engaged in research,
development, manufacture, or marketing of products, processes, or services
related to the agriculture, chemicals, containers, forest products,
non-ferrous metals, steel, or pollution control industries, including
synthetic and natural materials (for example, chemicals, plastics,
fertilizers, gases, fibers, flavorings, or fragrances), paper, wood
products, steel, and cement. Certain of these companies are subject to
state and federal regulation, which could require alteration or cessation
of production of a product, payment of fines, or cleaning of a disposal
site. Furthermore, because some of the materials and processes used by
these companies involve hazardous components, there are additional risks
associated with their production, handling, and disposal. The risk of
product obsolescence also is present.

(8) MACHINERY AND EQUIPMENT SECTOR: Companies engaged in the
research, development, or manufacture of products, processes, or services
relating to electrical equipment, machinery, pollution control, or
construction services, including transformers, motors, turbines, hand
tools, earth-moving equipment, and waste disposal services. The

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<PAGE>

profitability of most of these companies may fluctuate significantly in
response to capital spending and general economic conditions. As is the
case for the heavy industry sector, there are risks associated with the
production, handling, and disposal of materials and processes that involve
hazardous components and the risk of product obsolescence.

(9) MEDIA AND ENTERTAINMENT SECTOR: Companies engaged in design,
production, or distribution of goods or services for the media industries
(including television or radio broadcasting or manufacturing, publishing,
recordings and musical instruments, motion pictures, and photography) and
the entertainment industries (including sports arenas, amusement and theme
parks, gaming casinos, sporting goods, camping and recreational equipment,
toys and games, travel-related services, hotels and motels, and fast food
and other restaurants). Many products produced by companies in this
sector -- for example, video and electronic games -- may become obsolete
quickly. Additionally, companies engaged in television and radio
broadcast are subject to government regulation.

(10) RETAILING SECTOR: Companies engaged in retail distribution
of home furnishings, food products, clothing, pharmaceuticals, leisure
products, or other consumer goods, including department stores,
supermarkets, and retail chains specializing in particular items such as
shoes, toys, or pharmaceuticals. The value of these companies' securities
fluctuates based on consumer spending patterns, which depend on inflation
and interest rates, the level of consumer debt, and seasonal shopping
habits. The success or failure of a company in this highly competitive
sector depends on its ability to predict rapidly changing consumer tastes.

(11) TECHNOLOGY SECTOR: Companies that are expected to have or
develop products, processes, or services that will provide, or will
benefit significantly from, technological advances and improvements or
future automation trends, including semiconductors, computers and
peripheral equipment, scientific instruments, computer software,
telecommunications equipment, and electronic components, instruments, and
systems. These companies are sensitive to foreign competition and import
tariffs. Also, many of their products may become obsolete quickly.

(12) TRANSPORTATION SECTOR: Companies involved in providing
transportation of people and products, including airlines, railroads, and
trucking firms. Revenues of these companies are affected by fluctuations
in fuel prices and government regulation of fares.

(13) UTILITIES SECTOR: Companies in the public utilities industry
and companies that derive a substantial majority of their revenues through
supplying public utilities (including companies engaged in the
manufacture, production, generation, transmission, or sale of gas and
electric energy) and that provide telephone, telegraph, satellite,
microwave, and other communication facilities to the public. The gas and
electric public utilities industries are subject to various uncertainties,
including the outcome of political issues concerning the environment,
prices of fuel for electric generation, availability of natural gas, and

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<PAGE>

risks associated with the construction and operation of nuclear power
facilities.

PERFORMANCE INFORMATION

Each Fund's performance figures are based on historical
earnings and are not intended to indicate future performance. The share
price and total return of each Fund will vary, and an investment in a
Fund, when redeemed, may be worth more or less than an investor's original
cost.

Total Return Computations

Each Fund may advertise certain total return information. An
average annual compounded rate of return ("T") may be computed by using
the redeemable value at the end of a specified period ("ERV") of a
hypothetical initial investment of $1,000 ("P") over a period of time
("n") according to the formula:
(n)
P(1+T) = ERV

Average annual total return smooths out year-to-year
variations and, in that respect, differs from actual year-to-year results.

Although none of the Funds commenced operations until August
3, 1993, each Fund's investment objective, limitations, and policies are
the same as another mutual fund administered by N&B Management, which has
a name similar to the Fund's and invests in the same Portfolio ("Sister
Fund"). Each Sister Fund had a predecessor. The following total return
data is for each Fund since its inception and, for periods prior to each
Fund's inception, its Sister Fund and that Sister Fund's predecessor. The
total returns for periods prior to the Funds' inception would have been
lower had they reflected the higher fees of the Funds, as compared to
those of the Sister Funds and their predecessors. Appendix B to this SAI
includes additional performance data.

The average annual total returns for Neuberger & Berman
MANHATTAN Trust, its Sister Fund, and that Sister Fund's predecessor for
the one-, five-, and ten-year periods ended August 31, 1995, were 25.90%,
17.11%, and 15.02% respectively. If an investor had invested $10,000 in
that predecessor's shares on March 1, 1979 and had reinvested all
distributions and income dividends, the NAV of that investor's holdings
would have been $149,149 on August 31, 1995.

The average annual total returns for Neuberger & Berman
GENESIS Trust, its Sister Fund, and that Sister Fund's predecessor for the
one- and five-year periods ended August 31, 1995, and for the period from

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<PAGE>

September 27, 1988 (commencement of operations), through August 31, 1995,
were 19.51%, 17.35%, and 12.61%, respectively. If an investor had
invested $10,000 in that predecessor's shares on September 27, 1988 and
had reinvested all distributions and income dividends, the NAV of that
investor's holdings would have been $22,780 on August 31, 1995.

The average annual total returns for Neuberger & Berman FOCUS
Trust, its Sister Fund, and that Sister Fund's predecessor for the one-,
five-, and ten-year periods ended August 31, 1995, were 27.44%, 19.19%,
and 15.09%, respectively. If an investor had invested $10,000 in that
predecessor's shares on October 19, 1955 and had reinvested all
distributions and income dividends, the NAV of that investor's holdings
would have been $932,053 on August 31, 1995.

The average annual total returns for Neuberger & Berman
GUARDIAN Trust, its Sister Fund, and that Sister Fund's predecessor for
the one-, five-, and ten-year periods ended August 31, 1995, were 24.01%,
20.14%, and 15.66%, respectively. If an investor had invested $10,000 in
that predecessor's shares on June 1, 1950 and had reinvested all
distributions and income dividends, the NAV of that investor's holdings
would have been $2,629,312 on August 31, 1995.

The average annual total returns for Neuberger & Berman
PARTNERS Trust, its Sister Fund, and that Sister Fund's predecessor for
the one-, five-, and ten-year periods ended August 31, 1995, were 21.52%,
16.06%, and 14.44%, respectively. If an investor had invested $10,000 in
that predecessor's shares on January 20, 1975 and had reinvested all
distributions and income dividends, the NAV of that investor's holdings
would have been $287,463 on August 31, 1995.

Comparative Information

Prior to January 5, 1989, the investment policies of the
predecessor of Neuberger & Berman FOCUS Trust's Sister Fund required that
at least 80% of its investments normally be in energy-related investments;
prior to November 1, 1991, those investment policies required that at
least 25% of its investments normally be in the energy sector. Neuberger
& Berman FOCUS Trust may be required, under applicable law, to include
information reflecting the Sister Fund's predecessor's performance and
expenses before November 1, 1991, in its advertisements, sales literature,
financial statements, and other documents filed with the SEC and/or
provided to current and prospective shareholders. Investors should be
aware that such information may not accurately reflect the level of
performance and expenses that would have been experienced had the Sister
Fund's predecessor been operating under the Fund's current investment
policies.

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<PAGE>

From time to time each Fund's performance may be compared
with:

(1) data (that may be expressed as rankings or ratings)
published by independent services or publications (including
newspapers, newsletters, and financial periodicals) that
monitor the performance of mutual funds, such as Lipper
Analytical Services, Inc., C.D.A. Investment Technologies,
Inc., Wiesenberger Investment Companies Service, Investment
Company Data Inc., Morningstar, Inc., Micropal Incorporated,
and quarterly mutual fund rankings by Money, Fortune, Forbes,
Business Week, Personal Investor, and U.S. News & World
Report magazines, The Wall Street Journal, New York Times,
Kiplingers Personal Finance, and Barron's Newspaper, or

(2) recognized stock and other indices, such as the S&P
500 Composite Stock Price Index ("S&P 500 Index"), S&P Small
Cap 600 Index ("S&P 600 Index"), S&P Mid Cap 400 Index ("S&P
400 Index"), Russell 2000 Stock Index, Dow Jones Industrial
Average ("DJIA"), Wilshire 1750, Nasdaq Composite Index,
Value Line Index, U.S. Department of Labor Consumer Price
Index ("Consumer Price Index"), College Board Survey of
Colleges Annual Increases of College Costs, Kanon Bloch's
Family Performance Index, the Barra Growth Index, the Barra
Value Index, and various other domestic, international, and
global indices. The S&P 500 Index is a broad index of common
stock prices, while the DJIA represents a narrower segment of
industrial companies. The S&P 600 Index includes stocks that
range in market value from $27 million to $880 million, with
an average of $302 million. The S&P 400 Index measures mid-
sized companies with an average market capitalization of $1.2
billion. Each assumes reinvestment of distributions and is
calculated without regard to tax consequences or the costs of
investing. Each Portfolio may invest in different types of
securities from those included in some of the above indices.

Evaluations of the Funds' performance, their total returns,
and comparisons may be used in advertisements and in information furnished
to current and prospective shareholders (collectively, "Advertisements").
The Funds may also be compared to individual asset classes such as common
stocks, small-cap stocks, or Treasury bonds, based on information supplied
by Ibbotson and Sinquefield.

Other Performance Information

From time to time, information about a Portfolio's portfolio
allocation and holdings as of a particular date may be included in
Advertisements for the corresponding Fund. This information, for example,

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<PAGE>

may include the Portfolio's portfolio diversification by asset type.
Information used in Advertisements may include statements or illustrations
relating to the appropriateness of types of securities and/or mutual funds
that may be employed to meet specific financial goals, such as (1) funding
retirement, (2) paying for children's education, and (3) financially
supporting aging parents.

N&B Management believes that many of its common stock funds
may be attractive investment vehicles for conservative investors who are
interested in long-term appreciation from stock investments, but who have
a moderate tolerance for risk. Such investors may include, for example,
individuals (1) planning for or facing retirement, (2) receiving or
expecting to receive lump-sum distributions from individual retirement
accounts ("IRAs"), self-employed individual retirement plans ("Keogh
plans"), or other retirement plans, (3) anticipating rollovers of CDs or
IRAs, Keogh plans, or other retirement plans, and (4) receiving a
significant amount of money as a result of inheritance, sale of a
business, or termination of employment.

Investors who may find Neuberger & Berman PARTNERS Trust,
Neuberger & Berman GUARDIAN Trust or Neuberger & Berman FOCUS Trust to be
an attractive investment vehicle also include parents saving to meet
college costs for their children. For instance, the cost of a college
education is rapidly approaching the cost of the average family home.
Four years' tuition, room and board at a top private institution can
already cost over $80,000. If college expenses continue to increase at
current rates, by the time today's pre-schooler enters the ivy-covered
halls in 2009, four years at a private college may easily cost
$200,000!2/

Information relating to inflation and its effects on the
dollar also may be included in Advertisements. For example, after ten
years, the purchasing power of $25,000 would shrink to $16,621, $14,968,
$13,465, and $12,100, respectively, if the annual rates of inflation
during that period were 4%, 5%, 6%, and 7%, respectively. (To calculate
the purchasing power, the value at the end of each year is reduced by the
inflation rate for the ten-year period.)

From time to time the investment philosophy of N&B Man-
agement's founder, Roy R. Neuberger, may be included in the Funds'
Advertisements. This philosophy is described in further detail in "The
Art of Investing: A Conversation with Roy Neuberger," attached as
Appendix C to this SAI.

2/ Source: College Board, 1994, 1995 Annual Survey of Colleges,
Princeton, NJ, assuming an average 6% increase in annual expenses.

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<PAGE>

CERTAIN RISK CONSIDERATIONS

Although each Portfolio seeks to reduce risk by investing in
a diversified portfolio, diversification does not eliminate all risk.
There can, of course, be no assurance that any Portfolio will achieve its
investment objective, and an investment in a Fund involves certain risks
that are described in the sections entitled "Investment Programs" and
"Description of Investments" in the Prospectus and "Investment Information
-- Additional Investment Information" in this SAI.

TRUSTEES AND OFFICERS

The following table sets forth information concerning the
trustees and officers of the Trusts, including their addresses and
principal business experience during the past five years. Some persons
named as trustees and officers also serve in similar capacities for other
funds, and (where applicable) their corresponding portfolios, administered
or managed by N&B Management and Neuberger & Berman, L.P. ("Neuberger &
Berman").

Positions Held
Name, Age, and Address(1) With the Trusts Principal Occupation(s)(2)
------------------------- --------------- --------------------------

Faith Colish (60) Trustee of each Trust Attorney at Law, Faith Colish, A
63 Wall Street Professional Corporation.
24th Floor
New York, NY 10005

Donald M. Cox (73) Trustee of each Trust Retired. Formerly Senior Vice
435 East 52nd Street President and Director of Exxon
New York, NY 10022 Corporation; Director of Emigrant
Savings Bank.

Stanley Egener* (61) Chairman of the Board, Partner of Neuberger & Berman;
Chief Executive Officer, President and Director of N&B
and Trustee of each Management; Chairman of the
Trust Board, Chief Executive Officer,
and Trustee of eight other mutual
funds for which N&B Management
acts as investment manager or
administrator.

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<PAGE>

Positions Held
Name, Age, and Address(1) With the Trusts Principal Occupation(s)(2)
------------------------- --------------- --------------------------

Alan R. Gruber (68) Trustee of each Trust Chairman and Chief Executive
Orion Capital Corporation Officer of Orion Capital
600 Fifth Avenue Corporation (property and
24th Floor casualty insurance); Director of
New York, NY 10020 Trenwick Group, Inc. (property
and casualty reinsurance); Chair-
man of the Board and Director of
Guaranty National Corporation
(property and casualty
insurance); formerly Director of
Ketema, Inc. (diversified
manufac-turer).

Howard A. Mileaf (57) Trustee of each Trust Vice President and Special
Wheeling Pittsburgh Counsel to Wheeling Pittsburgh
Corporation Corporation (holding company)
110 East 59th Street since 1992; formerly Vice Presi-
New York, NY 10022 dent and General Counsel of Keene
Corporation (manufacturer of
industrial products); Director of
Kevlin Corporation (manufacturer
of microwave and other products).

Edward I. O'Brien* (67) Trustee of each Trust Until 1993, President of the
12 Woods Lane Securities Industry Association
Scarsdale, NY 10583 ("SIA") (securities industry's
representative in government
relations and regulatory matters
at the federal and state levels);
until November 1993, employee of
the SIA; Director of Legg Mason,
Inc.

John T. Patterson, Jr. (67) Trustee of each Trust President of SOBRO (South Bronx
90 Riverside Drive Overall Economic Development
Apartment 1B Corporation).
New York, NY 10024

John P. Rosenthal (63) Trustee of each Trust Senior Vice President of Burnham
Burnham Securities Inc. Securities Inc. (a registered
Burnham Asset Management Corp. broker-dealer) since 1991; for-
1325 Avenue of the Americas merly Partner of Silberberg,
17th Floor Rosenthal & Co. (member of
New York, NY 10019 National Association of
Securities Dealers, Inc.);
Director, Cancer Treatment
Holdings, Inc.

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<PAGE>

Positions Held
Name, Age, and Address(1) With the Trusts Principal Occupation(s)(2)
------------------------- --------------- --------------------------

Cornelius T. Ryan (64) Trustee of each Trust General Partner of Oxford
Oxford Bioscience Partners Partners and Oxford Bioscience
315 Post Road West Partners (venture capital
Westport, CT 06880 partnerships) and President of
Oxford Venture Corporation;
Director of Capital Cash
Management Trust (money market
fund) and Prime Cash Fund.

Gustave H. Shubert (66) Trustee of each Trust Senior Fellow/Corporate Advisor
13838 Sunset Boulevard and Advisory Trustee of Rand (a
Pacific Palisades, CA 90272 non-profit public interest
research institution) since 1989;
Honorary Member of the Board of
Overseers of the Institute for
Civil Justice, the Policy
Advisory Committee of the
Clinical Scholars Program at the
University of California, the
American Association for the
Advancement of Science, the
Counsel on Foreign Relations, and
the Institute for Strategic
Studies (London); advisor to the
Program Evaluation and
Methodology Division of the U.S.
General Accounting Office;
formerly Senior Vice President
and Trustee of Rand.

Lawrence Zicklin* (59) President and Trustee of Partner of Neuberger & Berman;
each Trust Director of N&B Management;
President and/or Trustee of five
other mutual funds for which N&B
Management acts as investment
manager or administrator.

Daniel J. Sullivan (55) Vice President of each Senior Vice President of N&B
Trust Management since 1992; prior
thereto, Vice President of N&B
Management; Vice President of
eight other mutual funds for
which N&B Management acts as
investment manager or
administrator.

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<PAGE>

Positions Held
Name, Age, and Address(1) With the Trusts Principal Occupation(s)(2)
------------------------- --------------- --------------------------

Michael J. Weiner (48) Vice President and Senior Vice President and
Principal Financial Treasurer of N&B Management since
Officer of each Trust 1992; prior thereto, Vice
President and Treasurer of N&B
Management and Treasurer of
certain mutual funds for which
N&B Management acted as
investment adviser; Vice
President and Principal Financial
Officer of eight other mutual
funds for which N&B Management
acts as investment manager or
administrator.

Claudia A. Brandon (38) Secretary of each Trust Vice President of N&B Management;
Secretary of eight other mutual
funds for which N&B Management
acts as investment manager or
administrator.

Richard Russell (48) Treasurer and Principal Vice President of N&B Management
Accounting Officer of since 1993; prior thereto,
each Trust Assistant Vice President of N&B
Management; Treasurer and Prin-
cipal Accounting Officer of eight
other mutual funds for which N&B
Management acts as investment
manager or administrator.

Stacy Cooper-Shugrue (32) Assistant Secretary of Assistant Vice President of N&B
each Trust Management since 1993; employee
of N&B Management since 1989;
Assistant Secretary of eight
other mutual funds for which N&B
Management acts as investment
manager or administrator.

C. Carl Randolph (57) Assistant Secretary of Partner of Neuberger & Berman
each Trust since 1992; employee thereof
since 1971; Assistant Secretary
of eight other mutual funds for
which N&B Management acts as
investment manager or
administrator.

______________________________

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<PAGE>

(1) Unless otherwise indicated, the business address of each listed person is 605 Third Avenue, New York, New York 10158.

(2) Except as otherwise indicated, each individual has held the positions shown for at least the last five years.
</TABLE>

* Indicates an "interested person" of each Trust within the meaning of
the 1940 Act. Messrs. Egener and Zicklin are interested persons by virtue
of the fact that they are officers and/or directors of N&B Management and
partners of Neuberger & Berman. Mr. O'Brien is an interested person by
virtue of the fact that he is a director of Legg Mason, Inc., a wholly
owned subsidiary of which, from time to time, serves as a broker or dealer
to the Portfolios and other funds for which N&B Management serves as
investment manager.

The Trust's Trust Instrument and Managers Trust's Declaration
of Trust each provides that it will indemnify its trustees and officers
against liabilities and expenses reasonably incurred in connection with
litigation in which they may be involved because of their offices with the
Trust, unless it is adjudicated that they engaged in bad faith, willful
misfeasance, gross negligence, or reckless disregard of the duties
involved in the conduct of their offices. In the case of settlement, such
indemnification will not be provided unless it has been determined (by a
court or other body approving the settlement or other disposition, by a
majority of disinterested trustees based upon a review of readily
available facts, or in a written opinion of independent counsel) that such
officers or trustees have not engaged in willful misfeasance, bad faith,
gross negligence, or reckless disregard of their duties.

For the fiscal year ended August 31, 1995, each Fund and Portfolio
paid the following fees and expenses to Fund and Portfolio Trustees who
were not affiliated with N&B Management or Neuberger & Berman: Neuberger
& Berman MANHATTAN Trust and Portfolio - $901; Neuberger & Berman GENESIS
Trust and Portfolio - $2,724; Neuberger & Berman FOCUS Trust and Portfolio
- $224; Neuberger & Berman GUARDIAN Trust and Portfolio - $15,468; and
Neuberger & Berman PARTNERS Trust and Portfolio - $2,015.

The following table sets forth information concerning the
compensation of the trustees and officers of the Trust. None of the
Neuberger & Berman Funds(SERVICEMARK) has any retirement plan for its
trustees or officers.

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<PAGE>

TABLE OF COMPENSATION
FOR FISCAL YEAR ENDED 8/31/95

Total Compensation from the
Name and Position with Aggregate Compensation Neuberger & Berman Fund
the Trust from the Trust Complex Paid to Trustees

Faith Colish $1,336.05 $39,000
Trustee (5 other investment companies)

Donald M. Cox $1,336.05 $31,000
Trustee (3 other investment companies)

Stanley Egener $0 $0
Chairman of the Board, (9 other investment companies)
Chief Executive Officer,
and Trustee

Alan R. Gruber $1,336.05 $31,000
Trustee (3 other investment companies)

Howard A. Mileaf $1,404.81 $36,500
Trustee (4 other investment companies)

Edward I. O'Brien Trustee $1,388.74 $31,500
(3 other investment companies)

John T. Patterson, Jr. $1,371.96 $34,500
Trustee (4 other investment companies)

John P. Rosenthal $1,309.92 $33,000
Trustee (4 other investment companies)

Cornelius T. Ryan $1,404.81 $33,500
Trustee (3 other investment companies)

Gustave H. Shubert $1,309.92 $30,000
Trustee (3 other investment companies)

Lawrence Zicklin $0 $0
(5 other investment companies)
President and Trustee

</TABLE>

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<PAGE>

INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES

Investment Manager and Administrator

Because all of the Funds' net investable assets are invested
in their corresponding Portfolios, the Funds do not need an investment
manager. N&B Management serves as the Portfolios' investment manager
pursuant to a management agreement with Managers Trust, dated as of August
2, 1993 ("Management Agreement"). The Management Agreement was approved
for each Portfolio by the Portfolio Trustees, including a majority of the
Portfolio Trustees who were not "interested persons" of N&B Management or
Managers Trust ("Independent Portfolio Trustees"), on July 15, 1993, and
was approved by the holders of the interests in all the Portfolios on
August 2, 1993.

The Management Agreement provides, in substance, that N&B
Management will make and implement investment decisions for the Portfolios
in its discretion and will continuously develop an investment program for
the Portfolios' assets. The Management Agreement permits N&B Management
to effect securities transactions on behalf of each Portfolio through
associated persons of N&B Management. The Management Agreement also
specifically permits N&B Management to compensate, through higher
commissions, brokers and dealers who provide investment research and
analysis to the Portfolios, although N&B Management has no current plans
to do so.

N&B Management provides to each Portfolio, without separate
cost, office space, equipment, and facilities and the personnel necessary
to perform executive, administrative, and clerical functions. N&B
Management pays all salaries, expenses, and fees of the officers,
trustees, and employees of Managers Trust who are officers, directors, or
employees of N&B Management. Two directors of N&B Management (who also
are partners of Neuberger & Berman), one of whom also serves as an officer
of N&B Management, presently serve as trustees and officers of the Trusts.
See "Trustees and Officers." Each Portfolio pays N&B Management a
management fee based on the Portfolio's average daily net assets, as
described in the Prospectus.

N&B Management provides similar facilities, services and
personnel, as well as shareholder accounting, recordkeeping, and other
shareholder services, to each Fund pursuant to an administration agreement
dated August 3, 1993 ("Administration Agreement"). For such
administrative services, each Fund pays N&B Management a fee based on the
Fund's average daily net assets, as described in the Prospectus. N&B
Management enters into administrative services agreements with
Institutions, pursuant to which it compensates such Institutions for
accounting, recordkeeping and other services that they provide to
investors who purchase shares of the Funds.

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<PAGE>

During the fiscal years ended August 31, 1995 and 1994 and
the period from August 3 to August 31, 1993, each Fund accrued management
and administration fees as follows: Neuberger & Berman MANHATTAN Trust -
$202,729, $49,957, and $0.51; Neuberger & Berman GENESIS Trust - $274,709,
$14,462, and $3.70; Neuberger & Berman FOCUS Trust - $43,330, $4,624, and
$0.51; Neuberger & Berman GUARDIAN Trust - $2,417,586, $142,142, and
$43.97; and Neuberger & Berman PARTNERS Trust - $292,161, $17,299, and
$0.50, respectively.

N&B Management has voluntarily undertaken until December 31,
1996, to reimburse each Fund for its Operating Expenses and its pro rata
share of its corresponding Portfolio's Operating Expenses so that each
Fund's expense ratio per annum will not exceed the expense ratio of its
Sister Fund by more than 0.10% of the Fund's average daily net assets.
"Operating Expenses" exclude interest, taxes, brokerage commissions, and
extraordinary expenses. During the period from August 3, 1993
(commencement of operations of each Fund) to December 31, 1994, N&B
Management voluntarily undertook to reimburse each Fund for its Operating
Expenses and its pro rata share of its corresponding Portfolio's Operating
Expenses which, in the aggregate, exceeded the aggregate Operating
Expenses and pro rata share of corresponding Portfolio Operating Expenses
of that Fund's Sister Fund. During the fiscal years ended August 31, 1995
and 1994, N&B Management reimbursed each Fund the following amounts of
expenses under the above arrangements: Neuberger & Berman MANHATTAN
Trust, $87,443 and $88,693, respectively; Neuberger & Berman GENESIS
Trust, $69,047 and $73,439, respectively; Neuberger & Berman FOCUS Trust,
$92,687 and $68,286, respectively; Neuberger & Berman GUARDIAN Trust,
$171,796 and $116,354, respectively; and Neuberger & Berman PARTNERS
Trust, $102,400 and $75,492, respectively.

The Management Agreement continues with respect to each
Portfolio for a period of two years after the date the Portfolio became
subject thereto. The Management Agreement is renewable thereafter from
year to year with respect to each Portfolio, so long as its continuance is
approved at least annually (1) by the vote of a majority of the
Independent Portfolio Trustees, cast in person at a meeting called for the
purpose of voting on such approval, and (2) by the vote of a majority of
the Portfolio Trustees or by a 1940 Act majority vote of the outstanding
shares in that Portfolio. The Administration Agreement continues with
respect to each Fund for a period of two years after the date the Fund
became subject thereto. The Administration Agreement is renewable from
year to year with respect to a Fund, so long as its continuance is
approved at least annually (1) by the vote of a majority of the Fund
Trustees who are not "interested persons" of N&B Management or the Trust
("Independent Fund Trustees"), cast in person at a meeting called for the
purpose of voting on such approval, and (2) by the vote of a majority of
the Fund Trustees or by a 1940 Act majority vote of the outstanding shares
in the Fund.

- 34 -
<PAGE>

The Management Agreement is terminable, without penalty,
with respect to a Portfolio on 60 days' written notice either by Managers
Trust or by N&B Management. The Administration Agreement is terminable,
without penalty, with respect to a Fund on 60 days' written notice either
by N&B Management or by the Trust if authorized by the Fund Trustees,
including a majority of the Independent Fund Trustees. Each Agreement
terminates automatically if it is assigned.

In addition to the voluntary expense reimbursements described
in the Prospectus under "Management and Administration -- Expenses," N&B
Management has agreed in the Management Agreement to reimburse each Fund's
expenses, as follows. If, in any fiscal year, a Fund's Aggregate
Operating Expenses (as defined below) exceed the most restrictive expense
limitation imposed under the securities laws of the states in which that
Fund's shares are qualified for sale ("State Expense Limitation"), then
N&B Management will pay the Fund the amount of that excess, less the
amount of any reduction of the administration fee payable by the Fund
under a similar State Expense Limitation contained in the Administration
Agreement. N&B Management will have no obligation to pay a Fund, however,
for any expenses that exceed the pro rata portion of the management fees
attributable to that Fund's interest in its corresponding Portfolio. At
the date of this SAI, the most restrictive State Expense Limitation to
which any Fund expects to be subject is 2 1/2% of the first $30 million of
average net assets, 2% of the next $70 million of average net assets, and
1-1/2% of average net assets over $100 million.

For purposes of the State Expense Limitation, the term
"Aggregate Operating Expenses" means a Fund's operating expenses plus its
pro rata portion of its corresponding Portfolio's operating expenses
(including any fees or expense reimbursements payable to N&B Management
and any compensation payable thereto pursuant to (1) the Administration
Agreement or (2) any other agreement or arrangement with Managers Trust in
regard to the Portfolio; but excluding (with respect to both the Fund and
the Portfolio) interest, taxes, brokerage commissions, litigation and
indemnification expenses, and other extraordinary expenses not incurred in
the ordinary course of business).

Sub-Adviser

N&B Management retains Neuberger & Berman, 605 Third Avenue,
New York, NY 10158-3698, as sub-adviser with respect to each Portfolio
pursuant to a sub-advisory agreement dated August 2, 1993 ("Sub-Advisory
Agreement"). The Sub-Advisory Agreement was approved by the Portfolio
Trustees, including a majority of the Independent Portfolio Trustees, on
July 15, 1993 and was approved by the holders of the interests in the
Portfolios on August 2, 1993.

- 35 -
<PAGE>

The Sub-Advisory Agreement provides in substance that
Neuberger & Berman will furnish to N&B Management, upon reasonable
request, the same type of investment recommendations and research that
Neuberger & Berman, from time to time, provides to its partners and
employees for use in managing client accounts. In this manner, N&B
Management expects to have available to it, in addition to research from
other professional sources, the capability of the research staff of
Neuberger & Berman. This staff consists of approximately fourteen
investment analysts, each of whom specializes in studying one or more
industries, under the supervision of the Director of Research, who is also
available for consultation with N&B Management. The Sub-Advisory
Agreement provides that N&B Management will pay for the services rendered
by Neuberger & Berman based on the direct and indirect costs to Neuberger
& Berman in connection with those services. Neuberger & Berman also
serves as sub-adviser for all of the other mutual funds managed by N&B
Management.

The Sub-Advisory Agreement continues with respect to each
Portfolio for a period of two years after the date the Portfolio became
subject thereto, and is renewable from year to year, subject to approval
of its continuance in the same manner as the Management Agreement. The
Sub-Advisory Agreement is subject to termination, without penalty, with
respect to each Portfolio by the Portfolio Trustees, by a 1940 Act
majority vote of the outstanding Portfolio shares, by N&B Management, or
by Neuberger & Berman on not less than 30 nor more than 60 days' written
notice. The Sub-Advisory Agreement also terminates automatically with
respect to each Portfolio if it is assigned or if the Management Agreement
terminates with respect to that Portfolio.

Most money managers that come to the Neuberger & Berman
organization have at least fifteen years experience. Neuberger & Berman
and N&B Management employ experienced professionals that work in a
competitive environment.

Investment Companies Managed

N&B Management currently serves as investment manager of the
following investment companies. As of September 30, 1995, these
companies, along with three investment companies advised by Neuberger &
Berman, had aggregate net assets of approximately $11.4 billion, as shown
in the following list:

- 36 -
<PAGE>

Approximate Net Assets
at September 30,
Name 1995
---- ----------------------

Neuberger & Berman Cash Reserves Portfolio $ 377,608,619
(investment portfolio for Neuberger
& Berman Cash Reserves)

Neuberger & Berman Government Income $ 12,053,656
Portfolio
(investment portfolio for Neuberger
& Berman Government Income Fund and
Neuberger & Berman Government Income
Trust)

Neuberger & Berman Government Money $ 346,898,132
Portfolio
(investment portfolio for Neuberger
& Berman Government Money Fund)

Neuberger & Berman Limited Maturity Bond $ 309,540,451
Portfolio
(investment portfolio for Neuberger
& Berman Limited Maturity Bond Fund
and Neuberger & Berman Limited
Maturity Bond Trust)

Neuberger & Berman Municipal Money $ 149,657,613
Portfolio
(investment portfolio for Neuberger
& Berman Municipal Money Fund)

Neuberger & Berman Municipal Securities $ 44,568,635
Portfolio
(investment portfolio for Neuberger
& Berman Municipal Securities Trust)

Neuberger & Berman New York Insured $ 10,679,324
Intermediate Portfolio
(investment portfolio for Neuberger
& Berman New York Insured
Intermediate Fund)

Neuberger & Berman Ultra Short Bond $ 102,903,312
Portfolio
(investment portfolio for Neuberger
& Berman Ultra Short Bond Fund and
Neuberger & Berman Ultra Short Bond
Trust)

- 37 -
<PAGE>

Approximate Net Assets
at September 30,
Name 1995
---- ----------------------

Neuberger & Berman Focus Portfolio $1,031,915,664
(investment portfolio for Neuberger
& Berman Focus Fund and Neuberger &
Berman Focus Trust)

Neuberger & Berman Genesis Portfolio $ 145,188,783
(investment portfolio for Neuberger
& Berman Genesis Fund and Neuberger
& Berman Genesis Trust)

Neuberger & Berman Guardian Portfolio $4,943,764,830
(investment portfolio for Neuberger
& Berman Guardian Fund and Neuberger
& Berman Guardian Trust)

Neuberger & Berman International Portfolio $ 29,990,616
(investment portfolio for Neuberger
& Berman International Fund)

Neuberger & Berman Manhattan Portfolio $ 670,916,038
(investment portfolio for Neuberger
& Berman Manhattan Fund and
Neuberger & Berman Manhattan Trust)

Neuberger & Berman Partners Portfolio $1,664,460,688
(investment portfolio for Neuberger
& Berman Partners Fund and
Neuberger & Berman Partners Trust)

Neuberger & Berman Socially Responsive $ 102,675,093
Portfolio
(investment portfolio for Neuberger
& Berman Socially Responsive Fund,
Neuberger & Berman Socially
Responsive Trust, and Neuberger &
Berman NYCDC Socially Responsive
Trust)

Neuberger & Berman Advisers $1,257,506,124
Managers Trust
(six series)

- 38 -
<PAGE>

In addition, Neuberger & Berman serves as investment adviser
to three investment companies, Plan Investment Fund, Inc., AHA Investment
Fund, Inc., and AHA Full Maturity, with assets of $85,110,472,
$110,683,193, and $23,891,472, respectively, at September 30, 1995.

The investment decisions concerning the Portfolios and the
other funds and portfolios managed by N&B Management (collectively, "Other
N&B Funds") have been and will continue to be made independently of one
another. In terms of their investment objectives, most of the Other N&B
Funds differ from the Portfolios. Even where the investment objectives
are similar, however, the methods used by the Other N&B Funds and the
Portfolios to achieve their objectives may differ.

There may be occasions when a Portfolio and one or more of
the Other N&B Funds or other accounts managed by Neuberger & Berman are
contemporaneously engaged in purchasing or selling the same securities
from or to third parties. When this occurs, the transactions are averaged
as to price and allocated as to amounts in accordance with a formula
considered to be equitable to the funds involved. Although in some cases
this arrangement may have a detrimental effect on the price or volume of
the securities as to a Portfolio, in other cases it is believed that a
Portfolio's ability to participate in volume transactions may produce
better executions for it. In any case, it is the judgment of the
Portfolio Trustees that the desirability of the Portfolios' having their
advisory arrangements with N&B Management outweighs any disadvantages that
may result from contemporaneous transactions. The investment results
achieved by all of the funds managed by N&B Management have varied from
one another in the past and are likely to vary in the future.

Management and Control of N&B Management

The directors and officers of N&B Management, all of whom
have offices at the same address as N&B Management, are Richard A. Cantor,
Chairman of the Board and director; Stanley Egener, President and
director; Theresa A. Havell, Vice President and director; Irwin Lainoff,
director; Marvin C. Schwartz, director; Lawrence Zicklin, director; Daniel
J. Sullivan, Senior Vice President; Michael J. Weiner, Senior Vice
President and Treasurer; Claudia A. Brandon, Vice President; William
Cunningham, Vice President; Clara Del Villar, Vice President; Mark R.
Goldstein, Vice President; Farha-Joyce Haboucha, Vice President; Michael
M. Kassen, Vice President; Michael Lamberti, Vice President; Josephine P.
Mahaney, Vice President; Lawrence Marx III, Vice President; Ellen Metzger,
Vice President and Secretary; Janet W. Prindle, Vice President; Felix
Rovelli, Vice President; Richard Russell, Vice President; Kent C. Simons,
Vice President; Frederick B. Soule, Vice President; Judith M. Vale, Vice
President; Thomas Wolfe, Vice President; Andrea Trachtenberg, Vice
President of Marketing; Patrick T. Byrne, Assistant Vice President; Robert
Conti, Assistant Vice President; Stacy Cooper-Shugrue, Assistant Vice
President; Robert Cresci, Assistant Vice President; Barbara DiGiorgio,
Assistant Vice President; Roberta D'Orio, Assistant Vice President; Robert

- 39 -
<PAGE>

I. Gendelman, Assistant Vice President; Leslie Holliday-Soto, Assistant
Vice President; Carmen G. Martinez, Assistant Vice President; Paul
Metzger, Assistant Vice President; Susan Switzer, Assistant Vice
President; Susan Walsh, Assistant Vice President; and Celeste Wischerth,
Assistant Vice President. Messrs. Cantor, Egener, Lainoff, Schwartz,
Zicklin, Goldstein, Kassen, Marx, and Simons and Mmes. Havell and Prindle
are general partners of Neuberger & Berman.

Messrs. Egener and Zicklin are trustees and officers, and
Messrs. Sullivan, Weiner, and Russell and Mmes. Brandon and Cooper-Shugrue
are officers, of each Trust. C. Carl Randolph, a general partner of
Neuberger & Berman, also is an officer of each Trust.

All of the outstanding voting stock in N&B Management is
owned by persons who are also general partners of Neuberger & Berman.

DISTRIBUTION ARRANGEMENTS

N&B Management serves as the distributor ("Distributor") in
connection with the offering of each Fund's shares on a no-load basis to
Institutions. In connection with the sale of its shares, each Fund has
authorized the Distributor to give only the information, and to make only
the statements and representations, contained in the Prospectus and this
SAI or that properly may be included in sales literature and
advertisements in accordance with the 1933 Act, the 1940 Act, and
applicable rules of self-regulatory organizations. Sales may be made only
by the Prospectus, which may be delivered either personally, through the
mails, or by electronic means. The Distributor is the Funds' "principal
underwriter" within the meaning of the 1940 Act and, as such, acts as
agent in arranging for the sale of each Fund's shares to Institutions
without sales commission or other compensation and bears all advertising
and promotion expenses incurred in the sale of the Funds' shares.

The Distributor or one of its affiliates may, from time to
time, deem it desirable to offer to a Fund's shareholders, through use of
its shareholder list, the shares of other mutual funds for which the
Distributor acts as distributor or other products or services. Any such
use of the Funds' shareholder lists, however, will be made subject to
terms and conditions, if any, approved by a majority of the Independent
Fund Trustees. These lists will not be used to offer the Funds'
shareholders any investment products or services other than those managed
or distributed by N&B Management or Neuberger & Berman.

The Trust, on behalf of each Fund, and the Distributor are
parties to a Distribution Agreement that continues until August 3, 1996.
The Distribution Agreement may be renewed annually if specifically
approved by (1) the vote of a majority of the Fund Trustees or a 1940 Act
majority vote of the Fund's outstanding shares and (2) the vote of a

- 40 -
<PAGE>

majority of the Independent Fund Trustees, cast in person at a meeting
called for the purpose of voting on such approval. The Distribution
Agreement may be terminated by either party and will automatically
terminate on its assignment, in the same manner as the Management
Agreement.

ADDITIONAL EXCHANGE INFORMATION

As more fully set forth in the section of the Prospectus
entitled "Exchanging Shares," an Institution may exchange shares of any
Fund for shares of one or more of the other Funds or the income funds that
are briefly described below ("Income Funds").

INCOME FUNDS

Neuberger & Berman Seeks a higher total return than is
Ultra Short Bond Trust available from money market funds, with
minimal risk to principal and liquidity.
Through its corresponding portfolio, the
fund invests in high-quality money
market instruments and short-term debt
securities.

Neuberger & Berman Seeks the highest current income con-
Limited Maturity Bond Trust sistent with low risk to principal and
liquidity and, secondarily, total
return. Through its corresponding
portfolio, the fund invests in short- to
intermediate-term debt securities of at
least investment grade.

Neuberger & Berman Seeks a high level of current income and
Government Income Trust total return, consistent with safety of
principal. At least 65% of the
corresponding portfolio's investments
are in U.S. Government securities that
are issued or guaranteed as to principal
and interest by the U.S. Government or
its agencies, including U.S. Government
mortgage-backed securities; at least 25%
of its investments are in mortgage-
backed and asset-backed securities.

Any Fund described herein, and any of the Income Funds, may
terminate or modify its exchange privilege in the future.

- 41 -
<PAGE>

Fund shareholders who are considering exchanging shares into any of
the funds listed above should note that (1) the Income Funds are series of
a Delaware business trust (named "Neuberger & Berman Income Trust") that
is registered with the SEC as an open-end management investment company,
and (2) each series of Neuberger & Berman Income Trust invests all its net
investable assets in a portfolio of Income Managers Trust, an open-end
management investment company that is managed by N&B Management. Each
such portfolio has an investment objective identical to that of its corre-
sponding fund and invests in accordance with investment policies and
limitations identical to those of that fund.

Before effecting an exchange, Fund shareholders must obtain
and should review a currently effective prospectus of the fund into which
the exchange is to be made. In this regard, it should be noted that the
Income Funds share a prospectus. An exchange is treated as a sale for
federal income tax purposes and, depending on the circumstances, a short-
or long-term capital gain or loss may be realized.

ADDITIONAL REDEMPTION INFORMATION

Suspension of Redemptions

The right to redeem a Fund's shares may be suspended or
payment of the redemption price postponed (1) when the NYSE is closed
(other than weekend and holiday closings), (2) when trading on the NYSE is
restricted, (3) when an emergency exists as a result of which it is not
reasonably practicable for the corresponding Portfolio to dispose of
securities it owns or fairly to determine the value of its net assets, or
(4) for such other period as the SEC may by order permit for the
protection of a Fund's shareholders; provided that applicable SEC rules
and regulations shall govern whether the conditions prescribed in (2) or
(3) exist. If the right of redemption is suspended, shareholders may
withdraw their offers of redemption, or they will receive payment at the
NAV per share in effect at the close of business on the first day the NYSE
is open ("Business Day") after termination of the suspension.

Redemptions in Kind

Each Fund reserves the right, under certain conditions, to
honor any request for redemption by making payment in whole or in part in
securities valued as described under "Share Information -- Share Prices
and Net Asset Value" in the Prospectus. If payment is made in securities,
a shareholder generally will incur brokerage expenses in converting those
securities into cash and will be subject to fluctuations in the market
price of those securities until they are sold. The Funds do not redeem in
kind under normal circumstances, but would do so when the Fund Trustees
determine that it is in the best interests of a Fund's shareholders as a
whole. Redemptions in kind will be made with readily marketable
securities to the extent possible.

- 42 -
<PAGE>

DIVIDENDS AND OTHER DISTRIBUTIONS

Each Fund distributes to its shareholders amounts equal to
substantially all of its proportionate share of any net investment income
(after deducting expenses incurred directly by the Fund), net capital
gains (both long-term and short-term), and net gains from foreign currency
transactions earned or realized by its corresponding Portfolio. Each Fund
calculates its net investment income and NAV per share as of the close of
regular trading on the NYSE on each Business Day (usually 4:00 p.m.
Eastern time).

A Portfolio's net investment income consists of all income
accrued on portfolio assets less accrued expenses, but does not include
realized gains and losses. Net investment income and realized gains and
losses are reflected in a Portfolio's NAV (and, hence, its corresponding
Fund's NAV) until they are distributed. Dividends from net investment
income and distributions of net realized capital and foreign currency
gains, if any, normally are paid once annually, in December, except that
Neuberger & Berman GUARDIAN Trust distributes substantially all of its
share of Neuberger & Berman GUARDIAN Portfolio's net investment income, if
any, at the end of each calendar quarter.

Dividends and/or other distributions are automatically
reinvested in additional shares of the distributing Fund, unless and until
the Institution elects to receive them in cash ("cash election"). To the
extent dividends and other distributions are subject to federal, state, or
local income taxation, they are taxable to the shareholders whether
received in cash or reinvested in Fund shares. A cash election with
respect to any Fund remains in effect until the Institution notifies the
Fund in writing to discontinue the election.

ADDITIONAL TAX INFORMATION

Taxation of the Funds

In order to continue to qualify for treatment as a RIC under
the Code, each Fund must distribute to its shareholders for each taxable
year at least 90% of its investment company taxable income (consisting
generally of net investment income, net short-term capital gain, and net
gains from certain foreign currency transactions) ("Distribution
Requirement") and must meet several additional requirements. With respect
to each Fund, these requirements include the following: (1) the Fund must
derive at least 90% of its gross income each taxable year from dividends,
interest, payments with respect to securities loans, and gains from the
sale or other disposition of securities or foreign currencies, or other
income (including gains from Hedging Instruments) derived with respect to
its business of investing in securities or those currencies ("Income
Requirement"); (2) the Fund must derive less than 30% of its gross income
each taxable year from the sale or other disposition of securities, or any
of the following, that were held for less than three months -- (i) options

- 43 -
<PAGE>

(other than those on foreign currencies), or (ii) foreign currencies or
Hedging Instruments thereon that are not directly related to the Fund's
principal business of investing in securities (or options with respect
thereto) ("Short-Short Limitation"); and (3) at the close of each quarter
of the Fund's taxable year, (i) at least 50% of the value of its total
assets must be represented by cash and cash items, U.S. Government
securities, and other securities limited, in respect of any one issuer, to
an amount that does not exceed 5% of the value of the Fund's total assets
and does not represent more than 10% of the issuer's outstanding voting
securities, and (ii) not more than 25% of the value of its total assets
may be invested in securities (other than U.S. Government securities) of
any one issuer.

Certain funds managed by N&B Management, including the Sister
Funds, have received a ruling from the Internal Revenue Service
("Service") that each such fund, as an investor in a corresponding
portfolio of Managers Trust or Income Managers Trust, will be deemed to
own a proportionate share of the portfolio's assets and income for pur-
poses of determining whether the fund satisfies all the requirements
described above to qualify as a RIC. Although that ruling may not be
relied on as precedent by the Funds, N&B Management believes that the
reasoning thereof and, hence, its conclusion apply to the Funds as well.

Each Fund will be subject to a nondeductible 4% excise tax
("Excise Tax") to the extent it fails to distribute by the end of any
calendar year substantially all of its ordinary income for that year and
capital gain net income for the one-year period ended on October 31 of
that year, plus certain other amounts.

See the next section for a discussion of the tax consequences
to the Funds of distributions to them from the Portfolios, investments by
the Portfolios in certain securities, and hedging transactions engaged in
by the Portfolios.

Taxation of the Portfolios

The Portfolios have received a ruling from the Service to the
effect that, among other things, each Portfolio will be treated as a
separate partnership for federal income tax purposes and will not be a
"publicly traded partnership." As a result, no Portfolio is subject to
federal income tax; instead, each investor in a Portfolio, such as a Fund,
is required to take into account in determining its federal income tax
liability its share of the Portfolio's income, gains, losses, deductions,
and credits, without regard to whether it has received any cash
distributions from the Portfolio. Each Portfolio also is not subject to
Delaware or New York income or franchise tax.

- 44 -
<PAGE>

Because each Fund is deemed to own a proportionate share of
its corresponding Portfolio's assets and income for purposes of
determining whether the Fund satisfies the requirements to qualify as a
RIC, each Portfolio intends to continue to conduct its operations so that
its corresponding Fund will be able to continue to satisfy all those
requirements.

Distributions to a Fund from its corresponding Portfolio
(whether pursuant to a partial or complete withdrawal or otherwise) will
not result in the Fund's recognition of any gain or loss for federal
income tax purposes, except that (1) gain will be recognized to the extent
any cash that is distributed exceeds the Fund's basis for its interest in
the Portfolio before the distribution, (2) income or gain will be
recognized if the distribution is in liquidation of the Fund's entire
interest in the Portfolio and includes a disproportionate share of any
unrealized receivables held by the Portfolio, and (3) loss will be
recognized if a liquidation distribution consists solely of cash and/or
unrealized receivables. A Fund's basis for its interest in its
corresponding Portfolio generally equals the amount of cash the Fund
invests in the Portfolio, increased by the Fund's share of the Portfolio's
net income and gains and decreased by (1) the amount of cash and the basis
of any property the Portfolio distributes to the Fund and (2) the Fund's
share of the Portfolio's losses.

Dividends and interest received by a Portfolio may be subject
to income, withholding, or other taxes imposed by foreign countries and
U.S. possessions that would reduce the yield on its securities. Tax
treaties between certain countries and the United States may reduce or
eliminate these foreign taxes, however, and many foreign countries do not
impose taxes on capital gains in respect of investments by foreign
investors.

A Portfolio may invest in the stock of "passive foreign
investment companies" ("PFICs"). A PFIC is a foreign corporation that, in
general, meets either of the following tests: (1) at least 75% of its
gross income is passive or (2) an average of at least 50% of its assets
produce, or are held for the production of, passive income. Under certain
circumstances, if a Portfolio holds stock of a PFIC, its corresponding
Fund (indirectly through its interest in the Portfolio) will be subject to
federal income tax on a portion of any "excess distribution" received on
the stock or of any gain on disposition of the stock (collectively, "PFIC
income"), plus interest thereon, even if the Fund distributes the PFIC
income as a taxable dividend to its shareholders. The balance of the PFIC
income will be included in the Fund's investment company taxable income
and, accordingly, will not be taxable to it to the extent that income is
distributed to its shareholders.

If a Portfolio invests in a PFIC and elects to treat the PFIC
as a "qualified electing fund," then in lieu of its corresponding Fund's

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<PAGE>

incurring the foregoing tax and interest obligation, the Fund would be
required to include in income each year its pro rata share of the
Portfolio's pro rata share of the qualified electing fund's annual
ordinary earnings and net capital gain (the excess of net long-term
capital gain over net short-term capital loss) -- which most likely would
have to be distributed by the Fund to satisfy the Distribution Requirement
and to avoid imposition of the Excise Tax -- even if those earnings and
gain were not received by the Portfolio. In most instances it will be
very difficult, if not impossible, to make this election because of
certain requirements thereof.

Pursuant to proposed regulations, open-end RICs, such as the
Funds, would be entitled to elect to mark to market their stock in certain
PFICs. Marking to market, in this context, means recognizing as gain for
each taxable year the excess, as of the end of that year, of the fair
market value of each such PFIC's stock over the adjusted basis in that
stock (including mark to market gain for each prior year for which an
election was in effect).

The Portfolios' use of hedging strategies, such as writing
(selling) and purchasing options and entering into forward contracts,
involves complex rules that will determine for income tax purposes the
character and timing of recognition of the gains and losses the Portfolios
realize in connection therewith. Income from foreign currencies (except
certain gains therefrom that may be excluded by future regulations), and
income from transactions in Hedging Instruments derived by the Portfolio
with respect to its business of investing in securities or foreign cur-
rencies, will qualify as permissible income for its corresponding Fund
under the Income Requirement. However, income from the disposition by a
Portfolio of options (other than those on foreign currencies) will be
subject to the Short-Short Limitation for its corresponding Fund if they
are held for less than three months. Income from the disposition of
foreign currencies, and Hedging Instruments on foreign currencies, that
are not directly related to a Portfolio's principal business of investing
in securities (or options with respect thereto) also will be subject to
the Short-Short Limitation for its corresponding Fund if they are held for
less than three months.

If a Portfolio satisfies certain requirements, any increase
in value of a position that is part of a "designated hedge" will be offset
by any decrease in value (whether realized or not) of the offsetting
hedging position during the period of the hedge for purposes of
determining whether its corresponding Fund satisfies the Short-Short
Limitation. Thus, only the net gain (if any) from the designated hedge
will be included in gross income for purposes of that limitation. Each
Portfolio will consider whether it should seek to qualify for this
treatment for its hedging transactions. To the extent a Portfolio does
not so qualify, it may be forced to defer the closing out of certain
Hedging Instruments beyond the time when it otherwise would be
advantageous to do so, in order for its corresponding Fund to continue to
qualify as a RIC.

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<PAGE>

Neuberger & Berman PARTNERS Portfolio may acquire zero coupon
securities or other securities issued with original issue discount
("OID"). As a holder of those securities, that Portfolio (and, through
it, its corresponding Fund) must take into account the OID that accrues on
the securities during the taxable year, even if it receives no
corresponding payment on the securities during the year. Because
Neuberger & Berman PARTNERS Trust annually must distribute substantially
all of its investment company taxable income (including its share of the
Portfolio's accrued OID) to satisfy the Distribution Requirement and to
avoid imposition of the Excise Tax, that Fund may be required in a parti-
cular year to distribute as a dividend an amount that is greater than its
proportionate share of the total amount of cash Neuberger & Berman
PARTNERS Portfolio actually receives. Those distributions will be made
from that Fund's (or its proportionate share of that Portfolio's) cash
assets or, if necessary, from the proceeds of sales of that Portfolio's
securities. That Portfolio may realize capital gains or losses from those
sales, which would increase or decrease Neuberger & Berman PARTNERS
Trust's investment company taxable income and/or net capital gain. In
addition, any such gains may be realized on the disposition of securities
held for less than three months. Because of the Short-Short Limitation,
any such gains would reduce Neuberger & Berman PARTNERS Portfolio's
ability to sell other securities, or certain Hedging Instruments, held for
less than three months that it might wish to sell in the ordinary course
of its portfolio management.

Taxation of the Funds' Shareholders

If Fund shares are sold at a loss after being held for six
months or less, the loss will be treated as long-term, instead of short-
term, capital loss to the extent of any capital gain distributions
received on those shares. Investors also should be aware that if shares
of any Fund are purchased shortly before the record date for a dividend or
other distribution, the purchaser will receive some portion of the
purchase price back as a taxable distribution.

PORTFOLIO TRANSACTIONS

Neuberger & Berman acts as each Portfolio's principal broker
in the purchase and sale of its portfolio securities (other than the
substantial portion of the portfolio transactions of Neuberger & Berman
GENESIS Portfolio that involves securities traded on the OTC market, which
that Portfolio purchases and sells in principal transactions with dealers
who are the principal market makers for the securities) and in connection
with the writing of covered call options on its securities. Transactions
in portfolio securities for which Neuberger & Berman serves as broker will
be effected in accordance with Rule 17e-1 under the 1940 Act.

During the period August 3 to August 31, 1993, Neuberger &
Berman MANHATTAN Portfolio paid brokerage commissions of $42,780, of which

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<PAGE>

$32,922 was paid to Neuberger & Berman. During the fiscal year ended
August 31, 1994, that Portfolio paid brokerage commissions of $655,640, of
which $525,610 was paid to Neuberger & Berman.

During the fiscal year ended August 31, 1995, Neuberger &
Berman MANHATTAN Portfolio paid brokerage commissions of $654,982, of
which $436,568 was paid to Neuberger & Berman. Transactions in which that
Portfolio used Neuberger & Berman as broker comprised 73.70% of the
aggregate dollar amount of transactions involving the payment of
commissions, and 66.65% of the aggregate brokerage commissions paid by the
Portfolio, during the fiscal year ended August 31, 1995. 94.53% of the
$218,414 paid to other brokers by that Portfolio during that fiscal year
(representing commissions on transactions involving approximately
$81,737,328) was directed to those brokers because of research services
they provided. During the fiscal year ended August 31, 1995, that
Portfolio acquired securities of the following of its "regular brokers or
dealers" (as defined in the 1940 Act) ("Regular B/Ds"): Bear Stearns &
Co. Inc., and Morgan Stanley & Co., Inc.; at that date, that Portfolio
held the securities of its Regular B/Ds with an aggregate value as
follows: Bear Stearns & Co. Inc., $6,187,500, and Morgan Stanley & Co.,
Inc., $10,859,370.

During the period August 3 to August 31, 1993, Neuberger &
Berman GENESIS Portfolio paid brokerage commissions of $13,580, of which
$10,660 was paid to Neuberger & Berman. During the fiscal year ended
August 31, 1994, that Portfolio paid brokerage commissions of $287,587, of
which $170,883 was paid to Neuberger & Berman.

During the fiscal year ended August 31, 1995, Neuberger &
Berman GENESIS Portfolio paid brokerage commissions of $199,718, of which
$118,014 was paid to Neuberger & Berman. Transactions in which that
Portfolio used Neuberger & Berman as broker comprised 55.55% of the
aggregate dollar amount of transactions involving the payment of
commissions, and 59.09% of the aggregate brokerage commissions paid by the
Portfolio, during the fiscal year ended August 31, 1995. 80.60% of the
$81,704 paid to other brokers by that Portfolio during that fiscal year
(representing commissions on transactions involving approximately
$21,361,399) was directed to those brokers because of research services
they provided. During the fiscal year ended August 31, 1995, that
Portfolio acquired securities of the following of its Regular B/Ds: EXXON
Credit Corp., and General Electric Capital Corp.; at that date, that
Portfolio held the securities of its Regular B/Ds with an aggregate value
as follows: None.

During the period August 3 to August 31, 1993, Neuberger &
Berman FOCUS Portfolio paid brokerage commissions of $46,296, of which
$42,606 was paid to Neuberger & Berman. During the fiscal year ended

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<PAGE>

August 31, 1994, that Portfolio paid brokerage commissions of $719,994, of
which $567,972 was paid to Neuberger & Berman.

During the fiscal year ended August 31, 1995, Neuberger &
Berman FOCUS Portfolio paid brokerage commissions of $1,031,245, of which
$617,957 was paid to Neuberger & Berman. Transactions in which that
Portfolio used Neuberger & Berman as broker comprised 66.83% of the
aggregate dollar amount of transactions involving the payment of
commissions, and 59.92% of the aggregate brokerage commissions paid by the
Portfolio, during the fiscal year ended August 31, 1995. 89.62% of the
$413,288 paid to other brokers by that Portfolio during that fiscal year
(representing commissions on transactions involving approximately
$160,855,610) was directed to those brokers because of research services
they provided. During the fiscal year ended August 31, 1995, that
Portfolio acquired securities of the following of its Regular B/Ds: EXXON
Credit Corp., General Electric Capital Corp., and Merrill Lynch, Pierce,
Fenner & Smith, Inc.; at that date, that Portfolio held the securities of
its Regular B/Ds with an aggregate value as follows: General Electric
Capital Corp., $2,300,000, and Merrill Lynch, Pierce, Fenner & Smith,
Inc., $14,406,250.

During the period August 3 to August 31, 1993, Neuberger &
Berman GUARDIAN Portfolio paid brokerage commissions of $201,981, of which
$149,496 was paid to Neuberger & Berman. During the fiscal year ended
August 31, 1994, that Portfolio paid brokerage commissions of $2,207,401,
of which $1,647,807 was paid to Neuberger & Berman.

During the fiscal year ended August 31, 1995, Neuberger &
Berman GUARDIAN Portfolio paid brokerage commissions of $3,751,206, of
which $2,521,523 was paid to Neuberger & Berman. Transactions in which
that Portfolio used Neuberger & Berman as broker comprised 70.49% of the
aggregate dollar amount of transactions involving the payment of
commissions, and 67.22% of the aggregate brokerage commissions paid by the
Portfolio, during the fiscal year ended August 31, 1995. 82.78% of the
$1,229,683 paid to other brokers by that Portfolio during that fiscal year
(representing commissions on transactions involving approximately
$509,609,733) was directed to those brokers because of research services
they provided. During the fiscal year ended August 31, 1995, that
Portfolio acquired securities of the following of its Regular B/Ds: EXXON
Credit Corp., General Electric Capital Corp., and Merrill Lynch, Pierce,
Fenner & Smith, Inc.; at that date, that Portfolio held the securities of
its Regular B/Ds with an aggregate value as follows: General Electric
Capital Corp., $1,500,000, and Merrill Lynch, Pierce, Fenner & Smith,
Inc., $48,116,875.

During the period August 3 to August 31, 1993, Neuberger &
Berman PARTNERS Portfolio paid brokerage commissions of $373,486, of which
$272,542 was paid to Neuberger & Berman. During the fiscal year ended

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<PAGE>

August 31, 1994, that Portfolio paid brokerage commissions of $2,994,540,
of which $2,031,570 was paid to Neuberger & Berman.

During the fiscal year ended August 31, 1995, Neuberger &
Berman PARTNERS Portfolio paid brokerage commissions of $4,608,156, of
which $3,092,789 was paid to Neuberger & Berman. Transactions in which
that Portfolio used Neuberger & Berman as broker comprised 71.83% of the
aggregate dollar amount of transactions involving the payment of
commissions, and 67.12% of the aggregate brokerage commissions paid by the
Portfolio, during the fiscal year ended August 31, 1995. 95.02% of the
$1,515,367 paid to other brokers by that Portfolio during that fiscal year
(representing commissions on transactions involving approximately
$600,676,631) was directed to those brokers because of research services
they provided. During the fiscal year ended August 31, 1995, that
Portfolio acquired securities of the following of its Regular B/Ds:
Salomon Brothers, Inc., EXXON Credit Corp., and General Electric Capital
Corp.; at that date, that Portfolio held the securities of its Regular
B/Ds with an aggregate value as follows: General Electric Capital Corp.,
$7,600,000.

Insofar as portfolio transactions of Neuberger & Berman
PARTNERS Portfolio result from active management of equity securities, and
insofar as portfolio transactions of Neuberger & Berman MANHATTAN
Portfolio result from seeking capital appreciation by selling securities
whenever sales are deemed advisable without regard to the length of time
the securities may have been held, it may be expected that the aggregate
brokerage commissions paid by those Portfolios to brokers (including
Neuberger & Berman where it acts in that capacity) may be greater than if
securities were selected solely on a long-term basis.

Portfolio securities are, from time to time, loaned by a
Portfolio to Neuberger & Berman in accordance with the terms and
conditions of an order issued by the SEC. The order exempts such
transactions from provisions of the 1940 Act that would otherwise prohibit
such transactions, subject to certain conditions. Among the conditions of
the order, securities loans made by a Portfolio to Neuberger & Berman must
be fully secured by cash collateral. Under the order, the portion of the
income on the cash collateral which may be shared with Neuberger & Berman
is determined with reference to concurrent arrangements between Neuberger
& Berman and non-affiliated lenders with which it engages in similar
transactions. In addition, where Neuberger & Berman borrows securities
from a Portfolio in order to relend them to others, Neuberger & Berman is
required to pay that Portfolio, on a quarterly basis, certain "excess
earnings" that Neuberger & Berman otherwise has derived from the relending
of the borrowed securities. When Neuberger & Berman desires to borrow a
security that a Portfolio has indicated a willingness to lend, Neuberger &
Berman must borrow such security from that Portfolio, rather than from an
unaffiliated lender, unless the unaffiliated lender is willing to lend
such security on more favorable terms (as specified in the order) than
that Portfolio. If a Portfolio's expenses exceed its income in any

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<PAGE>

securities loan transaction with Neuberger & Berman, Neuberger & Berman
must reimburse that Portfolio for such loss.

During the fiscal years ended August 31, 1995 and 1994, the
Portfolios earned the following amounts of interest income from the
collateralization of securities loans, from which Neuberger & Berman was
paid the indicated amounts:

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<PAGE>

1994 1995
----- ----

Payment to Payment to
Neuberger & Neuberger &
Portfolio Interest Berman Interest Berman
--------- -------- ---------- ------- ---------

Neuberger & Berman $147,103 $119,620 $1,430,672
GUARDIAN Portfolio $1,252,190

Neuberger & Berman 38,627 33,225 327,447 291,207
FOCUS Portfolio

Neuberger & Berman 16,085 13,880 52,410 48,736
PARTNERS Portfolio

Neuberger & Berman 0 0 0 0
GENESIS Portfolio

Neuberger & Berman 0 0 507,239 270,594
MANHATTAN Portfolio

</TABLE>

During the period August 3 to August 31, 1993, Neuberger &
Berman GUARDIAN Portfolio earned interest income of $3,164 from the
collateralization of securities loans, from which Neuberger & Berman was
paid $2,881. During the same period, none of the other Portfolios earned
interest income from the collateralization of securities loans.

Each Portfolio may also lend securities to unaffiliated
entities, including brokers or dealers, banks and other recognized
institutional borrowers of securities, provided that cash or equivalent
collateral, equal to at least 100% of the market value of the securities
loaned, is continuously maintained by the borrower with the Portfolio.
During the time securities are on loan, the borrower will pay the
Portfolio an amount equivalent to any dividends or interest paid on such
securities. The Portfolio may invest the cash collateral and earn income,
or it may receive an agreed upon amount of interest income from a borrower
who has delivered equivalent collateral. These loans are subject to
termination at the option of the Portfolio or the borrower. The Portfolio

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<PAGE>

may pay reasonable administrative and custodial fees in connection with a
loan and may pay a negotiated portion of the interest earned on the cash
or equivalent collateral to the borrower or placing broker. The Portfolio
does not have the right to vote securities on loan, but would terminate
the loan and regain the right to vote if that were considered important
with respect to the investment.

A committee of Independent Portfolio Trustees from time to
time reviews, among other things, information relating to securities loans
by the Portfolios.

In effecting securities transactions, each Portfolio gen-
erally seeks to obtain the best price and execution of orders. Commission
rates, being a component of price, are considered along with other
relevant factors. Each Portfolio plans to continue to use Neuberger &
Berman as its principal broker where, in the judgment of N&B Management
(the Portfolio's investment manager and an affiliate of Neuberger &
Berman), that firm is able to obtain a price and execution at least as
favorable as other qualified brokers. To the Portfolios' knowledge,
however, no affiliate of any Portfolio receives give-ups or reciprocal
business in connection with their securities transactions.

The use of Neuberger & Berman as a broker for each Portfolio
is subject to the requirements of Section 11(a) of the Securities Exchange
Act of 1934. Section 11(a) prohibits members of national securities
exchanges from retaining compensation for executing exchange transactions
for accounts which they or their affiliates manage, except where they have
the authorization of the persons authorized to transact business for the
account and comply with certain annual reporting requirements. The
Portfolio Trustees have expressly authorized Neuberger & Berman to retain
such compensation, and Neuberger & Berman complies with the reporting
requirements of Section 11(a).

Under the 1940 Act, commissions paid by a Portfolio to
Neuberger & Berman in connection with a purchase or sale of securities on
a securities exchange may not exceed the usual and customary broker's
commission. Accordingly, it is each Portfolio's policy that the
commissions paid to Neuberger & Berman must, in N&B Management's judgment,
be (1) at least as favorable as those charged by other brokers having
comparable execution capability and (2) at least as favorable as
commissions contemporaneously charged by Neuberger & Berman on comparable
transactions for its most favored unaffiliated customers, except for
accounts for which Neuberger & Berman acts as a clearing broker for
another brokerage firm and customers of Neuberger & Berman considered by a
majority of the Independent Portfolio Trustees not to be comparable to the
Portfolio. The Portfolios do not deem it practicable and in their best
interests to solicit competitive bids for commissions on each transaction
effected by Neuberger & Berman. However, consideration regularly is given

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<PAGE>

to information concerning the prevailing level of commissions charged by
other brokers on comparable transactions during comparable periods of
time. The 1940 Act generally prohibits Neuberger & Berman from acting as
principal in the purchase or sale of securities for a Portfolio's account,
unless an appropriate exemption is available.

A committee of Independent Portfolio Trustees from time to
time reviews, among other things, information relating to the commissions
charged by Neuberger & Berman to the Portfolios and to its other customers
and information concerning the prevailing level of commissions charged by
other brokers having comparable execution capability. In addition, the
procedures pursuant to which Neuberger & Berman effects brokerage
transactions for the Portfolios must be reviewed and approved no less
often than annually by a majority of the Independent Portfolio Trustees.

Each Portfolio expects that it will continue to execute a
portion of its transactions through brokers other than Neuberger & Berman.
In selecting those brokers, N&B Management considers the quality and
reliability of brokerage services, including execution capability,
performance, and financial responsibility, and may consider research and
other investment information provided by, and sale of Fund shares effected
through, those brokers.

To ensure that accounts of all investment clients, including
the Portfolio, are treated fairly in the event that transaction
instructions for more than one investment account regarding the same
security are received by Neuberger & Berman at or about the same time,
Neuberger & Berman may combine transaction orders placed on behalf of
clients, including advisory accounts in which affiliated persons have an
investment interest, for the purpose of negotiating brokerage commissions
or obtaining a more favorable price. Where appropriate, securities
purchased or sold may be allocated, in terms of amount, to a client
according to the proportion that the size of the transaction order
actually placed by the account bears to the aggregate size of transaction
orders simultaneously made by the other accounts, subject to de minimis
exceptions, with all participating accounts paying or receiving the same
price.

A committee comprised of officers of N&B Management and
partners of Neuberger & Berman who are portfolio managers of some of the
Portfolios and Other N&B Funds (collectively, "N&B Funds") and some of
Neuberger & Berman's managed accounts ("Managed Accounts") evaluates semi-
annually the nature and quality of the brokerage and research services
provided by other brokers. Based on this evaluation, the committee
establishes a list and projected rankings of preferred brokers for use in
determining the relative amounts of commissions to be allocated to those
brokers. Ordinarily, the brokers on the list effect a large portion of
the brokerage transactions for the N&B Funds and the Managed Accounts that
are not effected by Neuberger & Berman. However, in any semi-annual
period, brokers not on the list may be used, and the relative amounts of

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<PAGE>

brokerage commissions paid to the brokers on the list may vary
substantially from the projected rankings. These variations reflect the
following factors, among others: (1) brokers not on the list or ranking
below other brokers on the list may be selected for particular transac-
tions because they provide better price and/or execution, which is the
primary consideration in allocating brokerage; (2) adjustments may be
required because of periodic changes in the execution or research
capabilities of particular brokers, or in the execution or research needs
of the N&B Funds and/or the Managed Accounts; and (3) the aggregate amount
of brokerage commissions generated by transactions for the N&B Funds and
the Managed Accounts may change substantially from one semi-annual period
to the next.

The commissions charged by a broker other than Neuberger &
Berman may be higher than the amount another firm might charge if N&B
Management determines in good faith that the amount of those commissions
is reasonable in relation to the value of the brokerage and research
services provided by the broker. N&B Management believes that those
research services benefit the Portfolios by supplementing the research
otherwise available to N&B Management. That research may be used by N&B
Management in servicing Other N&B Funds and, in some cases, by Neuberger &
Berman in servicing the Managed Accounts. On the other hand, research
received by N&B Management from brokers effecting portfolio transactions
on behalf of the Other N&B Funds and by Neuberger & Berman from brokers
effecting portfolio transactions on behalf of the Managed Accounts may be
used for the Portfolios' benefit.

Mark R. Goldstein, Judith M. Vale, Lawrence Marx III and Kent
C. Simons, and Michael M. Kassen and Robert I. Gendelman, each of whom is
a Vice President of N&B Management (except for Mr. Gendelman, who is an
Assistant Vice President) and a general partner of Neuberger & Berman
(except for Ms. Vale and Mr. Gendelman), are the persons primarily respon-
sible for making decisions as to specific action to be taken with respect
to the investment portfolios of Neuberger & Berman MANHATTAN, Neuberger &
Berman GENESIS, Neuberger & Berman FOCUS and Neuberger & Berman GUARDIAN,
and Neuberger & Berman PARTNERS Portfolios, respectively. Each of them
has full authority to take action with respect to portfolio transactions
and may or may not consult with other personnel of N&B Management prior to
taking such action. If Mr. Goldstein is unavailable to perform his
responsibilities, Susan Switzer, who is an Assistant Vice President of N&B
Management, will assume responsibility for the portfolio of Neuberger &
Berman MANHATTAN Portfolio.

Portfolio Turnover

The portfolio turnover rate is the lesser of the cost of the
securities purchased or the value of the securities sold, excluding all
securities, including options, whose maturity or expiration date at the
time of acquisition was one year or less, divided by the average monthly
value of such securities owned during the year.

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<PAGE>

REPORTS TO SHAREHOLDERS

Shareholders of each Fund receive unaudited semi-annual
financial statements, as well as year-end financial statements audited by
the independent auditors or independent accountants for the Fund and its
corresponding Portfolio. Each Fund's statements show the investments
owned by its corresponding Portfolio and the market values thereof and
provide other information about the Fund and its operations, including the
Fund's beneficial interest in its corresponding Portfolio.

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<PAGE>

ORGANIZATION

Prior to January 1, 1995, the names of Neuberger and Berman
FOCUS Trust and Neuberger & Berman FOCUS Portfolio were Neuberger & Berman
Selected Sectors Trust and Neuberger & Berman Selected Sectors Portfolio,
respectively.

CUSTODIAN AND TRANSFER AGENT

Each Fund and Portfolio has selected State Street Bank and
Trust Company ("State Street"), 225 Franklin Street, Boston, MA 02110, as
custodian for its securities and cash. All correspondence should be
mailed to Neuberger & Berman Funds, Institutional Services, 605 Third
Avenue, 2nd Floor, New York, NY 10158-0180. State Street also serves as
each Fund's transfer agent, administering purchases, redemptions, and
transfers of Fund shares with respect to Institutions and the payment of
dividends and other distributions to Institutions.

INDEPENDENT AUDITORS/ACCOUNTANTS

Each Fund and Portfolio (other than Neuberger & Berman
MANHATTAN Trust and Portfolio) has selected Ernst & Young LLP, 200
Clarendon Street, Boston, MA 02116, as the independent auditors who will
audit its financial statements. Neuberger & Berman MANHATTAN Trust and
Portfolio have selected Coopers & Lybrand L.L.P., One Post Office Square,
Boston, MA 02109, as the independent accountants who will audit their
financial statements.

LEGAL COUNSEL

Each Fund and Portfolio has selected Kirkpatrick & Lockhart
LLP, 1800 M Street, N.W., Washington, D.C. 20036, as its legal counsel.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

The following table sets forth the name, address, and
percentage of ownership of each person who owned of record, or who was
known by each Fund to own beneficially or of record, 5% or more of that
Fund's outstanding shares at November 30, 1995:

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<PAGE>

Name and Address Percentage of
---------------- Ownership at
November 30, 1995
-----------------

Neuberger & Berman MAC & Co. 51.68%
MANHATTAN Trust A/C 195-643
Mellon Bank N.A.
Mutual Funds
P.O. Box 320
Pittsburgh, PA 15230-0320

The Northern Trust Co., Trustee 25.56%
FBO Case Corporation
22-75833
P.O. Box 92956
Chicago, IL 60675-0001

Riggs National Bank of Washington DC 7.40%
Retirement Plan for Employees of
Professional Golfers Assoc. of America
100 Avenue of the Champions
Palm Beach Gardens, FL 33418-3653

National Finance Services Corp.* 5.19%
P.O. Box 3908
Church Street Station
New York, NY 100008-3908

Neuberger & Berman PRC Inc. 50.62%
PARTNERS Trust c/o T. Rowe Price Financial
Attn: Asset Recom.
P.O. Box 17215
Baltimore, MD 21297-0354

The Bank of NY, Trustee 20.82%
Chesapeake Corp. 401(k) Plan
One Wall Street
Master Trust
7th Floor
New York, NY 10286-0001

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<PAGE>

Name and Address Percentage of
---------------- Ownership at
November 30, 1995
-----------------

National Financial Services Corp.* 12.18%
P.O. Box 3908
Church Street Station
New York, NY 10008-3908

Marshall & Isley Trust Co., Trustee 6.22%
Mitra & Co.
Attn: Exp Mutual Funds TR14
1000 N. Water Street
Milwaukee, WI 53202-3197

Neuberger & Berman The Northern Trust Co., Trustee 27.18%
GUARDIAN Trust Digital Equipment Corp.
DTD 1-3-95
P.O. Box 92956
Chicago, IL 60675-0001

MAC & Co. 17.15%
A/C 195-643
Mellon Bank N.A.
P.O. Box 320
Pittsburgh, PA 15230-0320

National Financial Services Corp.* 9.54%
P.O. Box 3908
Church Street Station
New York, NY 100008-3908

The Bank of NY, Trustee 6.33%
Melville Corp. 401(k)
PSRP-General DTD 6/7/89
1 Wall Street, 7th Floor
New York, NY 10286-0001

MAC & Co. 5.38%
A/C #854-169
Mellon Bank N.A.
Mutual Funds Dept.
P.O. Box 320
Pittsburgh, PA 15230-0320

Neuberger & Berman National Financial Services Corp.* 51.22%
FOCUS Trust P.O. Box 3908
Church Street Station
New York, NY 100008-3908

- 59 -
<PAGE>

Name and Address Percentage of
---------------- Ownership at
November 30, 1995
-----------------

MAC & Co. 21.80%
A/C 195-643
Mellon Bank N.A.
P.O. Box 320
Pittsburgh, PA 15230-0320

Aetna Life Insurance & Annuity Co. 8.97%
ACES - Separate Account F
Attn: Michael Weiner - RTAL
15 Farmington Ave.
Hartford, CT 06156-0001

Neuberger & Berman Profit Sharing Plan for Partners & 72.78%
GENESIS Trust Principals of Price Waterhouse
P.O. Box 30004
Tampa, FL 33630-3004

MAC & Co. 22.34%
A/C 195-643
Mellon Bank N.A.
P.O. Box 320
Pittsburgh, PA 15230-0320

</TABLE>

* National Financial Services Corp. holds these shares of
record for the account of certain of its clients and has informed the
Funds of its policy to maintain the confidentiality of holdings in its
client accounts unless disclosure is expressly required by law.

At December 6, 1995, the trustees and officers of the Trusts,
as a group, owned beneficially or of record less than 1% of the
outstanding shares of each Fund.

REGISTRATION STATEMENT

This SAI and the Prospectus do not contain all the infor-
mation included in the Trust's registration statement filed with the SEC
under the 1933 Act with respect to the securities offered by the
Prospectus. Certain portions of the registration statement have been
omitted pursuant to SEC rules and regulations. The registration
statement, including the exhibits filed therewith, may be examined at the
SEC's offices in Washington, D.C.

- 60 -
<PAGE>

Statements contained in this SAI and in the Prospectus as to
the contents of any contract or other document referred to are not
necessarily complete, and in each instance reference is made to the copy
of the contract or other document filed as an exhibit to the registration
statement, each such statement being qualified in all respects by such
reference.

FINANCIAL STATEMENTS

The following financial statements and related documents are
incorporated herein by reference from the Funds' Annual Report to
shareholders for the fiscal year ended August 31, 1995:

The audited financial statements of the Funds and Portfolios
and notes thereto for the fiscal year ended August 31, 1995,
and the reports of Ernst & Young LLP, independent auditors,
with respect to such audited financial statements of
Neuberger & Berman GENESIS Trust and Portfolio, Neuberger &
Berman FOCUS Trust and Portfolio, Neuberger & Berman GUARDIAN
Trust and Portfolio, and Neuberger & Berman PARTNERS Trust
and Portfolio, and the report of Coopers & Lybrand L.L.P.,
independent accountants, with respect to such audited
financial statements of Neuberger & Berman MANHATTAN Trust
and Portfolio.

- 61 -
<PAGE>

Appendix A

RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER

S&P corporate bond ratings:

AAA - Bonds rated AAA have the highest rating assigned by
S&P. Capacity to pay interest and repay principal is extremely strong.

AA - Bonds rated AA have a very strong capacity to pay
interest and repay principal and differ from the higher rated issues only
in small degree.

A - Bonds rated A have a strong capacity to pay interest and
repay principal, although they are somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
bonds in higher rated categories.

BBB - Bonds rated BBB are regarded as having an adequate
capacity to pay principal and interest. Whereas they normally exhibit
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
principal and interest for bonds in this category than for bonds in higher
rated categories.

BB, B, CCC, CC, C - Bonds rated BB, B, CCC, CC, and C are
regarded, on balance, as predominantly speculative with respect to
capacity to pay interest and repay principal in accordance with the terms
of the obligation. BB indicates the lowest degree of speculation and C
the highest degree of speculation. While such bonds will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.

CI - The rating CI is reserved for income bonds on which no
interest is being paid.

D - Bonds rated D are in default, and payment of interest
and/or repayment of principal is in arrears.

Plus (+) or Minus (-) - The ratings above may be modified by
the addition of a plus or minus sign to show relative standing within the
major rating categories.

Moody's corporate bond ratings:

Aaa - Bonds rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large or
an exceptionally stable margin, and principal is secure. Although the
various protective elements are likely to change, the changes that can be
visualized are most unlikely to impair the fundamentally strong position
of the issuer.

- 62 -
<PAGE>

Aa - Bonds rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally
known as "high-grade bonds." They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa-rated
securities, fluctuation of protective elements may be of greater
amplitude, or there may be other elements present that make the long-term
risks appear somewhat larger than in Aaa-rated securities.

A - Bonds rated A possess many favorable investment
attributes and are to be considered as upper-medium grade obligations.
Factors giving security to principal and interest are considered adequate,
but elements may be present that suggest a susceptibility to impairment
sometime in the future.

Baa - Bonds which are rated Baa are considered as medium-
grade obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for the
present, but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. These bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well.

Ba - Bonds rated Ba are judged to have speculative
elements; their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.

B - Bonds rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.

Caa - Bonds rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with respect
to principal or interest.

Ca - Bonds rated Ca represent obligations that are
speculative in a high degree. Such issues are often in default or have
other marked shortcomings.

C - Bonds rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

Modifiers--Moody's may apply numerical modifiers 1, 2, and 3 in each
generic rating classification described above. The modifier 1 indicates
that the security ranks in the higher end of its generic rating category;
the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates
that the issuer ranks in the lower end of its generic rating.

- 63 -
<PAGE>

S&P commercial paper ratings:

A-1 - This highest category indicates that the degree of
safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics are denoted with a plus
sign (+).

Moody's commercial paper ratings

Issuers rated Prime-1 (or related supporting institutions),
also known as P-1, have a superior capacity for repayment of short-term
promissory obligations. Prime-1 repayment capacity will normally be
evidenced by the following characteristics:

- Leading market positions in well-established
industries.
- High rates of return on funds employed.
- Conservative capitalization structures with moderate
reliance on debt and ample asset protection.
- Broad margins in earnings coverage of fixed financial
charges and high internal cash generation.
- Well-established access to a range of financial markets
and assured sources of alternate liquidity.

- 64 -
<PAGE>

Appendix B

PERFORMANCE DATA

- 65 -
<PAGE>

COST OF LIVING INDEX

PREPARED FOR: BARBARA
<TABLE>
<CAPTION>

Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
---- ---------- --------- -------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
9/27/88 $10,000.00 $119.8000 0.00% 83.472 $119.8000 $10,000

Dividends and Capital Gains Reinvested

=========== C O S T O F S H A R E S ==============
Annual Cumulative Total Annual
Cumulative Income Income Investment Cap Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
8/31/89 10,000 0 0 10,000 0
8/31/90 10,000 0 0 10,000 0
8/31/91 10,000 0 0 10,000 0
8/31/92 10,000 0 0 10,000 0
8/31/93 10,000 0 0 10,000 0
8/31/94 10,000 0 0 10,000 0
8/31/95 10,000 0 0 10,000 0

Totals 0 0

================ V A L U E O F S H A R E S ===============
From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
---- ---------- ---------- ----- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
8/31/89 10,401 0 10,401 0 10,401 83
8/31/90 10,985 0 10,985 0 10,985 83
8/31/91 11,402 0 11,402 0 11,402 83
8/31/92 11,761 0 11,761 0 11,761 83
8/31/93 12,087 0 12,087 0 12,087 83
8/31/94 12,437 0 12,437 0 12,437 83
8/31/95 12,730 0 12,730 0 12,730 83

Totals 12,730 0 12,730 0 12,730 83

Average Annual Total Return for This Illustration: 3.55% (Annual Compounding)
</TABLE>
<PAGE>

FROM FOCUS TRUST

PREPARED FOR: BARBARA

Net Asset Initial
Initial Offering Sales Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
---- ---------- -------- ----------- ---------- ---------- ---------

<S> <C> <C> <C> <C> <C> <C>
10/19/55 $200,000.00 $2.5084 0.00% 79,733.329 $2.5084 $200,000

Systematic Withdrawal Plan
Dividends and Capital Gains Reinvested
Monthly Withdrawals of $1,666.67 (10.0% Annually) Beginning 11/30/55

====================== AMOUNTS WITHDRAWN ========================
From
Income From Annual Cumulative
Date Dividends Principal Total Total
---- --------- --------- ------ ----------
<S> <C> <C> <C> <C>
12/31/55 0 3,333 3,333 3,333
12/31/56 3,075 16,925 20,000 23,333
12/31/57 2,911 17,089 20,000 43,333
12/31/58 3,531 16,469 20,000 63,333
12/31/59 2,647 17,353 20,000 83,333
12/31/60 2,638 17,362 20,000 103,333
12/31/61 1,514 18,486 20,000 123,333
12/31/62 2,823 17,177 20,000 143,333
12/31/63 4,158 15,842 20,000 163,333
12/31/64 4,580 15,420 20,000 183,333
12/31/65 4,878 15,122 20,000 203,333
12/31/66 5,474 14,526 20,000 223,333
12/31/67 6,001 13,999 20,000 243,333
12/31/68 7,814 12,186 20,000 263,333
12/31/69 10,904 9,096 20,000 283,333
12/31/70 11,517 8,483 20,000 303,333
12/31/71 8,939 11,061 20,000 323,333
12/31/72 6,963 13,037 20,000 343,333
12/31/73 7,714 12,286 20,000 363,333
12/31/74 10,666 9,334 20,000 383,333
12/31/75 11,931 8,069 20,000 403,333
12/31/76 11,691 8,309 20,000 423,333
12/31/77 12,064 7,936 20,000 443,333
12/31/78 14,895 5,105 20,000 463,333
12/31/79 17,745 2,255 20,000 483,333
12/31/80 24,168 -4,168 20,000 503,333
12/31/81 34,507 -14,507 20,000 523,333
12/31/82 35,376 -15,376 20,000 543,333
<PAGE>

From
Income From Annual Cumulative
Date Dividends Principal Total Total
---- --------- --------- ------ ----------
<S> <C> <C> <C> <C>
12/31/83 38,234 -18,234 20,000 563,333
12/31/84 34,870 -14,870 20,000 583,333
12/31/85 39,588 -19,588 20,000 603,333
12/31/86 40,877 -20,877 20,000 623,333
12/31/87 31,651 -11,651 20,000 643,333
12/31/88 31,622 -11,622 20,000 663,333
12/31/89 31,152 -11,152 20,000 683,333
12/31/90 25,865 -5,865 20,000 703,333
12/31/91 27,428 -7,428 20,000 723,333
12/31/92 22,593 -2,593 20,000 743,333
12/31/93 4,220 15,780 20,000 763,333
12/31/94 10,487 9,513 20,000 783,333
8/31/95 0 13,333 13,333 796,666

Totals 609,711 186,955 796,666 796,666

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
====== VALUE OF REMAINING SHARES =======
Annual Remaining Capital
Cap Gain Original Gain Total Shares
Date Distrib'n Shares Shares Value Held
---- --------- --------- -------- ----- ------
<S> <C> <C> <C> <C>
12/31/55 0 224,392 0 224,392 78,535
12/31/56 7,330 243,982 8,155 252,137 75,616
12/31/57 8,869 182,115 14,547 196,662 73,399
12/31/58 5,116 239,403 26,648 266,051 69,711
12/31/59 14,487 260,750 47,285 308,035 69,413
12/31/60 12,216 244,571 60,887 305,458 68,446
12/31/61 12,799 262,910 83,479 346,389 67,418
12/31/62 6,319 191,487 73,223 264,710 65,143
12/31/63 9,227 205,607 94,268 299,875 63,590
12/31/64 9,923 198,421 107,998 306,419 62,459
12/31/65 12,757 225,255 145,661 370,916 61,763
12/31/66 24,135 189,601 158,410 348,011 64,430
12/31/67 28,440 228,946 232,144 461,090 66,401
12/31/68 29,099 211,733 256,462 468,195 69,003
12/31/69 12,581 162,510 218,142 380,652 69,986
12/31/70 4,495 139,496 203,486 342,982 69,223
12/31/71 9,498 133,615 219,440 353,055 69,109
12/31/72 9,192 129,330 243,386 372,716 68,633
12/31/73 4,408 103,616 223,115 326,731 66,855
12/31/74 0 73,168 173,873 247,041 64,865
12/31/75 0 85,275 223,115 308,390 63,102
12/31/76 10,166 98,133 289,582 387,715 63,565
12/31/77 13,091 87,043 290,631 377,674 64,760
12/31/78 16,463 78,911 298,167 377,078 66,370
12/31/79 18,820 106,167 433,773 539,940 68,772
12/31/80 55,081 136,243 600,430 736,673 75,144
12/31/81 65,009 120,522 518,239 638,761 86,666
12/31/82 18,042 128,437 493,997 622,434 92,304
12/31/83 29,906 161,024 578,434 739,458 98,760
12/31/84 26,760 170,504 584,155 754,659 104,585
12/31/85 40,018 211,307 690,668 901,975 112,723
12/31/86 77,109 226,632 745,438 972,070 125,890
12/31/87 174,683 200,276 760,369 960,645 148,345
12/31/88 33,263 231,501 866,455 1,097,956 154,853
12/31/89 166,796 269,717 1,133,269 1,402,986 177,282
12/31/90 28,044 250,146 1,049,910 1,300,056 182,282
12/31/91 66,461 300,626 1,298,210 1,598,836 191,508
12/31/92 170,497 327,575 1,586,004 1,913,579 212,897
12/31/93 2,110 372,854 1,893,677 2,266,531 211,430
12/31/94 0 365,190 1,902,509 2,267,699 210,557
8/31/95 0 473,197 2,545,512 3,018,709 209,487

Totals 1,233,211 473,197 2,545,512 3,018,709 209,487

Average Annual Total Return for This Illustration: 12.25% (Annual Compounding)
<PAGE>

Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value ------ ------ -------
for Periods Ending 6/30/95: 26.32% 16.13% 14.32%
</TABLE>
<PAGE>

NEUBERGER & BERMAN FOCUS

<TABLE>
<CAPTION>
========================= COST OF SHARES ===========================

Annual Cumulative Total Annual Cap
Cumulative Income Income Investment Gain
Date Investment Dividends Dividends Cost Distribution

<S> <C> <C> <C> <C> <C>
8/31/77 10,000 2,230 17,323 27,232 1,939
8/31/78 10,000 2,425 19,748 29,748 2,631
8/31/79 10,000 3,158 22,906 32,906 3,490
8/31/80 10,000 3,951 26,857 36,857 4,191
8/31/81 10,00 5,579 32,436 42,436 12,716
8/31/82 10,000 8,199 40,635 50,635 15,446
8/31/83 10,000 8,699 49,334 59,334 4,436
8/31/84 10,000 9,691 59,025 69,025 7,580
8/31/85 10,000 9,081 68,106 78,106 6,969
8/31/86 10,000 10,569 78,675 88,675 10,684
8/31/87 10,000 11,157 89,832 99,832 21,046
8/31/88 10,000 8,807 98,639 108,639 48,561
8/31/89 10,000 8,973 107,612 117,612 9,433
8/31/90 10,000 8,987 116,599 126,599 48,090
8/31/91 10,000 7,572 124,172 134,172 8,209
8/31/92 10,000 8,144 132,316 142,316 19,739
8/31/93 10,000 6,791 139,107 149,107 51,238
8/31/94 10,000 6,710 145,817 155,817 45,629
8/31/95 10,000 5,822 151,639 161,639 43,083

Totals 151,639 387,682

=========================== VALUE OF SHARES=================================

From Cap From
From Gains Dividends
Date Investment Reinvested Sub Total Reinvested Total Value Shares Held
<S> <C> <C> <C> <C> <C> <C>
8/31/77 24,299 29,207 53,506 21,716 75,222 5,159
8/31/78 26,133 34,517 60,650 26,217 86,867 5,540
8/31/79 29,884 43,675 73,559 33,784 107,343 5,987
8/31/80 37,917 61,280 99,197 48,394 147,591 6,488
8/31/81 35,767 70,225 105,992 51,100 157,092 7,320
8/31/82 26,550 66,476 93,026 45,548 138,574 8,699
8/31/83 32,801 88,080 120,881 67,947 188,828 9,595
8/31/84 31,416 92,348 123,764 75,287 199,051 10,560
8/31/85 33,167 105,513 138,680 89,933 228,613 11,488
8/31/86 35,117 124,321 159,438 107,689 267,127 12,678
8/31/87 40,650 172,364 213,014 139,741 352,755 14,643
8/31/88 28,766 163,857 192,623 106,906 299,529 17,354
8/31/89 36,333 219,324 255,657 146,768 402,425 18,460
8/31/90 30,083 227,279 257,362 130,065 387,427 21,464
8/31/91 33,416 262,297 295,713 153,540 449,253 22,407
<PAGE>

=========================== VALUE OF SHARES=================================

From Cap From
From Gains Dividends
Date Investment Reinvested Sub Total Reinvested Total Value Shares Held
<S> <C> <C> <C> <C> <C> <C>
8/31/92 35,084 297,046 332,130 170,166 502,296 23,862
8/31/93 39,999 401,852 441,851 202,320 644,171 26,840
8/31/94 40,700 457,204 497,904 212,966 710,870 29,110
8/31/95 48,134 598,363 646,497 259,653 906,150 31,376

Totals 48,134 598,363 646,497 259,653 906,150 31,376

Average Annual Total Return for This Illustration: 11.97% (Annual Compounding)

Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value
for Period Ending 6/30/95: 26.38% 15.48% 14.00%

</TABLE>
<PAGE>

FROM SELECTED SECTORS TRUST

PREPARED FOR: BARBARA
<TABLE>
<CAPTION>

Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
----- ---------- -------- -------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
10/19/55 $10,000.00 $2.5084 0.00% 3,986.666 $2.5084 $10,000

Dividends and Capital Gains Reinvested

============= C O S T O F S H A R E S =============
Annual Cumulative Total Annual
Cumulative Income Income Investment Cap Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ---------- --------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
8/31/56 10,000 0 0 10,000 0
8/31/57 10,000 165 165 10,165 393
8/31/58 10,000 169 334 10,334 516
8/31/59 10,000 226 560 10,560 327
8/31/60 10,000 182 741 10,741 994
8/31/61 10,000 193 935 10,935 896
8/31/62 10,000 118 1,053 11,053 998
8/31/63 10,000 235 1,288 11,288 527
8/31/64 10,000 373 1,661 11,661 828
8/31/65 10,000 439 2,100 12,100 951
8/31/66 10,000 499 2,599 12,599 1,304
8/31/67 10,000 592 3,190 13,190 2,609
8/31/68 10,000 683 3,873 13,873 3,238
8/31/69 10,000 930 4,803 14,803 3,464
8/31/70 10,000 1,358 6,162 16,162 1,567
8/31/71 10,000 1,520 7,682 17,682 593
8/31/72 10,000 1,247 8,929 18,929 1,325
8/31/73 10,000 1,028 9,956 19,956 1,356
8/31/74 10,000 1,207 11,164 21,164 690
8/31/75 10,000 1,785 12,949 22,949 0
8/31/76 10,000 2,145 15,094 25,094 0
8/31/77 10,000 2,230 17,323 27,323 1,939
8/31/78 10,000 2,425 19,748 29,748 2,631
8/31/79 10,000 3,158 22,906 32,906 3,490
8/31/80 10,000 3,951 26,857 36,857 4,191
8/31/81 10,000 5,579 32,436 42,436 12,716
8/31/82 10,000 8,199 40,635 50,635 15,446
8/31/83 10,000 8,699 49,334 59,334 4,436
8/31/84 10,000 9,691 59,025 69,025 7,580
8/31/85 10,000 9,081 68,106 78,106 6,969
8/31/86 10,000 10,569 78,675 88,675 10,684
8/31/87 10,000 11,157 89,832 99,832 21,046
8/31/88 10,000 8,807 98,639 108,639 48,561
<PAGE>

Totals 143,610 299,612

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
===================== VALUE OF SHARES ==========================
From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
--- ---------- ---------- ----- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
8/31/56 13,082 0 13,082 0 13,082 3,987
8/31/57 13,343 439 13,782 184 13,966 4,173
8/31/58 13,022 995 14,017 366 14,383 4,403
8/31/59 17,576 1,780 19,356 795 20,151 4,571
8/31/60 18,891 3,108 21,999 1,073 23,072 4,869
8/31/61 20,491 4,497 24,988 1,407 26,395 5,135
8/31/62 16,392 4,432 20,824 1,224 22,048 5,362
8/31/63 19,283 5,929 25,212 1,760 26,972 5,576
8/31/64 19,692 6,927 26,619 2,190 28,809 5,833
8/31/65 21,250 8,509 29,759 2,841 32,600 6,116
8/31/66 21,350 9,776 31,126 3,323 34,449 6,433
8/31/67 28,650 17,059 45,709 5,353 51,062 7,105
8/31/68 28,016 19,965 47,981 5,928 53,909 7,671
8/31/69 23,799 20,063 43,862 5,869 49,731 8,330
8/31/70 18,833 17,235 36,068 5,822 41,890 8,867
8/31/71 22,017 20,853 42,870 8,613 51,483 9,322
8/31/72 21,783 22,065 43,848 9,870 53,718 9,831
8/31/73 19,151 20,718 39,869 9,677 49,546 10,314
8/31/74 15,166 16,907 32,073 8,536 40,609 10,674
8/31/75 20,167 22,480 42,647 13,779 56,426 11,155
8/31/76 23,783 26,512 50,295 18,869 69,164 11,594
8/31/77 24,299 29,207 53,506 21,716 75,222 12,341
8/31/78 26,133 34,517 60,650 26,217 86,867 13,252
8/31/79 29,884 43,675 73,559 33,784 107,343 14,320
8/31/80 37,917 61,280 99,197 48,394 147,591 15,518
8/31/81 35,767 70,225 105,992 51,100 157,092 17,510
8/31/82 26,549 66,476 93,025 45,548 138,573 20,808
8/31/83 32,801 88,080 120,881 67,947 188,828 22,951
8/31/84 31,416 92,348 123,764 75,287 199,051 25,259
8/31/85 33,167 105,513 138,680 89,933 228,613 27,479
8/31/86 35,117 124,231 159,438 107,689 267,127 30,326
8/31/87 40,650 172,364 213,014 139,741 352,755 34,596
8/31/88 28,766 163,857 192,623 106,906 299,529 41,511
8/31/89 36,333 219,324 255,657 146,768 402,425 44,156
8/31/90 30,083 227,279 257,362 130,065 387,427 51,342
8/31/91 33,416 262,297 295,713 153,540 449,253 53,597
8/31/92 35,083 297,046 332,129 170,166 502,295 57,078
8/31/93 39,986 401,714 441,700 202,250 643,950 64,202
8/31/94 45,288 455,662 500,950 230,430 731,380 64,382
8/31/95 57,448 578,001 635,449 296,604 932,053 64,681

Totals 57,448 578,001 635,449 296,604 932,053 64,681

Average Annual Total Return for This Illustration: 12.05% (Annual Compounding)
<PAGE>

Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value ------ ------ -------
for Periods Ending 6/30/95: 26.32% 16.13% 14.32%

</TABLE>
FROM GENESIS TRUST

PREPARED FOR: BARBARA
<TABLE>
<CAPTION>

Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
---- ---------- -------- -------- --------- ---------- ---------

<S> <C> <C> <C> <C> <C> <C>
9/27/88 $10,000.00 $5.8343 0.00% 1,714.000 $5.8343 $10,000

Dividends and Capital Gains Reinvested

Totals 163 454

=============== V A L U E O F S H A R E S ==================
From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
---- ---------- ---------- ----- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
13/31/88 10,320 0 10,320 20 10,340 1,717
12/31/89 11,820 240 12,060 63 12,123 1,758
12/31/90 9,820 200 10,020 134 10,154 1,772
12/31/91 13,700 465 14,165 208 14,373 1,798
12/31/92 15,840 537 16,377 241 16,618 1,798
12/31/93 18,100 632 18,732 275 19,007 1,800
12/31/94 17,792 630 18,422 270 18,692 1,801
8/31/95 21,683 768 22,451 329 22,780 1,801
<PAGE>

Totals 21,683 768 22,451 329 22,780 1,801

Average Annual Total Return for This Illustration: 12.62% (Annual Compounding)

Average Annual Total Returns 1-Year 5-Year Since Inception (9/27/88)
at Net Asset Value ------ ------ -------------------------
for Periods Ending 6/30/95: 16.33% 11.54% 11.68%
</TABLE>
<PAGE>

FROM GENESIS TRUST

PREPARED FOR: BARBARA
<TABLE>
<CAPTION>
Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
---- ---------- ------- -------- --------- --------- ---------

<S> <C> <C> <C> <C> <C> <C>
9/27/88 $10,000.00 $5.8343 0.00% 1,714.000 $5.8343 $10,000

Dividends and Capital Gains Reinvested

=============== C O S T O F S H A R E S ==============
Annual Cumulative Total Annual
Cumulative Income Income Investment Cap Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
8/31/89 10,000 20 20 10,020 0
8/31/90 10,000 40 60 10,060 240
8/31/91 10,000 82 142 10,142 0
8/31/92 10,000 21 163 10,163 186
8/31/93 10,000 0 163 10,163 0
8/31/94 10,000 0 163 10,163 18
8/31/95 10,000 0 163 10,163 9

Totals 163 454

==================== VALUE OF SHARES =======================
From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
---- ---------- ---------- ----- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
8/31/89 13,020 0 13,020 25 13,045 1,717
8/31/90 9,980 203 10,183 53 10,236 1,758
8/31/91 13,400 273 13,673 183 13,856 1,772
8/31/92 13,880 471 14,351 211 14,562 1,798
8/31/93 17,226 584 17,810 262 18,072 1,798
8/31/94 18,151 634 18,785 276 19,061 1,800
8/31/95 21,683 768 22,451 329 22,780 1,801

Totals 21,683 768 22,451 329 22,780 1,801

Average Annual Total Return for This Illustration: 12.62% (Annual Compounding)

Average Annual Total Returns 1-Year 5-Year Since Inception (9/27/88)
at Net Asset Value ------ ------ -------------------------
for Periods Ending 9/30/95: 22.18% 19.27% 12.66%
<PAGE>

</TABLE>
<PAGE>

FROM GUARDIAN TRUST

PREPARED FOR: BARBARA
<TABLE>
<CAPTION>

Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
---- ---------- -------- -------- --------- --------- ---------

6/1/50 $200,000.00 $1.8674 0.00% 107,100.000 $1.8674 $200,000

Systematic Withdrawal Plan
Dividends and Capital Gains Reinvested
Monthly Withdrawals of $1,666.67 (10.0% Annually) Beginning 6/30/50

================= AMOUNTS WITHDRAWN ========================
From Annual
Income From Annual Cumulative Cap Gain
Date Dividends Principal Total Total Distrib'n
---- --------- --------- ------ ---------- ---------
<S> <C> <C> <C> <C> <C>
12/31/50 1,949 9,718 11,667 11,667 0
12/31/51 8,912 11,088 20,000 31,667 4,011
12/31/52 7,746 12,254 20,000 51,667 5,294
12/31/53 7,508 12,492 20,000 71,667 1,195
12/31/54 6,623 13,377 20,000 91,667 8,092
12/31/55 7,297 12,703 20,000 111,667 14,484
12/31/56 8,168 11,832 20,000 131,667 11,270
12/31/57 8,166 11,834 20,000 151,667 4,022
12/31/58 8,448 11,552 20,000 171,667 7,844
12/31/59 7,257 12,743 20,000 191,667 29,528
12/31/60 8,672 11,328 20,000 211,667 8,561
12/31/61 7,963 12,037 20,000 231,667 24,917
12/31/62 8,563 11,437 20,000 251,667 8,454
12/31/63 9,171 10,829 20,000 271,667 11,764
12/31/64 9,205 10,795 20,000 291,667 20,942
12/31/65 10,119 9,881 20,000 311,667 21,979
12/31/66 10,391 9,609 20,000 331,667 13,153
12/31/67 10,141 9,859 20,000 351,667 35,963
12/31/68 11,847 8,153 20,000 371,667 40,279
12/31/69 14,336 5,664 20,000 391,667 21,098
12/31/70 16,016 3,984 20,000 411,667 4,760
12/31/71 16,556 3,444 20,000 431,667 27,974
12/31/72 16,575 3,425 20,000 451,667 26,866
12/31/73 17,922 2,078 20,000 471,667 12,600
12/31/74 23,031 -3,031 20,000 491,667 2,344
12/31/75 27,310 -7,310 20,000 511.667 4,072
12/31/76 26,446 -6,446 20,000 531,667 40,400
12/31/77 27,585 -7,585 20,000 551,667 31,538
<PAGE>

From Annual
Income From Annual Cumulative Cap Gain
Date Dividends Principal Total Total Distrib'n
---- --------- --------- ------ ---------- ---------
<S> <C> <C> <C> <C> <C>
12/31/78 30,570 -10,570 20,000 571,667 46,444
12/31/79 34,576 -14,576 20,000 591,667 80,676
12/31/80 41,729 -21,729 20,000 611,667 165,482
12/31/81 66,294 -46,294 20,000 631,667 70,690
12/31/82 68,340 -48,340 20,000 651,667 35,556
12/31/83 66,325 -46,325 20,000 671,667 109,076
12/31/84 71,652 -51,652 20,000 691,667 56,355
12/31/85 93,224 -73,224 20,000 711,667 342,188
12/31/86 96,987 -76,987 20,000 731,667 290,204
12/31/87 112,025 -92,025 20,000 751,667 313,521
12/31/88 93,586 -73,586 20,000 771,667 315,070
12/31/89 104,904 -84,904 20,000 791,667 342,357
12/31/90 113,366 -93,366 20,000 811,667 53,901
12/31/91 105,305 -85,305 20,000 831,667 303,786
12/31/92 91,918 -71,918 20,000 851,667 237,107
12/31/93 50,982 -30,982 20,000 871,667 6,718
12/31/94 81,035 -61,035 20,000 891,667 0
8/31/95 33,973 -20,640 13,333 905,000 0

Totals 1,700,716 -795,716 905,000 905,000 3,212,534

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
======= VALUE OF REMAINING SHARES ========
Remaining Capital
Original Gain Total Shares
Date Shares Shares Value Held
---- --------- --------- ----- ------
<S> <C> <C> <C> <C>
12/31/50 205,803 0 205,803 101,950
12/31/51 217,640 4,164 221,804 98,733
12/31/52 214,635 10,055 224,690 95,798
12/31/53 189,442 10,673 200,115 90,738
12/31/54 229,670 22,978 252,648 88,659
12/31/55 238,303 40,212 278,515 89,362
12/31/56 228,625 52,308 280,933 89,388
12/31/57 186,916 49,235 236,151 87,033
12/31/58 235,536 73,907 309,443 85,637
12/31/59 226,001 105,441 331,442 90,647
12/31/60 222,016 118,118 340,134 89,902
12/31/61 239,690 159,191 398,881 92,910
12/31/62 197,144 147,404 344,548 92,161
12/31/63 215,254 181,382 396,636 92,347
12/31/64 219,173 214,377 433,550 94,492
12/31/65 225,462 252,809 478,271 96,976
12/31/66 197,924 245,799 443,723 97,904
12/31/67 220,178 323,669 543,847 103,273
12/31/68 216,850 370,879 587,729 109,129
12/31/69 179,328 336,080 515,408 112,607
12/31/70 171,975 334,938 506,913 112,917
12/31/71 181,013 389,433 570,446 118,954
12/31/72 184,207 430,959 615,166 123,657
12/31/73 150,890 368,713 519,603 126,534
12/31/74 124,819 298,471 423,290 128,353
12/31/75 173,644 400,266 573,910 131,169
12/31/76 221,270 537,271 758,541 140,602
12/31/77 208,687 520,363 729,050 148,613
12/31/78 214,664 556,158 770,822 160,613
12/31/79 274,553 756,693 1,031,246 178,254
12/31/80 317,570 980,308 1,297,878 207,777
12/31/81 314,589 901,452 1,216,041 230,021
12/31/82 425,892 1,110,224 1,536,116 243,658
12/31/83 530,917 1,372,115 1,903,032 266,216
12/31/84 585,533 1,434,323 2,019,856 281,382
12/31/85 673,563 1,829,577 2,503,140 341,077
12/31/86 726,309 2,055,106 2,781,415 390,624
12/31/87 694,140 2,041,976 2,736,116 454,604
12/31/88 858,447 2,623,825 3,482,272 510,892
12/31/89 1,015,474 3,194,664 4,210,138 568,321
12/31/90 1,019,797 2,971,539 3,991,336 589,942
12/31/91 1,352,732 3,986,428 5,339,160 636,775
12/31/92 1,600,592 4,731,383 6,331,975 669,848
12/31/93 1,834,180 5,332,300 7,166,480 673,541
12/31/94 1,902,833 5,352,346 7,255,179 679,324
8/31/95 2,486,742 6,930,987 9,417,729 680,964
<PAGE>

Remaining Capital
Original Gain Total Shares
Date Shares Shares Value Held
---- --------- --------- ----- ------
<S> <C> <C> <C> <C>
12/31/50 205,803 0 205,803 101,950

Totals 2,486,742 6,930,987 9,417,729 680,964

Average Annual Return for This Illustration: 12.98% (Annual Compounding)

Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value ------ ------ -------
for Periods Ending 6/30/95: 24.88% 16.17% 14.92%
</TABLE>
<PAGE>

FROM GUARDIAN TRUST

PREPARED FOR: BARBARA
<TABLE>
<CAPTION>

Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
----- ----------- -------- --------- ---------- --------- ---------

<S> <C> <C> <C> <C> <C> <C>
6/1/50 $10,000.00 $1.8674 0.00% 5,355.000 $1.8674 $10,000

Dividends and Capital Gains Reinvested

=============== C O S T O F S H A R E S ================
Annual Cumulative Total Annual
Cumulative Income Income Investment Cap Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ---------- --------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
8/31/50 10,000 0 0 10,000 0
8/31/51 10,000 406 406 10,406 0
8/31/52 10,000 511 917 10,917 228
8/31/53 10,000 488 1,404 11,404 330
8/31/54 10,000 512 1,916 11,916 82
8/31/55 10,000 506 2,421 12,421 609
8/31/56 10,000 611 3,033 13,033 1,177
8/31/57 10,000 729 3,761 13,761 984
8/31/58 10,000 867 4,629 14,629 378
8/31/59 10,000 869 5,498 15,498 797
8/31/60 10,000 842 6,340 16,340 3,194
8/31/61 10,000 1,013 7,352 17,352 985
8/31/62 10,000 1,012 8,364 18,364 3,028
8/31/63 10,000 1,117 9,481 19,481 1,086
8/31/64 10,000 1,268 10,750 20,750 1,597
8/31/65 10,000 1,353 12,102 22,102 2,983
8/31/66 10,000 1,553 13,656 23,656 3,275
8/31/67 10,000 1,649 15,305 25,305 2,046
8/31/68 10,000 1,724 17,029 27,029 5,829
8/31/69 10,000 2,081 19,110 29,110 6,776
8/31/70 10,000 2,566 21,676 31,676 3,678
8/31/71 10,000 3,298 24,974 34,974 866
8/31/72 10,000 3,258 28,232 38,232 5,285
8/31/73 10,000 3,355 31,587 41,587 5,256
8/31/74 10,000 3,872 35,458 45,458 2,555
8/31/75 10,000 5,577 41,036 51,036 495
8/31/76 10,000 6,125 47,161 57,161 895
8/31/77 10,000 6,287 53,448 63,448 9,159
8/31/78 10,000 6,693 60,142 70,142 7,349
8/31/79 10,000 7,695 67,837 77,837 11,115
8/31/80 10,000 9,009 76,845 86,845 19,773
<PAGE>

Annual Cumulative Total Annual
Cumulative Income Income Investment Cap Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ---------- --------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
8/31/81 10,000 11,305 88,150 98,150 41,343
8/31/82 10,000 17,522 105,672 115,672 17,945
8/31/83 10,000 18,076 123,748 133,748 9,177
8/31/84 10,000 20,004 143,752 153,752 28,486
8/31/85 10,000 19,528 163,281 173,281 14,879
8/31/86 10,000 27,134 190,415 200,415 91,183
8/31/87 10,000 27,958 218,373 228,373 77,910
8/31/88 10,000 26,953 245,325 255,325 84,700
8/31/89 10,000 26,927 272,252 282,252 85,664
8/31/90 10,000 30,193 302,445 312,445 93,568
8/31/91 10,000 31,735 334,181 344,181 14,818
8/31/92 10,000 24,360 358,541 368,541 83,874
8/31/93 10,000 25,329 383,870 393,870 65,697
8/31/94 10,000 13,106 396,976 406,976 1,867
8/31/95 10,000 22,667 419,643 429,643 0

Totals 419,643 812,922

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
===================== VALUE OF SHARES ==========================
From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
---- ---------- ---------- ----- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
8/31/50 10,070 0 10,070 0 10,070 5,355
8/31/51 11,960 0 11,960 436 12,396 5,550
8/31/52 12,279 242 12,521 978 13,499 5,887
8/31/53 11,451 549 12,000 1,384 13,384 6,259
8/31/54 13,450 740 14,190 2,182 16,372 6,518
8/31/55 17,130 1,719 18,849 3,341 22,190 6,937
8/31/56 17,380 3,019 20,399 4,024 24,423 7,525
8/31/57 16,320 3,830 20,150 4,500 24,650 8,088
8/31/58 16,960 4,427 21,387 5,636 27,023 8,532
8/31/59 21,271 6,483 27,754 8,004 35,758 9,002
8/31/60 20,160 9,559 29,719 8,470 38,189 10,144
8/31/61 23,360 12,273 35,633 10,902 46,535 10,668
8/31/62 19,769 13,016 32,785 10,163 42,948 11,633
8/31/63 23,170 16,559 39,729 13,134 52,863 12,218
8/31/64 24,960 19,612 44,572 15,480 60,052 12,884
8/31/65 25,860 23,410 49,270 17,411 66,681 13,808
8/31/66 23,260 23,993 47,253 17,072 64,325 14,809
8/31/67 29,449 32,922 62,371 23,464 85,835 15,608
8/31/68 28,760 38,443 67,203 24,725 91,928 17,117
8/31/69 25,960 40,738 66,698 24,245 90,943 18,760
8/31/70 21,620 37,139 58,759 22,637 81,396 20,161
8/31/71 26,400 46,409 72,809 31,308 104,117 21,119
8/31/72 26,850 53,451 80,301 35,383 115,684 23,072
8/31/73 22,880 50,080 72,960 33,326 106,286 24,876
8/31/74 17,809 41,114 58,923 29,267 88,190 26,517
8/31/75 22,720 53,090 75,810 43,788 119,598 28,189
8/31/76 28,039 66,646 94,685 60,968 155,653 29,726
8/31/77 27,441 74,636 102,077 65,961 168,038 32,793
8/31/78 30,261 90,846 121,107 80,290 201,397 35,640
8/31/79 32,421 111,545 143,966 95,231 239,197 39,509
8/31/80 34,021 140,270 174,291 109,849 284,140 44,726
8/31/81 30,591 163,434 194,025 109,262 303,287 53,092
8/31/82 28,740 172,049 200,789 190,863 321,652 59,932
8/31/83 39,531 247,290 286,821 186,311 473,132 64,094
8/31/84 38,119 267,922 306,041 200,382 506,423 71,141
8/31/85 43,360 321,569 364,929 248,996 613,925 75,820
8/31/86 45,770 452,146 497,916 294,520 792,436 92,713
8/31/87 50,319 596,296 646,615 357,180 1,003,795 106,823
8/31/88 38,510 554,756 593,266 303,185 896,451 124,656
8/31/89 45,669 763,809 809,478 390,876 1,200,354 140,747
8/31/90 35,710 681,487 717,319 333,090 1,050,409 157,517
8/31/91 44,701 871,487 916,188 454,426 1,370,614 164,198
8/31/92 47,200 1,008,398 1,055,598 505,323 1,560,921 177,092
8/31/93 54,996 1,246,328 1,301,324 616,108 1,917,432 186,702
8/31/94 60,350 1,369,662 1,430,012 690,165 2,120,177 188,126
8/31/95 74,060 1,680,783 1,754,843 874,469 2,629,312 190,117
<PAGE>

From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
---- ---------- ---------- ----- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>

Totals 74,060 1,680,783 1,754,843 874,469 2,629,312 190,117

Average Annual Total Return for This Illustration: 13.10% (Annual Compounding)

Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value ------ ------ -------
for Periods Ending 6/30/95: 24.88% 16.17% 14.92%
</TABLE>
<PAGE>

FROM MANHATTAN TRUST

PREPARED FOR: BARBARA
<TABLE>
<CAPTION>

Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
---- ---------- -------- -------- --------- ---------- ---------

<S> <C> <C> <C> <C> <C> <C>
3/1/79 $100,000.00 $1.9814 0.00% 50,468.754 $1.9814 $100,000

Systematic Withdrawal Plan
Dividends and Capital Gains Reinvested
Monthly Withdrawals of $666.67 (8.0% Annually) Beginning 3/31/79

=============== AMOUNTS WITHDRAWN ===================
From Annual
Income From Annual Cumulative Cap Gain
Date Dividends Principal Total Total Distrib'n
---- --------- --------- ----- ---------- ---------
<S> <C> <C> <C> <C> <C>
12/31/79 1,883 4,784 6,667 6,667 0
12/31/80 3,280 4,720 8,000 14,667 0
12/31/81 3,547 4,453 8,000 22,667 0
12/31/82 4,551 3,449 8,000 30,667 0
12/31/83 5,835 2,165 8,000 38,667 0
12/31/84 6,138 1,862 8,000 46,667 0
12/31/85 3,726 4,274 8,000 54,667 0
12/31/86 2,675 5,325 8,000 62,667 42,676
12/31/87 3,393 4,607 8,000 70,667 5,279
12/31/88 13,101 -5,101 8,000 78,667 32,377
12/31/89 7,517 483 8,000 86,667 43,849
12/31/90 7,337 663 8,000 94,667 6,879
12/31/91 5,131 2,869 8,000 102,667 18,658
12/31/92 2,400 5,600 8,000 110,667 80,646
12/31/93 351 7,649 8,000 118,667 351
12/31/94 694 7,306 8,000 126,667 2,776
8/31/95 0 5,333 5,333 132,000 0

Totals 71,560 60,440 132,000 132,000 233,490

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
===== VALUE OF REMAINING SHARES =====
Remaining Capital
Original Gain Total Shares
Date Shares Shares Value Held
---- --------- ------ ----- ------
<S> <C> <C> <C> <C>
12/31/79 127,622 0 127,622 48,354
12/31/80 164,831 0 164,831 46,805
12/31/81 145,245 0 145,245 45,437
12/31/82 177,074 0 177,074 44,510
12/31/83 216,209 0 216,209 44,200
12/31/84 222,819 0 222,819 43,884
12/31/85 296,292 0 296,292 43,206
12/31/86 294,506 43,543 338,049 48,800
12/31/87 285,291 47,334 332,625 48,879
12/31/88 298,976 84,694 383,670 54,834
12/31/89 345,026 141,659 486,685 60,230
12/31/90 306,649 132,934 439,583 61,135
12/31/91 381,160 185,362 566,522 62,828
12/31/92 386,526 271,417 657,943 70,898
12/31/93 416,710 298,670 715,380 70,135
12/31/94 393,206 289,733 682,939 69,688
8/31/95 515,056 384,045 899,101 69,215

Totals 515,056 384,045 899,101 69,215

Average Annual Total Return for This Illustration: 18.35% (Annual Compounding)

Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value ------ ------ -------
for Periods Ending 6/30/95: 28.38% 12.59% 13.93%

</TABLE>
<PAGE>

FROM MANHATTAN TRUST

PREPARED FOR: BARBARA
<TABLE>
<CAPTION>

Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
---- ---------- -------- -------- --------- --------- ---------

<S> <C> <C> <C> <C> <C> <C>
3/1/79 $10,000.00 $1.9814 0.00% 5,046.875 $1.9814 $10,000

Dividends and Capital Gains Reinvested

============== C O S T O F S H A R E S =================
Annual Cumulative Total Annual
Cumulative Income Income Investment Cap Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
8/31/79 10,000 0 0 10,000 0
8/31/80 10,000 553 553 10,553 0
8/31/81 10,000 407 960 10,960 0
8/31/82 10,000 542 1,501 11,501 0
8/31/83 10,000 733 2,234 12,234 0
8/31/84 10,000 801 3,035 13,035 0
8/31/85 10,000 505 3,540 13,540 0
8/31/86 10,000 373 3,913 13,913 2,749
8/31/87 10,000 485 4,398 14,398 4,022
8/31/88 10,000 937 5,335 15,335 4,464
8/31/89 10,000 989 6,324 16,324 247
8/31/90 10,000 1,137 7,461 17,461 6,632
8/31/91 10,000 1,130 8,590 18,590 1,059
8/31/92 10,000 803 9,393 19,393 2,919
8/31/93 10,000 381 9,774 19,774 12,795
8/31/94 10,000 56 9,830 19,830 56
8/31/95 10,000 113 9,943 19,943 451

Totals 9,943 35,395
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
=============== V A L U E O F S H A R E S ==================
From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
----- ---------- ---------- ------ ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
8/31/79 12,383 0 12,383 0 12,383 5,047
8/31/80 15,469 0 15,469 649 16,118 5,259
8/31/81 15,586 0 15,586 1,037 16,623 5,383
8/31/82 16,015 0 16,015 1,661 17,676 5,570
8/31/83 23,633 0 23,633 3,290 26,923 5,750
8/31/84 25,039 0 25,039 4,385 29,424 5,931
8/31/85 30,430 0 30,430 5,872 36,302 6,021
8/31/86 38,632 3,199 41,831 7,889 49,720 6,495
8/31/87 47,343 9,210 56,553 10,245 66,798 7,121
8/31/88 33,867 11,378 45,245 8,334 53,579 7,984
8/31/89 47,187 16,184 63,371 12,933 76,304 8,161
8/31/90 36,954 18,683 55,637 11,158 66,795 9,123
8/31/91 45,117 24,128 69,245 15,028 84,273 9,427
8/31/92 45,273 27,115 72,388 15,879 88,267 9,840
8/31/93 50,519 44,058 94,577 18,129 112,706 11,259
8/31/94 52,337 45,699 98,036 18,838 116,874 11,270
8/31/95 65,559 57,843 123,402 23,747 147,149 11,328

Totals 65,559 57,843 123,402 23,747 147,149 11,328

Average Annual Total Return for This Illustration: 17.70% (Annual Compounding)

Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value ------ ------ -------
for Periods Ending 6/30/95: 28.38% 12.59% 13.93%
</TABLE>
<PAGE>

FROM PARTNERS TRUST

PREPARED FOR: BARBARA

Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
---- ---------- -------- --------- ---------- --------- ---------

<S> <C> <C> <C> <C> <C> <C>
1/20/75 $100,000.00 $2.9100 0.00% 34,364.471 $2.9100 $100,000

Systematic Withdrawal Plan
Dividends and Capital Gains Reinvested
Monthly Withdrawals of $666.67 (8.0% Annually) Beginning 2/28/75

============== AMOUNTS WITHDRAWN ===============
From Annual
Date Income From Annual Cumulative Cap Gain
---- Dividends Principal Total Total Distrib'n
--------- --------- ------ --------- ---------
<S> <C> <C> <C> <C> <C>
12/31/75 5,318 2,015 7,333 7,333 0
12/31/76 4,233 3,767 8,000 15,333 0
12/31/77 3,267 4,733 8,000 23,333 0
12/31/78 4,122 3,878 8,000 31,333 0
12/31/79 6,168 1,832 8,000 39,333 0
12/31/80 9,210 -1,210 8,000 47,333 40,179
12/31/81 15,507 -7,507 8,000 55,333 53,866
12/31/82 23,564 -15,564 8,000 63,333 0
12/31/83 19,017 -11,017 8,000 71,333 44,374
12/31/84 19,169 -11,169 8,000 79,333 7,188
12/31/85 18,242 -10,242 8,000 87,333 35,642
12/31/86 13,684 -5,684 8,000 95,333 69,975
12/31/87 26,170 -18,170 8,000 103,333 102,242
12/31/88 27,730 -19,730 8,000 111,333 0
12/31/89 33,949 -25,949 8,000 119,333 75,346
12/31/90 36,929 -28,929 8,000 127,333 16,660
12/31/91 18,002 -10,002 8,000 135,333 40,788
12/31/92 10,393 -2,393 8,000 143,333 97,911
12/31/93 1,342 6,658 8,000 151,333 2,685
12/31/94 2,677 5,323 8,000 159,333 10,707
8/31/95 0 5,333 5,333 164,666 0

Totals 298,694 -134,028 164,666 164,666 597,564
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
======= VALUE OF REMAINING SHARES======
Remaining Capital
Original Gain Total Shares
Date Shares Shares Value Held
---- --------- ------- ----- ------
<S> <C> <C> <C> <C>
12/31/75 110,735 0 110,735 33,808
12/31/76 136,496 0 136,496 32,829
12/31/77 137,664 0 137,664 31,716
12/31/78 151,649 0 151,649 30,824
12/31/79 207,212 0 207,212 30,511
12/31/80 222,076 45,753 267,829 37,168
12/31/81 184,895 91,414 276,309 48,327
12/31/82 234,349 105,949 340,298 51,354
12/31/83 245,016 152,082 397,098 60,372
12/31/84 259,418 160,969 420,387 63,525
12/31/85 311,544 225,673 537,217 70,251
12/31/86 321,789 300,102 621,891 80,341
12/31/87 295,384 346,029 641,413 95,573
12/31/88 348,049 384,170 732,219 98,272
12/31/89 401,420 489,025 890,445 110,640
12/31/90 386,054 450,928 836,982 117,240
12/31/91 454,523 561,044 1,015,567 123,586
12/31/92 487,673 696,987 1,184,660 135,011
12/31/93 554,180 804,960 1,359,140 134,568
12/31/94 538,043 799,728 1,337,771 135,128
8/31/95 683,111 1,024,298 1,707,409 134,654

Totals 683,111 1,024,298 1,707,409 134,654

Average Annual Total Return for This Illustration: 18.21% (Annual Compounding)

Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value ------- ------ -------
for Periods Ending 6/30/95: 23.93% 13.22% 13.61%
</TABLE>
<PAGE>

FROM PARTNERS TRUST

PREPARED FOR: BARBARA
<TABLE>
<CAPTION>

Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
---- ---------- ------- -------- --------- --------- ---------

<S> <C> <C> <C> <C> <C> <C>
1/20/75 $10,000.00 $2.9100 0.00% 3,436.447 $2.9100 $10,000

Dividends and Capital Gains Reinvested

=============== C O S T O F S H A R E S ================
Annual Cumulative Total Annual
Cumulative Income Income Investment Cap Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ---------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
8/31/75 10,000 551 551 10,551 0
8/31/76 10,000 467 1,018 11,018 0
8/31/77 10,000 383 1,401 11,401 0
8/31/78 10,000 511 1,912 11,912 0
8/31/79 10,000 804 2,716 12,716 0
8/31/80 10,000 1,248 3,965 13,965 5,446
8/31/81 10,000 2,167 6,131 16,131 7,527
8/31/82 10,000 3,390 9,521 19,521 0
8/31/83 10,000 2,802 12,323 22,323 6,537
8/31/84 10,000 2,883 15,206 25,206 1,081
8/31/85 10,000 2,795 18,001 28,001 5,461
8/31/86 10,000 2,127 20,128 30,128 10,879
8/31/87 10,000 2,409 22,537 32,537 12,101
8/31/88 10,000 3,739 26,276 36,276 4,006
8/31/89 10,000 4,786 31,063 41,063 4,206
8/31/90 10,000 3,090 34,152 44,152 7,945
8/31/91 10,000 6,011 40,163 50,163 2,709
8/31/92 10,000 2,956 43,120 53,120 6,694
8/31/93 10,000 1,722 44,841 54,841 16,219
8/31/94 10,000 224 45,065 55,065 448
8/31/95 10,000 449 45,514 55,514 1,796

Totals 45,514 93,055
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
=============== V A L U E O F S H A R E S =================
From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
---- ---------- ---------- ----- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
8/31/75 11,011 0 11,011 562 11,573 3,612
8/31/76 13,017 0 13,017 1,122 14,139 3,733
8/31/77 14,272 0 14,272 1,611 15,883 3,824
8/31/78 18,039 0 18,039 2,553 20,592 3,923
8/31/79 21,807 0 21,807 3,959 25,766 4,060
8/31/80 22,221 5,565 27,786 5,310 33,096 5,118
8/31/81 18,714 12,022 30,736 6,583 37,319 6,853
8/31/82 19,295 12,396 31,691 10,333 42,024 7,484
8/31/83 21,623 20,503 42,126 14,413 56,539 8,985
8/31/84 21,853 21,871 43,724 17,634 61,358 9,649
8/31/85 23,630 29,113 52,743 21,864 74,607 10,850
8/31/86 27,320 45,104 72,424 27,517 99,941 12,571
8/31/87 30,368 62,659 93,027 33,079 126,106 14,270
8/31/88 24,809 55,507 80,316 30,914 111,230 15,407
8/31/89 30,489 72,629 103,118 43,355 146,473 16,509
8/31/90 26,233 70,024 96,257 40,232 136,489 17,880
8/31/91 28,943 80,548 109,491 51,605 161,096 19,127
8/31/92 29,540 89,421 118,961 55,825 174,786 20,333
8/31/93 34,399 122,629 157,028 66,970 223,998 22,377
8/31/94 36,221 129,589 165,810 70,749 236,559 22,444
8/31/95 43,574 158,200 201,774 85,689 287,463 22,671

Totals 43,574 158,200 201,774 85,689 287,463 22,671

Average Annual Total Return for This Illustration: 17.69% (Annual Compounding)

Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value ------ ------ -------
for Periods Ending 6/30/95: 23.93% 13.22% 13.61%

</TABLE>
<PAGE>

Appendix C

THE ART OF INVESTMENT:
A CONVERSATION WITH ROY NEUBERGER

<PAGE>

The Art of Investing:
A Conversation with Roy Neuberger

"I firmly believe that
if you want to manage
your own money, you
must be a student of
the market. If you are
unwilling or unable to
do that, find someone
else to manage your
money for you."

NEUBERGER & BERMAN
<PAGE>

[THIS PAGE IS BLANK - IT IS AN INSIDE PAGE OF THIS BROCHURE]
<PAGE>

[PICTURE OF ROY NEUBERGER]

During my more than sixty-five
years of buying and selling securities,
I've been asked many questions about my
approach to investing. On the pages
that follow are a variety of my
thoughts, ideas and investment
principles which have served me well
over the years. If you gain useful
knowledge in the pursuit of profit as
well as enjoyment from these comments, I
shall be more than content.

\s\ Roy R.
Neuberger

- 1 -
<PAGE>

<S> <C>
YOU'VE BEEN ABLE TO CONDENSE SOME OF THE
CHARACTERISTICS OF SUCCESSFUL INVESTING INTO
FIVE "RULES." WHAT ARE THEY?

Rule #1: Be flexible. My philosophy has
necessarily changed from time to time because
of events and because of mistakes. My views
change as economic, political, and
technological changes occur both on and
sometimes off our planet. It is imperative
that you be willing to change your thoughts to
meet new conditions.

Rule #2: Take your temperament into account.
Recognize whether you are by nature very
speculative or just the opposite - fearful,
timid of taking risks. But in any event --

Diversify your investments, Rule #3: Be broad-gauged. Diversify your
make sure that some of your investments, make sure that some of your
principal is kept safe, and principal is kept safe, and try to increase
try to increase your income your income as well as your capital.
as well as your capital.

[PICTURE OF ROY NEUBERGER]

Rule #4: Always remember there are many ways to
skin a cat! Ben Graham and David Dodd did it by
understanding basic values. Warren Buffet
invested his portfolio in a handful of long-
term holdings, while staying involved with the
companies' managements. Peter Lynch chose to
understand, first-hand, the products of many
hundreds of the companies he invested in.
George Soros showed his genius as a hedge fund
investor who could decipher world currency
trends. Each has been successful in his own
way. But to be successful, remember to

- 2 -
<PAGE>

Rule #5: Be skeptical. To repeat a few well-
worn useful phrases:

A. Dig for yourself.
B. Be from Missouri.
C. If it sounds too good to be true,
it probably is.

IN YOUR 65 YEARS OF INVESTING ARE THERE ANY
GENERAL PATTERNS YOU'VE OBSERVED AS TO HOW THE
MARKET BEHAVES?

Every decade that I've been involved with Wall
Street has a nuance of its own, an economic and
social climate that influences investors. But
generally, bull markets tend to be longer than
bear markets, and stock prices tend to go up
more slowly and erratically than they go down.
Bear markets tend to be shorter and of greater
intensity. The market rarely rises or declines
concurrently with business cycles longer than
six months.

AS A LEGENDARY "VALUE INVESTOR," HOW DO YOU
DEFINE VALUE INVESTING?

Value investing means finding the best values -
- either absolute or relative. Absolute means
a stock has a low market price relative to its
own fundamentals. Relative value means the
price is attractive relative to the market as a
whole.

COULD YOU DESCRIBE A STOCK WITH "GOOD VALUE"?

A classic example is a company that has a low
price to earnings ratio, a low price to book
ratio, free cash flow, a strong balance sheet,
undervalued corporate assets, unrecognized
earnings turnaround and is selling at a
discount to private market value.

These characteristics usually lead to companies
that are under-researched and have a high
degree of inside ownership and entrepreneurial
management.

- 3 -
<PAGE>

One of my colleagues at Neuberger & Berman says
he finds his value stocks either "under a
cloud" or "under a rock." "Under a cloud"
stocks are those Wall Street in general doesn't
like, because an entire industry is out of
favor and even the good stocks are being
dropped. "Under a rock" stocks are those Wall
Street is ignoring, so you have to uncover them
on your own.

ARE THERE OTHER KEY CRITERIA YOU USE TO JUDGE
STOCKS?

I'm more interested in longer-term trends in
earnings than short-term trends. Earnings
gains should be the product of long-term
strategies, superior management, taking
advantage of business opportunities and so on.
If these factors are in their proper place,
short-term earnings should not be of major
concern. Dividends are an important extra
because, if they're stable, they help support
the price of the stock.

WHAT ABOUT SELLING STOCKS?

Most individual investors should invest for the
long term but not mindlessly. A sell
discipline, often neglected by investors, is
vitally important.

"One should fall in love One should fall in love with ideas, with
with ideas, with people or people, or with idealism. But in my book, the
with idealism. But in my last thing to fall in love with is a particular
book, the last thing to security. It is after all just a sheet of paper
fall in love with is a indicating a part ownership in a corporation
particular security." and its use is purely mercenary. If you must
love a security, stay in love with it until it
gets overvalued; then let somebody else fall in
love.

[PICTURE OF ROY NEUBERGER]

- 4 -
<PAGE>

ANY OTHER ADVICE FOR INVESTORS?

I firmly believe that if you want to manage
your own money, you must be a student of the
market. If you're unwilling or unable to do
that, find someone else to manage your money
for you. Two options are a well-managed no-
load mutual fund or, if you have enough assets
for separate account management, a money
manager you trust with a good record.

HOW WOULD YOU DESCRIBE YOUR PERSONAL INVESTING
STYLE?

Every stock I buy is bought to be sold. The
market is a daily event, and I continually
review my holdings looking for selling
opportunities. I take a profit occasionally on
something that has gone up in price over what
was expected and simultaneously take losses
whenever misjudgment seems evident. This
creates a reservoir of buying power that can be
used to make fresh judgments on what are the
best values in the market at that time. My
active investing style has worked well for me
over the years, but for most investors I
recommend a longer-term approach.

I tend not to worry very must about the day to
day swings of the market, which are very hard
to comprehend. Instead, I try to be rather
clever in diagnosing values and trying to win
70 to 80 percent of the time.

YOU BEGAN INVESTING IN 1929. WHAT WAS YOUR
EXPERIENCE WITH THE "GREAT CRASH"?

- 5 -
<PAGE>

The only money I managed in the Panic of 1929
was my own. My portfolio was down about 12
percent, and I had an uneasy feeling about the
market and conditions in general. Those were
the days of 10 percent margin. I studied the
lists carefully for a stock that was overvalued
in my opinion and which I could sell short as a
hedge. I came across RCA at about $100 per
share. It had recently split 5 for 1 and
appeared overvalued. There were no dividends,
little income, a low net worth and a weak
financial position. I sold RCA short in the
amount equal to the dollar value of my long
portfolio. It proved to be a timely and
profitable move.

HOW DID THE CRASH OF 1929 AFFECT YOUR INVESTING
STYLE?

I am prematurely bearish when the market goes
up for a long time and everybody is happy
because they are richer. I am very bullish
when the market has gone down perceptibly and I
feel it has discounted any troubles we are
going to have.

HOW IMPORTANT ARE PSYCHOLOGICAL FACTORS TO
MARKET BEHAVIOR?

There are many factors in addition to economic
statistics or security analysis in a buy or
sell decision. I believe psychology plays an
important role in the Market. Some people
follow the crowd in hopes they'll be swept
along in the right direction, but if the crowd
is late in acting, this can be a bad move.

I like to be contrary. When things look bad, I
become optimistic. When everything looks rosy,
and the crowd is optimistic, I like to be a
seller. Sometimes I'm too early, but I
generally profit.

AS A RENOWNED ART COLLECTOR, DO YOU FIND
SIMILARITIES BETWEEN SELECTING STOCKS AND
SELECTING WORKS OF ART?

- 6 -
<PAGE>

Both are an art, although picking stocks is a
minor art compared with painting, sculpture or
"When things look bad, I literature. I started buying art in the 30s,
become optimistic. When and in the 40s it was a daily, almost hourly
everything looks rosy, and occurrence. My inclination to buy the works of
the crowd is optimistic, I living artists comes from Van Gogh, who sold
like to be a seller." only one painting during his lifetime. He died
in poverty, only then to become a legend and
have his work sold for millions of dollars.

[PICTURE OF ROY NEUBERGER]

There are more variables to consider now in
both buying art and picking stocks. In the
modern stock markets, the heavy use of futures
and options has changed the nature of the
investment world. In past times, the stock
market was much less complicated, as was the
art world.

Artists rose and fell on their own merits
without a lot of publicity and attention. As
more and more dealers are involved with
artists, the price of their work becomes
inflated. So I almost always buy works of
unknown, relatively undiscovered artists,
which, I suppose is similar to value investing.

But the big difference in my view of art and
stocks is that I buy a stock to sell it and
make money. I never bought paintings or
sculptures for investment in my life. The
objective is to enjoy their beauty.

- 7 -
<PAGE>

WHAT DO YOU CONSIDER THE BUSINESS MILESTONES IN
YOUR LIFE?

Being a founder of Neuberger & Berman and
creating one of the first no-load mutual funds.
I started on Wall Street in 1929, and during
the depression I managed my own money and that
of my clientele. We all prospered, but I
wanted to have my own firm. In 1939 I became a
founder of Neuberger & Berman, and for about 10
years we managed money for individuals with
substantial financial assets. But I also
wanted to offer the smaller investor the
benefits of professional money management, so
in 1950 I created the Guardian Mutual Fund (now
known as the Neuberger & Berman Guardian Fund).
The Fund was kind of an innovation in its time
because it didn't charge a sales commission. I
thought the public was being overcharged for
mutual funds, so I wanted to create a fund that
would be offered directly to the public without
a sales charge. Now of course the "no-load"
fund business is a huge industry. I managed
the Fund myself for over 28 years.

[PICTURE OF ROY NEUBERGER]

YOU'RE IN YOUR NINETIES AND STILL YOU GO INTO
THE OFFICE EVERY DAY TO MANAGE YOUR
INVESTMENTS. WHY?

I like the fun of being nimble in the stock
market, and I'm addicted to the market's
fascinations.

WHAT CLOSING WORDS OF ADVICE DO YOU HAVE ABOUT
INVESTING?

Realize that there are opportunities at all
times for the adventuresome investor. And stay
in good physical condition. It's a strange
thing. You do not dissipate your energies by
using them. Exercise your body and your brain
every day, and you'll do better in investments
and in life.

- 8 -
<PAGE>

ROY NEUBERGER: A BRIEF BIOGRAPHY

Roy Neuberger is a founder of the investment
management firm Neuberger & Berman, and a
renowned value investor. He is also a
recognized collector of contemporary American
art, much of which he has given away to museums
and colleges across the country.

During the 1920s, Roy studied art in
Paris. When he realized he didn't possess the
talent to become an artist, he decided to
collect art, and to support this passion, Roy
turned to investing -- a pursuit for which his
talents have proven more than adequate.

A TALENT FOR INVESTING

Roy began his investment career by
joining a brokerage firm in 1929, seven months
before the "Great Crash." Just weeks before
"Black Monday," he shorted the stock of RCA,
thinking it was overvalued. He profited from
the falling market and gained a reputation for
market prescience and stock selection that has
lasted his entire career.

NEUBERGER & BERMAN'S FOUNDING

Roy's investing acumen attracted many
people who wished to have him manage their
money. In 1939, at the age of 36, after
purchasing a seat on the New York Stock
Exchange, Roy founded Neuberger & Berman to
provide money management services to people who
lacked the time, interest or expertise to
manage their own assets.

- 9 -
<PAGE>

NEUBERGER & BERMAN -- OVER FIVE DECADES OF
GROWTH

Neuberger & Berman has grown through
the years and now manages approximately $30
billion of equity and fixed income assets, both
domestic and international, for individuals,
institutions, and its family of no-load mutual
funds. Today, as when the firm was founded,
Neuberger & Berman follows a value approach to
investing, designed to enable clients to
advance in good markets and minimize losses
when conditions are less favorable.

For more complete information about
the Neuberger & Berman Guardian Fund,
including fees and expenses, call
Neuberger & Berman Management at 800-
877-9700 for a free prospectus.
Please read it carefully, before you
invest or send money.

- 10 -
<PAGE>

Neuberger & Berman Management
Inc.[SERVICE MARK]

605 Third Avenue, 2nd
Floor
New York, NY 10158-
0006
Shareholder Services
(800) 877-9700

[COPYRIGHT
SYMBOL]1995 Neuberger
& Berman

PRINTED ON RECYCLED PAPER
WITH SOY BASED INKS

</TABLE>

- 11 -
<PAGE>

<PAGE>

PROSPECTUS
- ----------------------------------------
December 15, 1995

Neuberger&Berman
EQUITY TRUST-SM-

Neuberger&Berman
GUARDIAN TRUST

No Sales Charges
No Redemption Fees
No 12b-1 Fees

<PAGE>
Neuberger&Berman

GUARDIAN TRUST

A No-Load Equity Fund

- ----------------------------------------------------------------------

Neuberger&Berman GUARDIAN TRUST (the "Fund") is a growth and income fund that
emphasizes investments in stocks of established, high-quality companies
considered to be undervalued in comparison to stocks of similar companies.

- ----------------------------------------------------------------------

THE FUND INVESTS ALL OF ITS NET INVESTABLE ASSETS IN NEUBERGER&BERMAN
GUARDIAN PORTFOLIO (THE "PORTFOLIO") OF EQUITY MANAGERS TRUST ("MANAGERS
TRUST"), AN OPEN-END MANAGEMENT INVESTMENT COMPANY MANAGED BY N&B MANAGEMENT.
THE PORTFOLIO INVESTS IN SECURITIES IN ACCORDANCE WITH AN INVESTMENT OBJECTIVE,
POLICIES, AND LIMITATIONS IDENTICAL TO THOSE OF THE FUND. THE INVESTMENT
PERFORMANCE OF THE FUND DIRECTLY CORRESPONDS WITH THE INVESTMENT PERFORMANCE OF
THE PORTFOLIO. THIS "MASTER/FEEDER FUND" STRUCTURE IS DIFFERENT FROM THAT OF
MANY OTHER INVESTMENT COMPANIES WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN
PORTFOLIOS OF SECURITIES. FOR MORE INFORMATION ON THIS UNIQUE STRUCTURE THAT YOU
SHOULD CONSIDER, SEE "SUMMARY" ON PAGE 3, AND "SPECIAL INFORMATION REGARDING
ORGANIZATION, CAPITALIZATION, AND OTHER MATTERS" ON PAGE 14.

Please read this Prospectus before investing in the Fund and keep it for
future reference. It contains information about the Fund that a prospective
investor should know before investing. A Statement of Additional Information
("SAI") about the Fund and Portfolio, dated December 15, 1995, is on file with
the Securities and Exchange Commission. The SAI is incorporated herein by
reference (so it is legally considered a part of this Prospectus). You can
obtain a free copy of the SAI for the Fund and Portfolio by calling N&B
Management at 800-877-9700.

PROSPECTUS DATED DECEMBER 15, 1995

<TABLE>
<CAPTION>
<S> <C>
SUMMARY 3
The Fund and Portfolio;
Risk Factors 3
Management 4
The Neuberger&Berman
Investment Approach 4

EXPENSE INFORMATION 6
Shareholder Transaction
Expenses for the Fund 6
Annual Fund Operating
Expenses 6
Example 7

FINANCIAL HIGHLIGHTS 8

INVESTMENT PROGRAM 11
Short-Term Trading;
Portfolio Turnover 12
Borrowings 12
Other Investments 12

PERFORMANCE
INFORMATION 13
Total Return Information 13

SPECIAL INFORMATION
REGARDING
ORGANIZATION,
CAPITALIZATION, AND
OTHER MATTERS 14
The Fund 14
The Portfolio 15

HOW TO BUY SHARES 17

HOW TO SELL SHARES 18

SHARE INFORMATION 19
Share Prices and Net
Asset Value 19

DIVIDENDS, OTHER
DISTRIBUTIONS, AND
TAXES 20
Distribution Options 20
Taxes 20

MANAGEMENT AND
ADMINISTRATION 22
Trustees and Officers 22
Investment Manager,
Administrator,
Distributor, and
Sub-Adviser 22
Expenses 23
Transfer Agent 24

DESCRIPTION OF
INVESTMENTS 25

DIRECTORY 28
</TABLE>

<PAGE>
SUMMARY

The Fund and Portfolio; Risk Factors

- ----------------------------------------------------------------------

The Fund is a series of Neuberger&Berman Equity Trust (the "Trust") and
invests in the Portfolio which, in turn, invests in securities in accordance
with an investment objective, policies, and limitations identical to those of
the Fund. This is sometimes called a master/feeder fund structure, because the
Fund "feeds" shareholders' investments into the Portfolio, a "master" fund. The
structure looks like this:

-------------------------
Shareholders
-------------------------
(down arrow) BUY SHARES IN
-------------------------
Fund
-------------------------
(down arrow) INVESTS IN
-------------------------
Portfolio
-------------------------
(down arrow) INVESTS IN
-------------------------
Stocks & Other Securities
-------------------------

The trustees who oversee the Fund believe that this structure may benefit
shareholders; investment in the Portfolio by investors in addition to the Fund
may enable the Portfolio to achieve economies of scale that could reduce
expenses. For more information about the organization of the Fund and the
Portfolio, including certain features of the master/feeder fund structure, see
"Special Information Regarding Organization, Capitalization, and Other Matters"
on page 14. An investment in the Fund involves certain risks, depending upon the
types of investments made by the Portfolio. For more details about the
Portfolio, its investments and their risks, see "Investment Program" on page 11
and "Description of Investments" on page 25.

3
<PAGE>

Here is a summary highlighting features of the Fund and the Portfolio. Of
course, there can be no assurance that the Fund will meet its investment
objective.

<TABLE>
<S> <C> <C>
NEUBERGER&BERMAN INVESTMENT PORTFOLIO
EQUITY TRUST STYLE CHARACTERISTICS
GUARDIAN TRUST Broadly diversified, large-cap A growth and income fund that
value fund. Relatively low invests in stocks of established,
portfolio turnover. high-quality companies that are not
well followed on Wall Street or are
temporarily out of favor.
</TABLE>

Management

- ----------------------------------------------------------------------

N&B Management, with the assistance of Neuberger&Berman, L.P.
("Neuberger&Berman") as sub-adviser, selects investments for the Portfolio. N&B
Management also provides administrative services to the Portfolio and the Fund
and acts as distributor of Fund shares. See "Management and Administration" on
page 22. If you want to know how to buy and sell shares of the Fund, see "How to
Buy Shares" on page 17 and "How to Sell Shares" on page 18, and the policies of
the Institution through which you are purchasing shares.

The Neuberger&Berman Investment Approach

- ----------------------------------------------------------------------

There are two basic investment approaches -- value and growth. A
value-oriented portfolio manager buys stocks that are selling for less than
their perceived market value. These include stocks that are currently
under-researched or are temporarily out of favor on Wall Street.

4
<PAGE>

relation to the growth rate of its earnings. Sometimes this happens when a
particular company or industry is temporarily out of favor with the market or
under-researched. This strategy is called "growth at a reasonable price."

Neuberger&Berman believes that, over time, securities that are undervalued
are more likely to appreciate in price and be subject to less risk of price
decline than securities whose market prices have already reached their perceived
economic value. This approach also contemplates selling portfolio securities
when they are considered to have reached their potential.

In general, Neuberger&Berman GUARDIAN Portfolio adheres to a value-oriented
investment approach.

5
<PAGE>
EXPENSE INFORMATION
This section gives you certain information about the expenses of the Fund and
the Portfolio. See "Performance Information" for important facts about the
investment performance of the Fund, after taking expenses into account.

Shareholder Transaction Expenses For The Fund

- ----------------------------------------------------------------------

As shown by this table, there are no transaction charges when you buy or sell
Fund shares.

<TABLE>
<S> <C>
Sales Charge Imposed on Purchases NONE
Sales Charge Imposed on Reinvested Dividends NONE
Deferred Sales Charges NONE
Redemption Fees NONE
Exchange Fees NONE
</TABLE>

Annual Fund Operating Expenses
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

- --------------------------------------------------------------------------------

The following table shows annual Total Operating Expenses, which are paid out
of the assets of the Fund and which include the Fund's pro rata portion of the
Operating Expenses of the Portfolio. These expenses are borne indirectly by Fund
shareholders. The Fund pays N&B Management an administration fee, based on the
Fund's average daily net assets. The Portfolio pays N&B Management a management
fee, based on the Portfolio's average daily net assets; a pro rata portion of
this fee is borne indirectly by the Fund. Therefore, the table combines
management and administration fees. The Fund and Portfolio also incur other
expenses for things such as accounting and legal fees, maintaining shareholder
records, and furnishing shareholder statements and Fund reports. "Operating
Expenses" exclude interest, taxes, brokerage commissions, and extraordinary
expenses. The Fund's expenses are factored into its share price and dividends
and are not charged directly to Fund shareholders. For more information, see
"Management and Administration" and the SAI.

<TABLE>
<CAPTION>
MANAGEMENT AND
NEUBERGER&BERMAN ADMINISTRATION 12B-1 OTHER TOTAL OPERATING
EQUITY TRUST FEES* FEES EXPENSES EXPENSES*
<S> <C> <C> <C> <C>
GUARDIAN TRUST 0.84% None 0.10% 0.94%
</TABLE>

*(REFLECTS N&B MANAGEMENT'S EXPENSE REIMBURSEMENT UNDERTAKING DESCRIBED BELOW)

Total Operating Expenses for the Fund have been restated based upon current
administration fees for the Fund and management fees for the Portfolio and the
current expense reimbursement undertaking. "Other Expenses" are based on the
Fund's and Portfolio's expenses for the past fiscal year. The trustees of the
Trust believe

6
<PAGE>

that the aggregate per share expenses of the Fund and the Portfolio will be
approximately equal to the expenses the Fund would incur if its assets were
invested directly in the type of securities held by the Portfolio. The trustees
of the Trust also believe that investment in a Portfolio by investors in
addition to the Fund may enable the Portfolio to achieve economies of scale
which could reduce expenses. The expenses and returns of other funds that may
invest in the Portfolio may differ from those of the Fund.

A mutual fund that is a series of Neuberger&Berman Equity Funds ("N&B Equity
Funds") and is administered by N&B Management has a name similar to the Fund and
the same investment objective, policies, and limitations as the Fund ("Sister
Fund") and also invests in the Portfolio. The previous table reflects N&B
Management's voluntary undertaking until December 31, 1996, to reimburse the
Fund for its Operating Expenses and its pro rata share of the Portfolio's
Operating Expenses so that the Fund's expense ratio per annum will not exceed
the expense ratio per annum of the Sister Fund by more than 0.10% of the Fund's
average daily net assets. A Fund's per annum "expense ratio" means the sum of
the Fund's Total Operating Expenses and its pro rata share of the Portfolio's
Total Operating Expenses, divided by the Fund's average daily net assets for the
year. The expense ratio of the Sister Fund is anticipated to be 0.84% per annum
of the Sister Fund's average daily net assets. Based on that expectation, the
expense ratio for the Fund is not anticipated to exceed 0.94% per annum. Absent
the reimbursement, Management and Administration Fees would be 0.86% per annum
of the average daily net assets of the Fund and the Total Operating Expenses
would be 0.96% per annum of the average daily net assets of the Fund.

Example

- ----------------------------------------------------------------------

To illustrate the effect of Operating Expenses, let's assume that the Fund's
annual return is 5% and that it had Total Operating Expenses described in the
table above. For every $1,000 you invested in the Fund, you would have paid the
following amounts of total expenses if you closed your account at the end of
each of the following time periods:

<TABLE>
<CAPTION>
NEUBERGER&BERMAN 10
EQUITY TRUST 1 YEAR 3 YEARS 5 YEARS YEARS
<S> <C> <C> <C> <C>
GUARDIAN TRUST $ 10 $ 30 $ 52 $ 115
</TABLE>

7
<PAGE>
FINANCIAL HIGHLIGHTS

Selected Per Share Data and Ratios

- ----------------------------------------------------------------------

The financial information in the following table is for the Fund as of August
31, 1995 and prior periods. This information has been audited by the Fund's
independent auditors. You may obtain, at no cost, further information about the
performance of the Fund in its annual report to shareholders. The annual report
contains the auditors' report. Please call 800-877-9700 for a free copy and for
up-to-date information. Also, see "Performance Information."

8
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman

Guardian Trust
- --------------------------------------------------------------------------------

The following table includes selected data for a share outstanding
throughout each year 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 the
Portfolio's income and expenses. It should be read in conjunction with the
Portfolio's Financial Statements and notes thereto.

<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED AUGUST 3, 1993(1)
AUGUST 31, TO AUGUST 31,
1995 1994 1993
<S> <C> <C> <C>
Net Asset Value, Beginning of Year $ 11.27 $10.27 $10.00
------- ------ ------
Income from Investment Operations
Net Investment Income .13 .09 --
Net Gains or Losses on Securities
(both realized and unrealized) 2.55 .99 .27
------- ------ ------
Total from Investment Operations 2.68 1.08 .27
------- ------ ------
Less Distributions
Dividends (from net investment income) (.12) (.07) --
Distributions (from capital gains) -- (.01) --
------- ------ ------
Total Distributions (.12) (.08) --
------- ------ ------
Net Asset Value, End of Year $ 13.83 $11.27 $10.27
------- ------ ------
Total Return+ +24.01% +10.57% +2.70%(2)
------- ------ ------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 683.1 $75.8 --
------- ------ ------
Ratio of Expenses to Average Net Assets(4) .90% .80% .81%(3)
------- ------ ------
Ratio of Net Income to Average Net Assets(4) 1.35% 1.50% 1.00%(3)
------- ------ ------
</TABLE>

SEE NOTES TO FINANCIAL HIGHLIGHTS.

<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
1)The date investment operations commenced.

2)Not annualized.

3)Annualized.

4)After reimbursement of expenses by N&B Management. Had N&B Management
not undertaken such action, the annualized ratios of expenses and net
investment income (loss) to average daily net assets would have been 0.96% and
1.29%, respectively, in 1995; 1.52% and 0.78%, respectively, in 1994; and
2.50% and (0.69%), respectively, for the period ended August 31, 1993.

5)Because the Fund invests only in the Portfolio and the Portfolio (rather than
the Fund) engages in securities transactions, the Fund does not calculate a
portfolio turnover rate. The portfolio turnover rate for the Portfolio was 26%
for the year ended August 31, 1995, 24% for the year ended August 31, 1994,
and 3% for the period from August 2, 1993 to August 31, 1993.

+ 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 year,
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. Had N&B Management not reimbursed
certain expenses of the Fund, total return would have been lower.

10
<PAGE>
INVESTMENT PROGRAM

The investment policies and limitations of the Fund and the Portfolio are
identical. The Fund invests only in the Portfolio. Therefore, the following
shows you the kinds of securities in which the Portfolio invests. For an
explanation of some types of investments, see "Description of Investments" on
page 25.

Investment policies and limitations of the Fund and Portfolio are not
fundamental unless otherwise specified in this Prospectus or the SAI. While a
non-fundamental policy or limitation may be changed by the trustees of the Trust
or of Managers Trust without shareholder approval, the Fund intends to notify
shareholders before making any material change to such policies or limitations.
Fundamental policies may not be changed without shareholder approval.

The investment objective of the Fund and Portfolio is not fundamental. The
Fund has undertaken to a state securities commission that it will seek
shareholder approval before changing its investment objective. The Fund has also
undertaken not to change its investment objective without 30 days' prior notice
to shareholders. There can be no assurance that the Fund or Portfolio will
achieve its objectives. The Fund, by itself, does not represent a comprehensive
investment program.

Additional investment techniques, features, and limitations concerning the
Portfolio's investment program are described in the SAI.

The investment objective of the Fund and Portfolio is to seek capital
appreciation and secondarily, current income.

The Portfolio invests primarily in a large number of common stocks of long-
established, high-quality companies. The Portfolio uses the value-oriented
investment approach in selecting securities. Thus, N&B Management looks for such
factors as low price-to-earnings ratios, strong balance sheets, solid
management, and consistent earnings. The Portfolio diversifies its holdings
among many different companies and industries.

The Fund, the Sister Fund and the Sister Fund's predecessor have paid their
shareholders an income dividend every quarter and a capital gain distribution
every year since the predecessor's inception in 1950. Of course, this past
record does not necessarily predict the Fund's future practices.

11
<PAGE>
Short-Term Trading; Portfolio Turnover

- ----------------------------------------------------------------------

Although the Portfolio does not purchase securities with the intention of
profiting from short-term trading, the Portfolio may sell portfolio securities
when N&B Management believes such action is advisable. The portfolio turnover
rate for the Portfolio is set forth under "Notes to Financial Highlights."

Borrowings

- ----------------------------------------------------------------------

The Portfolio has a fundamental policy that it may not borrow money, except
that it may (1) borrow money from banks for temporary or emergency purposes and
not for leveraging or investment and (2) enter into reverse repurchase
agreements for any purpose, so long as the aggregate amount of borrowings and
reverse repurchase agreements does not exceed one-third of the Portfolio's total
assets (including the amount borrowed) less liabilities (other than borrowings).
The Portfolio does not expect to borrow money. As a non-fundamental policy, the
Portfolio may not purchase portfolio securities if its outstanding borrowings,
including reverse repurchase agreements, exceed 5% of its total assets.

Other Investments

- ----------------------------------------------------------------------

For temporary defensive purposes, the Portfolio may invest up to 100% of its
total assets in cash and cash equivalents, U.S. Government and Agency
Securities, commercial paper and certain other money market instruments, as well
as repurchase agreements collateralized by the foregoing.

12
<PAGE>
PERFORMANCE INFORMATION

The performance of the Fund is commonly measured as TOTAL RETURN. TOTAL
RETURN is the change in value of an investment in a fund over a particular
period, assuming that all distributions have been reinvested. Thus, total return
reflects dividend income, other distributions, and variations in share prices
from the beginning to the end of a period.

An average annual total return is a hypothetical rate of return that, if
achieved annually, would result in the same cumulative total return as was
actually achieved for the period. This smooths out variations in performance.
Past results do not, of course, guarantee future performance. Share prices may
vary and your shares when redeemed may be worth more or less than your original
purchase price.

The Fund commenced operations in August 1993, and its first fiscal year ended
August 31, 1993. The following table shows the average annual total returns for
the period ended August 31, 1995 (the most recent fiscal year-end of the Fund),
of a 1-year, 5-year, and 10-year investment in the Fund since its inception and,
for periods prior to the Fund's inception, the Sister Fund and its predecessor.
The table also shows a comparison with the S&P 500 Index for the Fund, the
Sister Fund, and the Sister Fund's predecessor. The S&P 500 Index is the
Standard & Poor's 500 Composite Stock Price Index, an unmanaged index generally
considered to be representative of overall stock market activity. Please note
that an index does not take into account any fees and expenses of investing in
the individual securities it tracks, and that individuals cannot invest directly
in an index. Further information regarding the Fund's performance is presented
in its annual report to shareholders, which is available without charge by
calling 800-877-9700.

AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS

ENDED AUGUST 31, 1995

<TABLE>
<CAPTION>
NEUBERGER&BERMAN SINCE INCEPTION
EQUITY TRUST 1 YEAR 5 YEARS 10 YEARS INCEPTION DATE
<S> <C> <C> <C> <C> <C>
GUARDIAN TRUST +24.01% +20.14% +15.66% +13.10% 6/1/50
S&P 500 +21.42 +15.13 +15.17 N/A N/A
</TABLE>

The Fund commenced operations in August 1993. The following table lets you
take a closer look at how the Fund, the Sister Fund, and its predecessor
performed year by year, in terms of an annual per share total return for each
calendar year (that is, as of December 31). Please note that the above chart
reflects information for periods ended on the Fund's last fiscal year-end (that
is, as of August 31, 1995). Had N&B Management not waived certain fees since
August 1993, the total return of the Fund would have been lower. The total
returns for periods prior to the Fund's inception would have been lower had they
reflected the higher fees of the Fund, as compared to those of the Sister Fund
and its predecessor.

TOTAL RETURN FOR CALENDAR YEARS ENDED DECEMBER 31

<TABLE>
<CAPTION>
NEUBERGER&BERMAN
EQUITY TRUST 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GUARDIAN TRUST +7.3% +25.0% +11.9% -1.0% +28.0% +21.5% -4.7% +34.3% +19.0% +13.5% +1.5%
S&P 500 +6.2 +31.6 +18.6 +5.2 +16.5 +31.6 -3.1 +30.3 +7.6 +10.0 +1.4
</TABLE>

TOTAL RETURN INFORMATION. You can obtain current performance information
about the Fund by calling N&B Management at 800-877-9700.

13
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS

The Fund

- ----------------------------------------------------------------------

The Fund is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated as of May 6, 1993. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has six separate series. The Trust and the Fund commenced
operations in August 1993. The Fund invests all of its net investable assets in
the Portfolio, receiving a beneficial interest in the Portfolio. The trustees of
the Trust may establish additional series or classes of shares, without the
approval of shareholders. The assets of a series belong only to that series, and
the liabilities of a series are borne solely by that series and no other.

DESCRIPTION OF SHARES. The Fund is authorized to issue an unlimited number
of shares of beneficial interest (par value $0.001 per share). Shares of the
Fund represent equal proportionate interests in the assets of the Fund only and
have identical voting, dividend, redemption, liquidation, and other rights. All
shares issued are fully paid and non-assessable, and shareholders have no
preemptive or other right to subscribe to any additional shares.

SHAREHOLDER MEETINGS. The trustees of the Trust do not intend to hold annual
meetings of shareholders of the Fund. The trustees will call special meetings of
shareholders of the Fund only if required under the 1940 Act or in their
discretion or upon the written request of holders of 10% or more of the
outstanding shares of the Fund entitled to vote.

CERTAIN PROVISIONS OF TRUST INSTRUMENT. Under Delaware law, the shareholders
of the Fund will not be personally liable for the obligations of the Fund; a
shareholder is entitled to the same limitation of personal liability extended to
shareholders of corporations. To guard against the risk that Delaware law might
not be applied in other states, the Trust Instrument requires that every written
obligation of the Trust or the Fund contain a statement that such obligation may
be enforced only against the assets of the Trust or the Fund and provides for
indemnification out of the Trust or Fund property of any shareholder
nevertheless held personally liable for Trust or Fund obligations, respectively.

14
<PAGE>
The Portfolio

- ----------------------------------------------------------------------

The Portfolio is a separate series of Managers Trust, a New York common law
trust organized as of December 1, 1992. Managers Trust is registered under the
1940 Act as a diversified, open-end management investment company. Managers
Trust has six separate portfolios. The assets of the Portfolio belong only to
the Portfolio, and the liabilities of the Portfolio are borne solely by the
Portfolio and no other.

FUND'S INVESTMENT IN PORTFOLIO. The Fund is a "feeder fund" that seeks to
achieve its investment objective by investing all of its net investable assets
in the Portfolio, which is a "master fund." The Portfolio, which has the same
investment objective, policies, and limitations as the Fund, in turn invests in
securities; the Fund thus acquires an indirect interest in those securities.
Historically, N&B Management, which is the administrator of the Fund and the
investment manager of the Portfolio, has sponsored, with Neuberger&Berman,
traditionally structured funds since 1950. However, it has operated 12 master
funds and 20 feeder funds since August 1993 and now operates 21 master funds and
30 feeder funds. This "master/feeder fund" structure is depicted in the
"Summary" on page 3.

The Fund's investment in the Portfolio is in the form of a non-transferable
beneficial interest. Members of the general public may not purchase a direct
interest in the Portfolio. The Sister Fund, a series of N&B Equity Funds,
invests all of its net investable assets in the Portfolio. A mutual fund that is
a series of Neuberger&Berman Equity Assets ("N&B Equity Assets") is expected to
begin operations in 1996. This series will invest all of its net investable
assets in the Portfolio. The shares of the series of N&B Equity Funds (but not
of N&B Equity Assets) are available for purchase by members of the general
public. The Portfolio may also permit other investment companies and/or other
institutional investors to invest in the Portfolio. All investors will invest in
the Portfolio on the same terms and conditions as the Fund and will pay a
proportionate share of the Portfolio's expenses. The Fund does not sell its
shares directly to members of the general public. Other investors in the
Portfolio (including the series of N&B Equity Funds) that might sell shares to
members of the general public are not required to sell their shares at the same
public offering price as the Fund, could have a different administration fee and
expenses than the Fund, and (except N&B Equity Funds) might charge a sales
commission. Therefore, Fund shareholders may have different returns than
shareholders in another investment company that invests exclusively in the
Portfolio. Information regarding any fund that may invest in the Portfolio in
the future will be available from N&B Management by calling 800-877-9700.

The trustees of the Trust believe that investment in the Portfolio by a
series of N&B Equity Funds or N&B Equity Assets or other potential investors in
addition to the Fund may enable the Portfolio to realize economies of scale that
could reduce its operating expenses, thereby producing higher returns and
benefitting all shareholders.

15
<PAGE>

However, the Fund's investment in the Portfolio may be affected by the actions
of other large investors in the Portfolio, if any. For example, if a large
investor in the Portfolio (other than the Fund) redeemed its interest in the
Portfolio, the Portfolio's remaining investors (including the Fund) might, as a
result, experience higher pro rata operating expenses, thereby producing lower
returns.

The Fund may withdraw its entire investment from the Portfolio at any time,
if the trustees of the Trust determine that it is in the best interests of the
Fund and its shareholders to do so. The Fund might withdraw, for example, if
there were other investors in the Portfolio with power to, and who did by a vote
of all investors (including the Fund), change the investment objective,
policies, or limitations of the Portfolio in a manner not acceptable to the
trustees of the Trust. A withdrawal could result in a distribution in kind of
portfolio securities (as opposed to a cash distribution) by the Portfolio. That
distribution could result in a less diversified portfolio of investments for the
Fund and could affect adversely the liquidity of the Fund's investment
portfolio. If the Fund decided to convert those securities to cash, it usually
would incur brokerage fees or other transaction costs. If the Fund withdrew its
investment from the Portfolio, the trustees would consider what action might be
taken, including the investment of all of the Fund's net investable assets in
another pooled investment entity having substantially the same investment
objective as the Fund or the retention by the Fund of its own investment manager
to manage its assets in accordance with its investment objective, policies, and
limitations. The inability of the Fund to find a suitable replacement could have
a significant impact on shareholders.

INVESTOR MEETINGS AND VOTING. The Portfolio normally will not hold meetings
of investors except as required by the 1940 Act. Each investor in the Portfolio
will be entitled to vote in proportion to its relative beneficial interest in
the Portfolio. On most issues subjected to a vote of investors, the Fund will
solicit proxies from its shareholders and will vote its interest in the
Portfolio in proportion to the votes cast by the Fund's shareholders. If there
are other investors in the Portfolio, there can be no assurance that any issue
that receives a majority of the votes cast by Fund shareholders will receive a
majority of votes cast by all Portfolio investors; indeed, if other investors
hold a majority interest in the Portfolio, they could have voting control of the
Portfolio.

CERTAIN PROVISIONS. Each investor in the Portfolio, including the Fund, will
be liable for all obligations of the Portfolio. However, the risk of an investor
in the Portfolio incurring financial loss on account of such liability would be
limited to circumstances in which the Portfolio had inadequate insurance and was
unable to meet its obligations out of its assets. Upon liquidation of the
Portfolio, investors would be entitled to share pro rata in the net assets of
the Portfolio available for distribution to investors.

16
<PAGE>
HOW TO BUY SHARES

YOU CAN BUY AND OWN FUND SHARES ONLY THROUGH AN ACCOUNT WITH AN INSTITUTION
WHICH PROVIDES ACCOUNTING, RECORDKEEPING, AND OTHER SERVICES TO INVESTORS AND
WHICH HAS AN ADMINISTRATIVE SERVICES AGREEMENT WITH N&B MANAGEMENT. N&B
Management and the Fund do not recommend, endorse, or receive payments from any
Institution. N&B Management compensates Institutions for services they provide
under an administrative services agreement. N&B Management does not provide
investment advice to any Institution or its clients or make decisions regarding
their investments.

Each Institution will establish its own procedures for the purchase of Fund
shares in its account, including minimum initial and additional investments for
shares of the Fund and the acceptable methods of payment for shares. Shares are
purchased at the next price calculated on a day the New York Stock Exchange
("NYSE") is open, after a purchase order is received and accepted by an
Institution. Prices for Fund shares are usually calculated as of 4 p.m. Eastern
time. Your Institution may be closed on days when the NYSE is open. As a result,
prices for Fund shares may be significantly affected on days when you have no
access to your Institution. The Fund will not issue a certificate for your
shares.

Other Information

- ----------------------------------------------------------------------

/ / An Institution must pay for shares it purchases in U.S. dollars.

/ / The Fund has the right to suspend the offering of its shares for a period
of time. The Fund also has the right to accept or reject a purchase order
in its sole discretion.

17
<PAGE>
HOW TO SELL SHARES

You can sell (redeem) all or some of your Fund shares only through an account
with an Institution. Each Institution will establish its own procedures for the
sale of Fund shares. Shares are sold at the next price calculated on a day the
NYSE is open, after a sales order is received and accepted by an Institution.
Prices for Fund shares are usually calculated as of 4 p.m. Eastern time. Your
Institution may be closed on days when the NYSE is open. As a result, prices for
Fund shares may be significantly affected on days when you have no access to
your Institution.

The Fund has reserved the right, if conditions exist which make cash payments
undesirable, to honor any request for a redemption by making payments in
securities valued in the same way as they would be valued for purposes of
computing the Fund's net asset value per share. If payment is made in
securities, an Institution may incur brokerage expenses or other transaction
costs in converting those securities into cash and will be subject to
fluctuation in the market prices of those securities until they are sold.

Other Information

- ----------------------------------------------------------------------

/ / Redemption proceeds will be paid to Institutions as agreed with the Fund,
but in any case within three calendar days (under unusual circumstances
the Fund may take longer, as permitted by law).

/ / The Fund may suspend redemptions or postpone payments on days when the
NYSE is closed (besides weekends and holidays), when trading on the NYSE
is restricted, or as permitted by the Securities and Exchange Commission.

18
<PAGE>
SHARE INFORMATION

Share Prices and Net Asset Value

- ----------------------------------------------------------------------

The Fund's shares are bought or sold at a price that is the Fund's net asset
value ("NAV") per share. The NAVs for the Fund and the Portfolio are calculated
by subtracting liabilities from total assets (in the case of the Portfolio, the
market value of the securities the Portfolio holds plus cash and other assets;
in the case of the Fund, its percentage interest in the Portfolio, multiplied by
the Portfolio's NAV, plus any other assets). The Fund's per share NAV is
calculated by dividing its NAV by the number of Fund shares outstanding and
rounding the result to the nearest full cent. The Fund and the Portfolio
calculate their NAVs as of the close of regular trading on the NYSE, usually 4
p.m. Eastern time, on each day the NYSE is open. The Portfolio values securities
(including options) listed on the NYSE, the American Stock Exchange, or other
national securities exchanges or quoted on Nasdaq, and other securities for
which market quotations are readily available, at the last sale price on the day
the securities are being valued. If there is no sale of such a security on that
day, that security is valued at the mean between its closing bid and asked
prices. The Portfolio values all other securities and assets, including
restricted securities, by a method that the trustees of Managers Trust believe
accurately reflects fair value.

19
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS,
AND TAXES

The Fund distributes substantially all of its share of any net investment
income (net of the Fund's expenses) earned by the Portfolio, at the end of each
calendar quarter. The Fund distributes substantially all of its share of the
Portfolio's net realized capital gains and net realized gains from foreign
currency transactions, if any, normally in December. Investors who are
considering the purchase of Fund shares in December should take this into
account because of the tax consequences of such distributions.

Distribution Options

- ----------------------------------------------------------------------

REINVESTMENT IN SHARES. All dividends and other distributions paid on shares
of the Fund are automatically reinvested in additional shares of the Fund,
unless an Institution elects to receive them in cash. Dividends and other
distributions are reinvested at the Fund's per share NAV, usually as of the date
the dividend or other distribution is payable.

DISTRIBUTIONS IN CASH. An Institution may elect to receive dividends in
cash, with other distributions, being reinvested in additional Fund shares, or
to receive all dividends and other distributions in cash.

Taxes

- ----------------------------------------------------------------------

The Fund intends to continue to qualify for treatment as a regulated
investment company for federal income tax purposes so that it will be relieved
of federal income tax on that part of its taxable income and realized gains that
it distributes to its shareholders.

TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax and
may also be subject to state and local income taxes. Distributions are taxable
when they are paid, whether in cash or by reinvestment in additional Fund
shares, except that distributions declared in December to shareholders of record
on a date in that month and paid in the following January are taxable as if they
were paid on December 31 of the year in which the distributions were declared.

For federal income tax purposes, dividends and distributions of net
short-term capital gain and net gains from certain foreign currency transactions
are taxed as ordinary income. Distributions of net capital gain (the excess of
net long-term capital gain over net short-term capital loss), when designated as
such, are generally taxed as long-term capital gain, no matter how long you have
owned your shares. Distributions of net capital gain may include gains from the
sale of portfolio securities that

20
<PAGE>

appreciated in value before you bought your shares. Every January, the Fund will
send each Institution that is a shareholder therein a statement showing the
amount of distributions paid in the previous year.

TAXES ON REDEMPTIONS. Capital gains realized on redemptions of Fund shares
are subject to tax. A capital gain (or loss) is the difference between the
amount paid for shares (including the value of any dividends and other
distributions that were reinvested) and the amount received when shares are
sold.

The foregoing is only a summary of some of the important tax considerations
affecting the Fund and its shareholders. See the SAI for additional tax
information. There may be other federal, state, local, or foreign tax
considerations applicable to a particular investor. Therefore, investors should
consult their tax advisers.

21
<PAGE>
MANAGEMENT AND ADMINISTRATION

Trustees and Officers

- ----------------------------------------------------------------------

The trustees of the Trust and the trustees of Managers Trust, who are
currently the same individuals, have oversight responsibility for the operations
of the Fund and Portfolio, respectively. The SAI contains general background
information about each trustee and officer of the Trust and of Managers Trust.
The trustees and officers of the Trust and of Managers Trust who are officers
and/or directors of N&B Management or partners of Neuberger&Berman serve without
compensation from the Fund or the Portfolio. The trustees of the Trust and of
Managers Trust, including a majority of those trustees who are not "interested
persons" (as defined in the 1940 Act) of the Fund, have adopted written
procedures reasonably appropriate to deal with potential conflicts of interest
between the Trust and Managers Trust, including, if necessary, creating a
separate board of trustees of Managers Trust.

Investment Manager, Administrator,
Distributor, and Sub-Adviser

- ----------------------------------------------------------------------

N&B Management serves as the investment manager of the Portfolio, as
administrator of the Fund, and as distributor of the shares of the Fund. N&B
Management and its predecessor firms have specialized in the management of
no-load mutual funds since 1950. In addition to serving the Portfolio, N&B
Management currently serves as investment manager of other mutual funds.
Neuberger&Berman, which acts as sub-adviser for the Portfolio and other mutual
funds managed by N&B Management, also serves as investment adviser of three
other investment companies. The mutual funds managed by N&B Management and
Neuberger&Berman had aggregate net assets of approximately $11.4 billion as of
September 30, 1995.

As sub-adviser, Neuberger&Berman furnishes N&B Management with investment
recommendations and research without added cost to the Portfolio.
Neuberger&Berman is a member firm of the NYSE and other principal exchanges and
acts as the Portfolio's principal broker in the purchase and sale of its
securities. Neuberger&Berman and its affiliates, including N&B Management,
manage securities accounts that had approximately $37.6 billion of assets as of
September 30, 1995. All of the voting stock of N&B Management is owned by
individuals who are general partners of Neuberger&Berman.

Kent C. Simons and Lawrence Marx III are primarily responsible for the
day-to-day management of the Portfolio. Mr. Simons and Mr. Marx are Vice
Presidents of N&B Management and general partners of Neuberger&Berman. Mr.
Simons has had

22
<PAGE>

responsibility for Neuberger&Berman GUARDIAN Portfolio and Neuberger&Berman
GUARDIAN Trust's Sister Fund's predecessor since 1983, and Mr. Marx has had
those responsibilities since 1988.

Neuberger&Berman acts as the principal broker for the Portfolio in the
purchase and sale of portfolio securities and in the sale of covered call
options, and for those services receives brokerage commissions. In effecting
securities transactions, the Portfolio seeks to obtain the best price and
execution of orders. For more information, see the SAI.
The partners and employees of Neuberger&Berman and officers and employees of
N&B Management, together with their families, have invested over $100 million of
their own money in Neuberger&Berman Funds.-SM-

To mitigate the possibility that the Portfolio will be adversely affected by
personal trading of employees, the Trust, Managers Trust, N&B Management, and
Neuberger&Berman have adopted policies that restrict securities trading in the
personal accounts of portfolio managers and others who normally come into
possession of information on portfolio transactions.

Expenses

- ----------------------------------------------------------------------

N&B Management provides investment management services to the Portfolio that
include, among other things, making and implementing investment decisions and
providing facilities and personnel necessary to operate the Portfolio. N&B
Management provides administrative services to the Fund that include furnishing
similar facilities and personnel for the Fund and performing accounting,
recordkeeping, and other services for Institutions and their accounts. For such
administrative services, the Fund pays N&B Management a fee at the annual rate
of 0.40% of the Fund's average daily net assets. With the Fund's consent, N&B
Management may subcontract to third parties, including Institutions, some of its
responsibilities to the Fund under the administration agreement and may
compensate third parties that provide such services. For investment management
services, the Portfolio pays N&B Management a fee at the annual rate of 0.55% of
the first $250 million of the Portfolio's 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. During its 1995 fiscal year, the Fund accrued
administration fees and a pro rata portion of the Portfolio's management fees,
as an annualized percentage of its average daily net assets, of 0.86%.

See "Expense Information -- Annual Fund Operating Expenses" for anticipated
fees for the current fiscal year.

23
<PAGE>

The Fund bears all expenses of its operations other than those borne by N&B
Management as administrator of the Fund and as distributor of its shares. The
Portfolio bears all expenses of its operations other than those borne by N&B
Management as investment manager of the Portfolio. These expenses include, but
are not limited to, for the Fund and Portfolio, legal and accounting fees, and
compensation for trustees who are not affiliated with N&B Management; for the
Fund, transfer agent fees, and the cost of printing and sending reports and
proxy materials to shareholders; and for the Portfolio, custodial fees for
securities.

During its 1995 fiscal year, the Fund bore Total Operating Expenses as an
annualized percentage of its average daily net assets, after taking into
consideration N&B Management's expense reimbursement, of 0.90% per annum.

N&B Management has voluntarily undertaken until December 31, 1996, to
reimburse the Fund for its Operating Expenses and its pro rata share of the
Portfolio's Operating Expenses so that the Fund's expense ratio per annum will
not exceed the expense ratio per annum of its Sister Fund by more than 0.10% of
the Fund's average daily net assets. A Fund's per annum "expense ratio" means
the sum of the Fund's Total Operating Expenses and its pro rata share of the
Portfolio's Total Operating Expenses, divided by the Fund's average daily net
assets for the year. The expense ratio of the Sister Fund is anticipated to be
0.84% per annum of the Sister Fund's average daily net assets. Based on that
expectation, the expense ratio for the Fund is not anticipated to exceed 0.94%
per annum. The effect of reimbursement by N&B Management is to reduce the Fund's
expenses and thereby increase its total return.

Transfer Agent

- ----------------------------------------------------------------------

The Fund's transfer agent is State Street Bank and Trust Company ("State
Street"). State Street administers purchases, redemptions, and transfers of Fund
shares with respect to Institutions and the payment of dividends and other
distributions to Institutions. The main office of State Street is located at 225
Franklin Street, Boston, MA 02110.
All correspondence should be addressed to Neuberger&Berman Funds,
Institutional Services, 605 Third Avenue, 2nd Floor, New York, NY 10158.

24
<PAGE>
DESCRIPTION OF INVESTMENTS

In addition to common stocks and other securities referred to in "Investment
Program" herein, the Portfolio may make the following investments, among others,
individually or in combination, although it may not necessarily buy all of the
types of securities or use all of the investment techniques that are described.
For additional information on the following investments and on other types of
investments which the Portfolio may make, see the SAI.

ILLIQUID SECURITIES. The Portfolio may invest up to 10% of its net assets in
illiquid securities, which are securities that cannot be expected to be sold
within seven days at approximately the price at which they are valued. Due to
the absence of an active trading market, the Portfolio may experience difficulty
in valuing or disposing of illiquid securities. N&B Management determines the
liquidity of the Portfolio's securities, under supervision of the trustees of
Managers Trust. Securities that are freely tradeable in their country of origin
or in their principal market are not considered illiquid securities even if they
are not registered for sale in the U.S.

RESTRICTED SECURITIES AND RULE 144A SECURITIES. The Portfolio may invest in
restricted securities and Rule 144A securities. Restricted securities cannot be
sold to the public without registration under the Securities Act of 1933 ("1933
Act"). Unless registered for sale, these securities can be sold only in
privately negotiated transactions or pursuant to an exemption from registration.
Restricted securities are generally considered illiquid. Rule 144A securities,
although not registered, may be resold to qualified institutional buyers in
accordance with Rule 144A under the 1933 Act. Unregistered securities may also
be sold abroad pursuant to Regulation S under the 1933 Act. N&B Management,
acting pursuant to guidelines established by the trustees of Managers Trust, may
determine that some restricted securities are liquid.

FOREIGN SECURITIES. The Portfolio may invest up to 10% of the value of its
total assets in foreign securities. Foreign securities are those of issuers
organized and doing business principally outside the U.S., including non-U.S.
governments, their agencies, and instrumentalities. The 10% limitation does not
apply to foreign securities that are denominated in U.S. dollars, including
American Depositary Receipts ("ADRs"). Foreign securities (including those
denominated in U.S. dollars and ADRs) are affected by political or economic
developments in foreign countries. Foreign companies may not be subject to
accounting standards or governmental supervision comparable to U.S. companies,
and there may be less public information about their operations. In addition,
foreign markets may be less liquid or more volatile than U.S. markets and may
offer less protection to investors. Investments in foreign securities that are
not denominated in U.S. dollars (including those made through ADRs) may be
subject to special risks, such as governmental regulation of foreign exchange
transactions and changes in rates of exchange with the U.S. dollar, irrespective
of the performance of the underlying investment.

25
<PAGE>

COVERED CALL OPTIONS. The Portfolio may try to reduce the risk of securities
price changes (hedge) or generate income by writing (selling) covered call
options against securities held in its portfolio having a market value not
exceeding 10% of its net assets, and may purchase call options in related
closing transactions. The purchaser of a call option acquires the right to buy a
portfolio security at a fixed price during a specified period. The maximum price
the seller may realize on the security during the option period is the fixed
price; the seller continues to bear the risk of a decline in the security's
price, although this risk is reduced by the premium received for the option.

The primary risks in using call options are (1) possible lack of a liquid
secondary market for options and the resulting inability to close out options
when desired; (2) the fact that the skills needed to use options are different
from those needed to select the Portfolio's securities; (3) the fact that,
although use of these instruments for hedging purposes can reduce the risk of
loss, they also can reduce the opportunity for gain by offsetting favorable
price movements in underlying investments; and (4) the possible inability of the
Portfolio to sell a security at a time that would otherwise be favorable for it
to do so, or the possible need for the Portfolio to sell a security at a
disadvantageous time, due to its need to maintain "cover" in connection with its
use of these instruments. Options are considered "derivatives."

REPURCHASE AGREEMENTS/SECURITIES LOANS. In a repurchase agreement, the
Portfolio buys a security from a Federal Reserve member bank or a securities
dealer and simultaneously agrees to sell it back at a higher price, at a
specified date, usually less than a week later. The underlying securities must
fall within the Portfolio's investment policies and limitations. The Portfolio
also may lend portfolio securities to banks, brokerage firms, or institutional
investors to earn income. Costs, delays, or losses could result if the selling
party to a repurchase agreement or the borrower of portfolio securities becomes
bankrupt or otherwise defaults. N&B Management monitors the creditworthiness of
sellers and borrowers.
OTHER INVESTMENTS. Although the Portfolio invests primarily in common
stocks, when market conditions warrant it may invest in preferred stocks,
securities convertible into or exchangeable for common stocks, U.S. Government
and Agency Securities, investment grade debt securities, or money market
instruments, or may retain assets in cash or cash equivalents.

U.S. Government securities are obligations of the U.S. Treasury backed by the
full faith and credit of the United States. U.S. Government Agency Securities
are issued or

26
<PAGE>

guaranteed by U.S. Government agencies or instrumentalities; by other U.S.
Government-sponsored enterprises, such as the Government National Mortgage
Association, Federal National Mortgage Association, Federal Home Loan Mortgage
Corporation, Student Loan Marketing Association, and Tennessee Valley Authority;
and by various federally chartered or sponsored banks. Some U.S. Government
Agency Securities are supported by the full faith and credit of the United
States, while others may be supported by the issuer's ability to borrow from the
U.S. Treasury, subject to the Treasury's discretion in certain cases, or only by
the credit of the issuer. U.S. Government Agency Securities include U.S.
Government mortgage-backed securities. The market prices of U.S. Government
securities are not guaranteed by the Government and generally fluctuate with
changing interest rates.

"Investment grade" debt securities are those receiving one of the four
highest ratings from Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's, or another nationally recognized statistical rating organization
("NRSRO") or, if unrated by any NRSRO, deemed comparable by N&B Management to
such rated securities ("Comparable Unrated Securities") under guidelines
established by the trustees of Managers Trust. Securities rated by Moody's in
its fourth highest category (Baa) or Comparable Unrated Securities may be
considered speculative; a change in economic factors could lead to a weakened
capacity of the issuer to repay. The value of fixed income securities in which
the Portfolio may invest is likely to decline in times of rising interest rates.
Conversely, when rates fall, the value of the Portfolio's fixed income in
investments is likely to rise.

27
<PAGE>
DIRECTORY

INVESTMENT MANAGER, ADMINISTRATOR,
AND DISTRIBUTOR

Neuberger&Berman Management Incorporated
605 Third Avenue 2nd Floor
New York, NY 10158-0180

SUB-ADVISER
Neuberger&Berman, L.P.
605 Third Avenue
New York, NY 10158-3698

CUSTODIAN AND TRANSFER 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 10158-0180

LEGAL COUNSEL

Kirkpatrick & Lockhart LLP
1800 M Street, NW
Washington, DC 20036-5891

Neuberger&Berman, Neuberger&Berman Management Inc., and Neuberger&Berman
Guardian Trust are service marks of Neuberger&Berman Management Inc.
- -C- 1995 Neuberger&Berman Management Inc.

28
<PAGE>

Neuberger&Berman Management Inc.

605 THIRD AVENUE 2ND FLOOR
NEW YORK, NY 10158-0180
SHAREHOLDER SERVICES
800-877-9700

THE WRAPPER IS NOT PART OF THE PROSPECTUS.
[recycle PRINTED ON RECYCLED PAPER
logo] WITH SOY BASED INKS NBEP0001295

<PAGE>

--------------------------------------------------------------------------

NEUBERGER & BERMAN GUARDIAN TRUST AND PORTFOLIO

STATEMENT OF ADDITIONAL INFORMATION

DATED DECEMBER 15, 1995

No-Load Mutual Fund
605 Third Avenue, 2nd Floor, New York, NY 10158-0180
Toll-Free 800-877-9700

--------------------------------------------------------------------------

Neuberger & Berman GUARDIAN Trust ("Fund"), a series of
Neuberger & Berman Equity Trust ("Trust"), is a no-load mutual fund that
offers shares pursuant to a Prospectus dated December 15, 1995. The Fund
invests all of its net investable assets in Neuberger & Berman GUARDIAN
Portfolio ("Portfolio").

AN INVESTOR CAN BUY, OWN, AND SELL FUND SHARES ONLY
THROUGH AN ACCOUNT WITH A PENSION PLAN ADMINISTRATOR, BROKER-DEALER, OR
OTHER INSTITUTION (EACH AN "INSTITUTION") THAT PROVIDES ACCOUNTING,
RECORDKEEPING, AND OTHER SERVICES TO INVESTORS AND THAT HAS AN
ADMINISTRATIVE SERVICES AGREEMENT WITH NEUBERGER & BERMAN MANAGEMENT
INCORPORATED ("N&B MANAGEMENT").

The Fund's Prospectus provides basic information that an
investor should know before investing. A copy of the Prospectus may be
obtained, without charge, from Neuberger & Berman Management Incorporated,
Institutional Services, 605 Third Avenue, 2nd Floor, New York, NY 10158-
0180, or by calling 800-877-9700.

This Statement of Additional Information ("SAI") is not a
prospectus and should be read in conjunction with the Prospectus.

No person has been authorized to give any information or
to make any representations not contained in the Prospectus or in this SAI
in connection with the offering made by the Prospectus, and, if given or
made, such information or representations must not be relied upon as
having been authorized by the Fund or its distributor. The Prospectus and
this SAI do not constitute an offering by the Fund or its distributor in
any jurisdiction in which such offering may not lawfully be made.

<PAGE>

INVESTMENT INFORMATION

The Fund is a separate series of the Trust, a Delaware
business trust that is registered with the Securities and Exchange
Commission ("SEC") as an open-end management investment company. The Fund
seeks its investment objective by investing all of its net investable
assets in the Portfolio, a series of Equity Managers Trust ("Managers
Trust") that has an investment objective identical to, and a name similar
to, that of the Fund. The Portfolio, in turn, invests in accordance with
an investment objective, policies, and limitations identical to those of
the Fund. (The Trust and Managers Trust, which is an open-end management
investment company managed by N&B Management, are together referred to
below as the "Trusts.")

The following information supplements the discussion in
the Prospectus of the investment objective, policies, and limitations of
the Fund and Portfolio. The investment objective and, unless otherwise
specified, the investment policies and limitations of the Fund and
Portfolio are not fundamental. Although any investment policy or
limitation that is not fundamental may be changed by the trustees of the
Trust ("Fund Trustees") or of Managers Trust ("Portfolio Trustees")
without shareholder approval, the Fund intends to notify its shareholders
before changing its investment objective or implementing any material
change in any non-fundamental policy or limitation. The fundamental
investment policies and limitations of the Fund or the Portfolio may not
be changed without the approval of the lesser of (1) 67% of the total
units of beneficial interest ("shares") of the Fund or Portfolio
represented at a meeting at which more than 50% of the outstanding Fund or
Portfolio shares are represented or (2) a majority of the outstanding
shares of the Fund or Portfolio. This vote is required by the Investment
Company Act of 1940 ("1940 Act") and is referred to in this SAI as a "1940
Act majority vote." Whenever the Fund is called upon to vote on a change
in the fundamental investment policy or limitation of the Portfolio, the
Fund casts its votes thereon in proportion to the votes of its
shareholders at a meeting thereof called for that purpose.

Investment Policies and Limitations
-----------------------------------
The Fund has the following fundamental investment policy,
to enable it to invest in the Portfolio:

Notwithstanding any other investment policy of the Fund,
the Fund may invest all of its investable assets (cash,
securities, and receivables relating to securities) in an
open-end management investment company having substan-
tially the same investment objective, policies, and
limitations as the Fund.

- 1 -
<PAGE>

cusses the investment policies and limitations of the Portfolio, it
applies equally to the Fund.

Except for the limitation on borrowing and the limitation
on ownership of portfolio securities by officers and trustees, any
investment policy or limitation that involves a maximum percentage of
securities or assets will not be considered to be violated unless the
percentage limitation is exceeded immediately after, and because of, a
transaction by the Portfolio.

The Portfolio's fundamental investment policies and
limitations are as follows:

1. Borrowing. The Portfolio may not borrow money,
except that the Portfolio may (i) borrow money from banks for temporary or
emergency purposes and not for leveraging or investment and (ii) enter
into reverse repurchase agreements for any purpose; provided that (i) and
(ii) in combination do not exceed 33-1/3% of the value of its total assets
(including the amount borrowed) less liabilities (other than borrowings).
If at any time borrowings exceed 33-1/3% of the value of the Portfolio's
total assets, the Portfolio will reduce its borrowings within three days
(excluding Sundays and holidays) to the extent necessary to comply with
the 33-1/3% limitation.

2. Commodities. The Portfolio may not purchase
physical commodities or contracts thereon, unless acquired as a result of
the ownership of securities or instruments, but this restriction shall not
prohibit the Portfolio from purchasing futures contracts or options
(including options on futures contracts, but excluding options or futures
contracts on physical commodities) or from investing in securities of any
kind.

3. Diversification. The Portfolio may not, with
respect to 75% of the value of its total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government or any of its agencies or instrumentalities) if, as a result,
(i) more than 5% of the value of the Portfolio's total assets would be
invested in the securities of that issuer or (ii) the Portfolio would hold
more than 10% of the outstanding voting securities of that issuer.

4. Industry Concentration. The Portfolio may not
purchase any security if, as a result, 25% or more of its total assets
(taken at current value) would be invested in the securities of issuers
having their principal business activities in the same industry. This
limitation does not apply to securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities.

5. Lending. The Portfolio may not lend any security
or make any other loan if, as a result, more than 33-1/3% of its total
assets (taken at current value) would be lent to other parties, except, in
accordance with its investment objective, policies, and limitations, (i)

- 2 -
<PAGE>

through the purchase of a portion of an issue of debt securities or (ii)
by engaging in repurchase agreements.

6. Real Estate. The Portfolio may not purchase real
estate unless acquired as a result of the ownership of securities or
instruments, but this restriction shall not prohibit the Portfolio from
purchasing securities issued by entities or investment vehicles that own
or deal in real estate or interests therein or instruments secured by real
estate or interests therein.

7. Senior Securities. The Portfolio may not issue
senior securities, except as permitted under the 1940 Act.

8. Underwriting. The Portfolio may not underwrite
securities of other issuers, except to the extent that the Portfolio, in
disposing of portfolio securities, may be deemed to be an underwriter
within the meaning of the Securities Act of 1933 ("1933 Act").

The following non-fundamental investment policies and
limitations apply to the Portfolio:

1. Borrowing. The Portfolio may not purchase secu-
rities if outstanding borrowings, including any reverse repurchase agree-
ments, exceed 5% of its total assets.

2. Lending. Except for the purchase of debt
securities and engaging in repurchase agreements, the Portfolio may not
make any loans other than securities loans.

3. Investments in Other Investment Companies. The
Portfolio may not purchase securities of other investment companies,
except to the extent permitted by the 1940 Act and in the open market at
no more than customary brokerage commission rates. This limitation does
not apply to securities received or acquired as dividends, through offers
of exchange, or as a result of a reorganization, consolidation, or merger.

4. Margin Transactions. The Portfolio may not
purchase securities on margin from brokers or other lenders, except that
the Portfolio may obtain such short-term credits as are necessary for the
clearance of securities transactions. Margin payments in connection with
transactions in futures contracts and options on futures contracts shall
not constitute the purchase of securities on margin and shall not be
deemed to violate the foregoing limitation.

5. Short Sales. The Portfolio may not sell
securities short unless it owns, or has the right to obtain without
payment of additional consideration, securities equivalent in kind and
amount to the securities sold. Transactions in forward contracts, futures
contracts and options shall not constitute selling securities short.

- 3 -
<PAGE>

6. Ownership of Portfolio Securities by Officers and
Trustees. The Portfolio may not purchase or retain the securities of any
issuer if, to the knowledge of N&B Management, those officers and trustees
of Managers Trust and officers and directors of N&B Management who each
owns individually more than 1/2 of 1% of the outstanding securities of
such issuer, together own more than 5% of such securities.

7. Unseasoned Issuers. The Portfolio may not
purchase the securities of any issuer (other than securities issued or
guaranteed by domestic or foreign governments or political subdivisions
thereof) if, as a result, more than 5% of the Portfolio's total assets
would be invested in the securities of business enterprises that,
including predecessors, have a record of less than three years of
continuous operation.

8. Puts, Calls, Straddles, or Spreads. The
Portfolio may not invest in puts, calls, straddles, spreads, or any
combination thereof, except that the Portfolio may (i) write (sell)
covered call options against portfolio securities having a market value
not exceeding 10% of its net assets and (ii) purchase call options in
related closing transactions. The Portfolio does not construe the
foregoing limitation to preclude it from purchasing or writing options on
futures contracts or from purchasing securities with rights to put the
securities to the issuer or a guarantor.

9. Illiquid Securities. The Portfolio may not
purchase any security if, as a result, more than 10% of its net assets
would be invested in illiquid securities. Illiquid securities include
securities that cannot be sold within seven days in the ordinary course of
business for approximately the amount at which the Portfolio has valued
the securities, such as repurchase agreements maturing in more than seven
days.

10. Foreign Securities. The Portfolio may not invest
more than 10% of the value of its total assets in securities of foreign
issuers, provided that this limitation shall not apply to foreign
securities denominated in U.S. dollars, including American Depositary
Receipts ("ADRs").

11. Oil and Gas Programs. The Portfolio may not
invest in participations or other direct interests in oil, gas, or other
mineral leases or exploration or development programs, but the Portfolio
may purchase securities of companies that own interests in any of the
foregoing.

12. Real Estate. The Portfolio may not purchase or sell
real property (including interests in real estate limited partnerships,
but excluding readily marketable interests in real estate investment
trusts and readily marketable securities of companies that invest in real
estate); provided that the Portfolio may not purchase any security if, as
a result, more than 10% of its total assets would be invested in
securities of real estate investment trusts.

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<PAGE>

13. Investments in Any One Issuer. The Portfolio may
not purchase the securities of any one issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 5% of the Portfolio's total
assets would be invested in the securities of that issuer.

14. Warrants. The Portfolio may not invest more than
5% of its net assets in warrants, including warrants that are not listed
on the New York Stock Exchange ("NYSE") or American Stock Exchange
("AmEx"), or more than 2% of its net assets in such unlisted warrants.
For purposes of this limitation, warrants are valued at the lower of cost
or market value, and warrants acquired by the Portfolio in units or
attached to securities may be deemed to be without value.

15. Pledging. The Portfolio may not pledge or
hypothecate any of its assets, except that the Portfolio may pledge or
hypothecate up to 5% of its total assets in connection with its entry into
any agreement or arrangement pursuant to which a bank furnishes a letter
of credit to collateralize a capital commitment made by the Portfolio to a
mutual insurance company of which the Portfolio is a member.

The Portfolio, as an operating policy, does not intend to
invest in futures contracts and options thereon during the coming year.

Kent C. Simons and Lawrence Marx III, Portfolio Managers of the Portfolio
-------------------------------------------------------------------------

The Portfolio is managed by two veterans of N&B Manage-
ment who have consistently followed their value-oriented philosophy over
many years: Kent Simons and Larry Marx.

The Portfolio subscribes to the same stock-picking
philosophy followed since 1950, when Roy R. Neuberger founded the
predecessor of Neuberger & Berman GUARDIAN Fund, which, like the Fund,
invests all its net investable assets in the Portfolio.

It's no great trick for a mutual fund to make money when
the market is rising. The tide that lifts stock values will carry most
funds along. The true test of management is its ability to make money
even when the market is flat or declining. By that measure, the Fund,
Neuberger & Berman GUARDIAN Fund and its predecessor have served
shareholders well and have paid a dividend every quarter and a capital
gain distribution EVERY YEAR since 1950. Of course, there can be no
assurance that this trend will continue.

Both Mr. Simons and Mr. Marx place a high premium on
being knowledgeable about the companies whose stocks they buy for the
Portfolio. That knowledge is important, because sometimes it takes
courage to buy stocks that the rest of the market has forsaken. Says Mr.
Marx, "We're usually early in and early out. We'd rather buy an

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<PAGE>

undervalued stock because we expect it to become fairly valued than buy
one fairly valued and hope it becomes overvalued. We like a stock 'under
a rock' or with a cloud over it; you are not going to get great companies
at great valuations when the market perception is great."

"People who switch around a lot are not going to benefit
from our approach. They're following the market -- we're looking at
fundamentals."

Additional Investment Information
---------------------------------

The Portfolio, as indicated below, may make the following
investments, among others, although it may not buy all of the types of
securities or use all of the investment techniques that are described.

Repurchase Agreements. Repurchase agreements are
agreements under which the Portfolio purchases securities from a bank that
is a member of the Federal Reserve System or from a securities dealer that
agrees to repurchase the securities from the Portfolio at a higher price
on a designated future date. Repurchase agreements generally are for a
short period of time, usually less than a week. The Portfolio may not
enter into a repurchase agreement with a maturity of more than seven days
if, as a result, more than 10% of the value of its net assets would then
be invested in such repurchase agreements and other illiquid securities.
The Portfolio may enter into a repurchase agreement only if (1) the
underlying securities are of the type that the Portfolio's investment
policies and limitations would allow it to purchase directly, (2) the
market value of the underlying securities, including accrued interest, at
all times equals or exceeds the value of the repurchase agreement, and
(3) payment for the underlying securities is made only upon satisfactory
evidence that the securities are being held for the Portfolio's account by
its custodian or a bank acting as the Portfolio's agent.

Securities Loans. In order to realize income, the
Portfolio may lend portfolio securities with a value not exceeding 33-1/3%
of its total assets to banks, brokerage firms, or institutional investors
judged creditworthy by N&B Management. Borrowers are required
continuously to secure their obligations to return securities on loan from
the Portfolio by depositing collateral in a form determined to be satis-
factory by the Portfolio Trustees. The collateral, which must be marked
to market daily, must be equal to at least 100% of the market value of the
loaned securities, which will also be marked to market daily. N&B Man-
agement believes the risk of loss on these transactions is slight because,
if a borrower were to default for any reason, the collateral should
satisfy the obligation. However, as with other extensions of secured
credit, loans of portfolio securities involve some risk of loss of rights
in the collateral should the borrower fail financially.

- 6 -
<PAGE>

Restricted Securities and Rule 144A Securities. The
Portfolio may invest in restricted securities, which are securities that
may not be sold to the public without an effective registration statement
under the 1933 Act or, if they are unregistered, may be sold only in a
privately negotiated transaction or pursuant to an exemption from
registration. In recognition of the increased size and liquidity of the
institutional market for unregistered securities and the importance of
institutional investors in the formation of capital, the SEC has adopted
Rule 144A under the 1933 Act. Rule 144A is designed further to facilitate
efficient trading among institutional investors by permitting the sale of
certain unregistered securities to qualified institutional buyers. To the
extent privately placed securities held by the Portfolio qualify under
Rule 144A, and an institutional market develops for those securities, the
Portfolio likely will be able to dispose of the securities without regis-
tering them under the 1933 Act. To the extent that institutional buyers
become, for a time, uninterested in purchasing these securities, investing
in Rule 144A securities could increase the level of the Portfolio's
illiquidity. N&B Management, acting under guidelines established by the
Portfolio Trustees, may determine that certain securities qualified for
trading under Rule 144A are liquid. Foreign securities that can be freely
sold in the markets in which they are principally traded are not
considered to be restricted. Regulation S under the 1933 Act permits the
sale abroad of securities that are not registered for sale in the United
States.

Where registration is required, the Portfolio may be
obligated to pay all or part of the registration expenses, and a
considerable period may elapse between the decision to sell and the time
the Portfolio may be permitted to sell a security under an effective
registration statement. If, during such a period, adverse market
conditions were to develop, the Portfolio might obtain a less favorable
price than prevailed when it decided to sell. To the extent privately
placed securities, including Rule 144A securities, are illiquid, purchases
thereof will be subject to the Portfolio's 10% limit on investments in
illiquid securities. Restricted securities for which no market exists are
priced at fair value as determined in accordance with procedures approved
and periodically reviewed by the Portfolio Trustees.

Reverse Repurchase Agreements. In a reverse repurchase
agreement, the Portfolio sells portfolio securities subject to its
agreement to repurchase the securities at a later date for a fixed price
reflecting a market rate of interest; these agreements are considered
borrowings for purposes of the Portfolio's investment policies and
limitations concerning borrowings. While a reverse repurchase agreement
is outstanding, the Portfolio will maintain with its custodian in a
segregated account cash, U.S. Government or Agency Securities, or other
liquid, high-grade debt securities, marked to market daily, in an amount
at least equal to the Portfolio's obligations under the agreement. There
is a risk that the contra-party to a reverse repurchase agreement will be
unable or unwilling to complete the transaction as scheduled, which may
result in losses to the Portfolio.

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<PAGE>

Foreign Securities. The Portfolio may invest in U.S.
dollar-denominated securities issued by foreign issuers (including banks,
governments, and quasi-governmental organizations) and foreign branches of
U.S. banks, including negotiable certificates of deposit ("CDs"), bankers'
acceptances, and commercial paper. These investments are subject to the
Portfolio's quality standards. While investments in foreign securities
are intended to reduce risk by providing further diversification, such
investments involve sovereign and other risks, in addition to the credit
and market risks normally associated with domestic securities. These
additional risks include the possibility of adverse political and economic
developments (including political instability) and the potentially adverse
effects of unavailability of public information regarding issuers, less
governmental supervision and regulation of financial markets, reduced
liquidity of certain financial markets, and the lack of uniform
accounting, auditing, and financial standards or the application of
standards that are different or less stringent than those applied in the
United States.

The Portfolio also may invest in equity, debt, or other
income-producing securities that are denominated in or indexed to foreign
currencies, including (1) common and preferred stocks, (2) CDs, commercial
paper, fixed time deposits, and bankers' acceptances issued by foreign
banks, (3) obligations of other corporations, and (4) obligations of
foreign governments or their subdivisions, agencies, and instrumentali-
ties, international agencies, and supranational entities. Investing in
foreign currency denominated securities includes the special risks asso-
ciated with investing in non-U.S. issuers described in the preceding
paragraph and the additional risks of (1) adverse changes in foreign
exchange rates, (2) nationalization, expropriation, or confiscatory taxa-
tion, (3) adverse changes in investment or exchange control regulations
(which could prevent cash from being brought back to the United States),
and (4) expropriation or nationalization of foreign portfolio companies.
Additionally, dividends and interest payable on foreign securities may be
subject to foreign taxes, including taxes withheld from those payments.
Commissions on foreign securities exchanges are often at fixed rates and
are generally higher than negotiated commissions on U.S. exchanges,
although the Portfolio endeavors to achieve the most favorable net results
on portfolio transactions. The Portfolio may invest only in securities of
issuers in countries whose governments are considered stable by N&B Man-
agement.

Foreign securities often trade with less frequency and in
less volume than domestic securities and therefore may exhibit greater
price volatility. Additional costs associated with an investment in
foreign securities may include higher custodial fees than apply to
domestic custody arrangements, and transaction costs of foreign currency
conversions.

- 8 -
<PAGE>

Prices of foreign securities and exchange rates for
foreign currencies may be affected by the interest rates prevailing in
other countries. Interest rates in other countries are often affected by
local factors, including the strength of the local economy, the demand for
borrowing, the government's fiscal and monetary policies, and the
international balance of payments. Individual foreign economies may
differ favorably or unfavorably from the U.S. economy in such respects as
growth of gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency, and balance of payments position.

Foreign markets also have different clearance and
settlement procedures, and, in certain markets, there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Such
delays in settlement could result in temporary periods when a portion of
the assets of the Portfolio are uninvested and no return is earned
thereon. The inability of the Portfolio to make intended security
purchases due to settlement problems could cause the Portfolio to miss
attractive investment opportunities. Inability to dispose of portfolio
securities due to settlement problems could result in losses to the
Portfolio due to subsequent declines in value of the portfolio securities,
or, if the Portfolio has entered into a contract to sell the securities,
could result in possible liability to the purchaser.

In order to limit the risk inherent in investing in
foreign currency denominated securities, the Portfolio may not purchase
any such security if, after such purchase, more than 10% of its total
assets (taken at market value) would be invested in foreign currency
denominated securities. Within that limitation, however, the Portfolio is
not restricted in the amount it may invest in securities denominated in
any one foreign currency.

Covered Call Options. The Portfolio may write or
purchase covered call options on securities it owns valued at up to 10% of
its net assets. Generally, the purpose of writing and purchasing these
options is to reduce the effect of price fluctuations of securities held
by the Portfolio on the Portfolio's and the Fund's net asset values
("NAVs"). Portfolio securities on which call options may be written and
purchased by the Portfolio are purchased solely on the basis of investment
considerations consistent with the Portfolio's investment objective.

When the Portfolio writes a call option, it is obligated
to sell a security to a purchaser at a specified price at any time the
purchaser requests until a certain date, and receives a premium for
writing the call option. So long as the obligation of the call option
continues, the Portfolio may be assigned an exercise notice, requiring it
to deliver the underlying security against payment of the exercise price.

- 9 -
<PAGE>

The Portfolio may be obligated to deliver securities underlying an option
at less than the market price, thereby giving up any additional gain on
the security.

The Portfolio writes only "covered" call options on
securities it owns. The writing of covered call options is a conservative
investment technique that is believed to involve relatively little risk
(in contrast to the writing of "naked" or uncovered call options, which
the Portfolio will not do), but is capable of enhancing the Portfolio's
total return. When writing a covered call option, the Portfolio, in
return for the premium, gives up the opportunity for profit from a price
increase in the underlying security above the exercise price, but
conversely retains the risk of loss should the price of the security
decline.

If a call option that the Portfolio has written expires
unexercised, the Portfolio will realize a gain in the amount of the
premium; however, that gain may be offset by a decline in the market value
of the underlying security during the option period. If the call option
is exercised, the Portfolio will realize a gain or loss from the sale of
the underlying security.

When the Portfolio purchases a call option, it pays a
premium for the right to purchase a security from the writer at a
specified price until a specified date. A Portfolio would purchase a call
option to offset a previously written call option.

The obligation under any option terminates upon
expiration of the option or, at an earlier time, when the writer offsets
the option by entering into a "closing purchase transaction" to purchase
an option of the same series. If an option is purchased by the Portfolio
and is never exercised, the Portfolio will lose the entire amount of the
premium paid.

- 10 -
<PAGE>

OTC call option it has written, it will not be able to liquidate
securities used as cover until the option expires or is exercised or until
different cover is substituted. In the event of the counter-party's
insolvency, the Portfolio may be unable to liquidate its options position
and the associated cover. N&B Management monitors the creditworthiness of
dealers with which the Portfolio may engage in OTC options transactions,
and limits the Portfolios' counter-parties in such transactions to dealers
with a net worth of at least $20 million as reported in their latest
financial statements.

The assets used as cover for OTC options written by the
Portfolio will be considered illiquid unless the OTC options are sold to
qualified dealers who agree that the Portfolio may repurchase any OTC
option it writes at a maximum price to be calculated by a formula set
forth in the option agreement. The cover for an OTC call option written
subject to this procedure will be considered illiquid only to the extent
that the maximum repurchase price under the formula exceeds the intrinsic
value of the option.

Closing transactions are effected in order to realize a
profit on an outstanding option, to prevent an underlying security from
being called, or to permit the sale or the put of the underlying security.
If the Portfolio desires to sell a security on which it has written a call
option, it will seek to effect a closing transaction prior to, or
concurrently with, the sale of the security. There is, of course, no
assurance that the Portfolio will be able to effect closing transactions
at favorable prices. If the Portfolio cannot enter into such a
transaction, it may be required to hold a security that it might otherwise
have sold, in which case it would continue to be at market risk on the
security.

The Portfolio will realize a profit or loss from a
closing purchase transaction if the cost of the transaction is less or

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<PAGE>

more than the premium received from writing the call option. However,
because increases in the market price of a call option generally reflect
increases in the market price of the underlying security, any loss
resulting from the repurchase of a call option is likely to be offset in
whole or in part by appreciation of the underlying security owned by the
Portfolio.

The Portfolio pays brokerage commissions in connection
with purchasing or writing options, including those used to close out
existing positions. These brokerage commissions normally are higher than
those applicable to purchases and sales of portfolio securities.

Forward Foreign Currency Contracts. The Portfolio may
enter into contracts for the purchase or sale of a specific currency at a
future date at a fixed price ("forward contracts") in amounts not
exceeding 5% of its net assets. The Portfolio enters into forward
contracts in an attempt to hedge against expected changes in prevailing
currency exchange rates. The Portfolio does not engage in transactions in
forward contracts for speculation; it views investments in forward
contracts as a means of establishing more definitely the effective return
on securities denominated in foreign currencies that are held or intended
to be acquired by it. Forward contract transactions include forward sales
or purchases of foreign currencies for the purpose of protecting the U.S.
dollar value of securities held or to be acquired by the Portfolio or
protecting the U.S. dollar equivalent of dividends, interest, or other
payments on those securities.

N&B Management believes that the use of foreign currency
hedging techniques, including "cross-hedges," can help protect against
declines in the U.S. dollar value of income available for distribution and
declines in the Portfolio's NAV resulting from adverse changes in currency
exchange rates. For example, the return available from securities denomi-
nated in a particular foreign currency would diminish if the value of the
U.S. dollar increased against that currency. Such a decline could be
partially or completely offset by an increase in value of a cross-hedge
involving a forward contract to sell a different foreign currency, where
the contract is available on terms more advantageous to the Portfolio than
a contract to sell the currency in which the securities being hedged are
denominated. N&B Management believes that hedges and cross-hedges can,
therefore, provide significant protection of NAV in the event of a general
rise in the U.S. dollar against foreign currencies. However, a hedge or
cross-hedge cannot protect against exchange rate risks perfectly, and if
N&B Management is incorrect in its judgment of future exchange rate

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<PAGE>

relationships, the Portfolio could be in a less advantageous position than
if such a hedge had not been established. In addition, because forward
contracts are not traded on an exchange, the assets used to cover such
contracts may be illiquid.

Options on Foreign Currencies. The Portfolio may write
and purchase covered call and put options on foreign currencies, in
amounts not exceeding 5% of its net assets. The Portfolio would engage in
such transactions to protect against declines in the U.S. dollar value of
portfolio securities or increases in the U.S. dollar cost of securities to
be acquired, or to protect the U.S. dollar equivalent of dividends,
interest, or other payments on those securities. As with other types of
options, however, writing an option on foreign currency constitutes only a
partial hedge, up to the amount of the premium received, and the Portfolio
could be required to purchase or sell foreign currencies at
disadvantageous exchange rates, thereby incurring losses. The risks of
currency options are similar to the risks of other options, discussed
herein. Certain options on foreign currencies are traded on the OTC
market and involve liquidity and credit risks that may not be present in
the case of exchange-traded currency options. To the extent the Portfolio
writes options on foreign currencies that are traded on an exchange
regulated by the Commodity Futures Trading Commission ("CFTC") other than
for bona fide hedging purposes (as defined by the CFTC), the aggregate
initial margin and premiums on those positions (excluding the amount by
which options are "in-the-money") may not exceed 5% of the Portfolio's net
assets.

GENERAL CONSIDERATIONS INVOLVING OPTIONS AND FORWARD CONTRACTS
(COLLECTIVELY, "HEDGING INSTRUMENTS")

Risks Involved in Using Hedging Instruments. The primary
risks in using Hedging Instruments are (1) imperfect correlation or no
correlation between changes in market value of the securities held or to
be acquired by the Portfolio and changes in market value of Hedging
Instruments; (2) possible lack of a liquid secondary market for Hedging
Instruments and the resulting inability to close out Hedging Instruments
when desired; (3) the fact that the skills needed to use Hedging Instru-
ments are different from those needed to select the Portfolio's
securities; (4) the fact that, although use of these instruments for
hedging purposes can reduce the risk of loss, they also can reduce the
opportunity for gain, or even result in losses, by offsetting favorable
price movements in hedged investments; and (5) the possible inability of
the Portfolio to purchase or sell a portfolio security at a time that
would otherwise be favorable for it to do so, or the possible need for the
Portfolio to sell a portfolio security at a disadvantageous time, due to
its need to maintain "cover" or to segregate securities in connection with
its use of Hedging Instruments. N&B Management intends to reduce the risk
of imperfect correlation by investing only in Hedging Instruments whose
behavior is expected to resemble that of the Portfolio's underlying
securities. N&B Management intends to reduce the risk that the Portfolio
will be unable to close out Hedging Instruments by entering into such

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<PAGE>

transactions only if N&B Management believes there will be an active and
liquid secondary market. Hedging Instruments used by the Portfolio are
generally considered "derivatives." There can be no assurance that the
Portfolio's use of Hedging Instruments will be successful.

The Portfolio's use of Hedging Instruments may be limited
by the requirements of the Internal Revenue Code of 1986, as amended
("Code"), that apply to the Fund for qualification as a regulated
investment company ("RIC"). See "Additional Tax Information."

Cover for Hedging Instruments. The Portfolio will comply
with SEC guidelines regarding cover for Hedging Instruments and, if the
guidelines so require, set aside in a segregated account with its
custodian cash, U.S. Government or Agency Securities, or other liquid,
high-grade debt securities in the prescribed amount. Securities held in a
segregated account cannot be sold while the option or forward strategy
covered by those securities is outstanding, unless they are replaced with
other suitable assets. As a result, segregation of a large percentage of
the Portfolio's assets could impede portfolio management or the
Portfolio's ability to meet current obligations. The Portfolio may be
unable promptly to dispose of assets which cover, or are segregated with
respect to, an illiquid option or forward position; this inability may
result in a loss to the Portfolio.

Fixed Income Securities. While the emphasis of the
Portfolio's investment program is on common stocks and other equity
securities (including preferred stocks and securities convertible into or
exchangeable for common stocks), it may also invest in money market in-
struments, U.S. Government or Agency Securities, and other fixed income
securities. The Portfolio may invest in corporate bonds and debentures
receiving one of the four highest ratings from Standard & Poor's ("S&P"),
Moody's Investors Service, Inc. ("Moody's"), or any other nationally
recognized statistical rating organization ("NRSRO"), or, if not rated by
any NRSRO, deemed comparable by N&B Management to such rated securities
("Comparable Unrated Securities"). The ratings of an NRSRO represent its
opinion as to the quality of securities it undertakes to rate. Ratings
are not absolute standards of quality; consequently, securities with the
same maturity, coupon, and rating may have different yields. The Port-
folio relies primarily on ratings assigned by S&P and Moody's, which are
described in Appendix A to this SAI.

- 14 -
<PAGE>

which react primarily to movements in the general level of interest rates.
Subsequent to its purchase by the Portfolio, an issue of debt securities
may cease to be rated or its rating may be reduced, so that the securities
would not be eligible for purchase by the Portfolio. In such a case, N&B
Management will engage in an orderly disposition of the downgraded
securities to the extent necessary to ensure that the Portfolio's holdings
of such securities will not exceed 5% of its net assets.

Commercial Paper. Commercial paper is a short-term debt
security issued by a corporation or bank for purposes such as financing
current operations. The Portfolio may invest only in commercial paper
receiving the highest rating from S&P (A-1) or Moody's (P-1), or deemed by
N&B Management to be of equivalent quality.

The Portfolio may invest in commercial paper that cannot
be resold to the public without an effective registration statement under
the 1933 Act. While restricted commercial paper normally is deemed
illiquid, N&B Management may in certain cases determine that such paper is
liquid, pursuant to guidelines established by the Portfolio Trustees.

Convertible Securities. The Portfolio may invest in
convertible securities. A convertible security entitles the holder to
receive interest paid or accrued on debt or the dividend paid on preferred
stock until the convertible security matures or is redeemed, converted or
exchanged. Before conversion, such securities ordinarily provide a stream
of income with generally higher yields than common stocks of the same or
similar issuers, but lower than the yield on non-convertible debt.
Convertible securities are usually subordinated to comparable-tier non-
convertible securities but rank senior to common stock in a corporation's
capital structure. The value of a convertible security is a function of
(1) its yield in comparison to the yields of other securities of
comparable maturity and quality that do not have a conversion privilege
and (2) its worth if converted into the underlying common stock.

Convertible securities are typically issued by smaller
capitalization companies whose stock prices may be volatile. The price of
a convertible security often reflects variations in the price of the
underlying common stock in a way that non-convertible debt does not. A
convertible security may be subject to redemption at the option of the
issuer at a price established in the security's governing instrument. If
a convertible security held by the Portfolio is called for redemption, the
Portfolio will be required to convert it into the underlying common stock,
sell it to a third party or permit the issuer to redeem the security. Any
of these actions could have an adverse effect on the Portfolio's and the
Fund's ability to achieve their investment objectives.

Preferred Stock. The Portfolio may invest in preferred
stock. Unlike interest payments on debt securities, dividends on

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<PAGE>

preferred stock are generally payable at the discretion of the issuer's
board of directors, although preferred shareholders may have certain
rights if dividends are not paid. Shareholders may suffer a loss of value
if dividends are not paid and generally have no legal recourse against the
issuer. The market prices of preferred stocks are generally more
sensitive to changes in the issuer's creditworthiness than are the prices
of debt securities.

PERFORMANCE INFORMATION

The Fund's performance figures are based on historical
earnings and are not intended to indicate future performance. The share
price and total return of the Fund will vary, and an investment in the
Fund, when redeemed, may be worth more or less than an investor's original
cost.

Total Return Computations
-------------------------
The Fund may advertise certain total return information.
An average annual compounded rate of return ("T") may be computed by using
the redeemable value at the end of a specified period ("ERV") of a
hypothetical initial investment of $1,000 ("P") over a period of time
("n") according to the formula:
n
P(1+T) = ERV

Average annual total return smooths out year-to-year
variations and, in that respect, differs from actual year-to-year results.

Although the Fund commenced operations on August 3, 1993,
the Fund's investment objective, limitations, and policies are the same as
another mutual fund administered by N&B Management, which has a name
similar to the Fund's and invests in the same Portfolio ("Sister Fund").
The Sister Fund had a predecessor. The following total return data is for
the Fund since its inception and, for periods prior to the Fund's
inception, the Sister Fund and the Sister Fund's predecessor. The total
returns for periods prior to the Fund's inception would have been lower
had they reflected the higher fees of the Fund, as compared to those of
the Sister Fund and its predecessor. Appendix B to this SAI includes
additional performance data.

The average annual total returns for the Fund, its Sister
Fund, and the Sister Fund's predecessor for the one-, five-, and ten-year
periods ended August 31, 1995, were 24.01%, 20.14%, and 15.66%, respec-
tively. If an investor had invested $10,000 in the predecessor's shares
on June 1, 1950 and had reinvested all distributions and income dividends,
the NAV of that investor's holdings would have been $2,629,312 on August
31, 1995.

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<PAGE>

Comparative Information
-----------------------

From time to time the Fund's performance may be compared
with:

(1) data (that may be expressed as rankings or
ratings) published by independent services or
publications (including newspapers, newsletters, and
financial periodicals) that monitor the performance of
mutual funds, such as Lipper Analytical Services, Inc.,
C.D.A. Investment Technologies, Inc., Wiesenberger
Investment Companies Service, Investment Company Data
Inc., Morningstar, Inc., Micropal Incorporated, and
quarterly mutual fund rankings by Money, Fortune, Forbes,
Business Week, Personal Investor, and U.S. News & World
Report magazines, The Wall Street Journal, New York
Times, Kiplingers Personal Finance, and Barron's News-
paper, or

(2) recognized stock and other indices, such as
the S&P 500 Composite Stock Price Index ("S&P 500
Index"), S&P Small Cap 600 Index ("S&P 600 Index"), S&P
Mid Cap 400 Index ("S&P 400 Index"), Russell 2000 Stock
Index, Dow Jones Industrial Average ("DJIA"), Wilshire
1750, Nasdaq Composite Index, Value Line Index, U.S.
Department of Labor Consumer Price Index ("Consumer Price
Index"), College Board Survey of Colleges Annual
Increases of College Costs, Kanon Bloch's Family
Performance Index, the Barra Growth Index, the Barra
Value Index, and various other domestic, international,
and global indices. The S&P 500 Index is a broad index
of common stock prices, while the DJIA represents a
narrower segment of industrial companies. The S&P 600
Index includes stocks that range in market value from $27
million to $880 million, with an average of $302 million.
The S&P 400 Index measures mid-sized companies with an
average market capitalization of $1.2 billion. Each
assumes reinvestment of distributions and is calculated
without regard to tax consequences or the costs of
investing. The Portfolio may invest in different types
of securities from those included in some of the above
indices.

Evaluations of the Fund's performance, its total returns,
and comparisons may be used in advertisements and in information furnished
to current and prospective shareholders (collectively, "Advertisements").
The Fund may also be compared to individual asset classes such as common

- 17 -
<PAGE>

stocks, small-cap stocks, or Treasury bonds, based on information supplied
by Ibbotson and Sinquefield.

Other Performance Information
-----------------------------

From time to time, information about the Portfolio's
portfolio allocation and holdings as of a particular date may be included
in Advertisements for the Fund. This information, for example, may
include the Portfolio's portfolio diversification by asset type.
Information used in Advertisements may include statements or illustrations
relating to the appropriateness of types of securities and/or mutual funds
that may be employed to meet specific financial goals, such as (1) funding
retirement, (2) paying for children's education, and (3) financially
supporting aging parents.

N&B Management believes that many of its common stock
funds may be attractive investment vehicles for conservative investors who
are interested in long-term appreciation from stock investments, but who
have a moderate tolerance for risk. Such investors may include, for
example, individuals (1) planning for or facing retirement, (2) receiving
or expecting to receive lump-sum distributions from individual retirement
accounts ("IRAs"), self-employed individual retirement plans ("Keogh
plans"), or other retirement plans, (3) anticipating rollovers of CDs or
IRAs, Keogh plans, or other retirement plans, and (4) receiving a
significant amount of money as a result of inheritance, sale of a
business, or termination of employment.

Investors who may find the Fund to be an attractive
investment vehicle also include parents saving to meet college costs for
their children. For instance, the cost of a college education is rapidly
approaching the cost of the average family home. Four years' tuition,
room and board at a top private institution can already cost over $80,000.
If college expenses continue to increase at current rates, by the time
today's pre-schooler enters the ivy-covered halls in 2009, four years at a
private college may easily cost $200,000!3/

3/ Source: College Board, 1994, 1995 Annual Survey of Colleges,
Princeton, NJ, assuming an average 6% increase in annual expenses.

- 18 -
<PAGE>

From time to time the investment philosophy of N&B Man-
agement's founder, Roy R. Neuberger, may be included in the Fund's
Advertisements. This philosophy is described in further detail in "The
Art of Investing: A Conversation with Roy Neuberger," attached as Appendix
C to this SAI.

CERTAIN RISK CONSIDERATIONS

Although the Portfolio seeks to reduce risk by investing
in a diversified portfolio, diversification does not eliminate all risk.
There can, of course, be no assurance that the Portfolio will achieve its
investment objective, and an investment in the Fund involves certain risks
that are described in the sections entitled "Investment Program" and
"Description of Investments" in the Prospectus and "Investment Information
-- Additional Investment Information" in this SAI.

TRUSTEES AND OFFICERS

Name, Age, and Positions Held
Address(1) With the Trusts Principal Occupation(s)(2)
-------------- ---------------- --------------------------

Faith Colish (60) Trustee of each Trust Attorney at Law, Faith Colish,
63 Wall Street A Professional Corporation.
24th Floor
New York, NY 10005

- 19 -
<PAGE>

Donald M. Cox (73) Trustee of each Trust Retired. Formerly Senior Vice
435 East 52nd Street President and Director of Exxon
New York, NY 10022 Corporation; Director of
Emigrant Savings Bank.

Stanley Egener* (61) Chairman of the Board, Partner of Neuberger & Berman;
Chief Executive Officer, President and Director of N&B
and Trustee of each Trust Management; Chairman of the
Board, Chief Executive Officer,
and Trustee of eight other
mutual funds for which N&B
Management acts as investment
manager or administrator.

Alan R. Gruber (68) Trustee of each Trust Chairman and Chief Executive
Orion Capital Corporation Officer of Orion Capital
600 Fifth Avenue Corporation (property and
24th Floor casualty insurance); Director
New York, NY 10020 of Trenwick Group, Inc.
(property and casualty
reinsurance); Chairman of the
Board and Director of Guaranty
National Corporation (property
and casualty insurance);
formerly Director of Ketema,
Inc. (diversified manufactur-
er).

- 20 -
<PAGE>

Howard A. Mileaf (57) Trustee of each Trust Vice President and Special
Wheeling Pittsburgh Corporation Counsel to Wheeling Pittsburgh
110 East 59th Street Corporation (holding company)
New York, NY 10022 since 1992; formerly Vice
President and General Counsel
of Keene Corporation (manu-
facturer of industrial
products); Director of Kevlin
Corporation (manufacturer of
microwave and other products).

Edward I. O'Brien* (67) Trustee of each Trust Until 1993, President of the
12 Woods Lane Securities Industry Association
Scarsdale, NY 10583 ("SIA") (securities industry's
representative in government
relations and regulatory
matters at the federal and
state levels); until November
1993, employee of the SIA;
Director of Legg Mason, Inc.

John T. Patterson, Jr. (67) Trustee of each Trust President of SOBRO (South Bronx
90 Riverside Drive Overall Economic Development
Apartment 1B Corporation).
New York, NY 10024

John P. Rosenthal (63) Trustee of each Trust Senior Vice President of
Burnham Securities Inc. Burnham Securities Inc. (a
Burnham Asset Management Corp. registered broker-dealer) since
1325 Avenue of the Americas 1991; formerly Partner of
17th Floor Silberberg, Rosenthal & Co.
New York, NY 10019 (member of National Association
of Securities Dealers, Inc.);
Director, Cancer Treatment
Holdings, Inc.

- 21 -
<PAGE>

Gustave H. Shubert (66) Trustee of each Trust Senior Fellow/Corporate Advisor
13838 Sunset Boulevard and Advisory Trustee of Rand (a
Pacific Palisades, CA 90272 non-profit public interest
research institution) since
1989; Member of the Board of
Overseers of the Institute for
Civil Justice, the Policy
Advisory Committee of the
Clinical Scholars Program at
the University of California,
the American Association for
the Advancement of Science, the
Counsel on Foreign Relations,
and the Institute for Strategic
Studies (London); advisor to
the Program Evaluation and
Methodology Division of the
U.S. General Accounting Office;
formerly Senior Vice President
and Trustee of Rand.

Lawrence Zicklin* (59) President and Trustee of Partner of Neuberger & Berman;
each Trust Director of N&B Management;
President of five other mutual
funds for which N&B Management
acts as investment manager or
administrator.

- 22 -
<PAGE>

Michael J. Weiner (48) Vice President and Senior Vice President and
Principal Financial Treasurer of N&B Management
Officer of each Trust since 1992; prior thereto, Vice
President and Treasurer of N&B
Management and Treasurer of
certain mutual funds for which
N&B Management acted as
investment adviser; Vice
President and Principal
Financial Officer of eight
other mutual funds for which
N&B Management acts as invest-
ment manager or administrator.

Claudia A. Brandon (38) Secretary of each Trust Vice President of N&B Man-
agement; Secretary of eight
other mutual funds for which
N&B Management acts as
investment manager or
administrator.

Richard Russell (48) Treasurer and Principal Vice President of N&B
Accounting Officer of Management since 1993; prior
each Trust thereto, Assistant Vice
President of N&B Management;
Treasurer and Principal Ac-
counting Officer of eight other
mutual funds for which N&B
Management acts as investment
manager or administrator.

- 23 -
<PAGE>

Stacy Cooper-Shugrue (32) Assistant Secretary of Assistant Vice President of N&B
each Trust Management since 1993; employee
of N&B Management since 1989;
Assistant Secretary of eight
other mutual funds for which
N&B Management acts as
investment manager or
administrator.

</TABLE>

____________________

(1) Unless otherwise indicated, the business address of each listed
person is 605 Third Avenue, New York, New York 10158.

(2) Except as otherwise indicated, each individual has held the positions
shown for at least the last five years.

* Indicates an "interested person" of each Trust within the meaning of
the 1940 Act. Messrs. Egener and Zicklin are interested persons by virtue
of the fact that they are officers and/or directors of N&B Management and
partners of Neuberger & Berman. Mr. O'Brien is an interested person by
virtue of the fact that he is a director of Legg Mason, Inc., a wholly
owned subsidiary of which, from time to time, serves as a broker or dealer
to the Portfolio and other funds for which N&B Management serves as
investment manager.

The Trust's Trust Instrument and Managers Trust's
Declaration of Trust each provides that it will indemnify its trustees and
officers against liabilities and expenses reasonably incurred in

- 24 -
<PAGE>

connection with litigation in which they may be involved because of their
offices with the Trust, unless it is adjudicated that they engaged in bad
faith, willful misfeasance, gross negligence, or reckless disregard of the
duties involved in the conduct of their offices. In the case of
settlement, such indemnification will not be provided unless it has been
determined (by a court or other body approving the settlement or other
disposition, by a majority of disinterested trustees based upon a review
of readily available facts, or in a written opinion of independent
counsel) that such officers or trustees have not engaged in willful
misfeasance, bad faith, gross negligence, or reckless disregard of their
duties.

For the fiscal year ended August 31, 1995, the Fund and Portfolio
paid fees and expenses of $15,468 to the Fund and Portfolio Trustees who
were not affiliated with N&B Management or Neuberger & Berman.

- 25 -
<PAGE>

TABLE OF COMPENSATION
FOR FISCAL YEAR ENDED 8/31/95
-----------------------------

Total Compensation from the
Name and Position Aggregate Compensation Neuberger & Berman Fund Complex
with the Trust from the Trust Paid to Trustees
----------------- ---------------------- -------------------------------

Faith Colish $1,336.05 $39,000
Trustee (5 other investment companies)

Donald M. Cox $1,336.05 $31,000
Trustee (3 other investment companies)

Stanley Egener $0 $0
Chairman of the Board, Chief Executive (9 other investment companies)
Officer, and Trustee

Alan R. Gruber $1,336.05 $31,000
Trustee (3 other investment companies)

Howard A. Mileaf $1,404.81 $36,500
Trustee (4 other investment companies)

Edward I. O'Brien $1,388.74 $31,500
Trustee (3 other investment companies)

John T. Patterson, Jr. $1,371.96 $34,500
Trustee (4 other investment companies)

John P. Rosenthal $1,309.92 $33,000
Trustee (4 other investment companies)

Cornelius T. Ryan $1,404.81 $33,500
Trustee (3 other investment companies)

Gustave H. Shubert $1,309.92 $30,000
Trustee (3 other investment companies)

Lawrence Zicklin $0 $0
President and Trustee (5 other investment companies)

</TABLE>

- 26 -
<PAGE>

INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES

Investment Manager and Administrator
------------------------------------

Because all of the Fund's net investable assets are
invested in the Portfolio, the Fund does not need an investment manager.
N&B Management serves as the Portfolio's investment manager pursuant to a
management agreement with Managers Trust, dated as of August 2, 1993
("Management Agreement"). The Management Agreement was approved for the
Portfolio by the Portfolio Trustees, including a majority of the Portfolio
Trustees who were not "interested persons" of N&B Management or Managers
Trust ("Independent Portfolio Trustees"), on July 15, 1993, and was
approved by the holders of the interests in the Portfolio on August 2,
1993.

The Management Agreement provides, in substance, that N&B
Management will make and implement investment decisions for the Portfolio
in its discretion and will continuously develop an investment program for
the Portfolio's assets. The Management Agreement permits N&B Management
to effect securities transactions on behalf of the Portfolio through
associated persons of N&B Management. The Management Agreement also
specifically permits N&B Management to compensate, through higher
commissions, brokers and dealers who provide investment research and
analysis to the Portfolio, although N&B Management has no current plans to
do so.

N&B Management provides to the Portfolio, without
separate cost, office space, equipment, and facilities and the personnel
necessary to perform executive, administrative, and clerical functions.
N&B Management pays all salaries, expenses, and fees of the officers,
trustees, and employees of Managers Trust who are officers, directors, or
employees of N&B Management. Two directors of N&B Management (who also
are partners of Neuberger & Berman), one of whom also serves as an officer
of N&B Management, presently serve as trustees and officers of the Trusts.
See "Trustees and Officers." Each Portfolio pays N&B Management a
management fee based on the Portfolio's average daily net assets, as
described in the Prospectus.

N&B Management provides similar facilities, services and
personnel, as well as shareholder accounting, recordkeeping, and other
shareholder services, to the Fund pursuant to an administration agreement
dated August 3, 1993 ("Administration Agreement"). For such
administrative services, the Fund pays N&B Management a fee based on the
Fund's daily net assets, as described in the Prospectus. N&B Management
enters into administrative services agreements with Institutions, pursuant
to which it compensates such Institutions for accounting, recordkeeping,
and other services that they provide to investors who purchase shares of
the Fund.

- 27 -
<PAGE>

During the fiscal years ended August 31, 1995 and 1994,
and the period from August 3 to August 31, 1993, the Fund accrued
management and administration fees of $2,417,586, $142,142, and $43.97,
respectively.

N&B Management has voluntarily undertaken until December
31, 1996, to reimburse the Fund for its Operating Expenses and its pro
rata share of the Portfolio's Operating Expenses so that the Fund's
expense ratio per annum will not exceed the expense ratio of its Sister
Fund by more than 0.10% of the Fund's average daily net assets.
"Operating Expenses" exclude interest, taxes, brokerage commissions, and
extraordinary expenses. During the period from August 3, 1993
(commencement of operations of the Fund) to December 31, 1994, N&B
Management voluntarily undertook to reimburse the Fund for its Operating
Expenses and its pro rata share of the Portfolio's Operating Expenses
which, in the aggregate, exceeded the aggregate Operating Expenses and pro
rata share of Portfolio Operating Expenses of the Sister Fund. During the
fiscal years ended August 31, 1995 and 1994, N&B Management reimbursed the
Fund $171,796 and $116,354, respectively, of expenses, under this
arrangement.

The Management Agreement continues with respect to the
Portfolio for a period of two years after the date the Portfolio became
subject thereto. The Management Agreement is renewable thereafter from
year to year with respect to the Portfolio, so long as its continuance is
approved at least annually (1) by the vote of a majority of the
Independent Portfolio Trustees, cast in person at a meeting called for the
purpose of voting on such approval, and (2) by the vote of a majority of
the Portfolio Trustees or by a 1940 Act majority vote of the outstanding
shares in the Portfolio. The Administration Agreement continues with
respect to the Fund for a period of two years after the date the Fund
became subject thereto. The Administration Agreement is renewable from
year to year with respect to the Fund, so long as its continuance is
approved at least annually (1) by the vote of a majority of the Fund
Trustees who are not "interested persons" of N&B Management or the Trust
("Independent Fund Trustees"), cast in person at a meeting called for the
purpose of voting on such approval, and (2) by the vote of a majority of
the Fund Trustees or by a 1940 Act majority vote of the outstanding shares
in the Fund.

The Management Agreement is terminable, without penalty,
with respect to the Portfolio on 60 days' written notice either by
Managers Trust or by N&B Management. The Administration Agreement is
terminable, without penalty, with respect to the Fund on 60 days' written
notice either by N&B Management or by the Trust if authorized by the Fund
Trustees, including a majority of the Independent Fund Trustees. Each
Agreement terminates automatically if it is assigned.

- 28 -
<PAGE>

In addition to the voluntary expense reimbursements
described in the Prospectus under "Management and Administration --
Expenses," N&B Management has agreed in the Management Agreement to
reimburse the Fund's expenses, as follows. If, in any fiscal year, the
Fund's Aggregate Operating Expenses (as defined below) exceed the most
restrictive expense limitation imposed under the securities laws of the
states in which the Fund's shares are qualified for sale ("State Expense
Limitation"), then N&B Management will pay the Fund the amount of that
excess, less the amount of any reduction of the administration fee payable
by the Fund under a similar State Expense Limitation contained in the
Administration Agreement. N&B Management will have no obligation to pay
the Fund, however, for any expenses that exceed the pro rata portion of
the management fees attributable to the Fund's interest in the Portfolio.
At the date of this SAI, the most restrictive State Expense Limitation to
which the Fund expects to be subject is 2 1/2% of the first $30 million of
average net assets, 2% of the next $70 million of average net assets, and
1 1/2% of average net assets over $100 million.

For purposes of the State Expense Limitation, the term
"Aggregate Operating Expenses" means the Fund's operating expenses plus
its pro rata portion of the Portfolio's operating expenses (including any
fees or expense reimbursements payable to N&B Management and any
compensation payable thereto pursuant to (1) the Administration Agreement
or (2) any other agreement or arrangement with Managers Trust in regard to
the Portfolio; but excluding (with respect to both the Fund and the
Portfolio) interest, taxes, brokerage commissions, litigation and
indemnification expenses, and other extraordinary expenses not incurred in
the ordinary course of business).

Sub-Adviser
-----------

N&B Management retains Neuberger & Berman, 605 Third
Avenue, New York, NY 10158-3698, as sub-adviser with respect to the
Portfolio pursuant to a sub-advisory agreement dated August 2, 1993 ("Sub-
Advisory Agreement"). The Sub-Advisory Agreement was approved by the
Portfolio Trustees, including a majority of the Independent Portfolio
Trustees, on July 15, 1993 and was approved by the holders of the inter-
ests in the Portfolio on August 2, 1993.

- 29 -
<PAGE>

investment analysts, each of whom specializes in studying one or more
industries, under the supervision of the Director of Research, who is also
available for consultation with N&B Management. The Sub-Advisory
Agreement provides that N&B Management will pay for the services rendered
by Neuberger & Berman based on the direct and indirect costs to Neuberger
& Berman in connection with those services. Neuberger & Berman also
serves as sub-adviser for all of the other mutual funds managed by N&B
Management.

The Sub-Advisory Agreement continues with respect to the
Portfolio for a period of two years after the date the Portfolio became
subject thereto, and is renewable from year to year, subject to approval
of its continuance in the same manner as the Management Agreement. The
Sub-Advisory Agreement is subject to termination, without penalty, with
respect to the Portfolio by the Portfolio Trustees, by a 1940 Act majority
vote of the outstanding Portfolio shares, by N&B Management, or by
Neuberger & Berman on not less than 30 nor more than 60 days' written
notice. The Sub-Advisory Agreement also terminates automatically with
respect to the Portfolio if it is assigned or if the Management Agreement
terminates with respect to the Portfolio.

Investment Companies Managed
----------------------------

N&B Management currently serves as investment manager of
the following investment companies. As of September 30, 1995, these
companies, along with three investment companies advised by Neuberger &
Berman, had aggregate net assets of approximately $11.4 billion, as shown
in the following list:

- 30 -
<PAGE>

Approximate Net Assets at
September 30,
Name 1995
---- ------------------------

<S> <C>

Neuberger & Berman Cash Reserves Portfolio
(investment portfolio for Neuberger &
Berman Cash Reserves) $ 377,608,619

Neuberger & Berman Government Income Portfolio
(investment portfolio for Neuberger &
Berman Government Income Fund and Neuberger
& Berman Government Income Trust) $ 12,053,656

Neuberger & Berman Government Money Portfolio
(investment portfolio for Neuberger &
Berman Government Money Fund) $ 346,898,132

Neuberger & Berman Limited Maturity Bond Portfolio
(investment portfolio for Neuberger &
Berman Limited Maturity Bond Fund and
Neuberger & Berman Limited Maturity Bond
Trust) $ 309,540,451

Neuberger & Berman Municipal Money Portfolio
(investment portfolio for Neuberger &
Berman Municipal Money Fund) $ 149,657,613

Neuberger & Berman Municipal Securities Portfolio
(investment portfolio for Neuberger &
Berman Municipal Securities Trust) $ 44,568,635

Neuberger & Berman New York Insured Intermediate
Portfolio
(investment portfolio for Neuberger &
Berman New York Insured Intermediate Fund) $ 10,679,324

Neuberger & Berman Ultra Short Bond Portfolio
(investment portfolio for Neuberger &
Berman Ultra Short Bond Fund and Neuberger
& Berman Ultra Short Bond Trust) $ 102,903,312

- 31 -
<PAGE>

Approximate Net Assets at
September 30,
Name 1995
---- ------------------------

Neuberger & Berman Focus Portfolio
(investment portfolio for Neuberger & Berman Focus
Fund and Neuberger & Berman Focus Trust) $ 1,031,915,664

Neuberger & Berman Genesis Portfolio
(investment portfolio for Neuberger &
Berman Genesis Fund and Neuberger & Berman
Genesis Trust) $ 145,188,783

Neuberger & Berman Guardian Portfolio
(investment portfolio for Neuberger &
Berman Guardian Fund and Neuberger & Berman
Guardian Trust) $4,943,764,830

Neuberger & Berman International Portfolio
(investment portfolio for Neuberger &
Berman International Fund) $ 29,990,616

Neuberger & Berman Manhattan Portfolio
(investment portfolio for Neuberger &
Berman Manhattan Fund and Neuberger &
Berman Manhattan Trust) $ 670,916,038

Neuberger & Berman Partners Portfolio
(investment portfolio for Neuberger &
Berman Partners Fund and
Neuberger & Berman Partners Trust) $1,664,460,688

Neuberger & Berman Socially Responsive Portfolio
(investment portfolio for Neuberger &
Berman Socially Responsive Fund, Neuberger
& Berman Socially Responsive Trust, and
Neuberger & Berman NYCDC Socially
Responsive Trust) $ 102,675,093

Neuberger & Berman Advisers Managers Trust
(six series) $1,257,506,124

</TABLE>

In addition, Neuberger & Berman serves as investment
adviser to three investment companies, Plan Investment Fund, Inc., AHA
Investment Fund, Inc., and AHA Full Maturity, with assets of $85,110,472,
$110,683,193, and $23,891,472, respectively, at September 30, 1995.

- 32 -
<PAGE>

The investment decisions concerning the Portfolio and the
other funds and portfolios managed by N&B Management (collectively, "Other
N&B Funds") have been and will continue to be made independently of one
another. In terms of their investment objectives, most of the Other N&B
Funds differ from the Portfolio. Even where the investment objectives are
similar, however, the methods used by the Other N&B Funds and the
Portfolio to achieve their objectives may differ.

There may be occasions when the Portfolio and one or more
of the Other N&B Funds or other accounts managed by Neuberger & Berman are
contemporaneously engaged in purchasing or selling the same securities
from or to third parties. When this occurs, the transactions are averaged
as to price and allocated as to amounts in accordance with a formula
considered to be equitable to the funds involved. Although in some cases
this arrangement may have a detrimental effect on the price or volume of
the securities as to the Portfolio, in other cases it is believed that the
Portfolio's ability to participate in volume transactions may produce
better executions for it. In any case, it is the judgment of the
Portfolio Trustees that the desirability of the Portfolio's having its
advisory arrangements with N&B Management outweighs any disadvantages that
may result from contemporaneous transactions. The investment results
achieved by all of the funds managed by N&B Management have varied from
one another in the past and are likely to vary in the future.

Management and Control of N&B Management
----------------------------------------

- 33 -
<PAGE>

Assistant Vice President. Messrs. Cantor, Egener, Lainoff, Schwartz,
Zicklin, Goldstein, Kassen, Marx, and Simons and Mmes. Havell and Prindle
are general partners of Neuberger & Berman.

All of the outstanding voting stock in N&B Management is
owned by persons who are also general partners of Neuberger & Berman.

DISTRIBUTION ARRANGEMENTS

N&B Management serves as the distributor ("Distributor")
in connection with the offering of the Fund's shares on a no-load basis to
Institutions. In connection with the sale of its shares, the Fund has
authorized the Distributor to give only the information, and to make only
the statements and representations, contained in the Prospectus and this
SAI or that properly may be included in sales literature and
advertisements in accordance with the 1933 Act, the 1940 Act, and
applicable rules of self-regulatory organizations. Sales may be made only
by the Prospectus, which may be delivered either personally, through the
mails, or by electronic means. The Distributor is the Fund's "principal
underwriter" within the meaning of the 1940 Act and, as such, acts as
agent in arranging for the sale of the Fund's shares to Institutions
without sales commission or other compensation and bears all advertising
and promotion expenses incurred in the sale of the Fund's shares.

The Distributor or one of its affiliates may, from time
to time, deem it desirable to offer to the Fund's shareholders, through
use of its shareholder list, the shares of other mutual funds for which
the Distributor acts as distributor or other products or services. Any
such use of the Fund's shareholder lists, however, will be made subject to
terms and conditions, if any, approved by a majority of the Independent
Fund Trustees. These lists will not be used to offer the Fund's
shareholders any investment products or services other than those managed
or distributed by N&B Management or Neuberger & Berman.

The Trust, on behalf of the Fund, and the Distributor are
parties to a Distribution Agreement that continues until August 3, 1996.
The Distribution Agreement may be renewed annually if specifically
approved by (1) the vote of a majority of the Fund Trustees or a 1940 Act
majority vote of the Fund's outstanding shares and (2) the vote of a
majority of the Independent Fund Trustees, cast in person at a meeting
called for the purpose of voting on such approval. The Distribution
Agreement may be terminated by either party and will automatically
terminate on its assignment, in the same manner as the Management
Agreement.

- 34 -
<PAGE>

ADDITIONAL REDEMPTION INFORMATION

Suspension of Redemptions
-------------------------

The right to redeem the Fund's shares may be suspended or
payment of the redemption price postponed (1) when the NYSE is closed
(other than weekend and holiday closings), (2) when trading on the NYSE is
restricted, (3) when an emergency exists as a result of which it is not
reasonably practicable for the Portfolio to dispose of securities it owns
or fairly to determine the value of its net assets, or (4) for such other
period as the SEC may by order permit for the protection of the Fund's
shareholders; provided that applicable SEC rules and regulations shall
govern whether the conditions prescribed in (2) or (3) exist. If the
right of redemption is suspended, shareholders may withdraw their offers
of redemption, or they will receive payment at the NAV per share in effect
at the close of business on the first day the NYSE is open ("Business
Day") after termination of the suspension.

Redemptions in Kind
-------------------

The Fund reserves the right, under certain conditions, to
honor any request for redemption by making payment in whole or in part in
securities valued as described under "Share Information -- Share Prices
and Net Asset Value" in the Prospectus. If payment is made in securities,
a shareholder generally will incur brokerage expenses in converting those
securities into cash and will be subject to fluctuations in the market
price of those securities until they are sold. The Fund does not redeem
in kind under normal circumstances, but would do so when the Fund Trustees
determine that it is in the best interests of the Fund's shareholders as a
whole. Redemptions in kind will be made with readily marketable
securities to the extent possible.

DIVIDENDS AND OTHER DISTRIBUTIONS

The Fund distributes to its shareholders amounts equal to
substantially all of its proportionate share of any net investment income
(after deducting expenses incurred directly by the Fund), net capital
gains (both long-term and short-term), and net gains from foreign currency
transactions earned or realized by the Portfolio. The Fund calculates its
net investment income and NAV per share as of the close of regular trading
on the NYSE on each Business Day (usually 4:00 p.m. Eastern time).

The Portfolio's net investment income consists of all
income accrued on portfolio assets less accrued expenses, but does not
include realized gains and losses. Net investment income and realized
gains and losses are reflected in the Portfolio's NAV (and, hence, the
Fund's NAV) until they are distributed. The Fund generally distributes

- 35 -
<PAGE>

substantially all of its share of the Portfolio's net investment income,
if any, at the end of each calendar quarter. Distributions of net
realized capital and foreign currency gains, if any, normally are paid
once annually, in December.

Dividends and/or other distributions are automatically
reinvested in additional shares of the Fund, unless and until the
Institution elects to receive them in cash ("cash election"). To the
extent dividends and other distributions are subject to federal, state, or
local income taxation, they are taxable to the shareholders whether
received in cash or reinvested in Fund shares. A cash election with
respect to the Fund remains in effect until the Institution notifies the
Fund in writing to discontinue the election.

ADDITIONAL TAX INFORMATION

Taxation of the Fund
--------------------

In order to continue to qualify for treatment as a RIC
under the Code, the Fund must distribute to its shareholders for each
taxable year at least 90% of its investment company taxable income
(consisting generally of net investment income, net short-term capital
gain, and net gains from certain foreign currency transactions)
("Distribution Requirement") and must meet several additional
requirements. With respect to the Fund, these requirements include the
following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities
loans, and gains from the sale or other disposition of securities or
foreign currencies, or other income (including gains from Hedging
Instruments) derived with respect to its business of investing in secu-
rities or those currencies ("Income Requirement"); (2) the Fund must
derive less than 30% of its gross income each taxable year from the sale
or other disposition of securities, or any of the following, that were
held for less than three months -- (i) options (other than those on
foreign currencies), or (ii) foreign currencies or Hedging Instruments
thereon that are not directly related to the Fund's principal business of
investing in securities (or options with respect thereto) ("Short-Short
Limitation"); and (3) at the close of each quarter of the Fund's taxable
year, (i) at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. Government securities, and other
securities limited, in respect of any one issuer, to an amount that does
not exceed 5% of the value of the Fund's total assets and does not
represent more than 10% of the issuer's outstanding voting securities, and
(ii) not more than 25% of the value of its total assets may be invested in
securities (other than U.S. Government securities) of any one issuer.

Certain funds managed by N&B Management, including the
Sister Fund, have received a ruling from the Internal Revenue Service

- 36 -
<PAGE>

("Service") that each such fund, as an investor in a corresponding
portfolio of Managers Trust or Income Managers Trust, will be deemed to
own a proportionate share of the portfolio's assets and income for pur-
poses of determining whether the fund satisfies all the requirements
described above to qualify as a RIC. Although that ruling may not be
relied on as precedent by the Fund, N&B Management believes that the
reasoning thereof and, hence, its conclusion apply to the Fund as well.

The Fund will be subject to a nondeductible 4% excise tax
("Excise Tax") to the extent it fails to distribute by the end of any
calendar year substantially all of its ordinary income for that year and
capital gain net income for the one-year period ended on October 31 of
that year, plus certain other amounts.

See the next section for a discussion of the tax conse-
quences to the Fund of distributions to it from the Portfolio, investments
by the Portfolio in certain securities, and hedging transactions engaged
in by the Portfolio.

Taxation of the Portfolio
-------------------------

The Portfolio has received a ruling from the Service to
the effect that, among other things, the Portfolio will be treated as a
separate partnership for federal income tax purposes and will not be a
"publicly traded partnership." As a result, the Portfolio is not subject
to federal income tax; instead, each investor in the Portfolio, such as
the Fund, is required to take into account in determining its federal
income tax liability its share of the Portfolio's income, gains, losses,
deductions, and credits, without regard to whether it has received any
cash distributions from the Portfolio. The Portfolio also is not subject
to Delaware or New York income or franchise tax.

Because the Fund is deemed to own a proportionate share
of the Portfolio's assets and income for purposes of determining whether
the Fund satisfies the requirements to qualify as a RIC, the Portfolio
intends to continue to conduct its operations so that the Fund will be
able to continue to satisfy all those requirements.

- 37 -
<PAGE>

liquidation distribution consists solely of cash and/or unrealized
receivables. The Fund's basis for its interest in the Portfolio generally
equals the amount of cash the Fund invests in the Portfolio, increased by
the Fund's share of the Portfolio's net income and gains and decreased by
(1) the amount of cash and the basis of any property the Portfolio distri-
butes to the Fund and (2) the Fund's share of the Portfolio's losses.

Dividends and interest received by the Portfolio may be
subject to income, withholding, or other taxes imposed by foreign
countries and U.S. possessions that would reduce the yield on its
securities. Tax treaties between certain countries and the United States
may reduce or eliminate these foreign taxes, however, and many foreign
countries do not impose taxes on capital gains in respect of investments
by foreign investors.

The Portfolio may invest in the stock of "passive foreign
investment companies" ("PFICs"). A PFIC is a foreign corporation that, in
general, meets either of the following tests: (1) at least 75% of its
gross income is passive or (2) an average of at least 50% of its assets
produce, or are held for the production of, passive income. Under certain
circumstances, if the Portfolio holds stock of a PFIC, the Fund
(indirectly through its interest in the Portfolio) will be subject to
federal income tax on a portion of any "excess distribution" received on
the stock or of any gain on disposition of the stock (collectively, "PFIC
income"), plus interest thereon, even if the Fund distributes the PFIC
income as a taxable dividend to its shareholders. The balance of the PFIC
income will be included in the Fund's investment company taxable income
and, accordingly, will not be taxable to it to the extent that income is
distributed to its shareholders.

If the Portfolio invests in a PFIC and elects to treat
the PFIC as a "qualified electing fund," then in lieu of the Fund's
incurring the foregoing tax and interest obligation, the Fund would be
required to include in income each year its pro rata share of the
Portfolio's pro rata share of the qualified electing fund's annual
ordinary earnings and net capital gain (the excess of net long-term
capital gain over net short-term capital loss) -- which most likely would
have to be distributed by the Fund to satisfy the Distribution Requirement
and to avoid imposition of the Excise Tax -- even if those earnings and
gain were not received by the Portfolio. In most instances it will be
very difficult, if not impossible, to make this election because of
certain requirements thereof.

Pursuant to proposed regulations, open-end RICs, such as
the Fund, would be entitled to elect to mark to market their stock in
certain PFICs. Marking to market, in this context, means recognizing as
gain for each taxable year the excess, as of the end of that year, of the
fair market value of each such PFIC's stock over the adjusted basis in

- 38 -
<PAGE>

that stock (including mark to market gain for each prior year for which an
election was in effect).

The Portfolio's use of hedging strategies, such as writ-
ing (selling) and purchasing options and entering into forward contracts,
involves complex rules that will determine for income tax purposes the
character and timing of recognition of the gains and losses the Portfolio
realizes in connection therewith. Income from foreign currencies (except
certain gains therefrom that may be excluded by future regulations), and
income from transactions in Hedging Instruments derived by the Portfolio
with respect to its business of investing in securities or foreign cur-
rencies, will qualify as permissible income for the Fund under the Income
Requirement. However, income from the disposition by the Portfolio of
options (other than those on foreign currencies) will be subject to the
Short-Short Limitation for the Fund if they are held for less than three
months. Income from the disposition of foreign currencies, and Hedging
Instruments on foreign currencies, that are not directly related to the
Portfolio's principal business of investing in securities (or options with
respect thereto) also will be subject to the Short-Short Limitation for
the Fund if they are held for less than three months.

If the Portfolio satisfies certain requirements, any in-
crease in value of a position that is part of a "designated hedge" will be
offset by any decrease in value (whether realized or not) of the
offsetting hedging position during the period of the hedge for purposes of
determining whether the Fund satisfies the Short-Short Limitation. Thus,
only the net gain (if any) from the designated hedge will be included in
gross income for purposes of that limitation. The Portfolio will consider
whether it should seek to qualify for this treatment for its hedging
transactions. To the extent the Portfolio does not so qualify, it may be
forced to defer the closing out of certain Hedging Instruments beyond the
time when it otherwise would be advantageous to do so, in order for the
Fund to continue to qualify as a RIC.

Taxation of the Fund's Shareholders
-----------------------------------

If Fund shares are sold at a loss after being held for
six months or less, the loss will be treated as long-term, instead of
short-term, capital loss to the extent of any capital gain distributions
received on those shares. Investors also should be aware that if shares
of the Fund are purchased shortly before the record date for a dividend or
other distribution, the purchaser will receive some portion of the
purchase price back as a taxable distribution.

PORTFOLIO TRANSACTIONS

Neuberger & Berman acts as the Portfolio's principal
broker in the purchase and sale of its portfolio securities and in connec-
tion with the writing of covered call options on its securities.

- 39 -
<PAGE>

Transactions in portfolio securities for which Neuberger & Berman serves
as broker will be effected in accordance with Rule 17e-1 under the 1940
Act.

During the period August 3 to August 31, 1993, the
Portfolio paid brokerage commissions of $201,981, of which $149,496 was
paid to Neuberger & Berman. During the fiscal year ended August 31, 1994,
the Portfolio paid brokerage commissions of $2,207,401, of which
$1,647,807 was paid to Neuberger & Berman.

During the fiscal year ended August 31, 1995, the
Portfolio paid brokerage commissions of $3,751,206, of which $2,521,523
was paid to Neuberger & Berman. Transactions in which the Portfolio used
Neuberger & Berman as broker comprised 70.49% of the aggregate dollar
amount of transactions involving the payment of commissions, and 67.22% of
the aggregate brokerage commissions paid by the Portfolio, during the
fiscal year ended August 31, 1995. 82.78% of the $1,229,683 paid to other
brokers by the Portfolio during that fiscal year (representing commissions
on transactions involving approximately $509,609,733) was directed to
those brokers because of research services they provided. During the
fiscal year ended August 31, 1995, the Portfolio acquired securities of
the following of its Regular B/Ds: EXXON Credit Corp., General Electric
Capital Corp., and Merrill Lynch, Pierce, Fenner & Smith, Inc.; at that
date, the Portfolio held the securities of its Regular B/Ds with an
aggregate value as follows: General Electric Capital Corp., $1,500,000,
and Merrill Lynch, Pierce, Fenner & Smith, Inc., $48,116,875.

Portfolio securities are, from time to time, loaned by
the Portfolio to Neuberger & Berman in accordance with the terms and
conditions of an order issued by the SEC. The order exempts such
transactions from provisions of the 1940 Act that would otherwise prohibit
such transactions, subject to certain conditions. Among the conditions of
the order, securities loans made by the Portfolio to Neuberger & Berman
must be fully secured by cash collateral. Under the order, the portion of
the income on the cash collateral which may be shared with Neuberger &
Berman is determined with reference to concurrent arrangements between
Neuberger & Berman and non-affiliated lenders with which it engages in
similar transactions. In addition, where Neuberger & Berman borrows
securities from the Portfolio in order to relend them to others, Neuberger
& Berman is required to pay the Portfolio, on a quarterly basis, certain
"excess earnings" that Neuberger & Berman otherwise has derived from the
relending of the borrowed securities. When Neuberger & Berman desires to
borrow a security that the Portfolio has indicated a willingness to lend,
Neuberger & Berman must borrow such security from the Portfolio, rather
than from an unaffiliated lender, unless the unaffiliated lender is
willing to lend such security on more favorable terms (as specified in the
order) than the Portfolio. If the Portfolio's expenses exceed its income
in any securities loan transaction with Neuberger & Berman, Neuberger &
Berman must reimburse the Portfolio for such loss.

- 40 -
<PAGE>

During the fiscal years ended August 31, 1995 and 1994,
the Portfolio earned $1,430,672 and $147,103, respectively in interest
income from the collateralization of securities loans, from which
Neuberger & Berman was paid $1,252,190 and $119,620, respectively. During
the period August 3 to August 31, 1993, the Portfolio earned interest
income of $3,164 from the collateralization of securities loans, from
which Neuberger & Berman was paid $2,881.

The Portfolio may also lend securities to unaffiliated
entities, including brokers or dealers, banks and other recognized
institutional borrowers of securities, provided that cash or equivalent
collateral, equal to at least 100% of the market value of the securities
loaned, is continuously maintained by the borrower with the Portfolio.
During the time securities are on loan, the borrower will pay the
Portfolio an amount equivalent to any dividends or interest paid on such
securities. The Portfolio may invest the cash collateral and earn income,
or it may receive an agreed upon amount of interest income from a borrower
who has delivered equivalent collateral. These loans are subject to
termination at the option of the Portfolio or the borrower. The Portfolio
may pay reasonable administrative and custodial fees in connection with a
loan and may pay a negotiated portion of the interest earned on the cash
or equivalent collateral to the borrower or placing broker. The Portfolio
does not have the right to vote securities on loan, but would terminate
the loan and regain the right to vote if that were considered important
with respect to the investment.

A committee of Independent Portfolio Trustees from time
to time reviews, among other things, information relating to securities
loans by the Portfolio.

In effecting securities transactions, the Portfolio gen-
erally seeks to obtain the best price and execution of orders. Commission
rates, being a component of price, are considered along with other
relevant factors. The Portfolio plans to continue to use Neuberger &
Berman as its principal broker where, in the judgment of N&B Management
(the Portfolio's investment manager and an affiliate of Neuberger &
Berman), that firm is able to obtain a price and execution at least as
favorable as other qualified brokers. To the Portfolio's knowledge,
however, no affiliate of the Portfolio receives give-ups or reciprocal
business in connection with its securities transactions.

The use of Neuberger & Berman as a broker for the Port-
folio is subject to the requirements of Section 11(a) of the Securities
Exchange Act of 1934. Section 11(a) prohibits members of national
securities exchanges from retaining compensation for executing exchange
transactions for accounts which they or their affiliates manage, except

- 41 -
<PAGE>

where they have the authorization of the persons authorized to transact
business for the account and comply with certain annual reporting
requirements. The Portfolio Trustees have expressly authorized Neuberger
& Berman to retain such compensation, and Neuberger & Berman complies with
the reporting requirements of Section 11(a).

Under the 1940 Act, commissions paid by the Portfolio to
Neuberger & Berman in connection with a purchase or sale of securities on
a securities exchange may not exceed the usual and customary broker's
commission. Accordingly, it is the Portfolio's policy that the
commissions paid to Neuberger & Berman must, in N&B Management's judgment,
be (1) at least as favorable as those charged by other brokers having
comparable execution capability and (2) at least as favorable as
commissions contemporaneously charged by Neuberger & Berman on comparable
transactions for its most favored unaffiliated customers, except for
accounts for which Neuberger & Berman acts as a clearing broker for
another brokerage firm and customers of Neuberger & Berman considered by a
majority of the Independent Portfolio Trustees not to be comparable to the
Portfolio. The Portfolio does not deem it practicable and in its best
interests to solicit competitive bids for commissions on each transaction
effected by Neuberger & Berman. However, consideration regularly is given
to information concerning the prevailing level of commissions charged by
other brokers on comparable transactions during comparable periods of
time. The 1940 Act generally prohibits Neuberger & Berman from acting as
principal in the purchase or sale of securities for the Portfolio's
account, unless an appropriate exemption is available.

A committee of Independent Portfolio Trustees from time
to time reviews, among other things, information relating to the
commissions charged by Neuberger & Berman to the Portfolio and to its
other customers and information concerning the prevailing level of
commissions charged by other brokers having comparable execution
capability. In addition, the procedures pursuant to which Neuberger &
Berman effects brokerage transactions for the Portfolio must be reviewed
and approved no less often than annually by a majority of the Independent
Portfolio Trustees.

The Portfolio expects that it will continue to execute a
portion of its transactions through brokers other than Neuberger & Berman.
In selecting those brokers, N&B Management considers the quality and
reliability of brokerage services, including execution capability,
performance, and financial responsibility, and may consider research and
other investment information provided by, and sale of Fund shares effected
through, those brokers.

To ensure that accounts of all investment clients,
including the Portfolio, are treated fairly in the event that transaction
instructions for more than one investment account regarding the same

- 42 -
<PAGE>

security are received by Neuberger & Berman at or about the same time,
Neuberger & Berman may combine transaction orders placed on behalf of
clients, including advisory accounts in which affiliated persons have an
investment interest, for the purpose of negotiating brokerage commissions
or obtaining a more favorable price. Where appropriate, securities
purchased or sold may be allocated, in terms of amount, to a client
according to the proportion that the size of the transaction order
actually placed by the account bears to the aggregate size of transaction
orders simultaneously made by the other accounts, subject to de minimis
exceptions, with all participating accounts paying or receiving the same
price.

A committee comprised of officers of N&B Management and
partners of Neuberger & Berman who are portfolio managers of the Portfolio
and Other N&B Funds (collectively, "N&B Funds") and some of Neuberger &
Berman's managed accounts ("Managed Accounts") evaluates semi-annually the
nature and quality of the brokerage and research services provided by
other brokers. Based on this evaluation, the committee establishes a list
and projected rankings of preferred brokers for use in determining the
relative amounts of commissions to be allocated to those brokers.
Ordinarily, the brokers on the list effect a large portion of the
brokerage transactions for the N&B Funds and the Managed Accounts that are
not effected by Neuberger & Berman. However, in any semi-annual period,
brokers not on the list may be used, and the relative amounts of brokerage
commissions paid to the brokers on the list may vary substantially from
the projected rankings. These variations reflect the following factors,
among others: (1) brokers not on the list or ranking below other brokers
on the list may be selected for particular transactions because they
provide better price and/or execution, which is the primary consideration
in allocating brokerage; (2) adjustments may be required because of
periodic changes in the execution or research capabilities of particular
brokers, or in the execution or research needs of the N&B Funds and/or the
Managed Accounts; and (3) the aggregate amount of brokerage commissions
generated by transactions for the N&B Funds and the Managed Accounts may
change substantially from one semi-annual period to the next.

The commissions charged by a broker other than
Neuberger & Berman may be higher than the amount another firm might charge
if N&B Management determines in good faith that the amount of those
commissions is reasonable in relation to the value of the brokerage and
research services provided by the broker. N&B Management believes that
those research services benefit the Portfolio by supplementing the
research otherwise available to N&B Management. That research may be used
by N&B Management in servicing Other N&B Funds and, in some cases, by
Neuberger & Berman in servicing the Managed Accounts. On the other hand,
research received by N&B Management from brokers effecting portfolio
transactions on behalf of the Other N&B Funds and by Neuberger & Berman
from brokers effecting portfolio transactions on behalf of the Managed
Accounts may be used for the Portfolio's benefit.

- 43 -
<PAGE>

Lawrence Marx III and Kent C. Simons, each of whom is a
Vice President of N&B Management and a general partner of Neuberger &
Berman, are the persons primarily responsible for making decisions as to
specific action to be taken with respect to the investment portfolio of
the Portfolio. Each of them has full authority to take action with respect
to portfolio transactions and may or may not consult with other personnel
of N&B Management prior to taking such action.

Portfolio Turnover
------------------
The portfolio turnover rate is the lesser of the cost of
the securities purchased or the value of the securities sold, excluding
all securities, including options, whose maturity or expiration date at
the time of acquisition was one year or less, divided by the average
monthly value of such securities owned during the year.

REPORTS TO SHAREHOLDERS

Shareholders of the Fund receive unaudited semi-annual
financial statements, as well as year-end financial statements audited by
the independent auditors for the Fund and Portfolio. The Fund's
statements show the investments owned by the Portfolio and the market
values thereof and provide other information about the Fund and its
operations, including the Fund's beneficial interest in the Portfolio.

CUSTODIAN AND TRANSFER AGENT

The Fund and Portfolio have selected State Street Bank
and Trust Company ("State Street"), 225 Franklin Street, Boston, MA 02110,
as custodian for their respective securities and cash. All correspondence
should be mailed to Neuberger & Berman Funds, Institutional Services, 605
Third Avenue, 2nd Floor, New York, NY 10158-0180. State Street also
serves as the Fund's transfer agent, administering purchases, redemptions,
and transfers of Fund shares with respect to Institutions and the payment
of dividends and other distributions to Institutions.

INDEPENDENT AUDITORS

The Fund and Portfolio have selected Ernst & Young LLP,
200 Clarendon Street, Boston, MA 02116, as the independent auditors who
will audit their financial statements.

- 44 -
<PAGE>

LEGAL COUNSEL

The Fund and Portfolio have selected Kirkpatrick &
Lockhart LLP, 1800 M Street, N.W., Washington, D.C. 20036, as their legal
counsel.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

The following table sets forth the name, address, and
percentage of ownership of each person who owned of record, or who was
known by the Fund to own beneficially or of record, 5% or more of the
Fund's outstanding shares at November 30, 1995:

- 45 -
<PAGE>

Percentage of Ownership at
Name and Address November 30, 1995
----------------- --------------------------

<S> <C> <C>
Neuberger & Berman The Northern Trust Co., 27.18%
GUARDIAN Trust Trustee
Digital Equipment Corp.
DTD 1-3-95
P.O. Box 92956
Chicago, IL 60675-0001

MAC & Co. 17.15%
A/C 195-643
Mellon Bank N.A.
P.O. Box 320
Pittsburgh, PA 15230-0320

National Financial Services 9.54%
Corp.*
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
The Bank of NY, Trustee 6.33%
Melville Corp. 401(k)
PSRP - General DTD 6/7/89
1 Wall Street, 7th Floor
New York, NY 10286-0001

MAC & Co. 5.38%
A/C #854-169
Mellon Bank N.A.
Mutual Funds Dept.
P.O. Box 320
Pittsburgh, PA 15230-0320

</TABLE>

* National Financial Services Corp. holds these shares of
record for the account of certain of its clients and has informed the Fund
of its policy to maintain the confidentiality of holdings in its client
accounts unless disclosure is expressly required by law.

At December 6, 1995, the trustees and officers of the
Trusts, as a group, owned beneficially or of record less than 1% of the
outstanding shares of the Fund.

- 46 -
<PAGE>

REGISTRATION STATEMENT

Statements contained in this SAI and in the Prospectus as
to the contents of any contract or other document referred to are not
necessarily complete, and in each instance reference is made to the copy
of the contract or other document filed as an exhibit to the registration
statement, each such statement being qualified in all respects by such
reference.

FINANCIAL STATEMENTS

The following financial statements and related documents
are incorporated herein by reference from the Fund's Annual Report to
shareholders for the fiscal year ended August 31, 1995:

The audited financial statements of the Fund and
Portfolio and notes thereto for the fiscal year ended
August 31, 1995, and the reports of Ernst & Young LLP,
independent auditors, with respect to such audited
financial statements.

- 47 -
<PAGE>

Appendix A

RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER

S&P corporate bond ratings:

AAA - Bonds rated AAA have the highest rating assigned by
S&P. Capacity to pay interest and repay principal is extremely strong.

AA - Bonds rated AA have a very strong capacity to pay
interest and repay principal and differ from the higher rated issues only
in small degree.

A - Bonds rated A have a strong capacity to pay interest
and repay principal, although they are somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
bonds in higher rated categories.

CI - The rating CI is reserved for income bonds on
which no interest is being paid.

D - Bonds rated D are in default, and payment of interest
and/or repayment of principal is in arrears.

Plus (+) or Minus (-) - The ratings above may be modified
by the addition of a plus or minus sign to show relative standing within
the major rating categories.

Moody's corporate bond ratings:

Aaa - Bonds rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edge." Interest payments are protected by
a large or an exceptionally stable margin, and principal is secure.
Although the various protective elements are likely to change, the changes
that can be visualized are most unlikely to impair the fundamentally
strong position of the issuer.

- 48 -
<PAGE>

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.

Caa - Bonds rated Caa are of poor standing. Such
issues may be in default or there may be present elements of danger with
respect to principal or interest.

Ca - Bonds rated Ca represent obligations that are
speculative in a high degree. Such issues are often in default or have
other marked shortcomings.

C - Bonds rated C are the lowest rated class of bonds,
and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.

- 49 -
<PAGE>

S&P commercial paper ratings:

Moody's commercial paper ratings

Issuers rated Prime-1 (or related supporting
institutions), also known as P-1, have a superior capacity for repayment
of short-term promissory obligations. Prime-1 repayment capacity will
normally be evidenced by the following characteristics:

- Leading market positions in well-established
industries.
- High rates of return on funds employed.
- Conservative capitalization structures with
moderate reliance on debt and ample asset
protection.
- Broad margins in earnings coverage of fixed
financial charges and high internal cash
generation.
- Well-established access to a range of financial
markets and assured sources of alternate
liquidity.

- 50 -
<PAGE>

Appendix B

PERFORMANCE DATA

- 51 -
<PAGE>

COST OF LIVING INDEX

PREPARED FOR: BARBARA
<TABLE>
<CAPTION>

Dividends and Capital Gains Reinvested

Totals 0 0

Totals 12,730 0 12,730 0 12,730 83

Average Annual Total Return for This Illustration: 3.55% (Annual Compounding)
</TABLE>
<PAGE>

FROM GUARDIAN TRUST

PREPARED FOR: BARBARA
<TABLE>
<CAPTION>

Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
---- ---------- -------- -------- --------- --------- ---------

6/1/50 $200,000.00 $1.8674 0.00% 107,100.000 $1.8674 $200,000

Systematic Withdrawal Plan
Dividends and Capital Gains Reinvested
Monthly Withdrawals of $1,666.67 (10.0% Annually) Beginning 6/30/50

Totals 1,700,716 -795,716 905,000 905,000 3,212,534

</TABLE>
<PAGE>

Remaining Capital
Original Gain Total Shares
Date Shares Shares Value Held
---- --------- --------- ----- ------
<S> <C> <C> <C> <C>
12/31/50 205,803 0 205,803 101,950

Totals 2,486,742 6,930,987 9,417,729 680,964

Average Annual Return for This Illustration: 12.98% (Annual Compounding)

Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value ------ ------ -------
for Periods Ending 6/30/95: 24.88% 16.17% 14.92%
</TABLE>
<PAGE>

FROM GUARDIAN TRUST

PREPARED FOR: BARBARA
<TABLE>
<CAPTION>

Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
----- ----------- -------- --------- ---------- --------- ---------

<S> <C> <C> <C> <C> <C> <C>
6/1/50 $10,000.00 $1.8674 0.00% 5,355.000 $1.8674 $10,000

Dividends and Capital Gains Reinvested

Totals 419,643 812,922

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
===================== VALUE OF SHARES ==========================
From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
---- ---------- ---------- ----- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
8/31/50 10,070 0 10,070 0 10,070 5,355
8/31/51 11,960 0 11,960 436 12,396 5,550
8/31/52 12,279 242 12,521 978 13,499 5,887
8/31/53 11,451 549 12,000 1,384 13,384 6,259
8/31/54 13,450 740 14,190 2,182 16,372 6,518
8/31/55 17,130 1,719 18,849 3,341 22,190 6,937
8/31/56 17,380 3,019 20,399 4,024 24,423 7,525
8/31/57 16,320 3,830 20,150 4,500 24,650 8,088
8/31/58 16,960 4,427 21,387 5,636 27,023 8,532
8/31/59 21,271 6,483 27,754 8,004 35,758 9,002
8/31/60 20,160 9,559 29,719 8,470 38,189 10,144
8/31/61 23,360 12,273 35,633 10,902 46,535 10,668
8/31/62 19,769 13,016 32,785 10,163 42,948 11,633
8/31/63 23,170 16,559 39,729 13,134 52,863 12,218
8/31/64 24,960 19,612 44,572 15,480 60,052 12,884
8/31/65 25,860 23,410 49,270 17,411 66,681 13,808
8/31/66 23,260 23,993 47,253 17,072 64,325 14,809
8/31/67 29,449 32,922 62,371 23,464 85,835 15,608
8/31/68 28,760 38,443 67,203 24,725 91,928 17,117
8/31/69 25,960 40,738 66,698 24,245 90,943 18,760
8/31/70 21,620 37,139 58,759 22,637 81,396 20,161
8/31/71 26,400 46,409 72,809 31,308 104,117 21,119
8/31/72 26,850 53,451 80,301 35,383 115,684 23,072
8/31/73 22,880 50,080 72,960 33,326 106,286 24,876
8/31/74 17,809 41,114 58,923 29,267 88,190 26,517
8/31/75 22,720 53,090 75,810 43,788 119,598 28,189
8/31/76 28,039 66,646 94,685 60,968 155,653 29,726
8/31/77 27,441 74,636 102,077 65,961 168,038 32,793
8/31/78 30,261 90,846 121,107 80,290 201,397 35,640
8/31/79 32,421 111,545 143,966 95,231 239,197 39,509
8/31/80 34,021 140,270 174,291 109,849 284,140 44,726
8/31/81 30,591 163,434 194,025 109,262 303,287 53,092
8/31/82 28,740 172,049 200,789 190,863 321,652 59,932
8/31/83 39,531 247,290 286,821 186,311 473,132 64,094
8/31/84 38,119 267,922 306,041 200,382 506,423 71,141
8/31/85 43,360 321,569 364,929 248,996 613,925 75,820
8/31/86 45,770 452,146 497,916 294,520 792,436 92,713
8/31/87 50,319 596,296 646,615 357,180 1,003,795 106,823
8/31/88 38,510 554,756 593,266 303,185 896,451 124,656
8/31/89 45,669 763,809 809,478 390,876 1,200,354 140,747
8/31/90 35,710 681,487 717,319 333,090 1,050,409 157,517
8/31/91 44,701 871,487 916,188 454,426 1,370,614 164,198
8/31/92 47,200 1,008,398 1,055,598 505,323 1,560,921 177,092
8/31/93 54,996 1,246,328 1,301,324 616,108 1,917,432 186,702
8/31/94 60,350 1,369,662 1,430,012 690,165 2,120,177 188,126
8/31/95 74,060 1,680,783 1,754,843 874,469 2,629,312 190,117
<PAGE>

From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
---- ---------- ---------- ----- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>

Totals 74,060 1,680,783 1,754,843 874,469 2,629,312 190,117

Average Annual Total Return for This Illustration: 13.10% (Annual Compounding)

Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value ------ ------ -------
for Periods Ending 6/30/95: 24.88% 16.17% 14.92%
</TABLE>
<PAGE>

Appendix C

THE ART OF INVESTMENT:
A CONVERSATION WITH ROY NEUBERGER

<PAGE>

The Art of Investing:
A Conversation with Roy Neuberger

"I firmly believe that
if you want to manage
your own money, you
must be a student of
the market. If you are
unwilling or unable to
do that, find someone
else to manage your
money for you."

NEUBERGER & BERMAN
<PAGE>

[THIS PAGE IS BLANK - IT IS AN INSIDE PAGE OF THIS BROCHURE]
<PAGE>

[PICTURE OF ROY NEUBERGER]

\s\ Roy R.
Neuberger

- 1 -
<PAGE>

<S> <C>
YOU'VE BEEN ABLE TO CONDENSE SOME OF THE
CHARACTERISTICS OF SUCCESSFUL INVESTING INTO
FIVE "RULES." WHAT ARE THEY?

Rule #2: Take your temperament into account.
Recognize whether you are by nature very
speculative or just the opposite - fearful,
timid of taking risks. But in any event --

[PICTURE OF ROY NEUBERGER]

- 2 -
<PAGE>

Rule #5: Be skeptical. To repeat a few well-
worn useful phrases:

A. Dig for yourself.
B. Be from Missouri.
C. If it sounds too good to be true,
it probably is.

IN YOUR 65 YEARS OF INVESTING ARE THERE ANY
GENERAL PATTERNS YOU'VE OBSERVED AS TO HOW THE
MARKET BEHAVES?

AS A LEGENDARY "VALUE INVESTOR," HOW DO YOU
DEFINE VALUE INVESTING?

COULD YOU DESCRIBE A STOCK WITH "GOOD VALUE"?

These characteristics usually lead to companies
that are under-researched and have a high
degree of inside ownership and entrepreneurial
management.

- 3 -
<PAGE>

ARE THERE OTHER KEY CRITERIA YOU USE TO JUDGE
STOCKS?

WHAT ABOUT SELLING STOCKS?

Most individual investors should invest for the
long term but not mindlessly. A sell
discipline, often neglected by investors, is
vitally important.

[PICTURE OF ROY NEUBERGER]

- 4 -
<PAGE>

ANY OTHER ADVICE FOR INVESTORS?

HOW WOULD YOU DESCRIBE YOUR PERSONAL INVESTING
STYLE?

YOU BEGAN INVESTING IN 1929. WHAT WAS YOUR
EXPERIENCE WITH THE "GREAT CRASH"?

- 5 -
<PAGE>

HOW DID THE CRASH OF 1929 AFFECT YOUR INVESTING
STYLE?

HOW IMPORTANT ARE PSYCHOLOGICAL FACTORS TO
MARKET BEHAVIOR?

I like to be contrary. When things look bad, I
become optimistic. When everything looks rosy,
and the crowd is optimistic, I like to be a
seller. Sometimes I'm too early, but I
generally profit.

AS A RENOWNED ART COLLECTOR, DO YOU FIND
SIMILARITIES BETWEEN SELECTING STOCKS AND
SELECTING WORKS OF ART?

- 6 -
<PAGE>

[PICTURE OF ROY NEUBERGER]

- 7 -
<PAGE>

WHAT DO YOU CONSIDER THE BUSINESS MILESTONES IN
YOUR LIFE?

[PICTURE OF ROY NEUBERGER]

YOU'RE IN YOUR NINETIES AND STILL YOU GO INTO
THE OFFICE EVERY DAY TO MANAGE YOUR
INVESTMENTS. WHY?

I like the fun of being nimble in the stock
market, and I'm addicted to the market's
fascinations.

WHAT CLOSING WORDS OF ADVICE DO YOU HAVE ABOUT
INVESTING?

- 8 -
<PAGE>

ROY NEUBERGER: A BRIEF BIOGRAPHY

A TALENT FOR INVESTING

NEUBERGER & BERMAN'S FOUNDING

- 9 -
<PAGE>

NEUBERGER & BERMAN -- OVER FIVE DECADES OF
GROWTH

- 10 -
<PAGE>

Neuberger & Berman Management
Inc.[SERVICE MARK]

605 Third Avenue, 2nd
Floor
New York, NY 10158-
0006
Shareholder Services
(800) 877-9700

[COPYRIGHT
SYMBOL]1995 Neuberger
& Berman

PRINTED ON RECYCLED PAPER
WITH SOY BASED INKS

</TABLE>

- 11 -
<PAGE>

Table of Contents
-----------------

INVESTMENT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 1
Investment Policies and Limitations . . . . . . . . . . . . 1
Kent C. Simons and Lawrence Marx III, Portfolio Managers
of the Portfolio . . . . . . . . . . . . . . . . . . 5
Additional Investment Information . . . . . . . . . . . . . 6

PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 16
Total Return Computations . . . . . . . . . . . . . . . . . 16
Comparative Information . . . . . . . . . . . . . . . . . . 17
Other Performance Information . . . . . . . . . . . . . . . 18

CERTAIN RISK CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . 19

TRUSTEES AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . 19

INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES . . . . . . . . . . 26
Investment Manager and Administrator . . . . . . . . . . . . 26
Sub-Adviser . . . . . . . . . . . . . . . . . . . . . . . . 29
Investment Companies Managed . . . . . . . . . . . . . . . . 29
Management and Control of N&B Management . . . . . . . . . . 33

DISTRIBUTION ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . . 34

ADDITIONAL REDEMPTION INFORMATION . . . . . . . . . . . . . . . . . . 34

DIVIDENDS AND OTHER DISTRIBUTIONS . . . . . . . . . . . . . . . . . . 35

ADDITIONAL TAX INFORMATION . . . . . . . . . . . . . . . . . . . . . 36
Taxation of the Fund . . . . . . . . . . . . . . . . . . . . 36
Taxation of the Portfolio . . . . . . . . . . . . . . . . . 37
Taxation of the Fund's Shareholders . . . . . . . . . . . . 39

PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . 39
Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . 43

REPORTS TO SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . 44

CUSTODIAN AND TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . 44

INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . 44

LEGAL COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES . . . . . . . . . 44

REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . 45

- i -
<PAGE>

Page

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 46

Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER . . . . . . 47

Appendix B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
PERFORMANCE DATA . . . . . . . . . . . . . . . . . . . . . . 50

Appendix C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
THE ART OF INVESTMENT: A CONVERSATION WITH ROY NEUBERGER . 51

- ii -
<PAGE>

<PAGE>

PROSPECTUS
- --------------------------------------------------------------------------------
December 15, 1995

NEUBERGER&BERMAN
EQUITY TRUSTSM

Neuberger&Berman
NYCDC SOCIALLY RESPONSIVE TRUST

No Sales Charges
No Redemption Fees
No 12b-1 Fees

<PAGE>

Neuberger&Berman

NYCDC SOCIALLY RESPONSIVE TRUST

A No-Load Equity Fund
- --------------------------------------------------------------------------------

Neuberger&Berman NYCDC SOCIALLY RESPONSIVE TRUST (the "Fund") is an
equity fund that seeks long-term capital appreciation through investments
primarily in securities of companies that meet both financial and social
criteria.

The Fund was created as an investment vehicle for participants in the
Deferred Compensation Plan of the City of New York and Related Agencies
and Instrumentalities ("Plan") who are concerned about the relationship
between business and society and are seeking to invest their assets in a
manner consistent with their social sensibilities.

YOU CAN BUY, OWN, AND SELL FUND SHARES ONLY THROUGH THE PLAN.
- --------------------------------------------------------------------------------

THE FUND INVESTS ALL OF ITS NET INVESTABLE ASSETS IN THE
NEUBERGER&BERMAN SOCIALLY RESPONSIVE PORTFOLIO (THE "PORTFOLIO") OF EQUITY
MANAGERS TRUST ("MANAGERS TRUST"), AN OPEN-END MANAGEMENT INVESTMENT COM-
PANY MANAGED BY NEUBERGER&BERMAN MANAGEMENT INCORPORATED ("N&B MANAGE-
MENT"). THE PORTFOLIO INVESTS IN SECURITIES IN ACCORDANCE WITH AN INVEST-
MENT OBJECTIVE, POLICIES, AND LIMITATIONS IDENTICAL TO THOSE OF THE FUND.
THE INVESTMENT PERFORMANCE OF THE FUND DIRECTLY CORRESPONDS WITH THE IN-
VESTMENT PERFORMANCE OF THE PORTFOLIO. THIS "MASTER/FEEDER FUND" STRUCTURE
IS DIFFERENT FROM THAT OF MANY OTHER INVESTMENT COMPANIES WHICH DIRECTLY
ACQUIRE AND MANAGE THEIR OWN PORTFOLIOS OF SECURITIES. FOR MORE INFORMA-
TION ON THIS UNIQUE STRUCTURE THAT YOU SHOULD CONSIDER, SEE "SPECIAL IN-
FORMATION REGARDING ORGANIZATION, CAPITALIZATION, AND OTHER MATTERS" ON
PAGE 15.

The Portfolio seeks to achieve its objective by investing in securities
considered by N&B Management to be undervalued in relation to recognized
measures of fundamental economic value, such as earnings, cash flow, tan-
gible book value, and asset value. For a description of the investment
policies and techniques of the Portfolio, see "Investment Program" and
"Description of Investments."

The Fund is a no-load mutual fund, so you pay no sales commissions or
other charges when you buy or redeem shares. The Fund does not pay "12b-1
fees" to promote or distribute its shares.

Please read this Prospectus before investing in the Fund and keep it
for future reference. It contains information about the Fund that a pro-
spective investor should know before investing. A Statement of Additional
Information ("SAI") about the Fund and Portfolio, dated December 15, 1995,
is on file with the Securities and Exchange Commission. The SAI is incor-
porated herein by reference (so it is legally considered a part of this
Prospectus). You can obtain a free copy of the SAI by calling the Plan at
212-306-7760.

PROSPECTUS DATED DECEMBER 15, 1995

MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY
THE FDIC, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT
TO INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT
INVESTED.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTA-
TION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>

TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY 3
The Fund and
Portfolio; Risk
Factors 3
Management 4
The Neuberger&Berman
Investment Approach 4
EXPENSE
INFORMATION 6
Shareholder
Transaction
Expenses 6
Annual Fund
Operating Expenses 6
Example 7
FINANCIAL
HIGHLIGHTS 8
INVESTMENT PROGRAM 10
Social Policy 11
Short-Term Trading;
Portfolio Turnover 13
Borrowings 13
PERFORMANCE
INFORMATION 14
Total Return
Information 14
SPECIAL
INFORMATION
REGARDING
ORGANIZATION,
CAPITALIZATION,
AND OTHER
MATTERS 15
The Fund 15
The Portfolio 16
</TABLE>
<TABLE>
<S> <C>
HOW TO BUY AND SELL
SHARES 19
SHARE INFORMATION 20
Share Prices and Net
Asset Value 20
DIVIDENDS, OTHER
DISTRIBUTIONS, AND
TAXES 21
Distribution Options 21
Taxes 21
MANAGEMENT AND
ADMINISTRATION 22
Trustees and Officers 22
Investment Manager, Administrator,
Distributor, and
Sub-Adviser 22
Expenses 23
Transfer Agent 24
DESCRIPTION OF INVESTMENTS 25
DIRECTORY 28
</TABLE>

2
<PAGE>

SUMMARY

The Fund and Portfolio; Risk Factors
- --------------------------------------------------------------------------------

The Fund is a series of Neuberger&Berman Equity Trust (the "Trust") and
invests in the Portfolio which, in turn, invests in securities in accor-
dance with an investment objective, policies and limitations identical to
those of the Fund. This is sometimes called a master/feeder fund struc-
ture, because the Fund "feeds" shareholders' investments into the Portfo-
lio, a "master" fund. The structure looks like this:

SHAREHOLDERS

[DOWN ARROW] BUY SHARES IN

FUND

[DOWN ARROW] INVESTS IN

PORTFOLIO

[DOWN ARROW] INVESTS IN

STOCKS & OTHER SECURITIES

The trustees who oversee the Fund believe that this structure may bene-
fit shareholders; investment in the Portfolio by investors in addition to
the Fund may enable the Portfolio to realize economies of scale that could
reduce expenses. The Portfolio seeks long-term capital appreciation by in-
vesting primarily in securities considered by N&B Management to be under-
valued relative to the market as a whole and whose issuers meet certain
social criteria established by N&B Management ("Social Policy"). N&B Man-
agement evaluates companies to determine if they meet the Social Policy by
analyzing their policies, practices, products, and services in the follow-
ing major areas of concern: the environment and workplace diversity and
employment. Companies are further evaluated to determine if they

3
<PAGE>

meet other aspects of the Social Policy, such as public health, type of
products, and corporate citizenship. The Portfolio does not invest in com-
panies which derive a significant portion of their total annual revenue
from the following industries: nuclear power, tobacco, alcohol, gambling,
or weapons. The Portfolio will seek to dispose of a security as soon as
reasonably practicable when the issuer no longer meets the Social Policy,
even though a sale at that time might not be desirable from a purely fi-
nancial standpoint.

For more information about the organization of the Fund and the Portfo-
lio, including certain features of the master/feeder fund structure, see
"Special Information Regarding Organization, Capitalization, and Other
Matters" on page 15. An investment in the Fund involves certain risks, de-
pending upon the types of investments made by the Portfolio. For more de-
tails about the Portfolio, its investments and their risks, see "Invest-
ment Program" on page 10, "Social Policy" on page 11, and "Description of
Investments" on page 25.

INVESTMENT STYLE: Broadly diversified, large-cap value fund.

PORTFOLIO CHARACTERISTICS: Seeks long-term capital appreciation by in-
vesting in common stocks of companies that meet both financial and social
criteria.

Management
- --------------------------------------------------------------------------------

N&B Management, with the assistance of Neuberger&Berman, L.P.
("Neuberger&Berman") as sub-adviser, selects investments for the Portfo-
lio. N&B Management also provides administrative services to the Portfolio
and the Fund and acts as distributor of Fund shares. See "Management and
Administration" on page 22. If you want to know how to buy and sell shares
of the Fund, see "How to Buy and Sell Shares" on page 19, and the policies
set forth in the Plan.

The Neuberger&Berman Investment Approach
- --------------------------------------------------------------------------------

In general, Neuberger&Berman SOCIALLY RESPONSIVE Portfolio adheres to a
value-oriented investment approach. A value-oriented portfolio manager
buys stocks that are selling for less than their perceived market value.
These include stocks that are currently under-researched or are temporar-
ily out of favor on Wall Street.

Portfolio managers identify value stocks in several ways. One of the
most common identifiers is a low price-to-earnings ratio -- that is,
stocks selling at multiples of earnings per share that are lower than that
of the market as a whole. Other criteria are high dividend yield, a strong
balance sheet and financial position, a recent company restructuring with
the potential to realize hidden values, strong management, and low price-
to-book value (net value of the company's assets).

4
<PAGE>

Neuberger&Berman believes that, over time, securities that are under-
valued are more likely to appreciate in price and be subject to less risk
of price decline than securities whose market prices have already reached
their perceived economic value. This approach also contemplates selling
portfolio securities when they are considered to have reached their poten-
tial.

5
<PAGE>

EXPENSE INFORMATION

This section gives you certain information about the expenses of the
Fund and the Portfolio. See "Performance Information" for important facts
about the investment performance of the Fund, after taking expenses into
account.

Shareholder Transaction Expenses
- --------------------------------------------------------------------------------
As shown by this table, you pay no transaction charges when you buy or
sell Fund shares.

<TABLE>
<S> <C>
Sales Charge Imposed on Purchases NONE
Sales Charge Imposed on Reinvested Dividends NONE
Deferred Sales Charges NONE
Redemption Fees NONE
Exchange Fees NONE
</TABLE>

Annual Fund Operating Expenses (as a percentage of average net
assets)
- --------------------------------------------------------------------------------

The following table shows annual Total Operating Expenses for the Fund,
which are paid out of the assets of the Fund and which include the Fund's
pro rata portion of the Operating Expenses of the Portfolio. These ex-
penses are borne indirectly by Fund shareholders. The Fund pays N&B Man-
agement an administration fee, based on the Fund's average daily net as-
sets. The Portfolio pays N&B Management a management fee, based on the
Portfolio's average daily net assets; a pro rata portion of this fee is
borne indirectly by the Fund. Therefore, the table combines management and
administration fees. The Fund and the Portfolio also incur other expenses
for things such as accounting and legal fees, maintaining shareholder rec-
ords, and furnishing shareholder statements and Fund reports. "Operating
Expenses" exclude interest, taxes, brokerage commissions, and extraordi-
nary expenses. The Fund's expenses are factored into its share prices and
dividends and are not charged directly to Fund shareholders. For more in-
formation, see "Management and Administration" and the SAI.

<TABLE>
<CAPTION>
TOTAL
MANAGEMENT AND 12B-1 OTHER OPERATING
ADMINISTRATION FEES FEES EXPENSES EXPENSES
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
0.35%* None 0.25% 0.60%*
</TABLE>
*(Reflects N&B Management's expense reimbursement undertaking described
below)

6
<PAGE>

Total Operating Expenses for the Fund are annualized projections based
upon current administration fees for the Fund and management fees for the
Portfolio; "Other Expenses" are based on the Fund's and Portfolio's ex-
penses for the past fiscal year. The trustees of the Trust believe that
the aggregate per share expenses of the Fund and the Portfolio will be ap-
proximately equal to the expenses the Fund would incur if its assets were
invested directly in the type of securities held by the Portfolio. The
trustees of the Trust also believe that investment in the Portfolio by in-
vestors in addition to the Fund may enable the Portfolio to achieve econo-
mies of scale which could reduce expenses. The expenses and returns of
other funds that may invest in the Portfolio may differ from those of the
Fund.

The table reflects N&B Management's voluntary undertaking to reimburse
the Fund for its Operating Expenses and its pro rata share of the Portfo-
lio's Operating Expenses which, in the aggregate, exceed 0.60% per annum
of the Fund's average daily net assets. Absent the reimbursement, Manage-
ment and Administration Fees would be 0.60% per annum of the average daily
net assets of the Fund, and Total Operating Expenses would be 0.85% per
annum of the average daily net assets of the Fund.

Example
- --------------------------------------------------------------------------------

To illustrate the effect of Operating Expenses, let's assume that the
Fund's annual return is 5% and that it had annual Total Operating Expenses
described in the table above. For every $1,000 you invested in the Fund,
you would have paid the following amounts of total expenses if you closed
your account at the end of each of the following time periods:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C>
$6 $19 $33 $75
</TABLE>

The assumption in this example of a 5% annual return is required by
regulations of the Securities and Exchange Commission applicable to all
mutual funds. THE INFORMATION IN THE TABLE SHOULD NOT BE CONSIDERED A REP-
RESENTATION OF PAST OR FUTURE EXPENSES OR RATES OF RETURN; ACTUAL EXPENSES
OR RETURNS MAY BE GREATER OR LESS THAN THOSE SHOWN, AND MAY CHANGE IF EX-
PENSE REIMBURSEMENTS CHANGE.

7
<PAGE>

FINANCIAL HIGHLIGHTS
Neuberger&Berman

NYCDC Socially Responsive Trust
- -------------------------------------------------------------------------------

The financial information in the following ta-
ble is for the Fund as of August 31, 1995 and
prior periods. This information has been audited
by the Fund's independent accountants. You may
obtain, at no cost, further information about
the performance of the Fund in its annual report
to shareholders, which may be obtained by call-
ing 212-306-7760. The annual report contains the
accountants' report. Also, see "Performance In-
formation."

The following table includes selected data for
a share outstanding throughout each year and
other performance information derived from the
Financial Statements. The per share amounts and
ratios which are shown reflect income and ex-
penses, including the Fund's proportionate share
of the Portfolio's income and expenses. It
should be read in conjunction with the Portfo-
lio's Financial Statements and notes thereto.

<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED MARCH 14, 1994(/1/) TO
AUGUST 31, 1995 AUGUST 31, 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of
Year $10.43 $10.20
--------------------------
Income from Investment
Operations
Net Investment Income .13 .06
Net Gains or Losses on
Securities
(both realized and unrealized) 1.82 .17
--------------------------
Total from Investment
Operations 1.95 .23
--------------------------
Less Distributions
Dividends (from net investment
income) (.11) --
--------------------------
Net Asset Value, End of Year $12.27 $10.43
--------------------------
Total Return+ +18.95% +2.26%(/2/)
--------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $ 88.5 $ 68.6
--------------------------
Ratio of Expenses to Average
Net Assets(/4/) .60% .60%(/3/)
--------------------------
Ratio of Net Income to Average
Net Assets(/4/) 1.26% 1.42%(/3/)
--------------------------
</TABLE>

See Notes to Financial Highlights.

8
<PAGE>

NOTES TO FINANCIAL HIGHLIGHTS

1) The date investment operations commenced.

2) Not annualized.

3) Annualized.

4) After reimbursement of expenses by N&B Management. Had N&B Management
not undertaken such action the annualized ratios to average net assets
would have been:

<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED MARCH 14, 1994 TO
AUGUST 31, 1995 AUGUST 31, 1994
- ----------------------------------------------------------
<S> <C> <C>
Expenses .85% .84%
------------
Net Investment Income 1.01% 1.18%
------------
</TABLE>

5) Because the Fund invests only in the Portfolio and the Portfolio
(rather than the Fund) engages in securities transactions, the Fund
does not calculate a portfolio turnover rate. The portfolio turnover
rates for the Portfolio for the period from March 14, 1994 to August
31, 1994 and the year ended August 31, 1995 were 14% and 58%, respec-
tively.

+ 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
year and assumes dividends and other distributions, if any, were rein-
vested. 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 N&B Management had not reimbursed certain ex-
penses.

9
<PAGE>

INVESTMENT PROGRAM

The investment policies and limitations of the Fund and the Portfolio
are identical. The Fund invests only in the Portfolio. Therefore, the fol-
lowing shows you the kinds of securities in which the Portfolio invests.
For an explanation of some types of investments, see "Description of In-
vestments," on page 25.

Investment policies and limitations of the Fund and Portfolio are not
fundamental unless otherwise specified in this Prospectus or the SAI.
While a non- fundamental policy or limitation may be changed by the trust-
ees of the Trust or of Managers Trust without shareholder approval, the
Fund intends to notify shareholders before making any material change to
such policies or limitations. Fundamental policies may not be changed
without shareholder approval.
Additional investment techniques, features, and limitations concerning
the Portfolio's investment programs are described in the SAI.

The investment objective of the Fund and Portfolio is to seek long-term
capital appreciation by investing primarily in securities of companies
that meet both financial criteria and the Social Policy. This investment
objective is not fundamental. The Fund intends to notify shareholders 30
days in advance of making any change in its investment objective. There
can be no assurance that the Fund or Portfolio will achieve its objec-
tives. The Fund, by itself, does not represent a comprehensive investment
program.

In seeking capital appreciation, the Portfolio generally follows a val-
ue-oriented investment approach to the selection of individual securities.
Prospective investments are first subjected to detailed financial analysis
and are not studied further unless N&B Management believes that they are
currently undervalued relative to the issuer's assets and potential earn-
ing power.

The Portfolio expects to be nearly fully invested at all times, primar-
ily in common stock. It may also invest in convertible securities and pre-
ferred stock and in foreign securities and American Depositary Receipts
("ADRs") of foreign companies that meet the Social Policy. However, any
part of the Portfolio's assets may be retained temporarily in investment
grade debt securities and other investment grade fixed income securities
of non-governmental issuers, U.S. Government and Agency Securities, repur-
chase agreements, money market instruments, commercial paper, and cash and
cash equivalents when N&B Management believes that significant adverse
market, economic, political, or other circumstances require prompt action
to avoid losses. In addition, because of the master/feeder fund structure,
the Fund and the Portfolio deal with large institutional investors, and
the Portfolio may hold such instruments pending investment or payout when
the Portfolio has re

10
<PAGE>

ceived a large influx of cash due to sales of Fund shares, or shares of
other funds that invest in the Portfolio, or when it anticipates a sub-
stantial redemption. Generally, the foregoing temporary investments are
selected with a concern for the social impact of each investment. On occa-
sion, deposits with community banks and credit unions may be considered
for investment. Under normal conditions, at least 65% of the Portfolio's
total assets are invested in accordance with the Social Policy, and at
least 65% of total assets are invested in equity securities.

The Portfolio may also engage in portfolio management techniques that
are not subject to the Social Policy, such as selling short against-the-
box, lending securities, and purchasing and selling put and call options
on securities or currencies, futures contracts, options on futures con-
tracts, and forward contracts.

Social Policy
- --------------------------------------------------------------------------------

Companies deemed acceptable from a financial standpoint are evaluated
by N&B Management using a proprietary database that Neuberger&Berman has
designed to develop and monitor information on companies in various cate-
gories of social criteria. N&B Management seeks to invest in issuers that
show leadership in the following major areas of social impact: environment
and workplace diversity and employment. N&B Management also evaluates in-
vestments based on companies' records in other areas of concern: public
health, type of products, and corporate citizenship.
The Portfolio's social orientation is predicated in part on the belief
that good corporate citizenship is good business; that is, good policies
with respect to such social criteria as employment and environmental prac-
tices may often have a positive impact on the company's "bottom line." N&B
Management recognizes, however, that many social criteria represent goals
rather than achievements and that goals are often difficult to quantify.
In each area, N&B Management seeks to elicit and understand management's
vision of the company's social role, giving weight to enlightened, pro-
gressive policies. N&B Management attempts to assess the objectivity of
all information included in the database. However, decisions made by N&B
Management inevitably involve some level of subjective judgment.
N&B Management seeks to invest in companies that show leadership in ad-
dressing environmental problems effectively and in promoting progressive
workplace policies, especially as they affect women and minorities. It
seeks to identify companies committed to improving their environmental
performance by examining their policies and programs in such areas as en-
ergy conservation, pollution reduction and control, waste management, re-
cycling, and careful stewardship of natural resources. In a similar man-
ner, N&B Management seeks to identify companies whose policies

11
<PAGE>

and practices recognize the importance of human resources to corporate
productivity and the centrality of the work experience to the quality of
life of all employees. N&B Management seeks to invest in companies which
demonstrate leadership in such areas as providing and promoting equal op-
portunity, investing in the training and re-training of workers, promoting
a safe working environment, providing family-oriented flexible benefits,
and involving workers in job and workflow engineering.

In making investment decisions, N&B Management takes into account a
company's record as a member of the various communities of which it is a
part and its commitment to product quality and value. Currently, the So-
cial Policy screens out any company which derives more than (i) 5% of its
total annual revenue from manufacturing and selling alcohol and/or tobac-
co, (ii) 5% of its total annual revenue from sales in or services related
to gambling, or (iii) 10% of its total annual revenue from the manufactur-
ing of weapons systems. Additionally, the Portfolio does not invest in any
company which derives its total annual revenue primarily from non-consumer
sales to the military, or which owns or operates one or more nuclear power
facilities or is a major supplier of nuclear power services.

The information used by N&B Management in evaluating prospective in-
vestments for conformity with the Social Policy is obtained primarily from
services that specialize in reporting information from issuers or from
agencies that oversee issuers' activities or compliance with laws and reg-
ulations. Additionally, the information may come from public interest
groups and from N&B Management's discussions with company representatives.

Not every issuer selected by N&B Management will demonstrate leadership
in each category of the Social Policy. The social records of most compa-
nies are written in shades of gray. For example, a company may have a pro-
gressive record in employee relations and community affairs but a poor one
on product marketing issues. Another company may have a mixed record
within a single area. Finally, it is often difficult to distinguish be-
tween a substantive commitment and public relations. This principle works
both ways: there are many companies with excellent records on social is-
sues that maintain a low profile for one reason or another. Taking these
factors into consideration, N&B Management emphasizes the overall direc-
tion that companies take toward demonstrating leadership in the areas of
social impact, paying particular attention to progress achieved toward
these goals.
If securities held by the Portfolio no longer satisfy the Social Poli-
cy, the Portfolio will seek to dispose of the securities as soon as rea-
sonably practicable, which may cause the Portfolio to sell the securities
at a time not desirable from a purely financial standpoint.

12
<PAGE>

Short-Term Trading; Portfolio Turnover
- --------------------------------------------------------------------------------

Although the Portfolio does not purchase securities with the intention
of profiting from short-term trading, the Portfolio may sell portfolio se-
curities when N&B Management believes that such action is advisable. The
portfolio turnover rate for the Portfolio is set forth under "Notes to Fi-
nancial Highlights."

Borrowings
- --------------------------------------------------------------------------------

The Portfolio has a fundamental policy that it may not borrow money,
except that it may (1) borrow money from banks for temporary or emergency
purposes and not for leveraging or investment and (2) enter into reverse
repurchase agreements for any purpose, so long as the aggregate amount of
borrowings and reverse repurchase agreements does not exceed one-third of
the Portfolio's total assets (including the amount borrowed) less liabili-
ties (other than borrowings). The Portfolio does not expect to borrow mon-
ey. As a non-fundamental policy, the Portfolio may not purchase portfolio
securities if its outstanding borrowings, including reverse repurchase
agreements, exceed 5% of its total assets.

13
<PAGE>

PERFORMANCE INFORMATION

The performance of the Fund is commonly measured as TOTAL RETURN. TOTAL
RETURN is the change in value of an investment in a fund over a particular
period, assuming that all distributions have been reinvested. Thus, total
return reflects dividend income, other distributions, and variations in
share prices from the beginning to the end of a period.

An average annual total return is a hypothetical rate of return that,
if achieved annually, would result in the same cumulative total return as
was actually achieved for the period. This smooths out variations in per-
formance. Past results do not, of course, guarantee future performance.
Share prices may vary, and your shares when redeemed may be worth more or
less than your original purchase price.

The Fund's average annual total returns for the period ended August 31,
1995 (the most recent fiscal year-end of the Fund) of a one-year invest-
ment in the Fund and of an investment in the Fund since its inception were
18.95% and 14.25%, respectively. Had N&B Management not waived certain
fees, total return would have been lower. Further information regarding
the Fund's performance is presented in its annual report to shareholders,
which is available without charge by calling the Plan at 212-306-7760.

Total Return Information
- --------------------------------------------------------------------------------

You can obtain current performance information about the Fund by call-
ing the Plan at 212-306-7760.

14
<PAGE>

SPECIAL INFORMATION REGARDING ORGANIZATION, CAPITALIZATION, AND
OTHER MATTERS

The Fund
- --------------------------------------------------------------------------------

The Fund is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated May 6, 1993. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a
mutual fund. The Trust has six separate series. The Fund invests all of
its net investable assets in the Portfolio, receiving a beneficial inter-
est in the Portfolio. The trustees of the Trust may establish additional
series or classes of shares, without the approval of shareholders. The as-
sets of a series belong only to that series, and the liabilities of a se-
ries are borne solely by that series and no other.
DESCRIPTION OF SHARES. The Fund is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share).
Shares of the Fund represent equal proportionate interests in the assets
of the Fund only and have identical voting, dividend, redemption, liquida-
tion, and other rights. All shares issued are fully paid and non-assessa-
ble, and shareholders have no preemptive or other right to subscribe to
any additional shares.
SHAREHOLDER MEETINGS. The trustees of the Trust do not intend to hold
annual meetings of shareholders of the Fund. The trustees will call spe-
cial meetings of shareholders of the Fund only if required under the 1940
Act or in their discretion or upon the written request of holders of 10%
or more of the outstanding shares of the Fund entitled to vote.

CERTAIN PROVISIONS OF TRUST INSTRUMENT. Under Delaware law, the share-
holders of the Fund will not be personally liable for the obligations of
the Fund; a shareholder is entitled to the same limitation of personal li-
ability extended to shareholders of corporations. To guard against the
risk that Delaware law might not be applied in other states, the Trust In-
strument requires that every written obligation of the Trust or the Fund
contain a statement that such obligation may be enforced only against the
assets of the Trust or Fund and provides for indemnification out of Trust
or Fund property of any shareholder nevertheless held personally liable
for Trust or Fund obligations, respectively.

15
<PAGE>

The Portfolio
- --------------------------------------------------------------------------------

The Portfolio is a separate series of Managers Trust, a New York common
law trust organized as of December 1, 1992. Managers Trust is registered
under the 1940 Act as a diversified, open-end management investment compa-
ny. Managers Trust has six separate portfolios. The assets of the Portfo-
lio belong only to the Portfolio, and the liabilities of the Portfolio are
borne solely by the Portfolio and no other.

FUND'S INVESTMENT IN THE PORTFOLIO. The Fund is a "feeder fund" that
seeks to achieve its investment objective by investing all of its net
investable assets in the Portfolio, which is a "master fund." The Portfo-
lio, which has the same investment objective, policies and limitations as
the Fund, in turn invests in securities; the Fund thus acquires an indi-
rect interest in those securities. Historically, N&B Management, which is
the administrator of the Fund and the investment manager of the Portfolio,
has sponsored, with Neuberger&Berman, traditionally structured funds since
1950. However, it has operated 12 master funds and 20 feeder funds since
August 1993 and now operates 21 master funds and 30 feeder funds. This
"master/feeder fund" structure is depicted in the "Summary" on page 3.

The Fund's investment in the Portfolio is in the form of a non-trans-
ferable beneficial interest. Members of the general public may not pur-
chase a direct interest in the Portfolio. Neuberger&Berman Socially Re-
sponsive Fund, a mutual fund that is a series of Neuberger&Berman Equity
Funds ("N&B Equity Funds"), invests all of its net investable assets in
the Portfolio. Neuberger&Berman Socially Responsive Trust, a mutual fund
that is a series of Neuberger&Berman Equity Assets ("N&B Equity Assets")
and is expected to commence operations in early 1996, will invest all of
its net investable assets in the Portfolio. The shares of Neuberger&
Berman Socially Responsive Fund (but not of Neuberger&Berman Socially Re-
sponsive Trust) are available for purchase by members of the general pub-
lic. The Portfolio may also permit other investment companies and/or other
institutional investors to invest in the Portfolio. All investors will in-
vest in the Portfolio on the same terms and conditions as the Fund and
will pay a proportionate share of the Portfolio's expenses. The Fund does
not sell its shares directly to members of the general public. Other in-
vestors in the Portfolio (including the series of N&B Equity Funds) that
might sell shares to members of the general public are not required to
sell their shares at the same public offering price as the Fund, could
have a different administration fee and expenses than the Fund, and (ex-
cept N&B Equity Funds) might charge a sales commission. Therefore, Fund
shareholders may have different returns than shareholders in another in-
vestment company that invests exclusively in the Portfolio. Information
regarding any fund that may invest in the Portfolio in the future will be
available from N&B Management by calling 800-877-9700.

16
<PAGE>

The trustees of the Trust believe that investment in the Portfolio by
the series of N&B Equity Funds or N&B Equity Assets or other potential in-
vestors in addition to the Fund may enable the Portfolio to realize econo-
mies of scale that could reduce operating expenses, thereby producing
higher returns and benefitting all shareholders. However, the Fund's in-
vestment in the Portfolio may be affected by the actions of other large
investors in the Portfolio, if any. For example, if a large investor in
the Portfolio (other than the Fund) redeemed its interest in the Portfo-
lio, the Portfolio's remaining investors (including the Fund) might, as a
result, experience higher pro rata operating expenses, thereby producing
lower returns.

The Fund may withdraw its entire investment from the Portfolio at any
time, if the trustees of the Trust determine that it is in the best inter-
ests of the Fund and its shareholders to do so. The Fund might withdraw,
for example, if there were other investors in the Portfolio with power to,
and who did by a vote of all investors (including the Fund), change the
investment objective, policies, or limitations of the Portfolio in a man-
ner not acceptable to the trustees of the Trust. A withdrawal could result
in a distribution in kind of portfolio securities (as opposed to a cash
distribution) by the Portfolio to the Fund. That distribution could result
in a less diversified portfolio of investments for the Fund and could af-
fect adversely the liquidity of the Fund's investment portfolio. If the
Fund decided to convert those securities to cash, it usually would incur
brokerage fees or other transaction costs. If the Fund withdrew its in-
vestment from the Portfolio, the trustees would consider what action might
be taken, including the investment of all of the Fund's net investable as-
sets in another pooled investment entity having substantially the same in-
vestment objective as the Fund or the retention by the Fund of its own in-
vestment manager to manage its assets in accordance with its investment
objective, policies, and limitations. The inability of the Fund to find a
suitable replacement could have a significant impact on shareholders.

INVESTOR MEETINGS AND VOTING. The Portfolio normally will not hold
meetings of investors except as required by the 1940 Act. Each investor in
the Portfolio will be entitled to vote in proportion to its relative bene-
ficial interest in the Portfolio. On most issues subjected to a vote of
investors, the Fund will solicit proxies from its shareholders and will
vote its interest in the Portfolio in proportion to the votes cast by the
Fund's shareholders. If there are other investors in the Portfolio, there
can be no assurance that any issue that receives a majority of the votes
cast by Fund shareholders will receive a majority of votes cast by all
Portfolio investors; indeed, if other investors hold a majority interest
in the Portfolio, they could have voting control of the Portfolio.

17
<PAGE>

circumstances in which the Portfolio had inadequate insurance and was un-
able to meet its obligations out of its assets. Upon liquidation of the
Portfolio, investors would be entitled to share pro rata in the net assets
of the Portfolio available for distribution to investors.

18
<PAGE>

HOW TO BUY AND SELL SHARES

YOU CAN BUY AND SELL (REDEEM) SHARES OF THE FUND ONLY AS SET FORTH IN
THE PLAN. Shares are purchased and sold at the next price calculated on a
day the New York Stock Exchange ("NYSE") is open, after your purchase or
sales order is received and accepted by the trustee of the Plan as set
forth in the Plan. Prices for shares of the Fund are usually calculated as
of 4 p.m. Eastern time. The Plan may be closed on days when the NYSE is
open. As a result, the prices for Fund shares may be significantly af-
fected on days when you have no access to the Plan.

Other Information
- --------------------------------------------------------------------------------

.The Plan must pay for shares it purchases in U.S. dollars.

. The Fund has the right to suspend the offering of its shares for a
period of time. The Fund also has the right to accept or reject a
purchase order in its sole discretion.

. Redemption proceeds will be paid to the Plan in the manner and at the
times agreed with the Fund, but in any case within three calendar
days (under unusual circumstances the Fund may take longer, as per-
mitted by law).

. The Fund may suspend redemptions or postpone payments on days when
the NYSE is closed (besides weekends and holidays), when trading on
the NYSE is restricted, or as permitted by the Securities and Ex-
change Commission.

19
<PAGE>

SHARE INFORMATION

Share Prices and Net Asset Value
- --------------------------------------------------------------------------------

The Fund's shares are bought or sold at a price that is the Fund's net
asset value ("NAV") per share. The NAVs for the Fund and the Portfolio are
calculated by subtracting liabilities from total assets (in the case of
the Portfolio, the market value of the securities the Portfolio holds plus
cash and other assets; in the case of the Fund, its percentage interest in
the Portfolio, multiplied by the Portfolio's NAV, plus any other assets).
The Fund's per share NAV is calculated by dividing its NAV by the number
of Fund shares outstanding and rounding the result to the nearest full
cent. The Fund and the Portfolio calculate their NAVs as of the close of
regular trading on the NYSE, usually 4 p.m. Eastern time, on each day the
NYSE is open. The Portfolio values securities (including options) listed
on the NYSE, the American Stock Exchange, or other national securities ex-
changes or quoted on Nasdaq, and other securities for which market quota-
tions are readily available, at the last sale price on the day the securi-
ties are being valued. If there is no sale of such a security on that day,
that security is valued at the mean between its closing bid and asked
prices. The Portfolio values all other securities and assets, including
restricted securities, by a method that the trustees of Managers Trust be-
lieve accurately reflects fair value.

20
<PAGE>

DIVIDENDS, OTHER DISTRIBUTIONS, AND TAXES

The Fund distributes substantially all of its share of any net invest-
ment income (net of the Fund's expenses), net realized capital gains, and
net realized gains from foreign currency transactions earned or realized
by the Portfolio, normally in December.

Distribution Options
- --------------------------------------------------------------------------------

REINVESTMENT IN SHARES. All dividends and other distributions paid on
shares of the Fund are automatically reinvested in additional shares of
the Fund, unless the Plan elects to receive them in cash. Dividends and
other distributions are reinvested at the Fund's per share NAV, usually as
of the date the dividend or other distribution is payable.

DISTRIBUTIONS IN CASH. The Plan may elect to receive dividends in cash,
with other distributions being reinvested in additional Fund shares, or to
receive all dividends and other distributions in cash.

Taxes
- --------------------------------------------------------------------------------

The Fund intends to continue to qualify for treatment as a regulated
investment company under the Internal Revenue Code of 1986, as amended
("Code"), so that it will be relieved of federal income tax on that part
of its taxable income and realized gains that it distributes to the Plan.

Fund shares currently are offered only to the trustee of the Plan act-
ing on behalf of the participants in the Plan. Because the Plan is an eli-
gible deferred compensation plan under section 457 of the Code, taxes on
distributions from the Fund to the Plan are deferred. Individual partici-
pants in the Plan should consult the Plan documents and their own tax ad-
visers for information on the tax consequences associated with participat-
ing in an investment in the Fund through the Plan. See the SAI for
additional tax information.

21
<PAGE>

MANAGEMENT AND ADMINISTRATION

Trustees and Officers
- --------------------------------------------------------------------------------

The trustees of the Trust and the trustees of Managers Trust, who are
currently the same individuals, have oversight responsibility for the op-
erations of the Fund and the Portfolio, respectively. The SAI contains
general background information about each trustee and officer of the Trust
and of Managers Trust. The trustees and officers of the Trust and of Man-
agers Trust who are officers and/or directors of N&B Management and/or
partners of Neuberger&Berman serve without compensation from the Fund or
the Portfolio. The trustees of the Trust and of Managers Trust, including
a majority of those trustees who are not "interested persons" (as defined
in the 1940 Act) of the Fund, have adopted written procedures reasonably
appropriate to deal with potential conflicts of interest between the Trust
and Managers Trust, including, if necessary, creating a separate board of
trustees of Managers Trust.

Investment Manager, Administrator, Distributor, and Sub-Adviser
- --------------------------------------------------------------------------------

N&B Management serves as the investment manager of the Portfolio, as
administrator of the Fund, and as distributor of the shares of the Fund.
N&B Management and its predecessor firms have specialized in the manage-
ment of no-load mutual funds since 1950. In addition to serving the Port-
folio, N&B Management currently serves as investment manager of other mu-
tual funds. Neuberger&Berman, which acts as sub-adviser for the Portfolio
and other mutual funds managed by N&B Management, also serves as invest-
ment adviser of three investment companies. The mutual funds managed by
N&B Management and Neuberger&Berman had aggregate net assets of approxi-
mately $11.4 billion as of September 30, 1995.

As sub-adviser, Neuberger&Berman furnishes N&B Management with invest-
ment recommendations and research without added cost to the Portfolio.
Neuberger&Berman has advised clients in selecting socially responsive
investments since 1990. Neuberger&Berman is a member firm of the NYSE and
other principal exchanges and acts as the Portfolio's principal broker in
the purchase and sale of its securities. Neuberger&Berman and its affili-
ates, including N&B Management, manage securities accounts that had ap-
proximately $37.6 billion of assets as of September 30, 1995. All of the
voting stock of N&B Management is owned by individuals who are general
partners of Neuberger&Berman.

Janet Prindle and Farha-Joyce Haboucha are primarily responsible for
the day-to-day management of the Portfolio. Ms. Prindle, a Vice President
of N&B

22
<PAGE>

Management since November 1993, has been a general partner of
Neuberger&Berman since 1985. Ms. Haboucha has been a Vice President of N&B
Management since November 1994 and an employee of Neuberger&Berman since
1986. Mmes. Prindle and Haboucha, who are Co-Directors of Socially Respon-
sive Investment Services at Neuberger&Berman, have been researching and
developing corporate responsibility criteria as they apply to investments
since 1989. They have been managing money using these criteria since 1990.
Ms. Prindle has been responsible for Neuberger&Berman SOCIALLY RESPONSIVE
Portfolio since its inception in March 1994.
Neuberger&Berman acts as the principal broker for the Portfolio in the
purchase and sale of portfolio securities and in the sale of covered call
options, and for those services receives brokerage commissions. In effect-
ing securities transactions, the Portfolio seeks to obtain the best price
and execution of orders. For more information, see the SAI.

The partners and employees of Neuberger&Berman and officers and employ-
ees of N&B Management, together with their families, have invested over
$100 million of their own money in Neuberger&Berman FundsSM.

To mitigate the possibility that the Portfolio will be adversely af-
fected by employees' personal trading, the Trust, Managers Trust, N&B Man-
agement, and Neuberger&Berman have adopted policies that restrict securi-
ties trading in the personal accounts of portfolio managers and others who
normally come into possession of information on portfolio transactions.

Expenses
- --------------------------------------------------------------------------------

N&B Management provides investment management services to the Portfolio
that include, among other things, making and implementing investment deci-
sions and providing facilities and personnel necessary to operate the
Portfolio. N&B Management provides administrative services to the Fund
that include furnishing similar facilities and personnel for the Fund. For
such administrative services, the Fund pays N&B Management a fee at the
annual rate of 0.05% of the Fund's average daily net assets. With the
Fund's consent, N&B Management is authorized to subcontract to third par-
ties some of its responsibilities under the administration agreement. For
investment management services, the Portfolio pays N&B Management a fee at
the annual rate of 0.55% of the first $250 million of the Portfolio's av-
erage 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 mil-
lion, and 0.425% of average daily net assets in excess of $1.5 billion.
During its 1995 fiscal

23
<PAGE>

year, the Fund accrued administration fees, and a pro rata portion of the
Portfolio's management fees, as a percentage of the Fund's average daily
net assets, of 0.60%.

See "Expense Information -- Annual Fund Operating Expenses" for antici-
pated fees for the current fiscal year.
The Fund bears all expenses of its operations other than those borne by
N&B Management as administrator of the Fund and as distributor of its
shares. The Portfolio bears all expenses of its operations other than
those borne by N&B Management as investment manager of the Portfolio.
These expenses include, but are not limited to, for the Fund and Portfo-
lio, legal and accounting fees, and compensation for trustees who are not
affiliated with N&B Management; for the Fund, transfer agent fees, and the
cost of printing and sending reports and proxy materials to shareholders;
and for the Portfolio, custodial fees for securities.

N&B Management has voluntarily undertaken until December 31, 1996 to
reimburse the Fund for its Operating Expenses and its pro rata share of
the Portfolio's Operating Expenses which exceed, in the aggregate, 0.60%
per annum of the Fund's average daily net assets. N&B Management may ter-
minate this undertaking to the Fund by giving at least 60 days' prior
written notice to the Fund. The effect of the reimbursement by N&B Manage-
ment is to reduce the Fund's expenses and thereby increase its total re-
turn.

During its 1995 fiscal year, the Fund bore Total Operating Expenses as
a percentage of its average daily net assets, after taking into considera-
tion N&B Management's expense reimbursement, of 0.60%.

Transfer Agent
- --------------------------------------------------------------------------------
The Fund's transfer agent is State Street Bank and Trust Company
("State Street"). State Street administers purchases, redemptions, and
transfers of Fund shares with respect to the Plan and the payment of divi-
dends and other distributions to the Plan. Questions should be directed to
the Plan's address.

24
<PAGE>

DESCRIPTION OF INVESTMENTS

In addition to common stocks and other securities referred to in "In-
vestment Program" above, the Portfolio may make the following investments,
among others, individually or in combination, although it may not neces-
sarily buy all of the types of securities or use all of the investment
techniques that are described. For additional information on the following
investments or other types of investments which the Portfolio may make,
see the SAI.

ILLIQUID SECURITIES. The Portfolio may invest up to 10% of its net as-
sets in illiquid securities, which are securities that cannot be expected
to be sold within seven days at approximately the price at which they are
valued. Due to the absence of an active trading market, the Portfolio may
experience difficulty in valuing or disposing of illiquid securities. N&B
Management determines the liquidity of the Portfolio's securities, under
supervision of the trustees of Managers Trust. Securities that are freely
tradeable in their country of origin or in their principal market are not
considered illiquid securities even if they are not registered for sale in
the U.S.

RESTRICTED SECURITIES AND RULE 144A SECURITIES. The Portfolio may in-
vest in restricted securities and Rule 144A securities. Restricted securi-
ties cannot be sold to the public without registration under the Securi-
ties Act of 1933 ("1933 Act"). Unless registered for sale, these
securities can be sold only in privately negotiated transactions or pursu-
ant to an exemption from registration. Restricted securities are generally
considered illiquid. Rule 144A securities, although not registered, may be
resold to qualified institutional buyers in accordance with Rule 144A un-
der the 1933 Act. Unregistered securities may also be sold abroad pursuant
to Regulation S under the 1933 Act. N&B Management, acting pursuant to
guidelines established by the trustees of Managers Trust, may determine
that some restricted securities are liquid.

FOREIGN SECURITIES. The Portfolio may invest up to 10% of the value of
its total assets in foreign securities. Foreign securities are those of
issuers organized and doing business principally outside the U.S., includ-
ing non-U.S. governments, their agencies, and instrumentalities. The 10%
limitation does not apply to foreign securities that are denominated in
U.S. dollars, including ADRs. Foreign securities (including those denomi-
nated in U.S. dollars, such as ADRs) are affected by political or economic
developments in foreign countries. Foreign companies may not be subject to
accounting standards or governmental supervision comparable to U.S. compa-
nies, and there may be less public information about their operations. In
addition, foreign markets may be less liquid or more volatile than U.S.
markets and may offer less protection to investors. Investments in foreign
securities that are not denominated in U.S. dollars (including those made
through ADRs) may be subject to special risks,

25
<PAGE>

such as governmental regulation of foreign exchange transactions and
changes in rates of exchange with the U.S. dollar, irrespective of the
performance of the underlying investment.

COVERED CALL OPTIONS. The Portfolio may try to reduce the risk of secu-
rities price changes (hedge) or generate income by writing (selling) cov-
ered call options against securities held in its portfolio having a market
value not exceeding 10% of its net assets and may purchase call options in
related closing transactions. The purchaser of a call option acquires the
right to buy a portfolio security at a fixed price during a specified pe-
riod. The maximum price the seller may realize on the security during the
option period is the fixed price; the seller continues to bear the risk of
a decline in the security's price, although this risk is reduced by the
premium received for the option.

The primary risks in using call options are (1) possible lack of a liq-
uid secondary market for options and the resulting inability to close out
options when desired; (2) the fact that the skills needed to use options
are different from those needed to select the Portfolio's securities; (3)
the fact that, although use of these instruments for hedging purposes can
reduce the risk of loss, they also can reduce the opportunity for gain by
offsetting favorable price movements in underlying investments; and (4)
the possible inability of the Portfolio to purchase or sell a security at
a time that would otherwise be favorable for it to do so, or the possible
need for the Portfolio to sell a security at a disadvantageous time, due
to its need to maintain "cover" in connection with its use of these in-
struments. Options are considered "derivatives."

CONVERTIBLE SECURITIES. The Portfolio may invest up to 20% of its net
assets in convertible securities. A convertible security is a bond, deben-
ture, note, preferred stock, or other security that may be converted into
or exchanged for a prescribed amount of common stock of the same or a dif-
ferent issuer within a particular period of time at a specified price or
formula. The Portfolio does not intend to purchase any convertible securi-
ties that are not investment grade. "Investment grade" debt securities are
those receiving one of the four highest ratings from Moody's Investors
Service, Inc. ("Moody's"), Standard & Poor's, or another nationally recog-
nized statistical rating organization or, if unrated by any NRSRO, deemed
by N&B Management to be of comparable quality to such rated securities
("Comparable Unrated Securities") under guidelines established by the
trustees of Managers Trust. Moody's deems securities rated in its fourth
highest category (Baa) to have speculative characteristics; a change in
economic factors could lead to a weakened capacity of the issuer to make
interest and principal payments.

26
<PAGE>

U.S. GOVERNMENT AND AGENCY SECURITIES. The Portfolio may purchase U.S.
Government and Agency Securities. U.S. Government securities are obliga-
tions of the U.S. Treasury backed by the full faith and credit of the
United States. U.S. Government Agency Securities are issued or guaranteed
by U.S. Government agencies or instrumentalities; by other U.S. Govern-
ment-sponsored enterprises, such as the Government National Mortgage Asso-
ciation ("GNMA"), Federal National Mortgage Association ("FNMA"), Federal
Home Loan Mortgage Corporation ("FHLMC"), Student Loan Mortgage Associa-
tion, and Tennessee Valley Authority; and by various federally chartered
or sponsored banks. Some U.S. Government Agency securities are supported
by the full faith and credit of the United States, while others may be
supported by the issuer's ability to borrow from the U.S. Treasury, sub-
ject to the Treasury's discretion in certain cases, or only by the credit
of the issuer. U.S. Government Agency securities include U.S. Government
mortgage-backed securities. The market prices of U.S. Government securi-
ties are not guaranteed by the Government and generally fluctuate with
changing interest rates. The value of the fixed income securities in which
the Portfolio may invest is likely to decline in times of rising interest
rates. Conversely, when rates fall, the value of the Portfolio's fixed in-
come investments is likely to rise.

SHORT SALES AGAINST-THE-BOX. The Portfolio may make short sales
against-the-box, in which it sells securities short only if it owns or has
the right to obtain without payment of additional consideration an equal
amount of the same type of securities sold. Short selling against-the-box
may defer recognition of gains or losses to a later tax period.
REPURCHASE AGREEMENTS/SECURITIES LOANS. In a repurchase agreement, the
Portfolio buys a security from a Federal Reserve member bank or a securi-
ties dealer and simultaneously agrees to sell it back at a higher price,
at a specified date, usually less than a week later. The underlying secu-
rities must fall within the Portfolio's investment policies and limita-
tions. The Portfolio also may lend portfolio securities to banks, broker-
age firms, or institutional investors to earn income. Costs, delays, or
losses could result if the selling party to a repurchase agreement or the
borrower of portfolio securities becomes bankrupt or otherwise defaults.
N&B Management monitors the creditworthiness of sellers and borrowers.

27
<PAGE>

DIRECTORY

INVESTMENT MANAGER, ADMINISTRATOR, AND DISTRIBUTOR

Neuberger&Berman Management Incorporated 605 Third Avenue 2nd Floor New
York, NY 10158-0180

PLAN

Deferred Compensation Plan of the City of New York and Related Agencies and
Instrumentalities 40 Rector Street, 3rd Floor New York, NY 10006 212-306-
7760

SUB-ADVISER
Neuberger&Berman, L.P. 605 Third Avenue New York, NY 10158-3698

CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company 225 Franklin Street Boston, MA 02110

Correspondence should be sent to:

Deferred Compensation Plan of the City of New York and Related Agencies and
Instrumentalities 40 Rector Street, 3rd Floor New York, NY 10006 212-306-
7760

LEGAL COUNSEL

Kirkpatrick & Lockhart LLP 1800 M Street, NW Washington, DC 20036-5891

Neuberger&Berman NYCDC Socially Responsive Trust is a service mark of
Neuberger&Berman Management Inc.
(C)1995 Neuberger&Berman Management Inc.

28
<PAGE>

NEUBERGER&BERMAN MANAGEMENT INC.

605 THIRD AVENUE 2ND FLOOR
NEW YORK, NY 10158-0180

DEFERRED COMPENSATION PLAN
OF THE CITY OF NEW YORK
AND RELATED AGENCIES
AND INSTRUMENTALITIES
212.306.7760

This wrapper is not part of the Prospectus.
[LOGO] PRINTED ON RECYCLED PAPER
WITH SOY BASED INKS NBEP0061295

<PAGE>

________________________________________________________________________

NEUBERGER & BERMAN NYCDC SOCIALLY RESPONSIVE TRUST AND PORTFOLIO

STATEMENT OF ADDITIONAL INFORMATION

DATED DECEMBER 15, 1995

A No-Load Mutual Fund
605 Third Avenue, 2nd Floor, New York, NY 10158- 0180

________________________________________________________________________

Neuberger & Berman NYCDC Socially Responsive Trust ("Fund"), a
series of Neuberger & Berman Equity Trust ("Trust"), is a no-load mutual
fund that offers shares pursuant to a Prospectus dated December 15, 1995.
The Fund invests all of its net investable assets in Neuberger & Berman
Socially Responsive Portfolio ("Portfolio"). You can buy, own, and sell
Fund shares only through the Deferred Compensation Plan of the City of New
York and Related Agencies and Instrumentalities ("Plan").

The Fund's Prospectus provides basic information that an
investor should know before investing. A copy of the Prospectus may be
obtained, without charge, from the Plan by calling
212-306-7760.

This Statement of Additional Information ("SAI") is not a
prospectus and should be read in conjunction with the Prospectus.

No person has been authorized to give any information or to make
any representations not contained in the Prospectus or in this SAI in
connection with the offering made by the Prospectus, and, if given or
made, such information or representations must not be relied upon as
having been authorized by the Fund or its distributor. The Prospectus and
this SAI do not constitute an offering by the Fund or its distributor in
any jurisdiction in which such offering may not lawfully be made.
<PAGE>

Table of Contents

Page

INVESTMENT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 1
Investment Policies and Limitations . . . . . . . . . . . . . . 1
Janet Prindle, Portfolio Manager of the Portfolio . . . . . . . 5
Background Information on Socially Responsive Investing . . . . 5
The Socially Responsive Database . . . . . . . . . . . . . . . 6
Implementation of Social Policy . . . . . . . . . . . . . . . . 8
Additional Investment Information . . . . . . . . . . . . . . . 8

PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 22
Total Return Computations . . . . . . . . . . . . . . . . . . . 22
Comparative Information . . . . . . . . . . . . . . . . . . . . 23
Other Performance Information . . . . . . . . . . . . . . . . . 24

CERTAIN RISK CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . 24

TRUSTEES AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . 25

INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES . . . . . . . . . . 31
Investment Manager and Administrator . . . . . . . . . . . . . 31
Sub-Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Investment Companies Managed . . . . . . . . . . . . . . . . . 34
Management and Control of N&B Management . . . . . . . . . . . 36

DISTRIBUTION ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . . 37

ADDITIONAL REDEMPTION INFORMATION . . . . . . . . . . . . . . . . . . 38
Suspension of Redemptions . . . . . . . . . . . . . . . . . . . 38
Redemptions in Kind . . . . . . . . . . . . . . . . . . . . . . 38

DIVIDENDS AND OTHER DISTRIBUTIONS . . . . . . . . . . . . . . . . . . 38

ADDITIONAL TAX INFORMATION . . . . . . . . . . . . . . . . . . . . . 39
Taxation of the Fund . . . . . . . . . . . . . . . . . . . . . 39
Taxation of the Portfolio . . . . . . . . . . . . . . . . . . . 40

PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . 43
Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . . 47

REPORTS TO SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . 47

CUSTODIAN AND TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . 47

INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . 47

LEGAL COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES . . . . . . . . . 48

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<PAGE>

REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . 48

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 48

Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER . . . . . . . . 49

Appendix B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
THE ART OF INVESTMENT: A CONVERSATION WITH ROY NEUBERGER . . . 52

- ii -
<PAGE>

INVESTMENT INFORMATION

The Fund is a separate series of the Trust, a Delaware business
trust that is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company. The Fund seeks its
investment objective by investing all of its net investable assets in the
Portfolio, which is a series of Equity Managers Trust ("Managers Trust")
that has an investment objective identical to, and a name similar to, that
of the Fund. The Portfolio, in turn, invests in accordance with an
investment objective, policies, and limitations identical to those of the
Fund. (The Trust and Managers Trust, which is an open-end management
investment company managed by Neuberger & Berman Management Incorporated
("N&B Management") are together referred to below as the "Trusts.")

The following information supplements the discussion in the
Prospectus of the investment objective, policies, and limitations of the
Fund and the Portfolio. The investment objective and, unless otherwise
specified, the investment policies and limitations of the Fund and
Portfolio are not fundamental. Although any investment policy or
limitation that is not fundamental may be changed by the trustees of the
Trust ("Fund Trustees") or of Managers Trust ("Portfolio Trustees")
without shareholder approval, the Fund intends to notify its shareholders
before changing its investment objective or implementing any material
change in any non-fundamental policy or limitation. The fundamental
investment policies and limitations of the Fund or the Portfolio may not
be changed without the approval of the lesser of (1) 67% of the total
units of beneficial interest ("shares") of the Fund or Portfolio
represented at a meeting at which more than 50% of the outstanding Fund or
Portfolio shares are represented or (2) a majority of the outstanding
shares of the Fund or Portfolio. This vote is required by the Investment
Company Act of 1940 ("1940 Act") and is referred to in this SAI as a "1940
Act majority vote." Whenever the Fund is called upon to vote on a change
in a fundamental investment policy or limitation of the Portfolio, the
Fund casts its votes thereon in proportion to the votes of its
shareholders at a meeting thereof called for that purpose.

Investment Policies and Limitations

The Fund has the following fundamental investment policy, to
enable it to invest in the Portfolio:

Notwithstanding any other investment policy of the Fund, the
Fund may invest all of its investable assets in an open-end
management investment company having substantially the same
investment objective, policies, and limitations as the Fund.

All other fundamental investment policies and limitations and
the non-fundamental investment policies and limitations of the Fund and
the Portfolio are identical. Therefore, although the following discusses
the investment policies and limitations of the Portfolio, it applies
equally to the Fund.

- 1 -
<PAGE>

The Portfolio's fundamental investment policies and limitations
are as follows:

1. Borrowing. The Portfolio may not borrow money, except that
the Portfolio may (i) borrow money from banks for temporary or emergency
purposes and not for leveraging or investment and (ii) enter into reverse
repurchase agreements for any purpose; provided that (i) and (ii) in
combination do not exceed 33-1/3% of the value of its total assets
(including the amount borrowed) less liabilities (other than borrowings).
If at any time borrowings exceed 33-1/3% of the value of the Portfolio's
total assets, the Portfolio will reduce its borrowings within three days
(excluding Sundays and holidays) to the extent necessary to comply with
the 33-1/3% limitation.

2. Commodities. The Portfolio may not purchase physical
commodities or contracts thereon, unless acquired as a result of the
ownership of securities or instruments, but this restriction shall not
prohibit the Portfolio from purchasing futures contracts or options
(including options on futures contracts, but excluding options or futures
contracts on physical commodities) or from investing in securities of any
kind.

3. Diversification. The Portfolio may not, with respect to
75% of the value of its total assets, purchase the securities of any
issuer (other than securities issued or guaranteed by the U.S. Government
or any of its agencies or instrumentalities) if, as a result, (i) more
than 5% of the value of the Portfolio's total assets would be invested in
the securities of that issuer or (ii) the Portfolio would hold more than
10% of the outstanding voting securities of that issuer.

4. Industry Concentration. The Portfolio may not purchase any
security if, as a result, 25% or more of its total assets (taken at
current value) would be invested in the securities of issuers having their
principal business activities in the same industry. This limitation does
not apply to securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities.

5. Lending. The Portfolio may not lend any security or make
any other loan if, as a result, more than 33-1/3% of its total assets
(taken at current value) would be lent to other parties, except, in
accordance with its investment objective, policies, and limitations, (i)
through the purchase of a portion of an issue of debt securities or (ii)
by engaging in repurchase agreements.

- 2 -
<PAGE>

6. Real Estate. The Portfolio may not purchase real estate
unless acquired as a result of the ownership of securities or instruments,
but this restriction shall not prohibit the Portfolio from purchasing
securities issued by entities or investment vehicles that own or deal in
real estate or interests therein or instruments secured by real estate or
interests therein.

7. Senior Securities. The Portfolio may not issue senior
securities, except as permitted under the 1940 Act.

8. Underwriting. The Portfolio may not underwrite securities
of other issuers, except to the extent that the Portfolio, in disposing of
portfolio securities, may be deemed to be an underwriter within the
meaning of the Securities Act of 1933 ("1933 Act").

The following non-fundamental investment policies and
limitations apply to the Portfolio:

1. Borrowing. The Portfolio may not purchase securities if
outstanding borrowings, including any reverse repurchase agreements,
exceed 5% of its total assets.

2. Lending. Except for the purchase of debt securities and
engaging in repurchase agreements, the Portfolio may not make any loans
other than securities loans.

3. Investments in Other Investment Companies. The Portfolio
may not purchase securities of other investment companies, except to the
extent permitted by the 1940 Act and in the open market at no more than
customary brokerage commission rates. This limitation does not apply to
securities received or acquired as dividends, through offers of exchange,
or as a result of a reorganization, consolidation, or merger.

4. Margin Transactions. The Portfolio may not purchase
securities on margin from brokers or other lenders, except that the Port-
folio may obtain such short-term credits as are necessary for the
clearance of securities transactions. Margin payments in connection with
transactions in futures contracts and options on futures contracts shall
not constitute the purchase of securities on margin and shall not be
deemed to violate the foregoing limitation.

5. Short Sales. The Portfolio may not sell securities short
unless it owns, or has the right to obtain without payment of additional
consideration, securities equivalent in kind and amount to the securities
sold. Transactions in forward contracts, futures contracts and options
shall not constitute selling securities short.

6. Ownership of Portfolio Securities by Officers and Trustees.
The Portfolio may not purchase or retain the securities of any issuer if,

- 3 -
<PAGE>

to the knowledge of N&B Management, those officers and trustees of
Managers Trust and officers and directors of N&B Management who each owns
individually more than 1/2 of 1% of the outstanding securities of such
issuer, together own more than 5% of such securities.

7. Unseasoned Issuers. The Portfolio may not purchase the
securities of any issuer (other than securities issued or guaranteed by
domestic or foreign governments or political subdivisions thereof) if, as
a result, more than 5% of the Portfolio's total assets would be invested
in the securities of business enterprises that, including predecessors,
have a record of less than three years of continuous operation.

8. Illiquid Securities. The Portfolio may not purchase any
security if, as a result, more than 10% of its net assets would be in-
vested in illiquid securities. Illiquid securities include securities
that cannot be sold within seven days in the ordinary course of business
for approximately the amount at which the Portfolio has valued the
securities, such as repurchase agreements maturing in more than seven
days.

9. Foreign Securities. The Portfolio may not invest more than
10% of the value of its total assets in securities of foreign issuers,
provided that this limitation shall not apply to foreign securities
denominated in U.S. dollars, including American Depositary Receipts
("ADRs").

10. Oil and Gas Programs. The Portfolio may not invest in
participations or other direct interests in oil, gas, or other mineral
leases or exploration or development programs, but the Portfolio may
purchase securities of companies that own interests in any of the
foregoing.

11. Real Estate. The Portfolio may not invest in real estate
limited partnerships.

12. Warrants. The Portfolio does not intend to invest in
warrants (but may hold warrants obtained in units or attached to
securities).

Janet Prindle, Portfolio Manager of the Portfolio

How does Janet Prindle manage the Portfolio? "We select
securities through a two phase detection process. The first is financial.
We analyze a universe of companies according to N&B Management's
value-oriented philosophy, looking for stocks which are undervalued for
any number of reasons. We focus on financial fundamentals including
balance sheet ratios and cash flow analysis, and we meet with company
management in an effort to understand how those unrecognized values might
be realized in the market. The second part of the process is social
screening. Our social research is based on the same kind of philosophy
that governs our financial approach: we believe that first-hand knowledge
and experience are our most important tools. Utilizing a proprietary

- 4 -
<PAGE>

database, we do careful, in-depth tracking and we analyze a large number
of companies on some eighty issues in six broad social categories. We use
a wide variety of sources to determine company practices and policies in
these areas, and we analyze performance in light of our knowledge of the
issues and of the best practices in each industry. We understand that,
for many issues and in many industries, absolute standards are elusive and
often counterproductive. Thus, in addition to quantitative measurements,
we place value on such indicators as management commitment, progress,
direction, and industry leadership."

Background Information on Socially Responsive Investing

In an era when many people are concerned about the relationship
between business and society, socially responsive investing ("SRI") is a
mechanism for assuring that investors' social values are reflected in
their investment decisions. As such, SRI is a direct descendent of the
successful effort begun in the early 1970's to encourage companies to
divest their South African operations and subscribe to the Sullivan
Principles. Today, a growing number of individuals and institutions are
applying similar strategies to a broad range of problems.

Although there are many strategies available to the socially
responsive investor, including proxy activism, below-market loans to
community projects, and venture capital, the SRI strategies used by the
Portfolio generally fall into two categories:

Avoidance Investing. Most socially responsive investors seek to
avoid holding securities of companies whose products or policies are seen
as being at odds with the social good. The most common exclusions
historically have involved tobacco companies and weapons manufacturers.

Leadership Investing. A growing number of investors actively
look for companies with progressive programs that are exemplary or
companies which make it their business to try to solve some of the
problems of today's society.

The marriage of social and financial objectives would not have
surprised Adam Smith who was, first and foremost, a moral philosopher.
The Wealth of Nations is firmly rooted in the Enlightenment conviction
that the purpose of capital is the social good and the related belief that
idle capital is both wasteful and unethical. But, what very likely would
have surprised Smith is the sheer complexity of the social issues we face
today and the diversity of our attitudes toward the social good. War and
peace, race and gender, the distribution of wealth, and the conservation
of natural resources -- the social agenda is long and compelling. It is
also something about which reasonable people differ. What should
society's priorities be? What can and should be done about them? And
what is the role of business in addressing them? Since corporations are
on the front lines of so many key issues in today's world, a growing
number of investors feel that a corporation's role cannot be ignored.
This is true of some of the most important issues of the day such as equal
opportunity and the environment.

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<PAGE>

The Socially Responsive Database

Neuberger & Berman, L.P. ("Neuberger & Berman"), the Portfolio's
sub-adviser, maintains a proprietary database of information about the
social impact of the companies it follows. N&B Management uses the
database to evaluate social issues after it deems a stock acceptable from
a financial standpoint for acquisition by the Portfolio. More and more
frequently, however, N&B Management is finding that, by monitoring social
issues, it gains insight into the financial well-being of a company
because of a convergence of social and financial criteria on a company's
bottom line. This is especially evident in the areas of product quality
and marketing, workforce diversity, and the environment. The aim of the
database is to be as accurate, comprehensive, and flexible as possible,
given that much of the information concerning corporate responsibility
comes from subjective sources. Information for the database is gathered
by Neuberger & Berman in many categories and then analyzed by N&B
Management in the following six categories of corporate responsibility:

Workplace Diversity and Employment. N&B Management looks for
companies that show leadership in areas such as employee training and
promotion policies and benefits, such as flextime, generous profit
sharing, and parental leave. N&B Management looks for active programs to
promote women and minorities and takes into account their representation
among the officers and members of an issuer's board of directors. As a
basis for exclusion, N&B Management looks for Equal Employment Opportunity
Act infractions and Occupational Safety and Health Act violations ;
examines each case in terms of severity, frequency, and time elapsed since
the incident; and considers actions taken by the company since the
violation. N&B Management also monitors companies' progress and attitudes
toward these issues.

Environment. A company's impact on the environment depends
largely on the industry. Therefore, N&B Management examines a company's
environmental record vis-a-vis those of its peers in the industry. All
companies operating in an industry with inherently high environmental
risks are likely to have had problems in such areas as toxic chemical
emissions, federal and state fines, and Superfund sites. For these
companies, N&B Management examines their problems in terms of severity,
frequency, and elapsed time. N&B Management then balances the record
against whatever leadership the company may have demonstrated in terms of
environmental policies, procedures, and practices. N&B Management defines
an environmental leadership company as one that puts into place strong
affirmative programs to minimize emissions, promote safety, reduce waste
at the source, insure energy conservation, protect natural resources, and
incorporate recycling into its processes and products. N&B Management
looks for the commitment and active involvement of senior management in
all these areas. Several major manufacturers which still produce
substantial amounts of pollution are among the leaders in developing
outstanding waste source reduction and remediation programs.

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<PAGE>

Product. N&B Management considers company announcements, press
reports, and public interest publications relating to the health, safety,
quality, labeling, advertising, and promotion of both consumer and
industrial products. N&B Management takes note of companies with a strong
commitment to quality and with marketing practices which are ethical and
consumer-friendly. N&B Management pays particular attention to companies
whose products and services promote progressive solutions to social
problems.

Public Health. N&B Management measures the participation of
companies in such industries and markets as alcohol, tobacco, gambling and
nuclear power. N&B Management also considers the impact of products and
marketing activities related to those products on nutritional and other
health concerns, both domestically and in foreign markets.

Weapons. N&B Management keeps track of domestic military sales
and, whenever possible, foreign military sales and categorizes them as
nuclear weapons related, other weapons related, and non-weapon military
supplies, such as micro-chip manufacturers and companies that make
uniforms for military personnel.

Corporate Citizenship. N&B Management gathers information about
a company's participation in community affairs, its policies with respect
to charitable contributions, and its support of education and the arts.
N&B Management looks for companies with a focus, dealing with issues not
just by making financial contributions, but also by asking the questions:
What can we do to help? What do we have to offer? Volunteerism,
high-school mentoring programs, scholarships and grants, and in-kind
donations to specific groups are just a few ways that companies have
responded to these questions.

Implementation of Social Policy

Companies deemed acceptable by N&B Management from a financial
standpoint are analyzed using Neuberger & Berman's database. The
companies are then evaluated by the portfolio managers to determine if the
companies' policies, practices, products, and services withstand scrutiny
in the following major areas of concern: the environment and workplace
diversity and employment. Companies are then further evaluated to
determine their track record in issues and areas of concern such as public
health, weapons, product, and corporate citizenship.

The issues and areas of concern that are tracked lend themselves
to objective analysis in varying degrees. Few, however, can be resolved
entirely on the basis of scientifically demonstrable facts. Moreover, a
substantial amount of important information comes from sources that do not
purport to be disinterested. Thus, the quality and usefulness of the
information in the database depend upon Neuberger & Berman's ability to
tap a wide variety of sources and on the experience and judgement of the
people at N&B Management who interpret the information.

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<PAGE>

In applying the information in the database to stock selection
for the Portfolio, N&B Management considers several factors. N&B
Management examines the severity and frequency of various infractions, as
well as the time elapsed since their occurrence. N&B Management also
takes into account any remedial action which has been taken by the company
relating to these infractions. N&B Management notes any quality
innovations made by the company in its effort to create positive change
and looks at the company's overall social trend.

Additional Investment Information

The Portfolio may make the following investments, among others.
It may not buy all of the types of securities or use all of the investment
techniques that are described.

Repurchase Agreements. Repurchase agreements are agreements
under which the Portfolio purchases securities from a bank that is a
member of the Federal Reserve System or from a securities dealer that
agrees to repurchase the securities from the Portfolio at a higher price
on a designated future date. Repurchase agreements generally are for a
short period of time, usually less than a week. The Portfolio may not
enter into a repurchase agreement with a maturity of more than seven days
if, as a result, more than 10% of the value of its net assets would then
be invested in such repurchase agreements and other illiquid securities.
The Portfolio may enter into a repurchase agreement only if (1) the
underlying securities are of the type that the Portfolio's investment
policies and limitations would allow it to purchase directly, (2) the
market value of the underlying securities, including accrued interest, at
all times equals or exceeds the value of the repurchase agreement, and
(3) payment for the underlying securities is made only upon satisfactory
evidence that the securities are being held for the Portfolio's account by
its custodian or a bank acting as the Portfolio's agent.

Securities Loans. In order to realize income, the Portfolio may
lend portfolio securities with a value not exceeding 33-1/3% of its total
assets to banks, brokerage firms, or institutional investors judged
creditworthy by N&B Management. Borrowers are required continuously to
secure their obligations to return securities on loan from the Portfolio
by depositing collateral in a form determined to be satisfactory by the
Portfolio Trustees. The collateral, which must be marked to market daily,
must be equal to at least 100% of the market value of the loaned securi-
ties, which will also be marked to market daily. N&B Management believes
the risk of loss on these transactions is slight because, if a borrower
were to default for any reason, the collateral should satisfy the obli-
gation. However, as with other extensions of secured credit, loans of
portfolio securities involve some risk of loss of rights in the collateral
should the borrower fail financially.

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<PAGE>

Restricted Securities and Rule 144A Securities. The Portfolio
may invest in restricted securities, which are securities that may not be
sold to the public without an effective registration statement under the
1933 Act or, if they are unregistered, may be sold only in a privately
negotiated transaction or pursuant to an exemption from registration. In
recognition of the increased size and liquidity of the institutional
market for unregistered securities and the importance of institutional
investors in the formation of capital, the SEC has adopted Rule 144A under
the 1933 Act. Rule 144A is designed further to facilitate efficient
trading among institutional investors by permitting the sale of certain
unregistered securities to qualified institutional buyers. To the extent
privately placed securities held by the Portfolio qualify under Rule 144A,
and an institutional market develops for those securities, the Portfolio
likely will be able to dispose of the securities without registering them
under the 1933 Act. To the extent that institutional buyers become, for a
time, uninterested in purchasing these securities, investing in Rule 144A
securities could increase the level of the Portfolio's illiquidity. N&B
Management, acting under guidelines established by the Portfolio Trustees,
may determine that certain securities qualified for trading under Rule
144A are liquid. Foreign securities that can be freely sold in the
markets in which they are principally traded are not considered to be
restricted. Regulation S under the 1933 Act permits the sale abroad of
securities that are not registered for sale in the United States.

Where registration is required, the Portfolio may be obligated
to pay all or part of the registration expenses, and a considerable period
may elapse between the decision to sell and the time the Portfolio may be
permitted to sell a security under an effective registration statement.
If, during such a period, adverse market conditions were to develop, the
Portfolio might obtain a less favorable price than prevailed when it
decided to sell. To the extent privately placed securities, including
Rule 144A securities, are illiquid, purchases thereof will be subject to
the Portfolio's 10% limit on investments in illiquid securities.
Restricted securities for which no market exists are priced at fair value
as determined in accordance with procedures approved and periodically
reviewed by the Portfolio Trustees.

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<PAGE>

Foreign Securities. The Portfolio may invest in U.S.
dollar-denominated securities issued by foreign issuers (including banks,
governments, and quasi- governmental organizations) and foreign branches
of U.S. banks, including negotiable certificates of deposit ("CDs"),
bankers' acceptances and commercial paper. These investments are subject
to the Portfolio's quality standards. While investments in foreign
securities are intended to reduce risk by providing further diver-
sification, such investments involve sovereign and other risks, in
addition to the credit and market risks normally associated with domestic
securities. These additional risks include the possibility of adverse
political and economic developments (including political instability) and
the potentially adverse effects of unavailability of public information
regarding issuers, less governmental supervision and regulation of
financial markets, reduced liquidity of certain financial markets, and the
lack of uniform accounting, auditing, and financial standards or the
application of standards that are different or less stringent than those
applied in the United States.

Foreign securities often trade with less frequency and in less
volume than domestic securities and therefore may exhibit greater price
volatility. Additional costs associated with an investment in foreign
securities may include higher custodial fees than apply to domestic
custody arrangements, and transaction costs of foreign currency
conversions.

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<PAGE>

Foreign markets also have different clearance and settlement
procedures, and, in certain markets, there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Such
delays in settlement could result in temporary periods when a portion of
the assets of the Portfolio are uninvested and no return is earned
thereon. The inability of the Portfolio to make intended security
purchases due to settlement problems could cause the Portfolio to miss
attractive investment opportunities. Inability to dispose of portfolio
securities due to settlement problems could result in losses to the
Portfolio due to subsequent declines in value of the portfolio securities,
or, if the Portfolio has entered into a contract to sell the securities,
could result in possible liability to the purchaser.

In order to limit the risk inherent in investing in foreign
currency denominated securities, the Portfolio may not purchase any such
security if, after such purchase, more than 10% of its total assets (taken
at market value) would be invested in foreign currency denominated securi-
ties. Within that limitation, however, the Portfolio is not restricted in
the amount it may invest in securities denominated in any one foreign
currency.

Futures Contracts and Options Thereon. The Portfolio may
purchase and sell interest rate futures contracts, stock and bond index
futures contracts, and foreign currency futures contracts and options
thereon in an attempt to hedge against changes in the prices of securities
or, in the case of foreign currency futures and options thereon, to hedge
against expected changes in prevailing currency exchange rates. Because
the futures markets may be more liquid than the cash markets, the use of
futures contracts permits the Portfolio to enhance portfolio liquidity and
maintain a defensive position without having to sell portfolio securities.
The Portfolio does not engage in transactions in futures or options on
futures for speculation. The Portfolio views investment in (i) interest
rate and securities index futures and options thereon as a maturity
management device and/or a device to reduce risk or preserve total return
in an adverse environment for the hedged securities, and (ii) foreign
currency futures and options thereon as a means of establishing more
definitely the effective return on securities denominated in foreign
currencies that are held or intended to be acquired by the Portfolio.

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<PAGE>

Futures contracts and options thereon are traded only on national futures
exchanges.

A "sale" of a futures contract (or a "short" futures position)
entails the assumption of a contractual obligation to deliver the
securities or currency underlying the contract at a specified price at a
specified future time. A "purchase" of a futures contract (or a "long"
futures position) entails the assumption of a contractual obligation to
acquire the securities or currency underlying the contract at a specified
price at a specified future time. Certain futures, including stock and
bond index futures, are settled on a net cash payment basis rather than by
the sale and delivery of the securities underlying the futures.

"Margin" with respect to a futures contract is the amount of
assets that must be deposited by the Portfolio with, or for the benefit
of, a futures commission merchant in order to initiate and maintain the
Portfolio's futures positions. The margin deposit made by the Portfolio
when it enters into a futures contract ("initial margin") is intended to
assure its performance of the contract. If the price of the futures
contract changes --increases in the case of a short (sale) position or
decreases in the case of a long (purchase) position -- so that the
unrealized loss on the contract causes the margin deposit not to satisfy
margin requirements, the Portfolio will be required to make an additional
margin deposit ("variation margin"). However, if favorable price changes
in the futures contract cause the margin deposit to exceed the required
margin, the excess will be paid to the Portfolio. In computing its daily
net asset value ("NAV"), the Portfolio marks to market the current value
of its open futures positions. The Portfolio also must make margin
deposits with respect to options on futures that it has written. If the
futures commission merchant holding the margin deposit goes bankrupt, the
Portfolio could suffer a delay in recovering its funds and could
ultimately suffer a loss.

U.S. futures contracts (except certain currency futures) are
traded on exchanges that have been designated as "contract markets" by the
Commodity Futures Trading Commission ("CFTC"), an agency of the U.S.
Government; futures transactions must be executed through a futures
commission merchant that is a member of the relevant contract market.
The exchange's affiliated clearing organization guarantees performance of
the contracts between the clearing members of the exchange.

Although futures contracts by their terms may require the actual
delivery or acquisition of the underlying securities or currency, in most
cases the contractual obligation is extinguished by being offset before
the expiration of the contract, without the parties having to make or take
delivery of the assets. A futures position is offset by buying (to offset
an earlier sale) or selling (to offset an earlier purchase) an identical
futures contract calling for delivery in the same month.

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<PAGE>

Although the Portfolio believes that the use of futures
contracts will benefit it, if N&B Management's judgment about the general
direction of the markets is incorrect, the Portfolio's overall return
would be lower than if it had not entered into any such contracts.
Moreover, the spread between values in the cash and futures markets is
subject to distortion due to differences in the character of those
markets. Because of the possibility of distortion, even a correct
forecast of general market trends by N&B Management may not result in a
successful transaction.

An option on a futures contract gives the purchaser the right,
in return for the premium paid, to assume a position in the contract (a
long position if the option is a call and a short position if the option
is a put) at a specified exercise price at any time during the option
exercise period. The writer of the option is required upon exercise to
assume a short futures position (if the option is a call) or a long
futures position (if the option is a put). Upon exercise of the option,
the assumption of offsetting futures positions by the writer and holder of
the option is accompanied by delivery of the accumulated cash balance in
the writer's futures margin account. That balance represents the amount
by which the market price of the futures contract at exercise exceeds, in
the case of a call, or is less than, in the case of a put, the exercise
price of the option.

The prices of futures contracts are volatile and are influenced
by, among other things, actual and anticipated changes in interest rates,
which in turn are affected by fiscal and monetary policies and by national
and international political and economic events. At best, the correlation
between changes in prices of futures contracts and of the securities being
hedged can be only approximate. Decisions regarding whether, when, and
how to hedge involve skill and judgment. Even a well-conceived hedge may
be unsuccessful to some degree because of unexpected market behavior or
interest rate trends or lack of correlation between the futures markets
and the securities markets. Because of the low margin deposits required,
futures trading involves an extremely high degree of leverage; as a
result, a relatively small price movement in a futures contract may result
in immediate and substantial loss, or gain, to the investor. Losses that
may arise from certain futures transactions are potentially unlimited.

Most U.S. futures exchanges limit the amount of fluctuation in
the price of a futures contract or option thereon during a single trading
day; once the daily limit has been reached, no trades thereof may be made
on that day at a price beyond that limit. The daily limit only governs
price movements during a particular trading day, however; it thus does not
limit potential losses, because the limit may prevent the liquidation of
unfavorable positions. Prices can move to the daily limit for several
consecutive trading days with little or no trading, thereby preventing

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<PAGE>

liquidation of futures and options positions and subjecting traders to
substantial losses. If this were to happen with respect to a position
held by the Portfolio, it could (depending on the size of the position)
have an adverse impact on the NAV of the Portfolio.

Put and Call Options. The Portfolio may write or purchase put
and call options on securities. Generally, the purpose of writing and
purchasing these options is to reduce the effect of price fluctuations of
securities held by the Portfolio on the Portfolio's and the Fund's NAVs.
The Portfolio may also write covered call options to earn premium income.

The Portfolio will receive a premium for writing a put option,
which obligates the Portfolio to acquire a certain security at a certain
price at any time until a certain date if the purchaser of the option
decides to sell such security. The Portfolio may be obligated to purchase
the underlying security at more than its current value.

When the Portfolio purchases a put option, it pays a premium to
the writer for the right to sell a security to the writer for a specified
amount at any time until a certain date. The Portfolio would purchase a
put option in order to protect itself against a decline in the market
value of a security it owns.

When the Portfolio writes a call option, it is obligated to sell
a security to a purchaser at a specified price at any time the purchaser
requests until a certain date, and receives a premium for writing the call
option. The Portfolio intends to write only "covered" call options on
securities it owns. So long as the obligation of the call option
continues, the Portfolio may be assigned an exercise notice, requiring it
to deliver the underlying security against payment of the exercise price.
The Portfolio may be obligated to deliver securities underlying a call
option at less than the market price, thereby giving up any additional
gain on the security.

When the Portfolio purchases a call option, it pays a premium
for the right to purchase a security from the writer at a specified price
until a specified date. The Portfolio would purchase a call option in
order to protect against an increase in the price of securities it intends
to purchase or to offset a previously written call option.

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<PAGE>

Portfolio securities on which call and put options may be
written and purchased by the Portfolio are purchased solely on the basis
of investment considerations consistent with the Portfolio's investment
objective. The writing of covered call options is a conservative
investment technique that is believed to involve relatively little risk
(in contrast to the writing of "naked" or uncovered call options, which
the Portfolio will not do), but is capable of enhancing the Portfolio's
total return. When writing a covered call option, the Portfolio, in
return for the premium, gives up the opportunity for profit from a price
increase in the underlying security above the exercise price, but
conversely retains the risk of loss should the price of the security
decline. When writing a put option, the Portfolio, in return for the
premium, takes the risk that it must purchase the underlying security at
the exercise price, which may be higher than the current market price of
the security. If a call or put option that the Portfolio has written
expires unexercised, the Portfolio will realize a gain in the amount of
the premium; however, in the case of a call option, that gain may be
offset by a decline in the market value of the underlying security during
the option period. If the call option is exercised, the Portfolio will
realize a gain or loss from the sale of the underlying security.

Options are traded both on national securities exchanges and in
the over-the-counter ("OTC") market. Exchange-traded options in the
United States are issued by a clearing organization affiliated with the
exchange on which the option is listed; the clearing organization in
effect guarantees completion of every exchange-traded option. In
contrast, OTC options are contracts between the Portfolio and its
counter-party with no clearing organization guarantee. Thus, when the
Portfolio sells (or purchases) an OTC option, it generally will be able to
"close out" the option prior to its expiration only by entering into a
closing transaction with the dealer to whom (or from whom) the Portfolio
originally sold (or purchased) the option. There can be no assurance that
the Portfolio would be able to liquidate an OTC option at any time prior
to expiration. Unless the Portfolio is able to effect a closing purchase
transaction in a covered OTC call option it has written, it will not be
able to liquidate securities used as cover until the option expires or is
exercised or until different cover is substituted. In the event of the
counter-party's insolvency, the Portfolio may be unable to liquidate its
options position and the associated cover. N&B Management monitors the
creditworthiness of dealers with which the Portfolio may engage in OTC
options transactions, and limits the Portfolio's counter-parties in such
transactions to dealers with a net worth of at least $20 million as
reported in their latest financial statements.

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<PAGE>

that the maximum repurchase price under the formula exceeds the intrinsic
value of the option.

The premium received (or paid) by the Portfolio when it writes
(or purchases) an option is the amount at which the option is currently
traded on the applicable exchange, less (or plus) a commission. The
premium may reflect, among other things, the current market price of the
underlying security, the relationship of the exercise price to the market
price, the historical price volatility of the underlying security, the
length of the option period, the general supply of and demand for credit,
and the general interest rate environment. The premium received by the
Portfolio for writing an option is recorded as a liability on the
Portfolio's statement of assets and liabilities. This liability is
adjusted daily to the option's current market value, which is the sales
price on the option's last reported trade on that day before the time the
Portfolio's NAV is computed or, in the absence of any trades thereof on
that day, the mean between the closing bid and ask prices.

Closing transactions are effected in order to realize a profit
on an outstanding option, to prevent an underlying security from being
called, or to permit the sale or the put of the underlying security.
Furthermore, effecting a closing transaction permits the Portfolio to
write another call option on the underlying security with a different
exercise price or expiration date or both. If the Portfolio desires to
sell a particular security on which it has written a call option, it will
seek to effect a closing transaction prior to, or concurrently with, the
sale of the security. There is, of course, no assurance that the
Portfolio will be able to effect closing transactions at favorable prices.
If the Portfolio cannot enter into such a transaction, it may be required
to hold a security that it might otherwise have sold (or purchase a
security that it would not have otherwise bought), in which case it would
continue to be at market risk on the security.

The Portfolio will realize a profit or loss from a closing
purchase transaction if the cost of the transaction is less or more than
the premium received from writing the call or put option. However,
because increases in the market price of a call option generally reflect
increases in the market price of the underlying security, any loss
resulting from the repurchase of a call option is likely to be offset in
whole or in part by appreciation of the underlying security owned by the
Portfolio.

The Portfolio pays brokerage commissions in connection with
purchasing or writing options, including those used to close out existing
positions. These brokerage commissions normally are higher than those
applicable to purchases and sales of portfolio securities.

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<PAGE>

Options normally have expiration dates between three and nine
months from the date written. The exercise price of an option may be
below, equal to, or above the market value of the underlying security at
the time the option is written. From time to time, the Portfolio may
purchase an underlying security for delivery in accordance with an
exercise notice of a call option assigned to it, rather than delivering
the security from its portfolio. In those cases, additional brokerage
commissions are incurred.

Forward Foreign Currency Contracts. The Portfolio may enter
into contracts for the purchase or sale of a specific currency at a future
date at a fixed price ("forward contracts") in amounts not exceeding 5% of
its net assets. The Portfolio enters into forward contracts in an attempt
to hedge against expected changes in prevailing currency exchange rates.
The Portfolio does not engage in transactions in forward contracts for
speculation; it views investments in forward contracts as a means of
establishing more definitely the effective return on securities
denominated in foreign currencies that are held or intended to be acquired
by it. Forward contract transactions include forward sales or purchases
of foreign currencies for the purpose of protecting the U.S. dollar value
of securities held or to be acquired by the Portfolio or protecting the
U.S. dollar equivalent of dividends, interest, or other payments on those
securities.

N&B Management believes that the use of foreign currency hedging
techniques, including "cross-hedges," can help protect against declines in
the U.S. dollar value of income available for distribution and declines in
the Portfolio's NAV resulting from adverse changes in currency exchange
rates. For example, the return available from securities denominated in a
particular foreign currency would diminish if the value of the U.S. dollar
increased against that currency. Such a decline could be partially or
completely offset by an increase in value of a cross-hedge involving a
forward contract to sell a different foreign currency, where the contract
is available on terms more advantageous to the Portfolio than a contract
to sell the currency in which the securities being hedged are denominated.
N&B Management believes that hedges and cross-hedges can, therefore,
provide significant protection of NAV in the event of a general rise in
the U.S. dollar against foreign currencies. However, a hedge or
cross-hedge cannot protect against exchange rate risks perfectly, and if
N&B Management is incorrect in its judgment of future exchange rate
relationships, the Portfolio could be in a less advantageous position than
if such a hedge had not been established. In addition, because forward
contracts are not traded on an exchange, the assets used to cover such
contracts may be illiquid.

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<PAGE>

portfolio securities or increases in the U.S. dollar cost of securities to
be acquired or to protect the U.S. dollar equivalent of dividends,
interest, or other payments on those securities. As with other types of
options, however, writing an option on foreign currency constitutes only a
partial hedge, up to the amount of the premium received, and the Portfolio
could be required to purchase or sell foreign currencies at
disadvantageous exchange rates, thereby incurring losses. The risks of
currency options are similar to the risks of other options, discussed
herein. Certain options on foreign currencies are traded on the OTC
market and involve liquidity and credit risks that may not be present in
the case of exchange-traded currency options.

General Considerations Involving Futures, Options on Futures, Options on
Securities and Indices, Forward Contracts, and Options on Foreign
Currencies (collectively, "Hedging Instruments")

To the extent the Portfolio sells or purchases futures
contracts, and/or writes options thereon or options on foreign currencies
that are traded on an exchange regulated by the CFTC other than for bona
fide hedging purposes (as defined by the CFTC), the aggregate initial
margin and premiums on those positions (excluding the amount by which
options are "in-the-money") may not exceed 5% of the Portfolio's net
assets.

In addition, pursuant to state securities laws, (1) the
aggregate premiums paid by the Portfolio on all options (both
exchange-traded and OTC) held by it at any time may not exceed 20% of its
net assets, and (2) the aggregate margin deposits required on all
exchange-traded futures contracts and related options held by the
Portfolio at any time may not exceed 5% of its total assets. Also,
pursuant to an undertaking to a state securities law administrator, the
Portfolio will not purchase puts, calls, straddles, spreads, or any
combination thereof if, by reason of such purchase the value of its
aggregate investment in such instruments will exceed 5% of its total
assets.

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<PAGE>

the Portfolio to purchase or sell a portfolio security at a time that
would otherwise be favorable for it to do so, or the possible need for the
Portfolio to sell a portfolio security at a disadvantageous time, due to
its need to maintain "cover" or to segregate securities in connection with
its use of Hedging Instruments. N&B Management intends to reduce the risk
of imperfect correlation by investing only in Hedging Instruments whose
behavior is expected to resemble that of the Portfolio's underlying
securities. N&B Management intends to reduce the risk that the Portfolio
will be unable to close out Hedging Instruments by entering into such
transactions only if N&B Management believes there will be an active and
liquid secondary market. Hedging Instruments used by the Portfolio are
generally considered "derivatives." There can be no assurance that the
Portfolio's use of Hedging Instruments will be successful.

The Portfolio's use of Hedging Instruments may be limited by the
requirements of the Internal Revenue Code of 1986, as amended ("Code") for
qualification as a regulated investment company ("RIC"). See "Additional
Tax Information."

Cover for Hedging Instruments. The Portfolio will comply with
SEC guidelines regarding cover for Hedging Instruments and, if the
guidelines so require, set aside in a segregated account with its
custodian cash, U.S. Government or Agency Securities, or other liquid,
high-grade debt securities in the prescribed amount. Securities held in a
segregated account cannot be sold while the futures, option, or forward
strategy is outstanding, unless they are replaced with other suitable
assets. As a result, segregation of a large percentage of the Portfolio's
assets could impede portfolio management or the Portfolio's ability to
meet current obligations. The Portfolio may be unable promptly to dispose
of assets which cover, or are segregated with respect to, an illiquid
futures, option, or forward position ; this inability may result in a loss
to the Portfolio.

Fixed Income Securities. While the emphasis of the Portfolio's
investment program is on common stocks and other equity securities
(including preferred stocks and securities convertible into or
exchangeable for common stocks), it may also invest in money market in-
struments, U.S. Government or Agency Securities, and other fixed income
securities. The Portfolio may invest in corporate bonds and debentures
receiving one of the four highest ratings from Standard & Poor's ("S&P"),
Moody's Investors Service, Inc. ("Moody's"), or any other nationally
recognized statistical rating organization ("NRSRO"), or, if not rated by
any NRSRO, deemed comparable by N&B Management to such rated securities
("Comparable Unrated Securities"). The ratings of an NRSRO represent its
opinion as to the quality of securities it undertakes to rate. Ratings
are not absolute standards of quality; consequently, securities with the
same maturity, coupon, and rating may have different yields. The Port-
folio relies primarily on ratings assigned by S&P and Moody's, which are
described in Appendix A to this SAI.

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<PAGE>

Commercial Paper. Commercial paper is a short-term debt
security issued by a corporation or bank, among others, for purposes such
as financing current operations. The Portfolio may invest only in
commercial paper receiving the highest rating from S&P (A-1) or Moody's
(P-1), or deemed by N&B Management to be of equivalent quality.

The Portfolio may invest in commercial paper that cannot be
resold to the public without an effective registration statement under the
1933 Act. While restricted commercial paper normally is deemed illiquid,
N&B Management may in certain cases determine that such paper is liquid,
pursuant to guidelines established by the Portfolio Trustees.

Zero Coupon Securities. The Portfolio may invest up to 5% of
its net assets in zero coupon securities, which are debt obligations that
do not entitle the holder to any periodic payment of interest prior to
maturity or that specify a future date when the securities begin to pay
current interest. Zero coupon securities are issued and traded at a
discount from their face amount or par value. This discount varies
depending on prevailing interest rates, the time remaining until cash
payments begin, the liquidity of the security, and the perceived credit
quality of the issuer.

The discount on zero coupon securities ("original issue dis-
count") is taken into account by the Portfolio prior to the receipt of any
actual payments. Because the Fund must distribute substantially all of
its income (including its pro rata share of the Portfolio's original issue
discount) to the Plan each year for income and excise tax purposes (see
"Additional Tax Information --Taxation of the Fund"), the Portfolio may
have to dispose of portfolio securities under disadvantageous
circumstances to generate cash, or may be required to borrow, to satisfy
the Fund's distribution requirements.

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<PAGE>

The market prices of zero coupon securities generally are more
volatile than the prices of securities that pay interest periodically.
Zero coupon securities are likely to respond to changes in interest rates
to a greater degree than other types of debt securities having similar
maturities and credit quality.

Convertible Securities. The Portfolio may invest in convertible
securities. A convertible security entitles the holder to receive
interest paid or accrued on debt or the dividend paid on preferred stock
until the convertible security matures or is redeemed, converted or
exchanged. Before conversion, such securities ordinarily provide a stream
of income with generally higher yields than common stocks of the same or
similar issuers, but lower than the yield on non-convertible debt.
Convertible securities are usually subordinated to comparable-tier
non-convertible securities but rank senior to common stock in a
corporation's capital structure. The value of a convertible security is a
function of (1) its yield in comparison to the yields of other securities
of comparable maturity and quality that do not have a conversion privilege
and (2) its worth if converted into the underlying common stock.

Convertible securities are typically issued by smaller
capitalization companies whose stock prices may be volatile. The price of
a convertible security often reflects variations in the price of the
underlying common stock in a way that non-convertible debt does not. A
convertible security may be subject to redemption at the option of the
issuer at a price established in the security's governing instrument. If
a convertible security held by the Portfolio is called for redemption, the
Portfolio will be required to convert it into the underlying common stock,
sell it to a third party or permit the issuer to redeem the security. Any
of these actions could have an adverse effect on the Portfolio's and the
Fund's ability to achieve their investment objective.

Preferred Stock. The Portfolio may invest in preferred stock.
Unlike interest payments on debt securities, dividends on preferred stock
are generally payable at the discretion of the issuer's board of
directors, although preferred shareholders may have certain rights if
dividends are not paid. Shareholders may suffer a loss of value if
dividends are not paid and generally have no legal recourse against the
issuer. The market prices of preferred stocks are generally more
sensitive to changes in the issuer's creditworthiness than are the prices
of debt securities.

PERFORMANCE INFORMATION

The Fund's performance figures are based on historical earnings
and are not intended to indicate future performance. The share price and
total return of the Fund will vary, and an investment in the Fund, when
redeemed, may be worth more or less than an investor's original cost.

- 21 -
<PAGE>

Total Return Computations

The Fund may advertise certain total return information. An
average annual compounded rate of return ("T") may be computed by using
the redeemable value at the end of a specified period ("ERV") of a
hypothetical initial investment of $1,000 ("P") over a period of time
("n") according to the formula:

n
P(1+T) = ERV

Average annual total return smooths out year-to-year variations
and, in that respect, differs from actual year-to-year results.

The average annual total returns for the Fund for the one-year
period ended August 31, 1995, and for the period from March 14, 1994
(commencement of operations) through August 31, 1995 were 17.82% and
12.42%, respectively. Had N&B Management not waived certain fees, total
return would have been lower.

Comparative Information

From time to time the Fund's performance may be compared with:

(1) data (that may be expressed as rankings or ratings)
published by independent services or publications (including
newspapers, newsletters, and financial periodicals) that monitor
the performance of mutual funds, such as Lipper Analytical
Services, Inc., C.D.A. Investment Technologies, Inc., Wiesen-
berger Investment Companies Service, Investment Company Data
Inc., Morningstar, Inc., Micropal Incorporated, and quarterly
mutual fund rankings by Money, Fortune, Forbes, Business Week,
Personal Investor, and U.S. News & World Report magazines, The
Wall Street Journal, New York Times, Kiplingers Personal Fi-
nance, and Barron's Newspaper, or

- 22 -
<PAGE>

sents a narrower segment of industrial companies. The S&P 600
Index includes stocks that range in market value from $27
million to $880 million, with an average of $302 million. The
S&P 400 Index measures mid-sized companies with an average
market capitalization of $1.2 billion. Each assumes
reinvestment of distributions and is calculated without regard
to tax consequences or the costs of investing. The Portfolio
may invest in different types of securities from those included
in some of the above indices.

The Fund may also be compared to various socially responsive
indices, including The Domini Social Index and those developed by the
quantitative department of Prudential Securities, such as that
department's Large and Mid-Cap portfolio indices for various breakdowns
("Sin" Stock Free, Cigarette-Stock Free, S&P Composite, etc.).

Evaluations of the Fund's performance, its total return and
comparisons may be used in advertisements and in information furnished to
current and prospective shareholders (collectively, "Advertisements").
The Fund may also be compared to individual asset classes such as common
stocks, small cap stocks, or Treasury bonds, based on information supplied
by Ibbotson and Sinquefield.

Other Performance Information

From time to time, information about the Portfolio's portfolio
allocation and holdings as of a particular date may be included in
Advertisements. This information, for example, may include the
Portfolio's portfolio diversification by asset type or by the social
characteristics of companies owned. Information used in Advertisements
may include statements or illustrations relating to the appropriateness of
types of securities and/or mutual funds that may be employed to meet
specific financial goals, such as (1) funding retirement, (2) paying for
children's education, and (3) financially supporting aging parents.

Information relating to inflation and its effects on the dollar
also may be included in Advertisements. For example, after ten years, the
purchasing power of $25,000 would shrink to $16,621, $14,968, $13,465, and
$12,100, respectively, if the annual rates of inflation during that period
were 4%, 5%, 6%, and 7%, respectively. (To calculate the purchasing
power, the value at the end of each year is reduced by the inflation rate
for the ten-year period.)

From time to time the investment philosophy of N&B Management's
founder, Roy R. Neuberger, may be included in the Fund's Advertisements.
This philosophy is described in further detail in "The Art of Investing: A
Conversation with Roy Neuberger," attached as Appendix B to this SAI.

- 23 -
<PAGE>

CERTAIN RISK CONSIDERATIONS

Although the Portfolio seeks to reduce risk by investing in a
diversified portfolio, diversification does not eliminate all risk. There
can, of course, be no assurance that the Portfolio will achieve its
investment objective, and an investment in the Fund involves certain risks
that are described in the sections entitled "Investment Program" and
"Description of Investments" in the Prospectus and "Investment
Information" in this SAI.

TRUSTEES AND OFFICERS

<TABLE>
<CAPTION>
Name, Age and Positions Held
Address(1) With the Trusts Principal Occupation(s)(2)

<S> <C> <C>
Faith Colish (60) Trustee of each Trust Attorney at Law, Faith Colish, A
63 Wall Street Professional Corporation.
24th Floor
New York, NY 10005

Donald M. Cox (73) Trustee of each Trust Retired. Formerly Senior Vice President
435 East 52nd Street and Director of Exxon Corporation; Director
New York, NY 10022 of Emigrant Savings Bank.

Stanley Egener* (61) Chairman of the Board, Partner of Neuberger & Berman; President
Chief Executive Officer, and Director of N&B Management; Chairman of
and Trustee of each Trust the Board, Chief Executive Officer, and
Trustee of eight other mutual funds for
which N&B Management acts as investment
manager or administrator.

- 24 -
<PAGE>

Name, Age and Positions Held
Address(1) With the Trusts Principal Occupation(s)(2)

Alan R. Gruber (68) Trustee of each Trust Chairman and Chief Executive Officer of
Orion Capital Corporation Orion Capital Corporation (property and
600 Fifth Avenue casualty insurance); Director of Trenwick
24th Floor Group, Inc. (property and casualty
New York, NY 10020 reinsurance); Chairman of the Board and
Director of Guaranty National Corporation
(property and casualty insurance); formerly
Director of Ketema, Inc. (diversified
manufacturer).

Howard A. Mileaf (57) Trustee of each Trust Vice President and Special Counsel to
Wheeling Pittsburgh Corporation Wheeling Pittsburgh Corporation (holding
110 East 59th Street company) since 1992; formerly Vice
New York, NY 10022 President and General Counsel of Keene
Corporation (manufacturer of industrial
products); Director of Kevlin Corporation
(manufacturer of microwave and other
products).

Edward I. O'Brien* (67) Trustee of each Trust Until 1993, President of the Securities
12 Woods Lane Industry Association ("SIA") (securities
Scarsdale, NY 10583 industry's representative in government
relations and regulatory matters at the
federal and state levels); until November
1993, employee of the SIA; Director of Legg
Mason, Inc.

John T. Patterson, Jr. (67) Trustee of each Trust President of SOBRO (South Bronx Overall
90 Riverside Drive Economic Development Corporation).
Apartment 1B
New York, NY 10024

John P. Rosenthal (63) Trustee of each Trust Senior Vice President of Burnham Securities
Burnham Securities Inc. Inc. (a registered broker-dealer) since
Burnham Asset Management Corp. 1991; formerly Partner of Silberberg,
1325 Avenue of the Americas Rosenthal & Co. (member of National
17th Floor Association of Securities Dealers, Inc.);
New York, NY 10019 Director, Cancer Treatment Holdings, Inc.

Cornelius T. Ryan (64) Trustee of each Trust General Partner of Oxford Partners and
Oxford Bioscience Partners Oxford Bioscience Partners (venture capital
315 Post Road West partnerships) and President of Oxford
Westport, CT 06880 Venture Corporation; Director of Capital
Cash Management Trust (money market fund)
and Prime Cash Fund.

- 25 -
<PAGE>

Name, Age and Positions Held
Address(1) With the Trusts Principal Occupation(s)(2)

Gustave H. Shubert (66) Trustee of each Trust Senior Fellow/Corporate Advisor and
13838 Sunset Boulevard Advisory Trustee of Rand (a non-profit
Pacific Palisades, CA 90272 public interest research institution) since
1989; Honorary Member of the Board of
Overseers of the Institute for Civil
Justice, the Policy Advisory Committee of
the Clinical Scholars Program at the
University of California, the American
Association for the Advancement of Science,
the Counsel on Foreign Relations, and the
Institute for Strategic Studies (London);
advisor to the Program Evaluation and
Methodology Division of the U.S. General
Accounting Office; formerly Senior Vice
President and Trustee of Rand.

Lawrence Zicklin* (59) President and Trustee of Partner of Neuberger & Berman; Director of
each Trust N&B Management; President and/or Trustee of
five other mutual funds for which N&B
Management acts as investment manager or
administrator.

Daniel J. Sullivan (55) Vice President of each Senior Vice President of N&B Management
Trust since 1992; prior thereto, Vice President
of N&B Management; Vice President of eight
other mutual funds for which N&B Management
acts as investment manager or
administrator.

Michael J. Weiner (48) Vice President and Senior Vice President and Treasurer of N&B
Principal Financial Management since 1992; prior thereto, Vice
Officer of each Trust President and Treasurer of N&B Management
and Treasurer of certain mutual funds for
which N&B Management acted as investment
adviser; Vice President and Principal
Financial Officer of eight other mutual
funds for which N&B Management acts as
investment manager or administrator.

Claudia A. Brandon (38) Secretary of each Trust Vice President of N&B Management; Secretary
of eight other mutual funds for which N&B
Management acts as investment manager or
administrator.

- 26 -
<PAGE>

Name, Age and Positions Held
Address(1) With the Trusts Principal Occupation(s)(2)

Richard Russell (48) Treasurer and Principal Vice President of N&B Management since
Accounting Officer of 1993; prior thereto, Assistant Vice
each Trust President of N&B Management; Treasurer and
Principal Accounting Officer of eight other
mutual funds for which N&B Management acts
as investment manager or administrator.

Stacy Cooper- Shugrue (32) Assistant Secretary of Assistant Vice President of N&B Management
each Trust since 1993; employee of N&B Management
since August 1989; Assistant Secretary of
eight other mutual funds for which N&B
Management acts as investment manager or
administrator.

C. Carl Randolph (57) Assistant Secretary of Partner of Neuberger & Berman since 1992;
each Trust employee thereof since 1971; Assistant
Secretary of eight other mutual funds for
which N&B Management acts as investment
manager or administrator.

</TABLE>

____________________

(1) Unless otherwise indicated, the business address of each listed
person is 605 Third Avenue, New York, New York 10158.

(2) Except as otherwise indicated, each individual has held the positions
shown for at least the last five years.

* Indicates an "interested person" of each Trust within the meaning of
the 1940 Act. Messrs. Egener and Zicklin are interested persons by virtue
of the fact that they are officers and/or directors of N&B Management and
partners of Neuberger & Berman. Mr. O'Brien is an interested person by
virtue of the fact that he is a director of Legg Mason, Inc., a wholly
owned subsidiary of which, from time to time, serves as a broker or dealer
to the Portfolio and other funds for which N&B Management serves as
investment manager.

- 27 -
<PAGE>

court or other body approving the settlement or other disposition, by a
majority of disinterested trustees based upon a review of readily
available facts, or in a written opinion of independent counsel) that such
officers or trustees have not engaged in willful misfeasance, bad faith,
gross negligence, or reckless disregard of their duties.

For the fiscal year ended August 31, 1995, the Fund and
Portfolio paid fees and expenses of $13,318 to those Fund and Portfolio
Trustees who were not affiliated with N&B Management or Neuberger &
Berman.

The following table sets forth information concerning the
compensation of the trustees and officers of the Trust. None of the
Neuberger & Berman Funds has any retirement plan for its trustees or
officers.

<TABLE>
<CAPTION>
TABLE OF COMPENSATION
FOR FISCAL YEAR ENDED 8/31/95

Total Compensation from the
Aggregate Neuberger & Berman Fund Complex
Name and Position with Compensation from the Paid
the Trust Trust to Trustees

<S> <C> <C>
Faith Colish $14,140 $39,000
Trustee (5 other investment companies)

Donald M. Cox $14,140 $31,000
Trustee (3 other investment companies)

Stanley Egener $0 $0
Chairman of the Board, Chief Executive (9 other investment companies)
Officer, and Trustee

Alan R. Gruber $14,140 $31,000
Trustee (3 other investment companies)

Howard A. Mileaf $15,571 $36,500
Trustee (4 other investment companies)

Edward I. O'Brien $14,587 $31,500
Trustee (3 other investment companies)

John T. Patterson, Jr. $14,604 $34,500
Trustee (4 other investment companies)

- 28 -
<PAGE>

TABLE OF COMPENSATION
FOR FISCAL YEAR ENDED 8/31/95

John P. Rosenthal $13,916 $33,000
Trustee (4 other investment companies)

Cornelius T. Ryan $15,571 $33,500
Trustee (3 other investment companies)

Gustave H. Shubert $13,916 $30,000
Trustee (3 other investment companies)

Lawrence Zicklin $0 $0
President and Trustee (5 other investment companies)
</TABLE>

INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES

Investment Manager and Administrator

Because the Fund's net investable assets are invested in the
Portfolio, the Fund does not need an investment manager. N&B Management
serves as the investment manager to the Portfolio pursuant to a management
agreement with Managers Trust, on behalf of the Portfolio, dated as of
August 2, 1993 ("Management Agreement"). The Management Agreement was
approved by the holders of the interests in the Portfolio on March 9,
1994. The Portfolio was authorized to become subject to the Management
Agreement by vote of the Portfolio Trustees on October 20, 1993, and
became subject to it on March 14, 1994.

- 29 -
<PAGE>

Management, presently serve as trustees and officers of the Trusts. See
"Trustees and Officers." The Portfolio pays N&B Management a management
fee based on the Portfolio's average daily net assets, as described in the
Prospectus.

N&B Management provides similar facilities, services, and
personnel to the Fund pursuant to an administration agreement dated August
3, 1993 ("Administration Agreement"). The Fund was authorized to become
subject to the Administration Agreement by vote of the Fund Trustees on
October 20, 1993, and became subject to it on March 14, 1994. For such
administrative services, the Fund pays N&B Management a fee based on the
Fund's average daily net assets, as described in the Prospectus.

During the fiscal year ended August 31, 1995 and the period from
March 14, 1994 (commencement of operations) to August 31, 1994, the Fund
accrued management and administration fees of $440,649 and $179,578,
respectively. During those same periods, N&B Management reimbursed the
Fund for $186,559 and $70,891, respectively, of expenses.

The Management Agreement continues with respect to the
Portfolio for a period of two years after the date the Portfolio became
subject thereto. The Management Agreement is renewable thereafter from
year to year with respect to the Portfolio, so long as its continuance is
approved at least annually (1) by the vote of a majority of the Portfolio
Trustees who are not "interested persons" of N&B Management or Managers
Trust ("Independent Portfolio Trustees"), cast in person at a meeting
called for the purpose of voting on such approval, and (2) by the vote of
a majority of the Portfolio Trustees or by a 1940 Act majority vote of the
outstanding shares in the Portfolio. The Administration Agreement
continues with respect to the Fund for a period of two years after the
date the Fund became subject thereto. The Administration Agreement is
renewable from year to year with respect to the Fund, so long as its
continuance is approved at least annually (1) by the vote of a majority of
the Fund Trustees who are not "interested persons" of N&B Management or
the Trust ("Independent Fund Trustees"), cast in person at a meeting
called for the purpose of voting on such approval, and (2) by the vote of
a majority of the Fund Trustees or by a 1940 Act majority vote of the
outstanding shares in the Fund.

The Management Agreement is terminable, without penalty, with
respect to the Portfolio on 60 days' written notice either by Managers Tr-
ust or by N&B Management. The Administration Agreement is terminable,
without penalty, with respect to the Fund on 60 days' written notice
either by N&B Management or by the Trust if authorized by the Fund
Trustees, including a majority of the Independent Fund Trustees. Each
Agreement terminates automatically if it is assigned.

- 30 -
<PAGE>

In addition to the voluntary expense reimbursements described in
the Prospectus under "Management and Administration --Expenses," N&B
Management has agreed in the Management Agreement to reimburse the Fund's
expenses, as follows. If, in any fiscal year, the Fund's Aggregate
Operating Expenses (as defined below) exceed the most restrictive expense
limitation imposed under the securities laws of the states in which the
Fund's shares are qualified for sale ("State Expense Limitation"), then
N&B Management will pay the Fund the amount of that excess, less the
amount of any reduction of the administration fee payable by the Fund
under a similar State Expense Limitation contained in the Administration
Agreement. N&B Management will have no obligation to pay the Fund,
however, for any expenses that exceed the pro rata portion of the
management fees attributable to the Fund's interest in the Portfolio. At
the date of this SAI, the most restrictive State Expense Limitation to
which the Fund expects to be subject is 2 1/2% of the first $30 million of
average net assets, 2% of the next $70 million of average net assets, and
1-1/2% of average net assets over $100 million.

For purposes of the State Expense Limitation, the term
"Aggregate Operating Expenses" means the Fund's operating expenses plus
its pro rata portion of the Portfolio's operating expenses (including any
fees or expense reimbursements payable to N&B Management and any
compensation payable thereto pursuant to (1) the Administration Agreement
or (2) any other agreement or arrangement with Managers Trust with respect
to the Portfolio; but excluding (with respect to both the Fund and the
Portfolio) interest, taxes, brokerage commissions, litigation and
indemnification expenses, and other extraordinary expenses not incurred in
the ordinary course of business).

Sub-Adviser

N&B Management retains Neuberger & Berman, 605 Third Avenue, New
York, NY 10158-3698, as a sub-adviser with respect to the Portfolio
pursuant to a sub-advisory agreement dated August 2, 1993 ("Sub-Advisory
Agreement"). The Sub-Advisory Agreement was approved by the holders of
the interests in the Portfolio on March 9, 1994. The Portfolio was
authorized to become subject to the Sub-Advisory Agreement by vote of the
Portfolio Trustees on October 20, 1993, and became subject to it on March
14, 1994.

- 31 -
<PAGE>

Management. The Sub-Advisory Agreement provides that N&B Management will
pay for the services rendered by Neuberger & Berman based on the direct
and indirect costs to Neuberger & Berman in connection with those
services. Neuberger & Berman also serves as sub-adviser for all of the
other mutual funds managed by N&B Management.

The Sub-Advisory Agreement continues with respect to the
Portfolio for a period of two years after the Portfolio became subject
thereto and is renewable from year to year, subject to approval of its
continuance in the same manner as the Management Agreement. The
Sub-Advisory Agreement is subject to termination, without penalty, with
respect to the Portfolio by the Portfolio Trustees, by a 1940 Act majority
vote of the outstanding Portfolio shares, by N&B Management, or by
Neuberger & Berman on not less than 30 nor more than 60 days' written
notice. The Sub-Advisory Agreement also terminates automatically with
respect to the Portfolio if it is assigned or if the Management Agreement
terminates with respect to the Portfolio.

Investment Companies Managed

Approximate
Net Assets at
Name September 30, 1995
----- ------------------
Neuberger & Berman Cash Reserves Portfolio . . . . . . . . . $377,608,619
(investment portfolio for Neuberger & Berman Cash Reserves)

Neuberger & Berman Government Income Portfolio . . . . . . . $12,053,656
(investment portfolio for Neuberger & Berman Government Income Fund
and Neuberger & Berman Government Income Trust)

Neuberger & Berman Government Money Portfolio . . . . . . . $346,898,132
(investment portfolio for Neuberger & Berman Government Money Fund)

Neuberger & Berman Limited Maturity Bond Portfolio . . . . $309,540,451
(investment portfolio for Neuberger & Berman Limited Maturity Bond
Fund and Neuberger & Berman Limited Maturity Bond Trust)

Neuberger & Berman Municipal Money Portfolio . . . . . . . . $149,657,613
(investment portfolio for Neuberger & Berman Municipal Money Fund)

- 32 -
<PAGE>

Approximate
Net Assets at
Name September 30, 1995
----- ------------------

Neuberger & Berman Municipal Securities Portfolio . . . . . $44,568,635
(investment portfolio for Neuberger & Berman Municipal Securities
Trust)

Neuberger & Berman New York Insured Intermediate
Portfolio . . . . . . . . . . . . . . . . . . . . . . $10,679,324
(investment portfolio for Neuberger & Berman New York Insured
Intermediate Fund)

Neuberger & Berman Ultra Short Bond Portfolio . . . . . . . $102,903,312
(investment portfolio for Neuberger & Berman Ultra Short Bond Fund
and Neuberger & Berman Ultra Short Bond Trust)

Neuberger & Berman Focus Portfolio . . . . . . . . . . . . $1,031,915,664
(investment portfolio for Neuberger & Berman Focus Fund and Neuberger
& Berman Focus Trust)

Neuberger & Berman Genesis Portfolio . . . . . . . . . . . . $145,188,783
(investment portfolio for Neuberger & Berman Genesis Fund and
Neuberger & Berman Genesis Trust)

Neuberger & Berman Guardian Portfolio . . . . . . . . . $4,943,764,830
(investment portfolio for Neuberger & Berman Guardian Fund and
Neuberger & Berman Guardian Trust)

Neuberger & Berman International Portfolio . . . . . . . . . $29,990,616
(investment portfolio for Neuberger & Berman International Fund)

Neuberger & Berman Manhattan Portfolio . . . . . . . . . . . $670,916,038
(investment portfolio for Neuberger & Berman Manhattan Fund and
Neuberger & Berman Manhattan Trust)

Neuberger & Berman Partners Portfolio . . . . . . . . . . $1,664,460,688
(investment portfolio for Neuberger & Berman Partners Fund and
Neuberger & Berman Partners Trust)

Neuberger & Berman Socially Responsive
Portfolio . . . . . . . . . . . . . . . . . . . . . . $102,675,093
(investment portfolio for Neuberger & Berman Socially Responsive
Fund, Neuberger & Berman Socially Responsive Trust, and Neuberger &
Berman NYCDC Socially Responsive Trust)

Neuberger & Berman Advisers Managers
Trust (six series) . . . . . . . . . . . . . . . . $1,257,506,124

- 33 -
<PAGE>

In addition, Neuberger & Berman serves as investment adviser to
three investment companies, Plan Investment Fund, Inc., AHA Investment
Fund, Inc., and AHA Full Maturity, with assets of $85,110,472,
$110,683,193, and $23,891,472, respectively, at September 30, 1995.

The investment decisions concerning the Portfolio and the other
funds and portfolios managed by N&B Management (collectively, "Other N&B
Funds") have been and will continue to be made independently of one
another. In terms of their investment objectives, most of the Other N&B
Funds differ from the Portfolio. Even where the investment objectives are
similar, however, the methods used by the Other N&B Funds and the
Portfolio to achieve their objectives may differ.

There may be occasions when the Portfolio and one or more of the
Other N&B Funds or other accounts managed by Neuberger & Berman are
contemporaneously engaged in purchasing or selling the same securities
from or to third parties. When this occurs, the transactions are averaged
as to price and allocated as to amounts in accordance with a formula
considered to be equitable to the funds involved. Although in some cases
this arrangement may have a detrimental effect on the price or volume of
the securities as to the Portfolio, in other cases it is believed that the
Portfolio's ability to participate in volume transactions may produce
better executions for it. In any case, it is the judgment of the
Portfolio Trustees that the desirability of the Portfolio's having its
advisory arrangements with N&B Management outweighs any disadvantages that
may result from contemporaneous transactions. The investment results
achieved by all of the funds managed by N&B Management have varied from
one another in the past and are likely to vary in the future.

Management and Control of N&B Management

The directors and officers of N&B Management, all of whom have
offices at the same address as N&B Management, are Richard A. Cantor,
Chairman of the Board and director; Stanley Egener, President and
director; Theresa A. Havell, Vice President and director; Irwin Lainoff,
director; Marvin C. Schwartz, director; Lawrence Zicklin, director; Daniel
J. Sullivan, Senior Vice President; Michael J. Weiner, Senior Vice
President and Treasurer; Claudia A. Brandon, Vice President; William
Cunningham, Vice President; Clara Del Villar, Vice President; Mark R.
Goldstein, Vice President; Farha-Joyce Haboucha, Vice President; Michael
M. Kassen, Vice President; Michael Lamberti, Vice President; Josephine P.
Mahaney, Vice President; Lawrence Marx III, Vice President; Ellen Metzger,
Vice President and Secretary; Janet W. Prindle, Vice President; Felix
Rovelli, Vice President; Richard Russell, Vice President; Kent C. Simons,
Vice President; Frederick B. Soule, Vice President; Judith M. Vale, Vice
President; Thomas Wolfe, Vice President; Andrea Trachtenberg, Vice
President of Marketing; Patrick T. Byrne, Assistant Vice President; Robert
Conti, Assistant Vice President; Stacy Cooper-Shugrue, Assistant Vice
President; Robert Cresci, Assistant Vice President; Barbara DiGiorgio,
Assistant Vice President; Roberta D'Orio, Assistant Vice President; Robert

- 34 -
<PAGE>

Messrs. Egener and Zicklin are trustees and officers, and Messrs.
Sullivan, Weiner, and Russell and Mmes. Brandon and Cooper-Shugrue are
officers, of each Trust. C. Carl Randolph, a general partner of Neuberger
& Berman, also is an officer of each Trust.

All of the outstanding voting stock in N&B Management is owned by
persons who are also general partners of Neuberger & Berman.

DISTRIBUTION ARRANGEMENTS

N&B Management serves as the distributor ("Distributor") in
connection with the offering of the Fund's shares on a no-load basis to
the Plan. In connection with the sale of its shares, the Fund has
authorized the Distributor to give only the information, and to make only
the statements and representations, contained in the Prospectus and this
SAI or that properly may be included in sales literature and
advertisements in accordance with the 1933 Act, the 1940 Act, and
applicable rules of self-regulatory organizations. Sales may be made only
by the Prospectus, which may be delivered either personally, through the
mails, or by electronic means. The Distributor is the Fund's "principal
underwriter" within the meaning of the 1940 Act and, as such, acts as
agent in arranging for the sale of the Fund's shares without sales
commission or other compensation and bears all advertising and promotion
expenses incurred in the sale of the Fund's shares.

ADDITIONAL REDEMPTION INFORMATION

Suspension of Redemptions

- 35 -
<PAGE>

The right to redeem the Fund's shares may be suspended or
payment of the redemption price postponed (1) when the New York Stock
Exchange ("NYSE") is closed (other than weekend and holiday closings),
(2) when trading on the NYSE is restricted, (3) when an emergency exists
as a result of which it is not reasonably practicable for the Portfolio to
dispose of securities it owns or fairly to determine the value of its net
assets, or (4) for such other period as the SEC may by order permit for
the protection of the Fund's shareholders; provided that applicable SEC
rules and regulations shall govern whether the conditions prescribed in
(2) or (3) exist. If the right of redemption is suspended, the Plan may
withdraw its offers of redemption, or it will receive payment at the NAV
per share in effect at the close of business on the first day the NYSE is
open ("Business Day") after termination of the suspension.

Redemptions in Kind

The Fund reserves the right, under certain conditions, to honor
any request for redemption by making payment in whole or in part by
securities valued as described under" Share Information -- Share Prices
and Net Asset Value" in the Prospectus. If payment is made in securities,
a shareholder generally will incur brokerage expenses in converting those
securities into cash and will be subject to fluctuations in the market
price of those securities until they are sold. The Fund does not redeem
in kind under normal circumstances, but would do so when the Fund Trustees
determine that it is in the best interest of the Fund's shareholders as a
whole. Redemptions in kind will be made with readily marketable
securities to the extent possible.

DIVIDENDS AND OTHER DISTRIBUTIONS

The Fund distributes to the Plan amounts equal to substantially
all of its proportionate share of any net investment income (after
deducting expenses incurred directly by the Fund), net capital gains (both
long-term and short-term), and net gains from foreign currency
transactions earned or realized by the Portfolio. The Fund calculates its
net investment income and NAV per share as of the close of regular trading
on the NYSE on each Business Day (usually 4:00 p.m. Eastern time).

The Portfolio's net investment income consists of all income
accrued on portfolio assets less accrued expenses, but does not include
realized gains and losses. Net investment income and realized gains and
losses are reflected in the Portfolio's NAV (and, hence, the Fund's NAV)
until they are distributed. Dividends from net investment income and
distributions of realized net capital and foreign currency gains, if any,
normally are paid once annually, in December.

Dividends and/or other distributions are automatically
reinvested in additional shares of the Fund, unless and until the Plan
elects to receive them in cash ("cash election"). A cash election remains

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<PAGE>

in effect until the Plan notifies State Street Bank and Trust Company in
writing to discontinue the election.

ADDITIONAL TAX INFORMATION

Taxation of the Fund

In order to continue to qualify for treatment as a RIC under the
Code, the Fund must distribute to the Plan for each taxable year at least
90% of its investment company taxable income (consisting generally of net
investment income, net short-term capital gain, and net gains from certain
foreign currency transactions) ("Distribution Requirement") and must meet
several additional requirements. These requirements include the follow-
ing: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities
loans, and gains from the sale or other disposition of securities or
foreign currencies, or other income (including gains from Hedging
Instruments) derived with respect to its business of investing in
securities or those currencies ("Income Requirement"); (2) the Fund must
derive less than 30% of its gross income each taxable year from the sale
or other disposition of securities, or any of the following, that were
held for less than three months --Hedging Instruments (other than those on
foreign currencies), or foreign currencies (or Hedging Instruments
thereon) that are not directly related to the Fund's principal business of
investing in securities (or options and futures with respect thereto)
("Short-Short Limitation"); and (3) at the close of each quarter of the
Fund's taxable year, (i) at least 50% of the value of its total assets
must be represented by cash and cash items, U.S. Government securities,
and other securities limited, in respect of any one issuer, to an amount
that does not exceed 5% of the value of the Fund's total assets and does
not represent more than 10% of the issuer's outstanding voting securities,
and (ii) not more than 25% of the value of its total assets may be
invested in securities (other than U.S. Government securities) of any one
issuer.

Certain funds that invest in portfolios managed by N&B
Management, including funds that invest in other portfolios of Managers
Trust, have received a ruling from the Internal Revenue Service
("Service") that each such fund, as an investor in a corresponding
portfolio of Managers Trust, will be deemed to own a proportionate share
of the portfolio's assets and income for purposes of determining whether
the fund satisfies all the requirements described above to qualify as a
RIC. Although this ruling may not be relied on as precedent by the Fund,
N&B Management believes that the reasoning thereof and, hence, its
conclusion apply to the Fund as well.

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<PAGE>

capital gain net income for the one-year period ended on October 31 of
that year, plus certain other amounts.

See the next section for a discussion of the tax consequences to
the Fund of distributions to it from the Portfolio, investments by the
Portfolio in certain securities, and hedging transactions engaged in by
the Portfolio.

Taxation of the Portfolio

Certain portfolios managed by N&B Management, including the
other portfolios of Managers Trust, have received a ruling from the
Service to the effect that, among other things, each such portfolio will
be treated as a separate partnership for federal income tax purposes and
will not be a "publicly traded partnership." Although this ruling may not
be relied on as precedent by the Portfolio, N&B Management believes the
reasoning thereof and, hence, its conclusion apply to the Portfolio as
well. As a result, the Portfolio is subject to federal income tax;
instead, each investor in the Portfolio, such as the Fund, is required to
take into account in determining its federal income tax liability its
share of the Portfolio's income, gains, losses, deductions, and credits,
without regard to whether it has received any cash distributions from the
Portfolio. The Portfolio also is not subject to Delaware or New York
income or franchise tax.

Because the Fund is deemed to own a proportionate share of the
Portfolio's assets and income for purposes of determining whether the Fund
satisfies the requirements as a RIC, the Portfolio intends to continue to
conduct its operations so that the Fund will be able to continue to
satisfy all those requirements.

Distributions to the Fund from the Portfolio (whether pursuant
to a partial or complete withdrawal or otherwise) will not result in the
Fund's recognition of any gain or loss for federal income tax purposes,
except that (1) gain will be recognized to the extent any cash that is
distributed exceeds the Fund's basis for its interest in the Portfolio
before the distribution, (2) income or gain will be recognized if the
distribution is in liquidation of the Fund's entire interest in the
Portfolio and includes a disproportionate share of any unrealized
receivables held by the Portfolio, and (3) loss will be recognized if a
liquidation distribution consists solely of cash and/or unrealized
receivables. The Fund's basis for its interest in the Portfolio generally
equals the amount of cash and the basis of any property the Fund invests
in the Portfolio, increased by the Fund's share of the Portfolio's net
income and gains and decreased by (1) the amount of cash and the basis of
any property the Portfolio distributes to the Fund and (2) the Fund's
share of the Portfolio's losses.

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<PAGE>

Dividends and interest received by the Portfolio may be subject
to income, withholding, or other taxes imposed by foreign countries and
U.S. possessions that would reduce the yield on its securities. Tax
treaties between certain countries and the United States may reduce or
eliminate these foreign taxes, however, and many foreign countries do not
impose taxes on capital gains in respect of investments by foreign
investors.

The Portfolio may invest in the stock of "passive foreign
investment companies" ("PFICs"). A PFIC is a foreign corporation that, in
general, meets either of the following tests: (1) at least 75% of its
gross income is passive or (2) an average of at least 50% of its assets
produce, or are held for the production of, passive income. Under certain
circumstances, if the Portfolio holds stock of a PFIC, the Fund
(indirectly through its interest in the Portfolio) will be subject to
federal income tax on a portion of any "excess distribution" received on
the stock or of any gain on disposition of the stock (collectively, "PFIC
income"), plus interest thereon, even if the Fund distributes the PFIC
income as a taxable dividend to the Plan. The balance of the PFIC income
will be included in the Fund's investment company taxable income and,
accordingly, will not be taxable to it to the extent that income is
distributed to the Plan.

If the Portfolio invests in a PFIC and elects to treat the PFIC
as a "qualified electing fund," then in lieu of the Fund's incurring the
foregoing tax and interest obligation, the Fund would be required to
include in income each year its pro rata share of the Portfolio's pro rata
share of the qualified electing fund's annual ordinary earnings and net
capital gain (the excess of net long-term capital gain over net short-term
capital loss) -- which most likely would have to be distributed by the
Fund to satisfy the Distribution Requirement and to avoid imposition of
the Excise Tax -- even if those earnings and gain were not received by the
Portfolio. In most instances it will be very difficult, if not
impossible, to make this election because of certain requirements thereof.

Pursuant to proposed regulations, open-end RICs, such as the
Fund, would be entitled to elect to mark to market their stock in certain
PFICs. Marking to market, in this context, means recognizing as gain for
each taxable year the excess, as of the end of that year, of the fair
market value of each such PFIC's stock over the adjusted basis in that
stock (including mark to market gain for each prior year for which an
election was in effect).

The Portfolio's use of hedging strategies, such as writing
(selling) and purchasing options and futures contracts and entering into
forward contracts, involves complex rules that will determine for income
tax purposes the character and timing of recognition of the gains and
losses the Portfolio realizes in connection therewith. Income from foreign

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<PAGE>

currencies (except certain gains therefrom that may be excluded by future
regulations), and income from transactions in Hedging Instruments derived
by the Portfolio with respect to its business of investing in securities
or foreign currencies, will qualify as permissible income for the Fund
under the Income Requirement. However, income from the disposition by the
Portfolio of Hedging Instruments (other than those on foreign currencies)
will be subject to the Short-Short Limitation for the Fund if they are
held for less than three months. Income from the disposition of foreign
currencies, and Hedging Instruments on foreign currencies, that are not
directly related to the Portfolio's principal business of investing in
securities (or options and futures with respect thereto) also will be
subject to the Short-Short Limitation for the Fund if they are held for
less than three months.

If the Portfolio satisfies certain requirements, any increase in
value of a position that is part of a "designated hedge" will be offset by
any decrease in value (whether realized or not) of the offsetting hedging
position during the period of the hedge for purposes of determining
whether the Fund satisfies the Short-Short Limitation. Thus, only the net
gain (if any) from the designated hedge will be included in gross income
for purposes of that limitation. The Portfolio will consider whether it
should seek to qualify for this treatment for its hedging transactions.
To the extent the Portfolio does not so qualify, it may be forced to defer
the closing out of certain Hedging Instruments beyond the time when it
otherwise would be advantageous to do so, in order for the Fund to
continue to qualify as a RIC.

Exchange-traded futures contracts and listed options thereon
("Section 1256 contracts") are required to be marked to market (that is,
treated as having been sold at market value) at the end of the Portfolio's
taxable year. Sixty percent of any gain or loss recognized as a result of
these "deemed sales," and 60% of any net realized gain or loss from any
actual sales, of Section 1256 contracts are treated as long-term capital
gain or loss; the remainder is treated as short-term capital gain or loss.

The Portfolio may acquire zero coupon securities or other
securities issued with original issue discount ("OID"). As a holder of
those securities, the Portfolio (and, through it, the Fund) must take into
account the OID that accrues on the securities during the taxable year,
even if it receives no corresponding payment on the securities during the
year. Because the Fund annually must distribute substantially all of its
investment company taxable income (including its share of the Portfolio's
accrued OID) to satisfy the Distribution Requirement and to avoid
imposition of the Excise Tax, the Fund may be required in a particular
year to distribute as a dividend an amount that is greater than its
proportionate share of the total amount of cash the Portfolio actually
receives. Those distributions will be made from the Fund's (or its
proportionate share of the Portfolio's) cash assets or, if necessary, from
the proceeds of sales of the Portfolio's securities. The Portfolio may
realize capital gains or losses from those sales, which would increase or
decrease the Fund's investment company taxable income and/or net capital

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<PAGE>

gain. In addition, any such gains may be realized on the disposition of
securities held for less than three months. Because of the Short-Short
Limitation, any such gains would reduce the Portfolio's ability to sell
other securities, or certain Hedging Instruments, held for less than three
months that it might wish to sell in the ordinary course of its portfolio
management.

PORTFOLIO TRANSACTIONS

Neuberger & Berman acts as the Portfolio's principal broker in
the purchase and sale of its portfolio securities and in connection with
the purchase and sale of options on its securities. Transactions in
portfolio securities for which Neuberger & Berman serves as broker will be
effected in accordance with Rule 17e-1 under the 1940 Act.

During the period from March 14, 1994 (commencement of
operations) through August 31, 1994, and the fiscal year ended August 31,
1995, the Portfolio paid brokerage commissions of $46,374 and $138,378,
respectively, of which $46,050 and $95,964, respectively, were paid to
Neuberger & Berman. Transactions in which that Portfolio used Neuberger &
Berman as broker comprised 72.32% of the aggregate dollar amount of
transactions involving the payment of commissions, and 69.35% of the
aggregate brokerage commissions paid by the Portfolio, during the fiscal
year ended August 31, 1995. 93.17% of the $42,414 paid to other brokers
by that Portfolio during that fiscal year (representing commissions on
transactions involving approximately $17,590,257) was directed to those
brokers because of research services they provided. During the fiscal
year ended August 31, 1995, the Portfolio acquired securities of the
following of its Regular B/Ds: none; at that date, that Portfolio held the
securities of its Regular B/Ds with an aggregate value as follows: none.

Portfolio securities are, from time to time, loaned by the
Portfolio to Neuberger & Berman in accordance with the terms and
conditions of an order issued by the SEC. The order exempts such
transactions from provisions of the 1940 Act that would otherwise prohibit
such transactions, subject to certain conditions. Among the conditions of
the order, securities loans made by the Portfolio to Neuberger & Berman
must be fully secured by cash collateral. Under the order, the portion of
the income on cash collateral which may be shared with Neuberger & Berman
is determined with reference to concurrent arrangements between Neuberger
& Berman and non-affiliated lenders with which it engages in similar
transactions. In addition, where Neuberger & Berman borrows securities
from the Portfolio in order to relend them to others, Neuberger & Berman
is required to pay the Portfolio, on a quarterly basis, certain "excess
earnings" that Neuberger & Berman otherwise has derived from the relending
of the borrowed securities. When Neuberger & Berman desires to borrow a
security that the Portfolio has indicated a willingness to lend, Neuberger
& Berman must borrow such security from the Portfolio, rather than from an
unaffiliated lender, unless the unaffiliated lender is willing to lend

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<PAGE>

such security on more favorable terms (as specified in the order) than the
Portfolio. If the Portfolio's expenses exceed its income in any
securities loan transaction with Neuberger & Berman, Neuberger & Berman
must reimburse the Portfolio for such loss.

During the fiscal year ended August 31, 1995, and the period
March 14, 1994 (commencement of operations) to August 31, 1994, the
Portfolio earned no interest income from the collateralization of
securities loans.

The Portfolio may also lend securities to unaffiliated entities,
including brokers or dealers, banks and other recognized institutional
borrowers of securities, provided that cash or equivalent collateral,
equal to at least 100% of the market value of the securities loaned, is
continuously maintained by the borrower with the Portfolio. During the
time securities are on loan, the borrower will pay the Portfolio an amount
equivalent to any dividends or interest paid on such securities. The
Portfolio may invest the cash collateral and earn income, or it may
receive an agreed upon amount of interest income from a borrower who has
delivered equivalent collateral. These loans are subject to termination
at the option of the Portfolio or the borrower. The Portfolio may pay
reasonable administrative and custodial fees in connection with a loan and
may pay a negotiated portion of the interest earned on the cash or
equivalent collateral to the borrower or placing broker. The Portfolio
does not have the right to vote securities on loan, but would terminate
the loan and regain the right to vote if that were considered important
with respect to the investment.

A committee of Independent Portfolio Trustees from time to time
reviews, among other things, information relating to securities loans by
the Portfolio.

In effecting securities transactions, the Portfolio generally
seeks to obtain the best price and execution of orders. Commission rates,
being a component of price, are considered along with other relevant
factors. The Portfolio plans to continue to use Neuberger & Berman as its
principal broker where, in the judgment of N&B Management (the Portfolio's
investment manager and an affiliate of the broker), that firm is able to
obtain a price and execution at least as favorable as other qualified
brokers. To the Portfolio's knowledge, however, no affiliate of the Port-
folio receives give-ups or reciprocal business in connection with its
securities transactions.

The use of Neuberger & Berman as a broker for the Portfolio is
subject to the requirements of Section 11(a) of the Securities Exchange

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<PAGE>

Act of 1934. Section 11(a) prohibits members of national securities
exchanges from retaining compensation for executing exchange transactions
for accounts which they or their affiliates manage, except where they have
the authorization of the persons authorized to transact business for the
account and comply with certain annual reporting requirements. The Port-
folio Trustees have expressly authorized Neuberger & Berman to retain such
compensation, and Neuberger & Berman complies with the reporting
requirements of Section 11(a).

Under the 1940 Act, commissions paid by the Portfolio to
Neuberger & Berman in connection with a purchase or sale of securities on
a securities exchange may not exceed the usual and customary broker's
commission. Accordingly, it is the Portfolio's policy that the
commissions to be paid to Neuberger & Berman must, in N&B Management's
judgment, be (1) at least as favorable as those charged by other brokers
having comparable execution capability and (2) at least as favorable as
commissions contemporaneously charged by Neuberger & Berman on comparable
transactions for its most favored unaffiliated customers, except for
accounts for which Neuberger & Berman acts as a clearing broker for
another brokerage firm and customers of Neuberger & Berman considered by a
majority of the Independent Portfolio Trustees not to be comparable to the
Portfolio. The Portfolio does not deem it practicable and in its best
interest to solicit competitive bids for commissions on each transaction
effected by Neuberger & Berman. However, consideration regularly is given
to information concerning the prevailing level of commissions charged by
other brokers on comparable transactions during comparable periods of
time. The 1940 Act generally prohibits Neuberger & Berman from acting as
principal in the purchase or sale of securities for the Portfolio's
account, unless an appropriate exemption is available.

A committee of Independent Portfolio Trustees, from time to
time, reviews among other things, information relating to the commissions
charged by Neuberger & Berman to the Portfolio and to its other customers
and information concerning the prevailing level of commissions charged by
other brokers having comparable execution capability. In addition, the
procedures pursuant to which Neuberger & Berman effects brokerage
transactions for the Portfolio must be reviewed and approved no less often
than annually by a majority of the Independent Portfolio Trustees.

The Portfolio expects that it will continue to execute a portion
of its transactions through brokers other than Neuberger & Berman. In
selecting those brokers, N&B Management considers the quality and
reliability of brokerage services, including execution capability,
performance, and financial responsibility, and may consider research and
other investment information provided by, and sale of Fund shares effected
through, those brokers.

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<PAGE>

received by Neuberger & Berman at or about the same time, Neuberger &
Berman may combine transaction orders placed on behalf of clients,
including advisory accounts in which affiliated persons have an investment
interest, for the purpose of negotiating brokerage commissions or
obtaining a more favorable price. Where appropriate, securities purchased
or sold may be allocated, in terms of amount, to a client according to the
proportion that the size of the transaction order actually placed by the
account bears to the aggregate size of transaction orders simultaneously
made by the other accounts, subject to de minimis exceptions, with all
participating accounts paying or receiving the same price.

A committee comprised of officers of N&B Management and partners
of Neuberger & Berman who are portfolio managers of the Portfolio and/or
Other N&B Funds (collectively, "N&B Funds") and some of Neuberger &
Berman's managed accounts ("Managed Accounts") evaluates semi-annually the
nature and quality of the brokerage and research services provided by
other brokers. Based on this evaluation, the committee establishes a list
and projected rankings of preferred brokers for use in determining the
relative amounts of commissions to be allocated to those brokers.
Ordinarily, the brokers on the list effect a large portion of the
brokerage transactions for the N&B Funds and the Managed Accounts that are
not effected by Neuberger & Berman. However, in any semi-annual period,
brokers not on the list may be used, and the relative amounts of brokerage
commissions paid to the brokers on the list may vary substantially from
the projected rankings. These variations reflect the following factors,
among others: (1) brokers not on the list or ranking below other brokers
on the list may be selected for particular transactions because they
provide better price and/or execution, which is the primary consideration
in allocating brokerage; (2) adjustments may be required because of
periodic changes in the execution or research capabilities of particular
brokers, or in the execution or research needs of the N&B Funds and/or the
Managed Accounts; and (3) the aggregate amount of brokerage commissions
generated by transactions for the N&B Funds and the Managed Accounts may
change substantially from one semi-annual period to the next.

The commissions charged by a broker other than Neuberger &
Berman may be higher than the amount another firm might charge if N&B
Management determines in good faith that the amount of those commissions
is reasonable in relation to the value of the brokerage and research
services provided by the broker. N&B Management believes that those
research services benefit the Portfolio by supplementing the research
otherwise available to N&B Management. That research may be used by N&B
Management in servicing Other N&B Funds and, in some cases, by Neuberger &
Berman in servicing the Managed Accounts. On the other hand, research
received by N&B Management from brokers effecting portfolio transactions
on behalf of the Other N&B Funds and by Neuberger & Berman from brokers
effecting portfolio transactions on behalf of the Managed Accounts may be
used for the Portfolio's benefit.

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<PAGE>

Janet Prindle, a Vice President of N&B Management and a partner
of Neuberger & Berman, is the person primarily responsible for making
decisions as to specific action to be taken with respect to the investment
portfolio of the Portfolio. She has full authority to take action with
respect to portfolio transactions and may or may not consult with other
personnel of N&B Management prior to taking such action. If Ms. Prindle
is unavailable to perform her responsibilities, Farha-Joyce Haboucha, who
is a Vice President of N&B Management, will assume responsibility of the
Portfolio.

Portfolio Turnover

REPORTS TO SHAREHOLDERS

Shareholders of the Fund receive unaudited semi-annual financial
statements and audited year-end financial statements certified by the
independent accountants for the Fund and Portfolio. The Fund's statements
show the investments owned by the Portfolio and the market values thereof
and provide other information about the Fund and its operations, including
the Fund's beneficial interest in the Portfolio.

CUSTODIAN AND TRANSFER AGENT

The Fund and Portfolio have each selected Street Bank and Trust
Company ("State Street"), 225 Franklin Street, Boston, MA 02110 as
custodian for its securities and cash. All correspondence should be
mailed to the Deferred Compensation Plan of the City of New York and
Related Agencies and Instrumentalities, 40 Rector Street, 3rd Floor, New
York, NY 10006. State Street also serves as the Fund's transfer agent,
administering purchases, redemptions, and transfers of Fund shares and the
payment of dividends and other distributions to the Plan, and as transfer
agent for the Portfolio.

INDEPENDENT ACCOUNTANTS

The Fund and Portfolio have selected Coopers & Lybrand L.L.P.,
One Post Office Square, Boston, MA 02109, as the independent accountants
who will audit their financial statements.

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<PAGE>

LEGAL COUNSEL

The Fund and Portfolio have selected Kirkpatrick & Lockhart LLP,
1800 M Street, N.W., Washington, D.C. 20036, as their legal counsel.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of December 11, 1995, the Deferred Compensation Plan of the
City of New York and Related Agencies and Instrumentalities, 40 Rector
Street, 3rd Floor, New York, New York 10006, owned 100% of the outstanding
shares of the Fund; and the Fund held 90.02% of the interests in the
Portfolio.

REGISTRATION STATEMENT

This SAI and the Prospectus do not contain all the information
included in the Trust's registration statement filed with the SEC under
the 1933 Act with respect to the securities offered by the Prospectus.
Certain portions of the registration statement have been omitted pursuant
to SEC rules and regulations. The registration statement, including the
exhibits filed therewith, may be examined at the SEC's offices in Wash-
ington, D.C.

Statements contained in this SAI and in the Prospectus as to the
contents of any contract or other document referred to are not necessarily
complete, and in each instance reference is made to the copy of the
contract or other document filed as an exhibit to the registration
statement, each such statement being qualified in all respects by such
reference.

FINANCIAL STATEMENTS

The following financial statements and related documents are
incorporated herein by reference from the Fund's Annual Report to
shareholders for the fiscal year ended August 31, 1995:

The audited financial statements of the Fund and
Portfolio and notes thereto for the fiscal year ended
August 31, 1995, and the reports of Coopers & Lybrand
L.L.P., independent accountants, with respect to such
audited financial statements of the Fund and the
Portfolio.

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<PAGE>

Appendix A

RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER

S&P corporate bond ratings:

AAA - Bonds rated AAA have the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely strong.

AA - Bonds rated AA have a very strong capacity to pay interest
and repay principal and differ from the higher rated issues only in small
degree.

Plus (+) or Minus (-) - The ratings above may be modified by the
addition of a plus or minus sign to show relative standing within the
major categories.

Moody's corporate bond ratings:

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 to be as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but

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<PAGE>

elements may be present that suggest a susceptibility to impairment
sometime in the future.

Baa - Bonds which are rated Baa are considered as medium grade
obligations; i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. These bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well.

Modifiers - Moody's may apply numerical modifiers 1, 2, and 3 in
each generic rating classification described above. The modifier 1
indicates that the security ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issuer ranks in the lower end of its generic rating
category.

S&P commercial paper ratings:

A-1 - This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign (+).

A-2 - This designation denotes satisfactory capacity for timely
payment. However, the relative degree of safety is not as high as for
issues designated A-1.

Moody's commercial paper ratings:

Issuers rated Prime-1 (or related supporting institutions), also
known as P-1, have a superior capacity for repayment of short-term
promissory obligations. Prime-1 repayment capacity will normally be
evidenced by the following characteristics:

- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structures with moderate
reliance on debt and ample asset protection.
- Broad margins in earnings coverage of fixed financial
charges and high internal cash generation.
- Well-established access to a range of financial markets and
assured sources of alternate liquidity.

Issuers rated Prime-2 (or related supporting institutions), also
known as P-2, have a strong capacity for repayment of short-term
promissory obligations. This will normally be evidenced by many of the
characteristics cited above, but to a lesser degree. Earnings trends and
coverage ratios, while sound, will be more subject to variation.
Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

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<PAGE>

Appendix B

THE ART OF INVESTMENT: A CONVERSATION WITH ROY NEUBERGER

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<PAGE>

The Art of Investing:
A Conversation with Roy Neuberger

"I firmly believe that if you want to
manage your own money, you must be a
student of the market. If you are
unwilling or unable to do that, find
someone else to manage your money for you."

NEUBERGER & BERMAN
<PAGE>

[THIS PAGE IS BLANK - IT IS AN INSIDE PAGE OF THIS BROCHURE]
<PAGE>

[PICTURE OF ROY NEUBERGER]

During my more than sixty-five years of buying
and selling securities, I've been asked many questions
about my approach to investing. On the pages that
follow are a variety of my thoughts, ideas and
investment principles which have served me well over
the years. If you gain useful knowledge in the
pursuit of profit as well as enjoyment from these
comments, I shall be more than content.

\s\ Roy R. Neuberger

- 1 -
<PAGE>

<S> <C>
YOU'VE BEEN ABLE TO CONDENSE SOME OF THE
CHARACTERISTICS OF SUCCESSFUL INVESTING INTO
FIVE "RULES." WHAT ARE THEY?

Rule #2: Take your temperament into account.
Recognize whether you are by nature very
speculative or just the opposite - fearful,
timid of taking risks. But in any event --

[PICTURE OF ROY NEUBERGER]

- 2 -
<PAGE>

Rule #5: Be skeptical. To repeat a few well-
worn useful phrases:

A. Dig for yourself.
B. Be from Missouri.
C. If it sounds too good to be true, it
probably is.

IN YOUR 65 YEARS OF INVESTING ARE THERE ANY
GENERAL PATTERNS YOU'VE OBSERVED AS TO HOW THE
MARKET BEHAVES?

AS A LEGENDARY "VALUE INVESTOR," HOW DO YOU
DEFINE VALUE INVESTING?

COULD YOU DESCRIBE A STOCK WITH "GOOD VALUE"?

These characteristics usually lead to companies
that are under-researched and have a high
degree of inside ownership and entrepreneurial
management.

- 3 -
<PAGE>

ARE THERE OTHER KEY CRITERIA YOU USE TO JUDGE
STOCKS?

WHAT ABOUT SELLING STOCKS?

Most individual investors should invest for the
long term but not mindlessly. A sell
discipline, often neglected by investors, is
vitally important.

[PICTURE OF ROY NEUBERGER]

- 4 -
<PAGE>

ANY OTHER ADVICE FOR INVESTORS?

HOW WOULD YOU DESCRIBE YOUR PERSONAL INVESTING
STYLE?

YOU BEGAN INVESTING IN 1929. WHAT WAS YOUR
EXPERIENCE WITH THE "GREAT CRASH"?

- 5 -
<PAGE>

HOW DID THE CRASH OF 1929 AFFECT YOUR INVESTING
STYLE?

HOW IMPORTANT ARE PSYCHOLOGICAL FACTORS TO
MARKET BEHAVIOR?

I like to be contrary. When things look bad, I
become optimistic. When everything looks rosy,
and the crowd is optimistic, I like to be a
seller. Sometimes I'm too early, but I
generally profit.

AS A RENOWNED ART COLLECTOR, DO YOU FIND
SIMILARITIES BETWEEN SELECTING STOCKS AND
SELECTING WORKS OF ART?

- 6 -
<PAGE>

[PICTURE OF ROY NEUBERGER]

- 7 -
<PAGE>

WHAT DO YOU CONSIDER THE BUSINESS MILESTONES IN
YOUR LIFE?

[PICTURE OF ROY NEUBERGER]

YOU'RE IN YOUR NINETIES AND STILL YOU GO INTO
THE OFFICE EVERY DAY TO MANAGE YOUR
INVESTMENTS. WHY?

I like the fun of being nimble in the stock
market, and I'm addicted to the market's
fascinations.

WHAT CLOSING WORDS OF ADVICE DO YOU HAVE ABOUT
INVESTING?

- 8 -
<PAGE>

ROY NEUBERGER: A BRIEF BIOGRAPHY

A TALENT FOR INVESTING

Roy began his investment career by joining
a brokerage firm in 1929, seven months before
the "Great Crash." Just weeks before "Black
Monday," he shorted the stock of RCA, thinking
it was overvalued. He profited from the
falling market and gained a reputation for
market prescience and stock selection that has
lasted his entire career.

NEUBERGER & BERMAN'S FOUNDING

- 9 -
<PAGE>

NEUBERGER & BERMAN -- OVER FIVE DECADES OF
GROWTH

Neuberger & Berman has grown through the
years and now manages approximately $30 billion
of equity and fixed income assets, both
domestic and international, for individuals,
institutions, and its family of no-load mutual
funds. Today, as when the firm was founded,
Neuberger & Berman follows a value approach to
investing, designed to enable clients to
advance in good markets and minimize losses
when conditions are less favorable.

For more complete information about the
Neuberger & Berman Guardian Fund,
including fees and expenses, call
Neuberger & Berman Management at 800-877-
9700 for a free prospectus. Please read
it carefully, before you invest or send
money.

- 10 -
<PAGE>

Neuberger & Berman Management
Inc.[SERVICE MARK]

605 Third Avenue, 2nd Floor
New York, NY 10158-0006
Shareholder Services
(800) 877-9700

[COPYRIGHT SYMBOL]1995 Neuberger
& Berman

PRINTED ON RECYCLED PAPER
WITH SOY BASED INKS

</TABLE>

- 11 -
<PAGE>

NEUBERGER & BERMAN EQUITY TRUST
POST-EFFECTIVE AMENDMENT NO. 8 ON FORM N-1A

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements:

The audited financial statements contained in the Annual Reports to
Shareholders of the Registrant for the fiscal year ended August 31, 1995
for Neuberger & Berman Equity Trust (with respect to Neuberger & Berman
Focus Trust, Neuberger & Berman Genesis Trust, Neuberger & Berman Guardian
Trust, Neuberger & Berman Manhattan Trust, Neuberger & Berman Partners
Trust, and Neuberger & Berman NYCDC Socially Responsive Trust) and Equity
Managers Trust (with respect to Neuberger & Berman Focus Portfolio,
Neuberger & Berman Genesis Portfolio, Neuberger & Berman Guardian
Portfolio, Neuberger & Berman Manhattan Portfolio, Neuberger & Berman
Partners Portfolio, and Neuberger & Berman Socially Responsive Portfolio)
and the reports of the independent auditors/accountants are incorporated
into the Statement of Additional Information by reference.

Included in Part A of this Post-Effective Amendment:

FINANCIAL HIGHLIGHTS for the period indicated therein for
Neuberger & Berman Focus Trust, Neuberger & Berman Genesis
Trust, Neuberger & Berman Guardian Trust, Neuberger &
Berman Manhattan Trust, Neuberger & Berman Partner Trust,
and the Neuberger & Berman NYCDC Socially Responsive Trust.

(b) Exhibits:

Exhibit
Number Description
------- -----------

(1) (a) Certificate of Trust. Filed herewith.

(b) Trust Instrument of Neuberger & Berman
Equity Trust. Filed herewith.

(2) By-laws of Neuberger & Berman Equity Trust. Filed
herewith.

(3) Voting Trust Agreement. None.
<PAGE>

Exhibit
Number Description
------- -----------

(4) Specimen Share Certificate. Incorporated by
reference to Post-Effective Amendment No. 4 to
Registrant's Registration Statement, File Nos. 33-
64368 and 811-7784.

(5) (a) (i) Management Agreement Between Equity
Managers Trust and Neuberger &
Berman Management Incorporated.
Incorporated by Reference to Post-
Effective Amendment No. 70 to
Registration Statement of Neuberger
& Berman Equity Funds, File Nos. 2-
11357 and 811-582, Edgar Accession
No. 0000898432-000314.

(ii) Schedule A - Series of Equity
Managers Trust Currently Subject to
the Management Agreement.
Incorporated by Reference to Post-
Effective Amendment No. 70 to
Registration Statement of Neuberger
& Berman Equity Funds, File Nos. 2-
11357 and 811-582, Edgar Accession
No. 0000898432-000314.

(iii) Schedule B - Schedule of
Compensation Under the Management
Agreement. Incorporated by Reference
to Post-Effective Amendment No. 70
to Registration Statement of
Neuberger & Berman Equity Funds,
File Nos. 2-11357 and 811-582, Edgar
Accession No. 0000898432-000314.

(b) (i) Sub-Advisory Agreement Between
Neuberger & Berman Management
Incorporated and Neuberger & Berman,
L.P. with Respect to Equity Managers
Trust. Incorporated by Reference to
Post-Effective Amendment No. 70 to
Registration Statement of Neuberger
& Berman Equity Funds, File Nos. 2-
11357 and 811-582, Edgar Accession
No. 0000898432-000314.

- 2 -
<PAGE>

Exhibit
Number Description
------- -----------

(ii) Schedule A - Series of Equity
Managers Trust Currently Subject to
the Sub-Advisory Agreement.
Incorporated by Reference to Post-
Effective Amendment No. 70 to
Registration Statement of Neuberger
& Berman Equity Funds, File Nos. 2-
11357 and 811-582, Edgar Accession
No. 0000898432-000314.

(6) (a) Distribution Agreement Between Neuberger &
Berman Equity Trust and Neuberger & Berman
Management Incorporated. Filed herewith.

(b) Schedule A - Series of Neuberger & Berman
Equity Trust Currently Subject to the
Distribution Agreement. Filed herewith.

(7) Bonus, Profit Sharing or Pension Plans. None.

(8) (a) Custodian Contract Between Neuberger &
Berman Equity Trust and State Street Bank
and Trust Company. Filed herewith.

(b) Schedule A - Approved Foreign Banking
Institutions and Securities Depositories
Under the Custodian Contract. To be Filed
by Amendment.

(9) (a) (i) Transfer Agency Agreement Between
Neuberger & Berman Equity Trust and
State Street Bank and Trust Company.
Filed herewith.

(ii) Agreement Between Neuberger & Berman
Equity Trust and State Street Bank
and Trust Company Adding Neuberger &
Berman NYCDC Socially Responsive
Trust as a Portfolio Governed by the
Transfer Agency Agreement. Filed
herewith.

(iii) First Amendment to Transfer Agency
and Service Agreement between Equity
Trust and State Street Bank and
Trust Company. Filed herewith.

- 3 -
<PAGE>

Exhibit
Number Description
------- -----------

(b) (i) Administration Agreement Between
Neuberger & Berman Equity Trust and
Neuberger & Berman Management
Incorporated. Filed herewith.

(ii) Schedule A - Series of Neuberger &
Berman Equity Trust Currently
Subject to the Administration
Agreement. Filed herewith.

(iii) Schedule B - Schedule of
Compensation Under the
Administration Agreement. Filed
herewith.

(10) Opinion and Consent of Kirkpatrick &
Lockhart LLP on Securities Matters.
Incorporated by Reference to Registrant's
Rule 24f-2 Notice for the Fiscal Year ended
August 31, 1995, File Nos. 33-64368 and
811-7784, Edgar Accession No. 0000898432-
95-000340.

(11) (a) Consent of Ernst & Young LLP, Independent
Auditors. Filed herewith.

(b) Consent of Coopers & Lybrand L.L.P.,
Independent Accountants. Filed herewith.

(12) Financial Statements Omitted from
Prospectus. None.

(13) Letter of Investment Intent. None.

(14) Prototype Retirement Plan. None.

(15) Plan Pursuant to Rule 12b-1. None

(16) Schedule of Computation of Performance
Quotations. Incorporated by Reference to
Post-Effective Amendment No. 4 to
Registrant's Registration Statement, File
Nos. 33-64368 and 811-7784.

(17) Financial Data Schedule. Filed herewith.

(18) Plan Pursuant to Rule 18f-3. None.

- 4 -
<PAGE>

Item 25. Persons Controlled By or Under Common Control with
Registrant.

No person is controlled by or under common control with the
Registrant.

Item 26. Number of Holders of Securities.

The following information is given as of November 30, 1995.

Number of
Title of Class Record Holders
-------------- --------------

Shares of beneficial
interest, $0.001 par value, of:

Neuberger & Berman Focus Trust 38
Neuberger & Berman Genesis Trust 20
Neuberger & Berman Guardian Trust 250
Neuberger & Berman Manhattan Trust 24
Neuberger & Berman Partners Trust 55
Neuberger & Berman NYCDC Socially Responsive Trust 3

Item 27. Indemnification.

A Delaware business trust may provide in its governing instrument
for indemnification of its officers and trustees from and against any and
all claims and demands whatsoever. Article IX, Section 2 of the Trust
Instrument provides that the Registrant shall indemnify any present or
former trustee, officer, employee or agent of the Registrant ("Covered
Person") to the fullest extent permitted by law against liability and all
expenses reasonably incurred or paid by him or her in connection with any
claim, action, suit or proceeding ("Action") in which he or she becomes
involved as a party or otherwise by virtue of his or her being or having
been a Covered Person and against amounts paid or incurred by him or her
in settlement thereof. Indemnification will not be provided to a person
adjudged by a court or other body to be liable to the Registrant or its
shareholders by reason of "willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his office" ("Disabling Conduct"), or not to have acted in good faith in
the reasonable belief that his or her action was in the best interest of
the Registrant. In the event of a settlement, no indemnification may be
provided unless there has been a determination that the officer or trustee
did not engage in Disabling Conduct (i) by the court or other body
approving the settlement; (ii) by at least a majority of those trustees
who are neither interested persons, as that term is defined in the
Investment Company Act of 1940, of the Registrant ("Independent
Trustees"), nor are parties to the matter based upon a review of readily

- 5 -
<PAGE>

available facts; or (iii) by written opinion of independent legal counsel
based upon a review of readily available facts.

Pursuant to Article IX, Section 3 of the Trust Instrument, if any
present or former shareholder of any series ("Series") of the Registrant
shall be held personally liable solely by reason of his or her being or
having been a shareholder and not because of his or her acts or omissions
or for some other reason, the present or former shareholder (or his or her
heirs, executors, administrators or other legal representatives or in the
case of any entity, its general successor) shall be entitled out of the
assets belonging to the applicable Series to be held harmless from and
indemnified against all loss and expense arising from such liability. The
Registrant, on behalf of the affected Series, shall, upon request by such
shareholder, assume the defense of any claim made against such shareholder
for any act or obligation of the Series and satisfy any judgment thereon
from the assets of the Series.

Section 9 of the Management Agreement between Equity Managers Trust
and Neuberger and Berman Management Incorporated ("N&B Management")
provides that neither N&B Management nor any director, officer or employee
of N&B Management performing services for any series of Equity Managers
Trust (each a "Portfolio") at the direction or request of N&B Management
in connection with N&B Management's discharge of its obligations under the
Agreement shall be liable for any error of judgment or mistake of law or
for any loss suffered by a Portfolio in connection with any matter to
which the Agreement relates; provided, that nothing in the Agreement shall
be construed (i) to protect N&B Management against any liability to Equity
Managers Trust or a Portfolio of Equity Managers Trust or its
interestholders to which N&B Management would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of N&B Management's duties, or by reason of N&B Management's
reckless disregard of its obligations and duties under the Agreement, or
(ii) to protect any director, officer or employee of N&B Management who is
or was a Trustee or officer of Equity Managers Trust against any liability
to Equity Managers Trust or a Portfolio or its interestholders to which
such person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved
in the conduct of such person's office with Equity Managers Trust.

Section 1 of the Sub-Advisory Agreement between Equity Managers
Trust and Neuberger & Berman, L.P. ("Sub-Adviser") provides that in the
absence of willful misfeasance, bad faith or gross negligence in the
performance of its duties, or of reckless disregard of its duties and
obligations under the Agreement, the Sub-Adviser will not be subject to
liability for any act or omission or any loss suffered by any Portfolio of
Equity Managers Trust or its interestholders in connection with the
matters to which the Agreement relates.

Section 11 of the Distribution Agreement between the Registrant and
N&B Management provides that N&B Management shall look only to the assets
of a Series for the Registrant's performance of the Agreement by the
Registrant on behalf of such Series, and neither the Trustees nor any of

- 6 -
<PAGE>

the Registrant's officers, employees or agents, whether past, present or
future, shall be personally liable therefor.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 ("1933 Act") may be permitted to trustees, officers
and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a trustee, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such trustee, officer or controlling person, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the 1933 Act and will be governed by the final adjudication of such
issue.

Item 28. Business and Other Connections of Adviser and Sub-Adviser.

There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
director or officer of N&B Management and each partner of the Sub-Adviser
is, or at any time during the past two years has been, engaged for his or
her own account or in the capacity of director, officer, employee, partner
or trustee.

- 7 -
<PAGE>

<TABLE>
<CAPTION>
NAME BUSINESS AND OTHER CONNECTIONS

<S> <C>

Claudia A. Brandon Secretary, Neuberger & Berman Advisers
Vice President, N&B Management Trust (Delaware business trust);
Management Secretary, Advisers Managers Trust; Secretary,
Neuberger & Berman Advisers Management Trust
(Massachusetts business trust) (1); Secretary,
Neuberger & Berman Income Funds; Secretary,
Neuberger & Berman Income Trust; Secretary,
Neuberger & Berman Equity Funds; Secretary,
Neuberger & Berman Equity Trust; Secretary,
Income Managers Trust; Secretary, Equity
Managers Trust; Secretary, Global Managers
Trust; Secretary, Neuberger & Berman Equity
Assets.

Stacy Cooper-Shugrue Assistant Secretary, Neuberger & Berman
Assistant Vice President, Advisers Management Trust (Delaware business
N&B Management trust); Assistant Secretary, Advisers Managers
Trust; Assistant Secretary, Neuberger & Berman
Advisers Management Trust (Massachusetts
business trust) (1); Assistant Secretary,
Neuberger & Berman Income Funds; Assistant
Secretary, Neuberger & Berman Income Trust;
Assistant Secretary, Neuberger & Berman Equity
Funds; Assistant Secretary, Neuberger & Berman
Equity Trust; Assistant Secretary, Income
Managers Trust; Assistant Secretary, Equity
Managers Trust; Assistant Secretary, Global
Managers Trust; Assistant Secretary, Neuberger
& Berman Equity Assets.

Robert Cresci Assistant Portfolio Manager, BNP-N&B Global
Assistant Vice President, Asset Management L.P. (joint venture of
N&B Management Neuberger & Berman and Banque Nationale de
Paris) (2); Assistant Portfolio Manager,
Vontobel (Swiss bank) (3).

- 8 -
<PAGE>

NAME BUSINESS AND OTHER CONNECTIONS

Stanley Egener Chairman of the Board and Trustee, Neuberger &
President and Director, Berman Advisers Management Trust (Delaware
N&B Management; General business trust); Chairman of the Board and
Partner, Neuberger & Berman Trustee, Advisers Managers Trust; Chairman of
the Board and Trustee, Neuberger & Berman
Advisers Management Trust (Massachusetts
business trust) (1); Chairman of the Board and
Trustee, Neuberger & Berman Income Funds;
Chairman of the Board and Trustee, Neuberger &
Berman Income Trust; Chairman of the Board and
Trustee, Neuberger & Berman Equity Funds;
Chairman of the Board and Trustee, Neuberger &
Berman Equity Trust; Chairman of the Board and
Trustee, Income Managers Trust; Chairman of
the Board and Trustee, Equity Managers Trust;
Chairman of the Board and Trustee, Global
Managers Trust; Chairman of the Board and
Trustee, Neuberger & Berman Equity Assets.

Robert I. Gendelman Senior Portfolio Manager, Harpel Advisors (4).
Assistant Vice President,
N&B Management

Theodore P. Giuliano Executive Vice President and Trustee,
Vice President, N&B Neuberger & Berman Income Funds (6); Executive
Management (5); General Vice President and Trustee, Neuberger & Berman
Partner, Neuberger & Berman Income Trust (6); Executive Vice President and
Trustee, Income Managers Trust (6).

Theresa A. Havell President and Trustee, Neuberger & Berman
Vice President and Income Funds; President and Trustee,
Director, N&B Management; Neuberger & Berman Income Trust; President and
General Partner, Neuberger & Trustee, Income Managers Trust
Berman

- 9 -
<PAGE>

NAME BUSINESS AND OTHER CONNECTIONS

C. Carl Randolph Assistant Secretary, Neuberger & Berman
General Partner, Neuberger & Advisers Management Trust (Delaware business
Berman trust); Assistant Secretary, Advisers Managers
Trust; Assistant Secretary, Neuberger & Berman
Advisers Management Trust (Massachusetts
business trust) (1); Assistant Secretary,
Neuberger & Berman Income Funds; Assistant
Secretary, Neuberger & Berman Income Trust;
Assistant Secretary, Neuberger & Berman Equity
Funds; Assistant Secretary, Neuberger & Berman
Equity Trust; Assistant Secretary, Income
Managers Trust; Assistant Secretary, Equity
Managers Trust; Assistant Secretary, Global
Managers Trust; Assistant Secretary, Neuberger
& Berman Equity Assets.

Felix Rovelli Senior Vice President-Senior Equity Portfolio
Vice President, Manager, BNP-N&B Global Asset Management L.P.
N&B Management (joint venture of Neuberger & Berman and
Banque Nationale de Paris) (2); Portfolio
Manager, Vontobel (Swiss bank) (7).

Richard Russell Treasurer, Neuberger & Berman Advisers
Vice President, Management Trust (Delaware business trust);
N&B Management Treasurer, Advisers Managers Trust; Treasurer,
Neuberger & Berman Advisers Management Trust
(Massachusetts business trust) (1); Treasurer,
Neuberger & Berman Income Funds; Treasurer,
Neuberger & Berman Income Trust; Treasurer,
Neuberger & Berman Equity Funds; Treasurer,
Neuberger & Berman Equity Trust; Treasurer,
Income Managers Trust; Treasurer, Equity
Managers Trust; Treasurer, Global Managers
Trust; Treasurer, Neuberger & Berman Equity
Assets.

- 10 -
<PAGE>

NAME BUSINESS AND OTHER CONNECTIONS

Daniel J. Sullivan Vice President, Neuberger & Berman Advisers
Senior Vice President, Management Trust (Delaware business trust);
N&B Management Vice President, Advisers Managers Trust; Vice
President, Neuberger & Berman Advisers
Management Trust (Massachusetts business
trust) (1); Vice President, Neuberger & Berman
Income Funds; Vice President, Neuberger &
Berman Income Trust; Vice President,
Neuberger & Berman Equity Funds; Vice
President, Neuberger & Berman Equity Trust;
Vice President, Income Managers Trust; Vice
President, Equity Managers Trust; Vice
President, Global Managers Trust; Vice
President, Neuberger & Berman Equity Assets.

Susan Switzer Portfolio Manager, Mitchell Hutchins Asset
Assistant Vice President, Management Inc., 1285 Avenue of the Americas,
N&B Management New York, New York 10019 (8).

Michael J. Weiner Vice President, Neuberger & Berman Advisers
Senior Vice President and Management Trust (Delaware business trust);
Treasurer, N&B Management Vice President, Advisers Managers Trust; Vice
President, Neuberger & Berman Advisers
Management Trust (Massachusetts business
trust) (1); Vice President, Neuberger & Berman
Income Funds; Vice President, Neuberger &
Berman Income Trust; Vice President,
Neuberger & Berman Equity Funds; Vice
President, Neuberger & Berman Equity Trust;
Vice President, Income Managers Trust; Vice
President, Equity Managers Trust; Vice
President, Global Managers Trust; Vice
President, Neuberger & Berman Equity Assets.

Lawrence Zicklin President and Trustee, Neuberger & Berman
Director, N&B Management; Advisers Management Trust (Delaware business
General Partner, Neuberger & trust); President and Trustee, Advisers
Berman Managers Trust; President and Trustee,
Neuberger & Berman Advisers Management Trust
(Massachusetts business trust) (1); President
and Trustee, Neuberger & Berman Equity Funds;
President and Trustee, Neuberger & Berman
Equity Trust; President and Trustee, Equity
Managers Trust; President, Global Managers
Trust; President and Trustee, Neuberger &
Berman Equity Assets

</TABLE>

- 11 -
<PAGE>

The principal address of N&B Management, Neuberger & Berman, BNP-
N&B Global Asset Management L.P. and of each of the investment companies
named above, is 605 Third Avenue, New York, New York 10158. Other
addresses to be provided by amendment.

______________________________

(1) Until April 30, 1995.
(2) Until October 31, 1995.
(3) Until May 1994.
(4) Until 1993.
(5) Until November 4, 1994.
(6) Until June 22, 1994.
(7) Until April 1994.
(8) Until 1994.

Item 29. Principal Underwriters.

(a) Neuberger & Berman Management Incorporated, the
principal underwriter distributing securities of the Registrant, is also
the principal underwriter and distributor for each of the following
investment companies:

Neuberger & Berman Advisers Management Trust
Neuberger & Berman Equity Funds
Neuberger & Berman Equity Assets
Neuberger & Berman Income Funds
Neuberger & Berman Income Trust

Neuberger & Berman Management Incorporated is also the
investment manager to the master funds in which the above-named investment
companies invest.

(b) Set forth below is information concerning the directors
and officers of the Registrant's principal underwriter. The principal
business address of each of the persons listed is 605 Third Avenue, New
York, New York 10158-0180, which is also the address of the Registrant's
principal underwriter.

POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT

Claudia A. Brandon Vice President Secretary

Patrick T. Byrne Assistant Vice President None

- 12 -
<PAGE>

POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT

Richard A. Cantor Chairman of the Board and None
Director

Robert Conti Assistant Vice President None

Stacy Cooper-Shugrue Assistant Vice President Assistant Secretary

Robert Cresci Assistant Vice President None

William Cunningham Vice President None

Barbara DiGiorgio Assistant Vice President None

Roberta D'Orio Assistant Vice President None

Stanley Egener President and Director Chairman of the Board of
Trustees
(Chief Executive Officer)

Robert I. Gendelman Assistant Vice President None

Mark R. Goldstein Vice President None

Farha-Joyce Haboucha Vice President None

Theresa A. Havell Vice President and Director None

Leslie Holliday-Soto Assistant Vice President None

Michael M. Kassen Vice President None

Irwin Lainoff Director None

Michael Lamberti Vice President None
Josephine Mahaney Vice President None

Carmen G. Martinez Assistant Vice President None

Lawrence Marx III Vice President None

Ellen Metzger Vice President and Secretary None

Paul Metzger Assistant Vice President None

Janet W. Prindle Vice President None

- 13 -
<PAGE>

POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT

Felix Rovelli Vice President None

Richard Russell Vice President Treasurer (Principal
Accounting Officer)

Marvin C. Schwartz Director None

Kent C. Simons Vice President None

Frederick B. Soule Vice President None

Daniel J. Sullivan Senior Vice President Vice President

Susan Switzer Assistant Vice President None

Andrea Trachtenberg Vice President of Marketing None

Judith M. Vale Vice President None

Clara Del Villar Vice President None

Susan Walsh Assistant Vice President None

Michael J. Weiner Senior Vice President and Vice President
Treasurer (Principal Financial
Officer)

Celeste Wischerth Assistant Vice President None

Thomas Wolfe Vice President None

Lawrence Zicklin Director Trustee and President

</TABLE>

(c) No commissions or other compensation were received directly
or indirectly from the Registrant by any principal underwriter who was not
an affiliated person of the Registrant.

Item 30. Location of Accounts and Records.

- 14 -
<PAGE>

Registrant's Trustees and shareholders and the Registrant's policies and
contracts, which are maintained at the offices of the Registrant, 605
Third Avenue, New York, New York 10158.

All accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940, as
amended, and the rules promulgated thereunder with respect to Equity
Managers Trust are maintained at the offices of State Street Bank and
Trust Company, 225 Franklin Street, Boston, Massachusetts 02110, except
for the Equity Managers Trust's Declaration of Trust and By-laws, minutes
of meetings of Equity Managers Trust's Trustees and shareholders and
Equity Managers Trust's policies and contracts, which are maintained at
the offices of the Equity Managers Trust, 605 Third Avenue, New York, New
York 10158.

Item 31. Management Services

Other than as set forth in Parts A and B of this
Registration Statement, the Registrant is not a party to any management-
related service contract.

Item 32. Undertakings

Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of Registrant's latest annual report
to shareholders of Neuberger & Berman Focus, Neuberger & Berman Genesis,
Neuberger & Berman Guardian, Neuberger & Berman Manhattan, and Neuberger &
Berman Partners Trusts and/or a copy of Registrant's latest annual report
to shareholders of Neuberger & Berman NYCDC Socially Responsive Trust,
upon request and without charge.

- 15 -
<PAGE>

SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, NEUBERGER & BERMAN EQUITY
TRUST certifies that it meets all of the requirements for effectiveness of
this Post-Effective Amendment No. 8 to its Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City and State
of New York on the 15th day of December 1995.

NEUBERGER & BERMAN EQUITY TRUST

By: /s/ Lawrence Zicklin
__________________________
Lawrence Zicklin
President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 8 has been signed below by the following
persons in the capacities and on the date indicated.

Signature Title Date
--------- ----- ----

/s/ Faith Colish Trustee December 15, 1995
----------------------
Faith Colish

/s/ Donald M. Cox Trustee December 15, 1995
----------------------
Donald M. Cox

/s/ Stanley Egener Chairman of the Board December 15, 1995
---------------------- and Trustee (Chief
Stanley Egener Executive Officer)

/s/ Howard A. Mileaf Trustee December 15, 1995
-------------------------
Howard A. Mileaf

/s/ Edward I. O'Brien Trustee December 15, 1995
--------------------------
Edward I. O'Brien

- 16 -
<PAGE>

Signature Title Date
--------- ----- ----

/s/ John T. Patterson, Jr. Trustee December 15, 1995
--------------------------
John T. Patterson, Jr.

/s/ John P. Rosenthal Trustee December 15, 1995
--------------------------
John P. Rosenthal

/s/ Cornelius T. Ryan Trustee December 15, 1995
--------------------------
Cornelius T. Ryan

/s/ Gustave H. Shubert Trustee December 15, 1995
--------------------------
Gustave H. Shubert

/s/ Alan R. Gruber Trustee December 15, 1995
--------------------------
Alan R. Gruber

/s/ Lawrence Zicklin President and Trustee December 15, 1995
--------------------------
Lawrence Zicklin

/s/ Michael J. Weiner Vice President December 15, 1995
-------------------------- (Principal Financial
Michael J. Weiner Officer)

/s/ Richard Russell Treasurer (Principal December 15, 1995
-------------------------- Accounting Officer)
Richard Russell

- 17 -
<PAGE>

SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, EQUITY MANAGERS TRUST certifies that it
meets all of the requirements for effectiveness of the Post-Effective
Amendment No. 8 to the Registration Statement pursuant to Rule 485(b)
under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City and State of New York on
the 15th day of December, 1995.

EQUITY MANAGERS TRUST

By: /s/ Lawrence Zicklin
_____________________________
Lawrence Zicklin
President

Pursuant to the requirements of the Securities Act of 1933, the
Post-Effective Amendment No. 8 has been signed below by the following
persons in the capacities and on the date indicated.

</TABLE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- -----

/s/ Faith Colish Trustee December 15, 1995
----------------------
Faith Colish

/s/ Donald M. Cox Trustee December 15, 1995
----------------------
Donald M. Cox

/s/ Stanley Egener Chairman of the Board and December 15, 1995
---------------------- Trustee (Chief Executive
Stanley Egener Officer)

/s/ Howard A. Mileaf Trustee December 15, 1995
-------------------------
Howard A. Mileaf

/s/ Edward I. O'Brien Trustee December 15, 1995
--------------------------
Edward I. O'Brien

- 18 -
<PAGE>

Signature Title Date
--------- ----- -----

/s/ John T. Patterson, Jr. Trustee December 15, 1995
--------------------------
John T. Patterson, Jr.

/s/ John P. Rosenthal Trustee December 15, 1995
--------------------------
John P. Rosenthal

/s/ Cornelius T. Ryan Trustee December 15, 1995
--------------------------
Cornelius T. Ryan

/s/ Gustave H. Shubert Trustee December 15, 1995
--------------------------
Gustave H. Shubert

/s/ Alan R. Gruber Trustee December 15, 1995
--------------------------
Alan R. Gruber

/s/ Lawrence Zicklin President and Trustee December 15, 1995
--------------------------
Lawrence Zicklin

/s/ Michael J. Weiner Vice President (Principal December 15, 1995
-------------------------- Financial Officer)
Michael J. Weiner

/s/ Richard Russell Treasurer (Principal December 15, 1995
-------------------------- Accounting Officer)
Richard Russell

</TABLE>

- 19 -
<PAGE>

NEUBERGER & BERMAN EQUITY TRUST
POST-EFFECTIVE AMENDMENT NO. 8 ON FORM N-1A

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- -----------

(1) (a) Certificate of Trust. Filed herewith. _____

(b) Trust Instrument of Neuberger & Berman Equity _____
Trust. Filed herewith

(2) By-laws of Neuberger & Berman Equity Trust. Filed _____
herewith.

(3) Voting Trust Agreement. None. N.A.

(4) Specimen Share Certificate. Incorporated by N.A.
Reference to Post-Effective Amendment No. 4 to
Registrant's Registration Statement, File Nos. 33-
64368 and 811-7784.

(5) (a) (i) Management Agreement Between Equity N.A.
Managers Trust and Neuberger & Berman
Management Incorporated. Incorporated
by Reference to Post-Effective
Amendment No. 70 to Registration
Statement of Neuberger & Berman Equity
Funds, File Nos. 2-11357 and 811-582,
Edgar Accession No. 0000898432-000314.

(ii) Schedule A - Series of Neuberger & N.A.
Berman Equity Managers Trust Currently
Subject to the Management Agreement.
Incorporated by Reference to Post-
Effective Amendment No. 70 to
Registration Statement of Neuberger &
Berman Equity Funds, File Nos. 2-11357
and 811-582, Edgar Accession No.
0000898432-000314.
<PAGE>

Sequentially
Exhibit Numbered
Number Description Page
------- ----------- -----------

(iii) Schedule B - Schedule of Compensation N.A.
Under the Management Agreement.
Incorporated by Reference to Post-
Effective Amendment No. 70 to
Registration Statement of Neuberger &
Berman Equity Funds, File Nos. 2-11357
and 811-582, Edgar Accession No.
0000898432-000314.

(b) (i) Sub-Advisory Agreement Between N.A.
Neuberger & Berman Management
Incorporated and Neuberger & Berman,
L.P. with Respect to Equity Managers
Trust. Incorporated by Reference to
Post-Effective Amendment No. 70 to
Registration Statement of Neuberger &
Berman Equity Funds, File Nos. 2-11357
and 811-582, Edgar Accession No.
0000898432-000314.

(ii) Schedule A - Series of Neuberger & N.A.
Berman Equity Managers Trust Currently
Subject to the Sub-Advisory Agreement.
Incorporated by Reference to Post-
Effective Amendment No. 70 to
Registration Statement of Neuberger &
Berman Equity Funds, File Nos. 2-11357
and 811-582, Edgar Accession No.
0000898432-000314.

(6) (a) Distribution Agreement Between Neuberger & _____
Berman Equity Trust and Neuberger & Berman
Management Incorporated. Filed herewith.

(b) Schedule A - Series of Neuberger & Berman _____
Equity Trust Currently Subject to the
Distribution Agreement. Filed herewith.

(7) Bonus, Profit Sharing or Pension Plans. None. N.A.

(8) (a) Custodian Contract Between Neuberger & Berman _____
Equity Trust and State Street Bank and Trust
Company. Filed herewith.

_____
<PAGE>

Sequentially
Exhibit Numbered
Number Description Page
------- ----------- -----------

(b) Schedule A - Approved Foreign Banking N.A.
Institutions and Securities Depositories Under
the Custodian Contract. To be Filed by
Amendment.

(9) (a) (i) Transfer Agency Agreement Between _____
Neuberger & Berman Equity Trust and
State Street Bank and Trust Company.
Filed herewith.

(ii) Agreement Between Neuberger & Berman _____
Equity Trust and State Street Bank and
Trust Company Adding Neuberger &
Berman NYCDC Socially Responsive Trust
as a Portfolio Governed by the
Transfer Agency Agreement. Filed
herewith.

(iii) First Amendment to Transfer Agency and _____
Service Agreement between Equity Trust
and State Street Bank and Trust
Company. Filed herewith.

(b) (i) Administration Agreement Between _____
Neuberger & Berman Equity Trust and
Neuberger & Berman Management
Incorporated. Filed herewith.

(ii) Schedule A - Series of Neuberger & _____
Berman Equity Trust Currently Subject
to the Administration Agreement.
Filed herewith.

(iii) Schedule B - Schedule of Compensation _____
Under the Administration Agreement.
Filed herewith.

(10) Opinion and Consent of Kirkpatrick & Lockhart N.A.
LLP on Securities Matters. Incorporated by
Reference to Registrant's Rule 24f-2 Notice for
the Fiscal Year Ended August 31, 1995, File
Nos. 33-64368 and 811-7784, Edgar Accession No.
0000898432-95-000340.

(11) (a) Consent of Ernst & Young LLP, Independent _____
Auditors. Filed herewith.
<PAGE>

Sequentially
Exhibit Numbered
Number Description Page
------- ----------- -----------

(b) Consent of Coopers & Lybrand L.L.P., _____
Independent Accountants. Filed herewith.

(12) Financial Statements Omitted from Prospectus. N.A.
None.

(13) Letter of Investment Intent. None N.A.

(14) Prototype Retirement Plan. None. N.A.

(15) Plan Pursuant to Rule 12b-1. None. N.A.

(16) Schedule of Computation of Performance N.A.
Quotations. Incorporated by Reference to Post-
Effective Amendment No. 4 to Registrant's
Registration Statement, File Nos. 33-64368 and
811-7784.

(17) Financial Data Schedule. Filed herewith. _____

(18) Plan Pursuant to Rule 18f-3. None N.A.

</TABLE>
<PAGE>

<PAGE>

Exhibit 1(a)
CERTIFICATE OF TRUST
OF
NEUBERGER & BERMAN EQUITY TRUST

This Certificate of Trust ("Certificate") is filed in accordance
with the provisions of the Delaware Business Trust Act (12 Del. Code Ann.
Tit. 12 Section 3801 et seq.) and sets forth the following:

1. The name of the trust is: Neuberger & Berman Equity Trust
("Trust").

2. The business address of the registered office of the
Trust and of the registered agent of the Trust is:

The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801

3. This Certificate is effective upon filing.

4. The Trust is a Delaware business trust to be registered
under the Investment Company Act of 1940. Notice is
hereby given that the Trust shall consist of one or more
series. The debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with
respect to a particular series of the Trust shall be
enforceable against the assets of such series only, and
not against the assets of the Trust generally or any
other series.

IN WITNESS WHEREOF, the undersigned, being the initial Trustees,
have executed this Certificate on this 11th day of May, 1993.

/s/ Claudia A. Brandon
------------------------------
Claudia A. Brandon, as
Trustee and not individually

/s/ Ellen Metzger
------------------------------
Ellen Metzger, as
Trustee and not individually

/s/ Michael J. Weiner
------------------------------
Michael J. Weiner, as
Trustee and not individually

Address: 605 Third Avenue
New York, NY 10158
<PAGE>

STATE OF NEW YORK
CITY OF NEW YORK

Before me this 11th day of May, 1993, personally appeared the
above-named Claudia A. Brandon, Ellen Metzger, and Michael J. Weiner,
known to me to be the persons who executed the foregoing instrument and
who acknowledged that they executed the same.

/s/ Loraine Olavarria
------------------------------
Loraine Olavarria
Notary Public

My commission expires April 15, 1995

- 2 -
<PAGE>

<PAGE>

TABLE OF CONTENTS

PAGE
----

ARTICLE I--Definitions . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II--The Trustees . . . . . . . . . . . . . . . . . . . . . . 2

Section 1. Management of the Trust . . . . . . . . . . . . 2
Section 2. Initial Trustees; Election and Number of
Trustees . . . . . . . . . . . . . . . . . . . 2
Section 3. Term of Office of Trustees . . . . . . . . . . . 3
Section 4. Vacancies; Appointment of Trustees . . . . . . . 3
Section 5. Temporary Vacancy or Absence . . . . . . . . . . 3
Section 6. Chairman . . . . . . . . . . . . . . . . . . . . 3
Section 7. Action by the Trustees . . . . . . . . . . . . . 4
Section 8. Ownership of Trust Property . . . . . . . . . . 4
Section 9. Effect of Trustees Not Serving . . . . . . . . . 4
Section 10. Trustees, etc. as Shareholders . . . . . . . . . 4

ARTICLE III--Powers of the Trustees . . . . . . . . . . . . . . . . . 5

Section 1. Powers . . . . . . . . . . . . . . . . . . . . . 5
Section 2. Certain Transactions . . . . . . . . . . . . . . 7

ARTICLE IV--Series; Classes; Shares . . . . . . . . . . . . . . . . . 8

Section 1. Establishment of Series or Class . . . . . . . . 8
Section 2. Shares . . . . . . . . . . . . . . . . . . . . . 8
Section 3. Investment in the Trust . . . . . . . . . . . . 9
Section 4. Assets and Liabilities of Series . . . . . . . . 9
Section 5. Ownership and Transfer of Shares . . . . . . . . 10
Section 6. Status of Shares; Limitation of
Shareholder Liability . . . . . . . . . . . . 10

ARTICLE V--Distributions and Redemptions . . . . . . . . . . . . . . 11

Section 1. Distributions . . . . . . . . . . . . . . . . . 11
Section 2. Redemptions . . . . . . . . . . . . . . . . . . 11
Section 3. Determination of Net Asset Value . . . . . . . . 12
Section 4. Suspension of Right of Redemption . . . . . . . 12
Section 5. Redemptions Necessary for Qualification as
Regulated Investment Company . . . . . . . . . 12

ARTICLE VI--Shareholders' Voting Powers and Meetings . . . . . . . . 13

Section 1. Voting Powers . . . . . . . . . . . . . . . . . 13
Section 2. Meetings of Shareholders . . . . . . . . . . . . 13
Section 3. Quorum; Required Vote . . . . . . . . . . . . . 14
<PAGE>

ARTICLE VII--Contracts With Service Providers . . . . . . . . . . . . 14

Section 1. Investment Adviser . . . . . . . . . . . . . . . 14
Section 2. Principal Underwriter . . . . . . . . . . . . . 14
Section 3. Transfer Agency, Shareholder Services, and
Administration Agreements . . . . . . . . . . 15
Section 4. Custodian . . . . . . . . . . . . . . . . . . . 15
Section 5. Parties to Contracts with Service
Providers . . . . . . . . . . . . . . . . . . 15

ARTICLE VIII--Expenses of the Trust and Series . . . . . . . . . . . 16

ARTICLE IX--Limitation of Liability and Indemnification . . . . . . . 16

Section 1. Limitation of Liability . . . . . . . . . . . . 16
Section 2. Indemnification . . . . . . . . . . . . . . . . 17
Section 3. Indemnification of Shareholders . . . . . . . . 18

ARTICLE X--Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 19

Section 1. Trust Not a Partnership . . . . . . . . . . . . 19
Section 2. Trustee Action; Expert Advice; No Bond or
Surety . . . . . . . . . . . . . . . . . . . . 19
Section 3. Record Dates . . . . . . . . . . . . . . . . . . 19
Section 4. Termination of the Trust . . . . . . . . . . . . 19
Section 5. Reorganization . . . . . . . . . . . . . . . . . 20
Section 6. Trust Instrument . . . . . . . . . . . . . . . . 21
Section 7. Applicable Law . . . . . . . . . . . . . . . . . 21
Section 8. Amendments . . . . . . . . . . . . . . . . . . . 22
Section 9. Fiscal Year . . . . . . . . . . . . . . . . . . 22
Section 10. Severability . . . . . . . . . . . . . . 22

<PAGE>

NEUBERGER & BERMAN EQUITY TRUST
-------------------------------

TRUST INSTRUMENT
----------------

This TRUST INSTRUMENT is made as of May 6, 1993, by the Trustees, to
establish a business trust for the investment and reinvestment of funds
contributed to the Trust by investors. The Trustees declare that all
money and property contributed to the Trust shall be held and managed in
trust pursuant to this Trust Instrument. The name of the Trust created by
this Trust Instrument is Neuberger & Berman Equity Trust.

ARTICLE I
---------
DEFINITIONS
-----------

Unless otherwise provided or required by the context:

(a) "By-laws" means the By-laws of the Trust adopted by the
Trustees, as amended from time to time;

(b) "Class" means the class of Shares of a Series established
pursuant to Article IV;

(d) "Covered Person" means a person so defined in Article IX,
Section 2;

(e) "Delaware Act" means Chapter 38 of Title 12 of the Delaware Code
entitled "Treatment of Delaware Business Trusts," as amended from time to
time;

(f) "Majority Shareholder Vote" means "the vote of a majority of the
outstanding voting securities" as defined in the 1940 Act;

(g) "Net Asset Value" means the net asset value of each Series of
the Trust, determined as provided in Article V, Section 3;

(h) "Outstanding Shares" means Shares shown in the books of the
Trust or its transfer agent as then issued and outstanding, but does not
include Shares which have been repurchased or redeemed by the Trust and
which are held in the treasury of the Trust;

(i) "Series" means a series of Shares established pursuant to
Article IV;
<PAGE>

(j) "Shareholder" means a record owner of Outstanding Shares;
(k) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest of each Series or Class is
divided from time to time (including whole Shares and fractions of
Shares);

(l) "Trust" means Neuberger & Berman Equity Trust established
hereby, and reference to the Trust, when applicable to one or more Series,
refers to that Series;

(m) "Trustees" means the persons who have signed this Trust
Instrument, so long as they shall continue in office in accordance with
the terms hereof, and all other persons who may from time to time be duly
qualified and serving as Trustees in accordance with Article II, in all
cases in their capacities as Trustees hereunder;

(n) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the Trust or any
Series or the Trustees on behalf of the Trust or any Series;

(o) The "1940 Act" means the Investment Company Act of 1940, as
amended from time to time.

ARTICLE II
----------
THE TRUSTEES
------------

Section 1. Management of the Trust. The business and affairs of the
Trust shall be managed by or under the direction of the Trustees, and they
shall have all powers necessary or desirable to carry out that
responsibility. The Trustees may execute all instruments and take all
action they deem necessary or desirable to promote the interests of the
Trust. Any determination made by the Trustees in good faith as to what is
in the interests of the Trust shall be conclusive.

Section 2. Initial Trustees; Election and Number of Trustees. The
initial Trustees shall be the persons initially signing this Trust
Instrument. The number of Trustees (other than the initial Trustees)
shall be fixed from time to time by a majority of the Trustees; provided,
that there shall be at least two (2) Trustees. The Shareholders shall
elect the Trustees (other than the initial Trustees) on such dates as the
Trustees may fix from time to time.

Section 3. Term of Office of Trustees. Each Trustee shall hold
office for life or until his successor is elected or the Trust terminates;
except that (a) any Trustee may resign by delivering to the other Trustees
or to any Trust officer a written resignation effective upon such delivery
or a later date specified therein; (b) any Trustee may be removed with or
without cause at any time by a written instrument signed by at least
two-thirds of the other Trustees, specifying the effective date of

- 2 -

removal; (c) any Trustee who requests to be retired, or who has become
physically or mentally incapacitated or is otherwise unable to serve, may
be retired by a written instrument signed by a majority of the other
Trustees, specifying the effective date of retirement; and (d) any Trustee
may be removed at any meeting of the Shareholders by a vote of at least
two-thirds of the Outstanding Shares.

Section 4. Vacancies; Appointment of Trustees. Whenever a vacancy
shall exist in the Board of Trustees, regardless of the reason for such
vacancy, the remaining Trustees shall appoint any person as they determine
in their sole discretion to fill that vacancy, consistent with the
limitations under the 1940 Act. Such appointment shall be made by a
written instrument signed by a majority of the Trustees or by a resolution
of the Trustees, duly adopted and recorded in the records of the Trust,
specifying the effective date of the appointment. The Trustees may
appoint a new Trustee as provided above in anticipation of a vacancy
expected to occur because of the retirement, resignation, or removal of a
Trustee, or an increase in number of Trustees, provided that such
appointment shall become effective only at or after the expected vacancy
occurs. As soon as any such Trustee has accepted his appointment in
writing, the trust estate shall vest in the new Trustee, together with the
continuing Trustees, without any further act or conveyance, and he shall
be deemed a Trustee hereunder. The power of appointment is subject to
Section 16(a) of the 1940 Act.

Section 5. Temporary Vacancy or Absence. Whenever a vacancy in the
Board of Trustees shall occur, until such vacancy is filled, or while any
Trustee is absent from his domicile (unless that Trustee has made
arrangements to be informed about, and to participate in, the affairs of
the Trust during such absence), or is physically or mentally
incapacitated, the remaining Trustees shall have all the powers hereunder
and their certificate as to such vacancy, absence, or incapacity shall be
conclusive. Any Trustee may, by power of attorney, delegate his powers as
Trustee for a period not exceeding six (6) months at any one time to any
other Trustee or Trustees.

Section 6. Chairman. The Trustees shall appoint one of their number
to be Chairman of the Board of Trustees. The Chairman shall preside at
all meetings of the Trustees, shall be responsible for the execution of
policies established by the Trustees and the administration of the Trust,
and may be the chief executive, financial and/or accounting officer of the
Trust.

Section 7. Action by the Trustees. The Trustees shall act by
majority vote at a meeting duly called (including at a telephonic meeting,
unless the 1940 Act requires that a particular action be taken only at a
meeting of Trustees in person) at which a quorum is present or by written
consent of a majority of Trustees (or such greater number as may be
required by applicable law) without a meeting. A majority of the Trustees
shall constitute a quorum at any meeting. Meetings of the Trustees may be
called orally or in writing by the Chairman of the Board of Trustees or by
any two other Trustees. Notice of the time, date and place of all

- 3 -

Trustees meetings shall be given to each Trustee by telephone, facsimile
or other electronic mechanism sent to his home or business address at
least twenty-four hours in advance of the meeting or by written notice
mailed to his home or business address at least seventy-two hours in
advance of the meeting. Notice need not be given to any Trustee who
attends the meeting without objecting to the lack of notice or who signs a
waiver of notice either before or after the meeting. Subject to the
requirements of the 1940 Act, the Trustees by majority vote may delegate
to any Trustee or Trustees authority to approve particular matters or take
particular actions on behalf of the Trust. Any written consent or waiver
may be provided and delivered to the Trust by facsimile or other similar
electronic mechanism.

Section 8. Ownership of Trust Property. The Trust Property of the
Trust and of each Series shall be held separate and apart from any assets
now or hereafter held in any capacity other than as Trustee hereunder by
the Trustees or any successor Trustees. All of the Trust Property and
legal title thereto shall at all times be considered as vested in the
Trustees on behalf of the Trust, except that the Trustees may cause legal
title to any Trust Property to be held by or in the name of the Trust, or
in the name of any person as nominee. No Shareholder shall be deemed to
have a severable ownership in any individual asset of the Trust or of any
Series or any right of partition or possession thereof, but each
Shareholder shall have, as provided in Article IV, a proportionate
undivided beneficial interest in the Trust or Series represented by
Shares.

Section 9. Effect of Trustees Not Serving. The death, resignation,
retirement, removal, incapacity, or inability or refusal to serve of the
Trustees, or any one of them, shall not operate to annul the Trust or to
revoke any existing agency created pursuant to the terms of this Trust
Instrument.

Section 10. Trustees, etc. as Shareholders. Subject to any
restrictions in the By-laws, any Trustee, officer, agent or independent
contractor of the Trust may acquire, own and dispose of Shares to the same
extent as any other Shareholder; the Trustees may issue and sell Shares to
and buy Shares from any such person or any firm or company in which such
person is interested, subject only to any general limitations herein.

ARTICLE III
-----------
POWERS OF THE TRUSTEES
----------------------

Section 1. Powers. The Trustees in all instances shall act as
principals, free of the control of the Shareholders. The Trustees shall
have full power and authority to take or refrain from taking any action
and to execute any contracts and instruments that they may consider
necessary or desirable in the management of the Trust. The Trustees shall
not in any way be bound or limited by current or future laws or customs

- 4 -

applicable to trust investments, but shall have full power and authority
to make any investments which they, in their sole discretion, deem proper
to accomplish the purposes of the Trust. The Trustees may exercise all of
their powers without recourse to any court or other authority. Subject to
any applicable limitation herein or in the By-laws or resolutions of the
Trust, the Trustees shall have power and authority, without limitation:

(a) To invest and reinvest cash and other property, and to hold cash
or other property uninvested, without in any event being bound or limited
by any current or future law or custom concerning investments by trustees,
and to sell, exchange, lend, pledge, mortgage, hypothecate, write options
on and lease any or all of the Trust Property; to invest in obligations
and securities of any kind, and without regard to whether they may mature
before the possible termination of the Trust; and without limitation to
invest all or any part of its cash and other property in securities issued
by a registered investment company or series thereof, subject to the
provisions of the 1940 Act;

(b) To operate as and carry on the business of a registered
investment company, and exercise all the powers necessary and proper to
conduct such a business;

(c) To adopt By-laws not inconsistent with this Trust Instrument
providing for the conduct of the business of the Trust and to amend and
repeal them to the extent such right is not reserved to the Shareholders;

(d) To elect and remove such officers and appoint and terminate such
agents as they deem appropriate;

(e) To employ as custodian of any assets of the Trust, subject to any
provisions herein or in the By-laws, one or more banks, trust companies or
companies that are members of a national securities exchange, or other
entities permitted by the Commission to serve as such;

(f) To retain one or more transfer agents and Shareholder servicing
agents, or both;

(g) To provide for the distribution of Shares either through a
Principal Underwriter as provided herein or by the Trust itself, or both,
or pursuant to a distribution plan of any kind;

(h) To set record dates in the manner provided for herein or in the
By-laws;

(i) To delegate such authority as they consider desirable to any
officers of the Trust and to any agent, independent contractor, manager,
investment adviser, custodian or underwriter;

(j) To sell or exchange any or all of the assets of the Trust,
subject to Article X, Section 4;

- 5 -

(k) To vote or give assent, or exercise any rights of ownership, with
respect to other securities or property; and to execute and deliver powers
of attorney delegating such power to other persons;

(l) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;

(m) To hold any security or other property (i) in a form not
indicating any trust, whether in bearer, book entry, unregistered or other
negotiable form, or (ii) either in the Trust's or Trustees' own name or in
the name of a custodian or a nominee or nominees, subject to safeguards
according to the usual practice of business trusts or investment
companies;

(n) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes, and
with separate Shares representing beneficial interests in such Series, and
to establish separate Classes, all in accordance with the provisions of
Article IV;

(o) To the full extent permitted by Section 3804 of the Delaware Act,
to allocate assets, liabilities and expenses of the Trust to a particular
Series and liabilities and expenses to a particular Class or to apportion
the same between or among two or more Series or Classes, provided that any
liabilities or expenses incurred by a particular Series or Class shall be
payable solely out of the assets belonging to that Series or Class as
provided for in Article IV, Section 4;

(p) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern whose securities are
held by the Trust; to consent to any contract, lease, mortgage, purchase,
or sale of property by such corporation or concern; and to pay calls or
subscriptions with respect to any security held in the Trust;

(q) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy including, but not
limited to, claims for taxes;

(r) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for;

(s) To borrow money;

(t) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving notice
to such Shareholder;

(u) To establish committees for such purposes, with such membership,
and with such responsibilities as the Trustees may consider proper,
including a committee consisting of fewer than all of the Trustees then in
office, which may act for and bind the Trustees and the Trust with respect

- 6 -

to the institution, prosecution, dismissal, settlement, review or
investigation of any legal action, suit or proceeding, pending or
threatened;

(v) To issue, sell, repurchase, redeem, cancel, retire, acquire,
hold, resell, reissue, dispose of and otherwise deal in Shares; to
establish terms and conditions regarding the issuance, sale, repurchase,
redemption, cancellation, retirement, acquisition, holding, resale,
reissuance, disposition of or dealing in Shares; and, subject to Articles
IV and V, to apply to any such repurchase, redemption, retirement,
cancellation or acquisition of Shares any funds or property of the Trust
or of the particular Series with respect to which such Shares are issued;
and

(w) To carry on any other business in connection with or incidental
to any of the foregoing powers, to do everything necessary or desirable to
accomplish any purpose or to further any of the foregoing powers, and to
take every other action incidental to the foregoing business or purposes,
objects or powers.

The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general
powers of the Trustees. Any action by one or more of the Trustees in
their capacity as such hereunder shall be deemed an action on behalf of
the Trust or the applicable Series, and not an action in an individual
capacity. No one dealing with the Trustees shall be under any obligation
to make any inquiry concerning the authority of the Trustees, or to see to
the application of any payments made or property transferred to the
Trustees or upon their order. In construing this Trust Instrument, the
presumption shall be in favor of a grant of power to the Trustees.

Section 2. Certain Transactions. Except as prohibited by applicable
law, the Trustees may, on behalf of the Trust, buy any securities from or
sell any securities to, or lend any assets of the Trust to, any Trustee or
officer of the Trust or any firm of which any such Trustee or officer is a
member acting as principal, or have any such dealings with any investment
adviser, administrator, distributor or transfer agent for the Trust or
with any Interested Person of such person. The Trust may employ any such
person or entity in which such person is an Interested Person, as broker,
legal counsel, registrar, investment adviser, administrator, distributor,
transfer agent, dividend disbursing agent, custodian or in any other
capacity upon customary terms.

ARTICLE IV
----------
SERIES; CLASSES; SHARES
-----------------------

Section 1. Establishment of Series or Class. The Trust shall
consist of one or more Series. The Trustees hereby establish the Series
listed in Schedule A attached hereto and made a part hereof. Each

- 7 -

additional Series shall be established by the adoption of a resolution of
the Trustees. The Trustees may designate the relative rights and
preferences of the Shares of each Series. The Trustees may divide the
Shares of any Series into Classes. In such case each Class of a Series
shall represent interests in the assets of that Series and have identical
voting, dividend, liquidation and other rights and the same terms and
conditions, except that expenses allocated to a Class may be borne solely
by such Class as determined by the Trustees and a Class may have exclusive
voting rights with respect to matters affecting only that Class. The
Trust shall maintain separate and distinct records for each Series and
hold and account for the assets thereof separately from the other assets
of the Trust or of any other Series. A Series may issue any number of
Shares and need not issue Shares. Each Share of a Series shall represent
an equal beneficial interest in the net assets of such Series. Each
holder of Shares of a Series shall be entitled to receive his pro rata
share of all distributions made with respect to such Series. Upon
redemption of his Shares, such Shareholder shall be paid solely out of the
funds and property of such Series. The Trustees may change the name of
any Series or Class.

Section 2. Shares. The beneficial interest in the Trust shall be
divided into Shares of one or more separate and distinct Series or Classes
established by the Trustees. The number of Shares of each Series and
Class is unlimited and each Share shall have a par value of $0.001 per
Share. All Shares issued hereunder shall be fully paid and nonassessable.
Shareholders shall have no preemptive or other right to subscribe to any
additional Shares or other securities issued by the Trust. The Trustees
shall have full power and authority, in their sole discretion and without
obtaining Shareholder approval: to issue original or additional Shares at
such times and on such terms and conditions as they deem appropriate; to
issue fractional Shares and Shares held in the treasury; to establish and
to change in any manner Shares of any Series or Classes with such
preferences, terms of conversion, voting powers, rights and privileges as
the Trustees may determine (but the Trustees may not change Outstanding
Shares in a manner materially adverse to the Shareholders of such Shares);
to divide or combine the Shares of any Series or Classes into a greater or
lesser number; to classify or reclassify any unissued Shares of any Series
or Classes into one or more Series or Classes of Shares; to abolish any
one or more Series or Classes of Shares; to issue Shares to acquire other
assets (including assets subject to, and in connection with, the
assumption of liabilities) and businesses; and to take such other action
with respect to the Shares as the Trustees may deem desirable. Shares
held in the treasury shall not confer any voting rights on the Trustees
and shall not be entitled to any dividends or other distributions declared
with respect to the Shares.

Section 3. Investment in the Trust. The Trustees shall accept
investments in any Series from such persons and on such terms as they may
from time to time authorize. At the Trustees' discretion, such
investments, subject to applicable law, may be in the form of cash or
securities in which that Series is authorized to invest, valued as
provided in Article V, Section 3. Investments in a Series shall be

- 8 -

credited to each Shareholder's account in the form of full Shares at the
Net Asset Value per Share next determined after the investment is received
or accepted as may be determined by the Trustees; provided, however, that
the Trustees may, in their sole discretion, (a) impose a sales charge upon
investments in any Series or Class, (b) issue fractional Shares, or (c)
determine the Net Asset Value per Share of the initial capital
contribution. The Trustees shall have the right to refuse to accept
investments in any Series at any time without any cause or reason therefor
whatsoever.

Section 4. Assets and Liabilities of Series. All consideration
received by the Trust for the issue or sale of Shares of a particular
Series, together with all assets in which such consideration is invested
or reinvested, all income, earnings, profits, and proceeds thereof
(including any proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any reinvestment of
such proceeds in whatever form the same may be), shall be held and
accounted for separately from the other assets of the Trust and every
other Series and are referred to as "assets belonging to" that Series.
The assets belonging to a Series shall belong only to that Series for all
purposes, and to no other Series, subject only to the rights of creditors
of that Series. Any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series shall be allocated by the Trustees
between and among one or more Series as the Trustees deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all Series for all purposes, and such assets, earnings,
income, profits or funds, or payments and proceeds thereof shall be
referred to as assets belonging to that Series. The assets belonging to a
Series shall be so recorded upon the books of the Trust, and shall be held
by the Trustees in trust for the benefit of the Shareholders of that
Series. The assets belonging to a Series shall be charged with the
liabilities of that Series and all expenses, costs, charges and reserves
attributable to that Series, except that liabilities and expenses
allocated solely to a particular Class shall be borne by that Class. Any
general liabilities, expenses, costs, charges or reserves of the Trust
which are not readily identifiable as belonging to any particular Series
or Class shall be allocated and charged by the Trustees between or among
any one or more of the Series or Classes in such manner as the Trustees
deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series or Classes for all purposes.

Without limiting the foregoing, but subject to the right of the
Trustees to allocate general liabilities, expenses, costs, charges or
reserves as herein provided, the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular Series shall be enforceable against the assets of such Series
only, and not against the assets of the Trust generally or of any other
Series. Notice of this contractual limitation on liabilities among Series
may, in the Trustees' discretion, be set forth in the certificate of trust
of the Trust (whether originally or by amendment) as filed or to be filed
in the Office of the Secretary of State of the State of Delaware pursuant

- 9 -

to the Delaware Act, and upon the giving of such notice in the certificate
of trust, the statutory provisions of Section 3804 of the Delaware Act
relating to limitations on liabilities among Series (and the statutory
effect under Section 3804 of setting forth such notice in the certificate
of trust) shall become applicable to the Trust and each Series. Any
person extending credit to, contracting with or having any claim against
any Series may look only to the assets of that Series to satisfy or
enforce any debt, with respect to that Series. No Shareholder or former
Shareholder of any Series shall have a claim on or any right to any assets
allocated or belonging to any other Series.

Section 5. Ownership and Transfer of Shares. The Trust shall
maintain a register containing the names and addresses of the Shareholders
of each Series and Class thereof, the number of Shares of each Series and
Class held by such Shareholders, and a record of all Share transfers. The
register shall be conclusive as to the identity of Shareholders of record
and the number of Shares held by them from time to time. The Trustees may
authorize the issuance of certificates representing Shares and adopt rules
governing their use. The Trustees may make rules governing the transfer
of Shares, whether or not represented by certificates.

Section 6. Status of Shares; Limitation of Shareholder Liability.
Shares shall be deemed to be personal property giving Shareholders only
the rights provided in this Trust Instrument. Every Shareholder, by
virtue of having acquired a Share, shall be held expressly to have
assented to and agreed to be bound by the terms of this Trust Instrument
and to have become a party hereto. No Shareholder shall be personally
liable for the debts, liabilities, obligations and expenses incurred by,
contracted for, or otherwise existing with respect to, the Trust or any
Series. Neither the Trust nor the Trustees shall have any power to bind
any Shareholder personally or to demand payment from any Shareholder for
anything, other than as agreed by the Shareholder. Shareholders shall
have the same limitation of personal liability as is extended to
shareholders of a private corporation for profit incorporated in the State
of Delaware. Every written obligation of the Trust or any Series shall
contain a statement to the effect that such obligation may only be
enforced against the assets of the Trust or such Series; however, the
omission of such statement shall not operate to bind or create personal
liability for any Shareholder or Trustee.

ARTICLE V
---------
DISTRIBUTIONS AND REDEMPTIONS
-----------------------------

Section 1. Distributions. The Trustees may declare and pay
dividends and other distributions, including dividends on Shares of a
particular Series and other distributions from the assets belonging to
that Series. The amount and payment of dividends or distributions and
their form, whether they are in cash, Shares or other Trust Property,
shall be determined by the Trustees. Dividends and other distributions

- 10 -

may be paid pursuant to a standing resolution adopted once or more often
as the Trustees determine. All dividends and other distributions on
Shares of a particular Series shall be distributed pro rata to the
Shareholders of that Series in proportion to the number of Shares of that
Series they held on the record date established for such payment, except
that such dividends and distributions shall appropriately reflect expenses
allocated to a particular Class of such Series. The Trustees may adopt
and offer to Shareholders such dividend reinvestment plans, cash dividend
payout plans or similar plans as the Trustees deem appropriate.

Section 2. Redemptions. Each Shareholder of a Series shall have the
right at such times as may be permitted by the Trustees to require the
Series to redeem all or any part of his Shares at a redemption price per
Share equal to the Net Asset Value per Share at such time as the Trustees
shall have prescribed by resolution. In the absence of such resolution,
the redemption price per Share shall be the Net Asset Value next
determined after receipt by the Series of a request for redemption in
proper form less such charges as are determined by the Trustees and
described in the Trust's Registration Statement for that Series under the
Securities Act of 1933. The Trustees may specify conditions, prices, and
places of redemption, and may specify binding requirements for the proper
form or forms of requests for redemption. Payment of the redemption price
may be wholly or partly in securities or other assets at the value of such
securities or assets used in such determination of Net Asset Value, or may
be in cash. Upon redemption, Shares may be reissued from time to time.
The Trustees may require Shareholders to redeem Shares for any reason
under terms set by the Trustees, including the failure of a Shareholder to
supply a personal identification number if required to do so, or to have
the minimum investment required, or to pay when due for the purchase of
Shares issued to him. To the extent permitted by law, the Trustees may
retain the proceeds of any redemption of Shares required by them for
payment of amounts due and owing by a Shareholder to the Trust or any
Series or Class. Notwithstanding the foregoing, the Trustees may postpone
payment of the redemption price and may suspend the right of the
Shareholders to require any Series or Class to redeem Shares during any
period of time when and to the extent permissible under the 1940 Act.

Section 3. Determination of Net Asset Value. The Trustees shall
cause the Net Asset Value of Shares of each Series or Class to be
determined from time to time in a manner consistent with applicable laws
and regulations. The Trustees may delegate the power and duty to
determine Net Asset Value per Share to one or more Trustees or officers of
the Trust or to a custodian, depository or other agent appointed for such
purpose. The Net Asset Value of Shares shall be determined separately for
each Series or Class at such times as may be prescribed by the Trustees
or, in the absence of action by the Trustees, as of the close of trading
on the New York Stock Exchange on each day for all or part of which such
Exchange is open for unrestricted trading.

Section 4. Suspension of Right of Redemption. If, as referred to in
Section 2 of this Article, the Trustees postpone payment of the redemption
price and suspend the right of Shareholders to redeem their Shares, such

- 11 -

suspension shall take effect at the time the Trustees shall specify, but
not later than the close of business on the business day next following
the declaration of suspension. Thereafter Shareholders shall have no
right of redemption or payment until the Trustees declare the end of the
suspension. If the right of redemption is suspended, a Shareholder may
either withdraw his request for redemption or receive payment based on the
Net Asset Value per Share next determined after the suspension terminates.

Section 5. Redemptions Necessary for Qualification as Regulated
Investment Company. If the Trustees shall determine that direct or
indirect ownership of Shares of any Series has or may become concentrated
in any person to an extent which would disqualify any Series as a
regulated investment company under the Internal Revenue Code, then the
Trustees shall have the power (but not the obligation) by lot or other
means they deem equitable to (a) call for redemption by any such person of
a number, or principal amount, of Shares sufficient to maintain or bring
the direct or indirect ownership of Shares into conformity with the
requirements for such qualification and (b) refuse to transfer or issue
Shares to any person whose acquisition of Shares in question would, in the
Trustees' judgment, result in such disqualification. Any such redemption
shall be effected at the redemption price and in the manner provided in
this Article. Shareholders shall upon demand disclose to the Trustees in
writing such information concerning direct and indirect ownership of
Shares as the Trustees deem necessary to comply with the requirements of
any taxing authority.

ARTICLE VI
----------
SHAREHOLDERS' VOTING POWERS AND MEETINGS
----------------------------------------

Section 1. Voting Powers. The Shareholders shall have power to vote
only with respect to (a) the election of Trustees as provided in Section 2
of this Article; (b) the removal of Trustees as provided in Article II,
Section 3(d); (c) any investment advisory or management contract as
provided in Article VII, Section 1; (d) any termination of the Trust as
provided in Article X, Section 4; (e) the amendment of this Trust
Instrument to the extent and as provided in Article X, Section 8; and (f)
such additional matters relating to the Trust as may be required or
authorized by law, this Trust Instrument, or the By-laws or any
registration of the Trust with the Commission or any State, or as the
Trustees may consider desirable.

On any matter submitted to a vote of the Shareholders, all Shares
shall be voted by individual Series or Class, except (a) when required by
the 1940 Act, Shares shall be voted in the aggregate and not by individual
Series or Class, and (b) when the Trustees have determined that the matter
affects the interests of more than one Series or Class, then the
Shareholders of all such Series or Classes shall be entitled to vote
thereon. Each whole Share shall be entitled to one vote as to any matter
on which it is entitled to vote, and each fractional Share shall be

- 12 -

entitled to a proportionate fractional vote. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by
proxy or in any manner provided for in the By-laws. The By-laws may
provide that proxies may be given by any electronic or telecommunications
device or in any other manner, but if a proposal by anyone other than the
officers or Trustees is submitted to a vote of the Shareholders of any
Series or Class, or if there is a proxy contest or proxy solicitation or
proposal in opposition to any proposal by the officers or Trustees, Shares
may be voted only in person or by written proxy. Until Shares of a Series
are issued, as to that Series the Trustees may exercise all rights of
Shareholders and may take any action required or permitted to be taken by
Shareholders by law, this Trust Instrument or the By-laws.

Section 2. Meetings of Shareholders. The first Shareholders'
meeting shall be held to elect Trustees at such time and place as the
Trustees designate. Special meetings of the Shareholders of any Series or
Class may be called by the Trustees and shall be called by the Trustees
upon the written request of Shareholders owning at least ten percent of
the Outstanding Shares of such Series or Class entitled to vote.
Shareholders shall be entitled to at least fifteen days' notice of any
meeting, given as determined by the Trustees.

Section 3. Quorum; Required Vote. One-third of the Outstanding
Shares of each Series or Class, or one-third of the Outstanding Shares of
the Trust, entitled to vote in person or by proxy shall be a quorum for
the transaction of business at a Shareholders' meeting with respect to
such Series or Class, or with respect to the entire Trust, respectively.
Any lesser number shall be sufficient for adjournments. Any adjourned
session of a Shareholders' meeting may be held within a reasonable time
without further notice. Except when a larger vote is required by law,
this Trust Instrument or the By-laws, a majority of the Outstanding Shares
voted in person or by proxy shall decide any matters to be voted upon with
respect to the entire Trust and a plurality of such Outstanding Shares
shall elect a Trustee; provided, that if this Trust Instrument or
applicable law permits or requires that Shares be voted on any matter by
individual Series or Classes, then a majority of the Outstanding Shares of
that Series or Class (or, if required by law, a Majority Shareholder Vote
of that Series or Class) voted in person or by proxy voted on the matter
shall decide that matter insofar as that Series or Class is concerned.
Shareholders may act as to the Trust or any Series or Class by the written
consent of a majority (or such greater amount as may be required by
applicable law) of the Outstanding Shares of the Trust or of such Series
or Class, as the case may be.

ARTICLE VII
-----------
CONTRACTS WITH SERVICE PROVIDERS
--------------------------------

Section 1. Investment Adviser. Subject to a Majority Shareholder
Vote, the Trustees may enter into one or more investment advisory

- 13 -

contracts on behalf of the Trust or any Series, providing for investment
advisory services, statistical and research facilities and services, and
other facilities and services to be furnished to the Trust or Series on
terms and conditions acceptable to the Trustees. Any such contract may
provide for the investment adviser to effect purchases, sales or exchanges
of portfolio securities or other Trust Property on behalf of the Trustees
or may authorize any officer or agent of the Trust to effect such
purchases, sales or exchanges pursuant to recommendations of the
investment adviser. The Trustees may authorize the investment adviser to
employ one or more sub-advisers.

Section 2. Principal Underwriter. The Trustees may enter into
contracts on behalf of the Trust or any Series or Class, providing for the
distribution and sale of Shares by the other party, either directly or as
sales agent, on terms and conditions acceptable to the Trustees. The
Trustees may adopt a plan or plans of distribution with respect to Shares
of any Series or Class and enter into any related agreements, whereby the
Series or Class finances directly or indirectly any activity that is
primarily intended to result in sales of its Shares, subject to the
requirements of Section 12 of the 1940 Act, Rule 12b-1 thereunder, and
other applicable rules and regulations.

Section 3. Transfer Agency, Shareholder Services, and Administration
Agreements. The Trustees, on behalf of the Trust or any Series or Class,
may enter into transfer agency agreements, Shareholder service agreements,
and administration and management agreements with any party or parties on
terms and conditions acceptable to the Trustees.

Section 4. Custodian. The Trustees shall at all times place and
maintain the securities and similar investments of the Trust and of each
Series in custody with a custodian meeting the requirements of Section
17(f) of the 1940 Act and the rules thereunder. The Trustees, on behalf
of the Trust or any Series, may enter into an agreement with a custodian
on terms and conditions acceptable to the Trustees, providing for the
custodian, among other things, to (a) hold the securities owned by the
Trust or any Series and deliver the same upon written order or oral order
confirmed in writing, (b) to receive and receipt for any moneys due to the
Trust or any Series and deposit the same in its own banking department or
elsewhere, (c) to disburse such funds upon orders or vouchers, and (d) to
employ one or more sub-custodians.

Section 5. Parties to Contracts with Service Providers. The
Trustees may enter into any contract referred to in this Article with any
entity, although one more of the Trustees or officers of the Trust may be
an officer, director, trustee, partner, shareholder, or member of such
entity, and no such contract shall be invalidated or rendered void or
voidable because of such relationship. No person having such a
relationship shall be disqualified from voting on or executing a contract
in his capacity as Trustee and/or Shareholder, or be liable merely by
reason of such relationship for any loss or expense to the Trust with
respect to such a contract or accountable for any profit realized directly

- 14 -

or indirectly therefrom; provided, that the contract was reasonable and
fair and not inconsistent with this Trust Instrument or the By-laws.

Any contract referred to in Sections 1 and 2 of this Article shall be
consistent with and subject to the applicable requirements of Section 15
of the 1940 Act and the rules and orders thereunder with respect to its
continuance in effect, its termination, and the method of authorization
and approval of such contract or renewal. No amendment to a contract
referred to in Section 1 of this Article shall be effective unless
assented to in a manner consistent with the requirements of Section 15 of
the 1940 Act, and the rules and orders thereunder.

ARTICLE VIII
------------
EXPENSES OF THE TRUST AND SERIES
--------------------------------

Subject to Article IV, Section 4, the Trust or a particular Series
shall pay, or shall reimburse the Trustees from the Trust estate or the
assets belonging to the particular Series, for their expenses and
disbursements, including, but not limited to, interest charges, taxes,
brokerage fees and commissions; expenses of issue, repurchase and
redemption of Shares; certain insurance premiums; applicable fees,
interest charges and expenses of third parties, including the Trust's
investment advisers, managers, administrators, distributors, custodians,
transfer agents and fund accountants; fees of pricing, interest, dividend,
credit and other reporting services; costs of membership in trade
associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and
its Series and maintaining its existence; costs of preparing and printing
the prospectuses of the Trust and each Series, statements of additional
information and Shareholder reports and delivering them to Shareholders;
expenses of meetings of Shareholders and proxy solicitations therefor;
costs of maintaining books and accounts; costs of reproduction, stationery
and supplies; fees and expenses of the Trustees; compensation of the
Trust's officers and employees and costs of other personnel performing
services for the Trust or any Series; costs of Trustee meetings;
Commission registration fees and related expenses; state or foreign
securities laws registration fees and related expenses; and for such
non-recurring items as may arise, including litigation to which the Trust
or a Series (or a Trustee or officer of the Trust acting as such) is a
party, and for all losses and liabilities by them incurred in
administering the Trust. The Trustees shall have a lien on the assets
belonging to the appropriate Series, or in the case of an expense
allocable to more than one Series, on the assets of each such Series,
prior to any rights or interests of the Shareholders thereto, for the
reimbursement to them of such expenses, disbursements, losses and
liabilities.

- 15 -

ARTICLE IX
----------
LIMITATION OF LIABILITY AND INDEMNIFICATION
-------------------------------------------

Section 1. Limitation of Liability. All persons contracting with or
having any claim against the Trust or a particular Series shall look only
to the assets of the Trust or such Series for payment under such contract
or claim; and neither the Trustees nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally
liable therefor. Every written instrument or obligation on behalf of the
Trust or any Series shall contain a statement to the foregoing effect, but
the absence of such statement shall not operate to make any Trustee or
officer of the Trust liable thereunder. Provided they have exercised
reasonable care and have acted under the reasonable belief that their
actions are in the best interest of the Trust, the Trustees and officers
of the Trust shall not be responsible or liable for any act or omission or
for neglect or wrongdoing of them or any officer, agent, employee,
investment adviser or independent contractor of the Trust, but nothing
contained in this Trust Instrument or in the Delaware Act shall protect
any Trustee or officer of the Trust against liability to the Trust or to
Shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.

Section 2. Indemnification. (a) Subject to the exceptions and
limitations contained in subsection (b) below:

(i) every person who is, or has been, a Trustee or an officer,
employee or agent of the Trust ("Covered Person") shall be
indemnified by the Trust or the appropriate Series to the
fullest extent permitted by law against liability and against
all expenses reasonably incurred or paid by him in connection
with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or
having been a Covered Person and against amounts paid or
incurred by him in the settlement thereof;

(ii) as used herein, the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal or other, including appeals),
actual or threatened, and the words "liability" and "expenses"
shall include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties and
other liabilities.

(b) No indemnification shall be provided hereunder to a Covered
Person:

(i) who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the Trust
or its Shareholders by reason of willful misfeasance, bad faith,

- 16 -

gross negligence or reckless disregard of the duties involved in
the conduct of his office, or (B) not to have acted in good
faith in the reasonable belief that his action was in the best
interest of the Trust; or

(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office; (A) by the
court or other body approving the settlement; (B) by at least a
majority of those Trustees who are neither Interested Persons of
the Trust nor are parties to the matter based upon a review of
readily available facts (as opposed to a full trial-type
inquiry); or (C) by written opinion of independent legal counsel
based upon a review of readily available facts (as opposed to a
full trial-type inquiry).

(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
be exclusive of or affect any other rights to which any Covered Person may
now or hereafter be entitled, and shall inure to the benefit of the heirs,
executors and administrators of a Covered Person.

(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any
claim, action, suit or proceeding of the character described in subsection
(a) of this Section may be paid by the Trust or applicable Series from
time to time prior to final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person that such amount will
be paid over by him to the Trust or applicable Series if it is ultimately
determined that he is not entitled to indemnification under this Section;
provided, however, that either (i) such Covered Person shall have provided
appropriate security for such undertaking, (ii) the Trust is insured
against losses arising out of any such advance payments or (iii) either a
majority of the Trustees who are neither Interested Persons of the Trust
nor parties to the matter, or independent legal counsel in a written
opinion, shall have determined, based upon a review of readily available
facts (as opposed to a full trial-type inquiry) that there is reason to
believe that such Covered Person will not be disqualified from
indemnification under this Section.

(e) Any repeal or modification of this Article IX by the
Shareholders of the Trust, or adoption or modification of any other
provision of the Trust Instrument or By-laws inconsistent with this
Article, shall be prospective only, to the extent that such repeal or
modification would, if applied retrospectively, adversely affect any
limitation on the liability of any Covered Person or indemnification
available to any Covered Person with respect to any act or omission which
occurred prior to such repeal, modification or adoption.

Section 3. Indemnification of Shareholders. If any Shareholder or
former Shareholder of any Series shall be held personally liable solely by

- 17 -

reason of his being or having been a Shareholder and not because of his
acts or omissions or for some other reason, the Shareholder or former
Shareholder (or his heirs, executors, administrators or other legal
representatives or in the case of any entity, its general successor) shall
be entitled out of the assets belonging to the applicable Series to be
held harmless from and indemnified against all loss and expense arising
from such liability. The Trust, on behalf of the affected Series, shall,
upon request by such Shareholder, assume the defense of any claim made
against such Shareholder for any act or obligation of the Series and
satisfy any judgment thereon from the assets of the Series.

ARTICLE X
---------
MISCELLANEOUS
-------------

Section 1. Trust Not a Partnership. This Trust Instrument creates a
trust and not a partnership. No Trustee shall have any power to bind
personally either the Trust's officers or any Shareholder.

Section 2. Trustee Action; Expert Advice; No Bond or Surety. The
exercise by the Trustees of their powers and discretion hereunder in good
faith and with reasonable care under the circumstances then prevailing
shall be binding upon everyone interested. Subject to the provisions of
Article IX, the Trustees shall not be liable for errors of judgment or
mistakes of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Trust
Instrument, and subject to the provisions of Article IX, shall not be
liable for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is obtained.

Section 3. Record Dates. The Trustees may fix in advance a date up
to ninety (90) days before the date of any Shareholders' meeting, or the
date for the payment of any dividends or other distributions, or the date
for the allotment of rights, or the date when any change or conversion or
exchange of Shares shall go into effect as a record date for the
determination of the Shareholders entitled to notice of, and to vote at,
any such meeting, or entitled to receive payment of such dividend or other
distribution, or to receive any such allotment of rights, or to exercise
such rights in respect of any such change, conversion or exchange of
Shares.

Section 4. Termination of the Trust. (a) This Trust shall have
perpetual existence. Subject to a Majority Shareholder Vote of the Trust
or of each Series to be affected, the Trustees may

(i) sell and convey all or substantially all of the assets of
the Trust or any affected Series to another Series or to another
entity which is an open-end investment company as defined in the
1940 Act, or is a series thereof, for adequate consideration,

- 18 -

which may include the assumption of all outstanding obligations,
taxes and other liabilities, accrued or contingent, of the Trust
or any affected Series, and which may include shares of or
interests in such Series, entity, or series thereof; or

(ii) at any time sell and convert into money all or
substantially all of the assets of the Trust or any affected
Series.

Upon making reasonable provision for the payment of all known liabilities
of the Trust or any affected Series in either (i) or (ii), by such
assumption or otherwise, the Trustees shall distribute the remaining
proceeds or assets (as the case may be) ratably among the Shareholders of
the Trust or any affected Series; however, the payment to any particular
Class of such Series may be reduced by any fees, expenses or charges
allocated to that Class.

(b) The Trustees may take any of the actions specified in subsection
(a) (i) and (ii) above without obtaining a Majority Shareholder Vote of
the Trust or any Series if a majority of the Trustees determines that the
continuation of the Trust or Series is not in the best interests of the
Trust, such Series, or their respective Shareholders as a result of
factors or events adversely affecting the ability of the Trust or such
Series to conduct its business and operations in an economically viable
manner. Such factors and events may include the inability of the Trust or
a Series to maintain its assets at an appropriate size, changes in laws or
regulations governing the Trust or the Series or affecting assets of the
type in which the Trust or Series invests, or economic developments or
trends having a significant adverse impact on the business or operations
of the Trust or such Series.

(c) Upon completion of the distribution of the remaining proceeds or
assets pursuant to subsection (a), the Trust or affected Series shall
terminate and the Trustees and the Trust shall be discharged of any and
all further liabilities and duties hereunder with respect thereto and the
right, title and interest of all parties therein shall be canceled and
discharged. Upon termination of the Trust, following completion of
winding up of its business, the Trustees shall cause a certificate of
cancellation of the Trust's certificate of trust to be filed in accordance
with the Delaware Act, which certificate of cancellation may be signed by
any one Trustee.

Section 5. Reorganization. Notwithstanding anything else herein, to
change the Trust's form of organization the Trustees may, without
Shareholder approval, (a) cause the Trust to merge or consolidate with or
into one or more entities, if the surviving or resulting entity is the
Trust or another open-end management investment company under the 1940
Act, or a series thereof, that will succeed to or assume the Trust's
registration under the 1940 Act, or (b) cause the Trust to incorporate
under the laws of Delaware. Any agreement of merger or consolidation or
certificate of merger may be signed by a majority of Trustees and

- 19 -

facsimile signatures conveyed by electronic or telecommunication means
shall be valid.

Pursuant to and in accordance with the provisions of Section 3815(f)
of the Delaware Act, an agreement of merger or consolidation approved by
the Trustees in accordance with this Section 5 may effect any amendment to
the Trust Instrument or effect the adoption of a new trust instrument of
the Trust if it is the surviving or resulting trust in the merger or
consolidation.

Section 6. Trust Instrument. The original or a copy of this Trust
Instrument and of each amendment hereto or Trust Instrument supplemental
shall be kept at the office of the Trust where it may be inspected by any
Shareholder. Anyone dealing with the Trust may rely on a certificate by a
Trustee or an officer of the Trust as to the authenticity of the Trust
Instrument or any such amendments or supplements and as to any matters in
connection with the Trust. The masculine gender herein shall include the
feminine and neuter genders. Headings herein are for convenience only and
shall not affect the construction of this Trust Instrument. This Trust
Instrument may be executed in any number of counterparts, each of which
shall be deemed an original.

Section 7. Applicable Law. This Trust Instrument and the Trust
created hereunder are governed by and construed and administered according
to the Delaware Act and the applicable laws of the State of Delaware;
provided, however, that there shall not be applicable to the Trust, the
Trustees or this Trust Instrument (a) the provisions of Section 3540 of
Title 12 of the Delaware Code, or (b) any provisions of the laws
(statutory or common) of the State of Delaware (other than the Delaware
Act) pertaining to trusts which relate to or regulate (i) the filing with
any court or governmental body or agency of trustee accounts or schedules
of trustee fees and charges, (ii) affirmative requirements to post bonds
for trustees, officers, agents or employees of a trust, (iii) the
necessity for obtaining court or other governmental approval concerning
the acquisition, holding or disposition of real or personal property,
(iv) fees or other sums payable to trustees, officers, agents or employees
of a trust, (v) the allocation of receipts and expenditures to income or
principal, (vi) restrictions or limitations on the permissible nature,
amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii)
the establishment of fiduciary or other standards of responsibilities or
limitations on the acts or powers of trustees, which are inconsistent with
the limitations or liabilities or authorities and powers of the Trustees
set forth or referenced in this Trust Instrument. The Trust shall be of
the type commonly called a Delaware business trust, and, without limiting
the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust under Delaware law. The Trust
specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by trusts
under the Delaware Act, and the absence of a specific reference herein to
any such power, privilege or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.

- 20 -

Section 8. Amendments. The Trustees may, without any Shareholder
vote, amend or otherwise supplement this Trust Instrument by making an
amendment, a Trust Instrument supplemental hereto or an amended and
restated trust instrument; provided, that Shareholders shall have the
right to vote on any amendment (a) which would affect the voting rights of
Shareholders granted in Article VI, Section 1, (b) to this Section 8, (c)
required to be approved by Shareholders by law or by the Trust's
registration statement(s) filed with the Commission, and (d) submitted to
them by the Trustees in their discretion. Any amendment submitted to
Shareholders which the Trustees determine would affect the Shareholders of
any Series shall be authorized by vote of the Shareholders of such Series
and no vote shall be required of Shareholders of a Series not affected.
Notwithstanding anything else herein, any amendment to Article IX which
would have the effect of reducing the indemnification and other rights
provided thereby to Trustees, officers, employees, and agents of the Trust
or to Shareholders or former Shareholders, and any repeal or amendment of
this sentence shall each require the affirmative vote of the holders of
two-thirds of the Outstanding Shares of the Trust entitled to vote
thereon.

Section 9. Fiscal Year. The fiscal year of the Trust shall end on a
specified date as set forth in the By-Laws. The Trustees may change the
fiscal year of the Trust without Shareholder approval.

Section 10. Severability. The provisions of this Trust Instrument
are severable. If the Trustees determine, with the advice of counsel,
that any provision hereof conflicts with the 1940 Act, the regulated
investment company provisions of the Internal Revenue Code or with other
applicable laws and regulations, the conflicting provision shall be deemed
never to have constituted a part of this Trust Instrument; provided,
however, that such determination shall not affect any of the remaining
provisions of this Trust Instrument or render invalid or improper any
action taken or omitted prior to such determination. If any provision

- 21 -

hereof shall be held invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall attach only to such provision only in
such jurisdiction and shall not affect any other provision of this Trust
Instrument.

IN WITNESS WHEREOF, the undersigned, being the initial Trustees,
have executed this Trust Instrument as of the date first above written.

/s/ Claudia A. Brandon
--------------------------
Claudia A. Brandon, as
Trustee and not individually

/s/ Ellen Metzger
--------------------------
Ellen Metzger, as Trustee
and not individually

/s/ Michael J. Weiner
--------------------------
Michael J. Weiner, as
Trustee and not individually

Address: 605 Third Avenue
New York, New York 10058

STATE OF NEW YORK ss
CITY OF NEW YORK

/s/ Loraine Olavarria
---------------------------------
Notary Public

My Commission expires 4-15-95 .
LORAINE OLVAARRIA
Notary Public, State of New York
No. 03-4979299
Qualified in Bronx County
Commission Expires in 4-15-95

- 22 -

NEUBERGER & BERMAN EQUITY TRUST

SCHEDULE A

Initial Series
--------------

Neuberger & Berman Focus Trust

Neuberger & Berman Genesis Trust

Neuberger & Berman Guardian Trust

Neuberger & Berman Manhattan Trust

Neuberger & Berman Partners Trust

Additional Series
-----------------

Neuberger & Berman NYDC Socially Responsive Trust

NEUBERGER & BERMAN EQUITY TRUST

BY-LAWS

May 12, 1993

TABLE OF CONTENTS

Page
----
ARTICLE I
PRINCIPAL OFFICE AND SEAL . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Principal Office . . . . . . . . . . . . 1
Section 2. Seal . . . . . . . . . . . . . . . . . . 1

ARTICLE II
MEETINGS OF TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Action by Trustees . . . . . . . . . . . 1
Section 2. Compensation of Trustees . . . . . . . . 1

ARTICLE III
COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Establishment . . . . . . . . . . . . . 1
Section 2. Proceedings; Quorum; Action . . . . . . 2
Section 3. Executive Committee . . . . . . . . . . 2
Section 4. Nominating Committee . . . . . . . . . . 2
Section 5. Audit Committee . . . . . . . . . . . . 2
Section 6. Compensation of Committee Members . . . 2

ARTICLE IV
OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1. General . . . . . . . . . . . . . . . . 2
Section 2. Election, Tenure and Qualifications
of Officers . . . . . . . . . . . . . . . 2
Section 3. Vacancies and Newly Created Offices . . 3
Section 4. Removal and Resignation . . . . . . . . 3
Section 5. Chairman . . . . . . . . . . . . . . . . 3
Section 6. President . . . . . . . . . . . . . . . 3
Section 7. Vice President(s) . . . . . . . . . . . 3
Section 8. Treasurer and Assistant Treasurer(s) . . 4
Section 9. Secretary and Assistant Secretaries . . 4
Section 10. Compensation of Officers . . . . . . . . 4
Section 11. Surety Bond . . . . . . . . . . . . . . 4

ARTICLE V
MEETINGS OF SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . 5
Section 1. No Annual Meetings . . . . . . . . . . . 5
Section 2. Special Meetings . . . . . . . . . . . . 5
Section 3. Notice of Meetings; Waiver . . . . . . . 5
Section 4. Adjourned Meetings . . . . . . . . . . . 6
Section 5. Validity of Proxies . . . . . . . . . . 6
Section 6. Record Date . . . . . . . . . . . . . . 7
Section 7. Action Without a Meeting . . . . . . . . 7

- i -

ARTICLE VI
SHARES OF BENEFICIAL INTEREST . . . . . . . . . . . . . . . . . . . . 7
Section 1. No Share Certificates . . . . . . . . . 7
Section 2. Transfer of Shares . . . . . . . . . . . 7

ARTICLE VII
FISCAL YEAR AND ACCOUNTANT . . . . . . . . . . . . . . . . . . . . . 7
Section 1. Fiscal Year . . . . . . . . . . . . . . 7
Section 2. Accountant . . . . . . . . . . . . . . . 7

ARTICLE VIII
AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1. General . . . . . . . . . . . . . . . . 8
Section 2. By Shareholders Only . . . . . . . . . . 8

ARTICLE IX
NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE X
CONFLICT OF INTEREST PROCEDURES . . . . . . . . . . . . . . . . . . . 9
Section 1. Monitoring and Reporting Conflicts . . . 9
Section 2. Annual Report . . . . . . . . . . . . . 9
Section 3. Resolution of Conflicts . . . . . . . . 9
Section 4. Annual Review . . . . . . . . . . . . . 9

- ii -

BY-LAWS

NEUBERGER & BERMAN EQUITY TRUST

These By-laws of Neuberger & Berman Equity Trust (the "Trust"), a
Delaware business trust, are subject to the Trust Instrument of the Trust
dated as of May 6, 1993, as from time to time amended, supplemented or
restated (the "Trust Instrument"). Capitalized terms used herein have the
same meanings as in the Trust Instrument.

ARTICLE I
---------
PRINCIPAL OFFICE AND SEAL
-------------------------
Section 1. Principal Office. The principal office of the Trust shall be
located in New York, New York, or such other location as the Trustees
determine. The Trust may establish and maintain other offices and places
of business as the Trustees determine.

Section 2. Seal. The Trustees may adopt a seal for the Trust in such
form and with such inscription as the Trustees determine. Any Trustee or
officer of the Trust shall have authority to affix the seal to any
document.

ARTICLE II
----------
MEETINGS OF TRUSTEES
--------------------

Section 1. Action by Trustees. Trustees may take actions at meetings
held at such places and times as the Trustees may determine, or without
meetings, all as provided in Article II, Section 7, of the Trust
Instrument.

Section 2. Compensation of Trustees. Each Trustee who is neither an
employee of an investment adviser of the Trust or any Series nor an
employee of an entity affiliated with the investment adviser may receive
such compensation from the Trust for services and reimbursement for
expenses as the Trustees may determine.

ARTICLE III
-----------
COMMITTEES
----------

Section 1. Establishment. The Trustees may designate one or more
committees of the Trustees, which shall include an Executive Committee, a
Nominating Committee, and an Audit Committee (collectively, the
"Established Committees"). The Trustees shall determine the number of

members of each committee and its powers and shall appoint its members and
its chair. Each committee member shall serve at the pleasure of the
Trustees. The Trustees may abolish any committee, other than the
Established Committees, at any time. Each committee shall maintain
records of its meetings and report its actions to the Trustees. The
Trustees may rescind any action of any committee, but such rescission
shall not have retroactive effect. The Trustees may delegate to any
committee any of its powers, subject to the limitations of applicable law.

Section 2. Proceedings; Quorum; Action. Each committee may adopt such
rules governing its proceedings, quorum and manner of acting as it shall
deem proper and desirable. In the absence of such rules, a majority of
any committee shall constitute a quorum, and a committee shall act by the
vote of a majority of a quorum.

Section 3. Executive Committee. The Executive Committee shall have all
the powers of the Trustees when the Trustees are not in session. The
Chairman shall be a member and the chair of the Executive Committee. A
majority of the members of the Executive Committee shall be trustees who
are not "interested persons" of the Trust, as defined in the 1940 Act
("Disinterested Trustees").

Section 4. Nominating Committee. The Nominating Committee shall nominate
individuals to serve as Trustees (including Disinterested Trustees), as
members of committees, and as officers of the Trust. The members of the
Committee shall be Disinterested Trustees.

Section 5. Audit Committee. The Audit Committee shall review and
evaluate the audit function, including recommending the selection of
independent certified public accountants for each Series. The members of
the Committee shall be Disinterested Trustees.

Section 6. Compensation of Committee Members. Each committee member who
is a Disinterested Trustee may receive such compensation from the Trust
for services and reimbursement for expenses as the Trustees may determine.

ARTICLE IV
----------
OFFICERS
--------

Section 1. General. The officers of the Trust shall be a Chairman, a
President, one or more Vice Presidents, a Treasurer, and a Secretary, and
may include one or more Assistant Treasurers or Assistant Secretaries and
such other officers ("Other Officers") as the Trustees may determine.

Section 2. Election, Tenure and Qualifications of Officers. The Trustees
shall elect the officers of the Trust, except those appointed as provided
in Section 9 of this Article. Each officer elected by the Trustees shall
hold office until his or her successor shall have been elected and
qualified or until his or her earlier death, inability to serve, or

- 2 -

resignation. Any person may hold one or more offices, except that the
Chairman and the Secretary may not be the same individual. A person who
holds more than one office in the Trust may not act in more than one
capacity to execute, acknowledge, or verify an instrument required by law
to be executed, acknowledged, or verified by more than one officer. No
officer other than the Chairman need be a Trustee or Shareholder.

Section 3. Vacancies and Newly Created Offices. Whenever a vacancy shall
occur in any office or if any new office is created, the Trustees may fill
such vacancy or new office.

Section 4. Removal and Resignation. Officers serve at the pleasure of
the Trustees and may be removed at any time with or without cause. The
Trustees may delegate this power to the Chairman or President with respect
to any Other Officer. Such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Any officer may resign
from office at any time by delivering a written resignation to the
Trustees, Chairman, or the President. Unless otherwise specified therein,
such resignation shall take effect upon delivery.

Section 5. Chairman. The Chairman shall be the chief executive officer
of the Trust. Subject to the direction of the Trustees, the Chairman
shall have general charge, supervision and control over the Trust's
business affairs and shall be responsible for the management thereof and
the execution of policies established by the Trustees. The Chairman shall
preside at any Shareholders' meetings and at all meetings of the Trustees
and shall in general exercise the powers and perform the duties of the
Chairman of the Trustees. Except as the Trustees may otherwise order, the
Chairman shall have the power to grant, issue, execute or sign such powers
of attorney, proxies, agreements or other documents. The Chairman also
shall have the power to employ attorneys, accountants and other advisers
and agents for the Trust. The Chairman shall exercise such other powers
and perform such other duties as the Trustees may assign to the Chairman.

Section 6. President. The President shall have such powers and perform
such duties as the Trustees or the Chairman may determine. At the request
or in the absence or disability of the Chairman, the President shall
perform all the duties of the President and, when so acting, shall have
all the powers of the President.

Section 7. Vice President(s). The Vice President(s) shall have such
powers and perform such duties as the Trustees or the Chairman may
determine. At the request or in the absence or disability of the
President, the Vice President (or, if there are two or more Vice
Presidents, then the senior of the Vice Presidents present and able to
act) shall perform all the duties of the President and, when so acting,
shall have all the powers of the President. The Trustees may designate a
Vice President as the principal financial officer of the Trust or to serve
one or more other functions. If a Vice President is designated as
principal financial officer of the Trust, he or she shall have general
charge of the finances and books of the Trust and shall report to the
Trustees annually regarding the financial condition of each Series as soon

- 3 -

as possible after the close of such Series's fiscal year. The Trustees
also may designate one of the Vice Presidents as Executive Vice President.

Section 8. Treasurer and Assistant Treasurer(s). The Treasurer may be
designated as the principal financial officer or as the principal
accounting officer of the Trust. If designated as principal financial
officer, the Treasurer shall have general charge of the finances and books
of the Trust, and shall report to the Trustees annually regarding the
financial condition of each Series as soon as possible after the close of
such Series' fiscal year. The Treasurer shall be responsible for the
delivery of all funds and securities of the Trust to such company as the
Trustees shall retain as Custodian. The Treasurer shall furnish such
reports concerning the financial condition of the Trust as the Trustees
may request. The Treasurer shall perform all acts incidental to the
office of Treasurer, subject to the Trustees' supervision, and shall
perform such additional duties as the Trustees may designate.

Any Assistant Treasurer may perform such duties of the Treasurer
as the Trustees or the Treasurer may assign, and, in the absence of the
Treasurer, may perform all the duties of the Treasurer.

Section 9. Secretary and Assistant Secretaries. The Secretary shall
record all votes and proceedings of the meetings of Trustees and
Shareholders in books to be kept for that purpose. The Secretary shall be
responsible for giving and serving notices of the Trust. The Secretary
shall have custody of any seal of the Trust and shall be responsible for
the records of the Trust, including the Share register and such other
books and documents as may be required by the Trustees or by law. The
Secretary shall perform all acts incidental to the office of Secretary,
subject to the supervision of the Trustees, and shall perform such
additional duties as the Trustees may designate.

Any Assistant Secretary may perform such duties of the Secretary
as the Trustees or the Secretary may assign, and, in the absence of the
Secretary, may perform all the duties of the Secretary.

Section 10. Compensation of Officers. Each officer may receive such
compensation from the Trust for services and reimbursement for expenses as
the Trustees may determine.

Section 11. Surety Bond. The Trustees may require any officer or agent
of the Trust to execute a bond (including, without limitation, any bond
required by the 1940 Act and the rules and regulations of the Securities
and Exchange Commission ("Commission")) to the Trust in such sum and with
such surety or sureties as the Trustees may determine, conditioned upon
the faithful performance of his or her duties to the Trust, including
responsibility for negligence and for the accounting of any of the Trust's
property, funds or securities that may come into his or her hands.

- 4 -

ARTICLE V
----------
MEETINGS OF SHAREHOLDERS
------------------------

Section 1. No Annual Meetings. There shall be no annual Shareholders'
meetings, unless required by law.

Section 2. Special Meetings. The Secretary shall call a special meeting
of Shareholders of any Series or Class whenever ordered by the Trustees.

The Secretary also shall call a special meeting of Shareholders
of any Series or Class upon the written request of Shareholders owning at
least ten percent of the Outstanding Shares of such Series or Class
entitled to vote at such meeting; provided, that (1) such request shall
state the purposes of such meeting and the matters proposed to be acted
on, and (2) the Shareholders requesting such meeting shall have paid to
the Trust the reasonably estimated cost of preparing and mailing the
notice thereof, which the Secretary shall determine and specify to such
Shareholders. If the Secretary fails for more than thirty days to call a
special meeting when required to do so, the Trustees or the Shareholders
requesting such a meeting may, in the name of the Secretary, call the
meeting by giving the required notice. The Secretary shall not call a
special meeting upon the request of Shareholders of any Series or Class to
consider any matter that is substantially the same as a matter voted upon
at any special meeting of Shareholders of such Series or Class held during
the preceding twelve months, unless requested by the holders of a majority
of the Outstanding Shares of such Series or Class entitled to be voted at
such meeting.

A special meeting of Shareholders of any Series or Class shall be
held at such time and place as is determined by the Trustees and stated in
the notice of that meeting.

Section 3. Notice of Meetings; Waiver. The Secretary shall call a
special meeting of Shareholders by giving written notice of the place,
date, time, and purposes of that meeting at least fifteen days before the
date of such meeting. The Secretary may deliver or mail, postage prepaid,
the written notice of any meeting to each Shareholder entitled to vote at
such meeting. If mailed, notice shall be deemed to be given when
deposited in the United States mail directed to the Shareholder at his or
her address as it appears on the records of the Trust.

Section 4. Adjourned Meetings. A Shareholders' meeting may be adjourned
one or more times for any reason, including the failure of a quorum to
attend the meeting. No notice of adjournment of a meeting to another time
or place need be given to Shareholders if such time and place are
announced at the meeting at which the adjournment is taken or reasonable
notice is given to persons present at the meeting, and if the adjourned
meeting is held within a reasonable time after the date set for the
original meeting. Any business that might have been transacted at the
original meeting may be transacted at any adjourned meeting. If after the

- 5 -

adjournment a new record date is fixed for the adjourned meeting, the
Secretary shall give notice of the adjourned meeting to Shareholders of
record entitled to vote at such meeting. Any irregularities in the notice
of any meeting or the nonreceipt of any such notice by any of the
Shareholders shall not invalidate any action otherwise properly taken at
any such meeting.

Section 5. Validity of Proxies. Subject to the provisions of the Trust
Instrument, Shareholders entitled to vote may vote either in person or by
proxy; provided, that either (1) the Shareholder or his or her duly
authorized attorney has signed and dated a written instrument authorizing
such proxy to act, or (2) the Trustees adopt by resolution an electronic,
telephonic, computerized or other alternative to execution of a written
instrument authorizing the proxy to act, but if a proposal by anyone other
than the officers or Trustees is submitted to a vote of the Shareholders
of any Series or Class, or if there is a proxy contest or proxy
solicitation or proposal in opposition to any proposal by the officers or
Trustees, Shares may be voted only in person or by written proxy. Unless
the proxy provides otherwise, it shall not be valid for more than eleven
months before the date of the meeting. All proxies shall be delivered to
the Secretary or other person responsible for recording the proceedings
before being voted. A proxy with respect to Shares held in the name of
two or more persons shall be valid if executed by one of them unless at or
prior to exercise of such proxy the Trust receives a specific written
notice to the contrary from any one of them. Unless otherwise
specifically limited by their terms, proxies shall entitle the Shareholder
to vote at any adjournment of a Shareholders' meeting. A proxy purporting
to be executed by or on behalf of a Shareholder shall be deemed valid
unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. At every meeting of
Shareholders, unless the voting is conducted by inspectors, the chairman
of the meeting shall decide all questions concerning the qualifications of
voters, the validity of proxies, and the acceptance or rejection of votes.
Subject to the provisions of the Delaware Business Trust Act, the Trust
Instrument, or these By-laws, the General Corporation Law of the State of
Delaware relating to proxies, and judicial interpretations thereunder
shall govern all matters concerning the giving, voting or validity of
proxies, as if the Trust were a Delaware corporation and the Shareholders
were shareholders of a Delaware corporation.

Section 6. Record Date. The Trustees may fix in advance a date up to
ninety days before the date of any Shareholders' meeting as a record date
for the determination of the Shareholders entitled to notice of, and to
vote at, any such meeting. The Shareholders of record entitled to vote at
a Shareholders' meeting shall be deemed the Shareholders of record at any
meeting reconvened after one or more adjournments, unless the Trustees
have fixed a new record date. If the Shareholders' meeting is adjourned
for more than sixty days after the original date, the Trustees shall
establish a new record date.

Section 7. Action Without a Meeting. Shareholders may take any action
without a meeting if a majority (or such greater amount as may be required

- 6 -

by law) of the Outstanding Shares entitled to vote on the matter consent
to the action in writing and such written consents are filed with the
records of Shareholders' meetings. Such written consent shall be treated
for all purposes as a vote at a meeting of the Shareholders.

ARTICLE VI
----------
SHARES OF BENEFICIAL INTEREST
-----------------------------

Section 1. No Share Certificates. Neither the Trust nor any Series or
Class shall issue certificates certifying the ownership of Shares, unless
the Trustees may otherwise specifically authorize such certificates.

Section 2. Transfer of Shares. Shares shall be transferable only by a
transfer recorded on the books of the Trust by the Shareholder of record
in person or by his or her duly authorized attorney or legal
representative. Shares may be freely transferred and the Trustees may,
from time to time, adopt rules and regulations regarding the method of
transfer of such Shares.

ARTICLE VII
-----------
FISCAL YEAR AND ACCOUNTANT
--------------------------

Section 1. Fiscal Year. The fiscal year of the Trust shall end on August
31.

Section 2. Accountant. The Trust shall employ independent certified
public accountants as its Accountant to examine the accounts of the Trust
and to sign and certify financial statements filed by the Trust. The
Accountant's certificates and reports shall be addressed both to the
Trustees and to the Shareholders. A majority of the Disinterested
Trustees shall select the Accountant at any meeting held within ninety
days before or after the beginning of the fiscal year of the Trust, acting
upon the recommendation of the Audit Committee. The Trust shall submit
the selection for ratification or rejection at the next succeeding
Shareholders' meeting, if such a meeting is to be held within the Trust's
fiscal year. If the selection is rejected at that meeting, the Accountant
shall be selected by majority vote of the Trust's outstanding voting
securities, either at the meeting at which the rejection occurred or at a
subsequent meeting of Shareholders called for the purpose of selecting an
Accountant. The employment of the Accountant shall be conditioned upon
the right of the Trust to terminate such employment without any penalty by
vote of a Majority Shareholder Vote at any Shareholders' meeting called
for that purpose.

- 7 -

ARTICLE VIII
------------
AMENDMENTS
----------

Section 1. General. Except as provided in Section 2 of this Article,
these By-laws may be amended by the Trustees, or by the affirmative vote
of a majority of the Outstanding Shares entitled to vote at any meeting.

Section 2. By Shareholders Only. After the issue of any Shares, this
Article may only be amended by the affirmative vote of the holders of the
lesser of (a) at least two-thirds of the Outstanding Shares present and
entitled to vote at any meeting, or (b) at least fifty percent of the
Outstanding Shares.

ARTICLE IX
----------
NET ASSET VALUE
---------------

The term "Net Asset Value" of any Series shall mean that amount
by which the assets belonging to that Series exceed its liabilities, all
as determined by or under the direction of the Trustees. Net Asset Value
per Share shall be determined separately for each Series and shall be
determined on such days and at such times as the Trustees may determine.
The Trustees shall make such determination with respect to securities for
which market quotations are readily available, at the market value of such
securities, and with respect to other securities and assets, at the fair
value as determined in good faith by the Trustees; provided, however, that
the Trustees, without Shareholder approval, may alter the method of
appraising portfolio securities insofar as permitted under the 1940 Act
and the rules, regulations and interpretations thereof promulgated or
issued by the SEC or insofar as permitted by any order of the SEC
applicable to the Series. The Trustees may delegate any of their powers
and duties under this Article X with respect to appraisal of assets and
liabilities. At any time the Trustees may cause the Net Asset Value per
Share last determined to be determined again in a similar manner and may
fix the time when such redetermined values shall become effective.

ARTICLE X
---------
CONFLICT OF INTEREST PROCEDURES
-------------------------------

Section 1. Monitoring and Reporting Conflicts. The trustees of Equity
Managers Trust and the Trust (collectively, the "Trusts") are the same
individuals. Set forth in this Article are procedures established to
address potential conflicts of interest that may arise between the Trusts.
On an ongoing basis, the investment adviser ("Manager") of Equity Managers
Trust shall be responsible for monitoring the Trusts for the existence of
any material conflicts of interest between the Trusts. The Manager shall

- 8 -

be responsible for reporting any potential or existing conflicts to
trustees of the Trusts as they may develop.

Section 2. Annual Report. The Manager shall report to the trustees of
the Trusts annually regarding its monitoring of the Trusts for conflicts
of interest.

Section 3. Resolution of Conflicts. If a potential conflict of interest
arises, the Trustees shall take such action as is reasonably appropriate
to deal with the conflict, up to and including recommending a change in
the trustees and implementing such recommendation, consistent with
applicable law.

Section 4. Annual Review. The Trustees, including a majority of the
Disinterested Trustees, shall determine no less frequently than annually
that the operating structure is in the best interest of Shareholders. The
Trustees shall consider, among other things, whether the expenses incurred
by the Trust are approximately the same or less than the expenses that the
Trust would incur if it invested directly in the type of securities being
held by Equity Managers Trust. The Trustees, including a majority of the
Disinterested Trustees, shall review no less frequently than annually
these procedures for their continuing appropriateness.

- 9 -

DISTRIBUTION AGREEMENT

This Agreement is made as of August 3, 1993, between
Neuberger & Berman Equity Trust, a Delaware business trust ("Trust"), and
Neuberger & Berman Management Incorporated, a New York corporation (the
"Distributor").

WHEREAS, the Trust is registered under the Investment Company Act
of 1940, as amended ("1940 Act"), as an open-end, diversified management
investment company and has established several separate series of shares
("Series"), with each Series having its own assets and investment
policies; and

WHEREAS, the Trust desires to retain the Distributor to furnish
distribution services to each Series listed in Schedule A attached hereto,
and to such other Series of the Trust hereinafter established as agreed to
from time to time by the parties, evidenced by an addendum to Schedule A
(hereinafter "Series" shall refer to each Series which is subject to this
Agreement and all agreements and actions described herein to be made or
taken by a Series shall be made or taken by the Trust on behalf of the
Series), and the Distributor is willing to furnish such services,

NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties agree as follows:

1. The Trust hereby appoints the Distributor as agent
to sell the shares of beneficial interest of each Series (the "Shares")
and the Distributor hereby accepts such appointment. All sales by the
Distributor shall be expressly subject to acceptance by the Trust, acting
on behalf of the Series.

2. (a) The Distributor agrees that (i) all Shares
sold by the Distributor shall be sold at the net asset value ("NAV")
thereof as described in Section 3 hereof, and (ii) the Series shall
receive 100% of such NAV.

(b) The Distributor may enter into agreements, in form
and substance satisfactory to the Trust, with dealers selected by the
Distributor, providing for the sale to such dealers and resale by such
dealers of Shares at their NAV.

3. The Trust agrees to supply to the Distributor,
promptly after the time or times at which NAV is determined, on each day
on which the New York Stock Exchange is open for business and on such
other days as the Board of Trustees of the Trust ("Trustees") may from
time to time determine (each such day being hereinafter called a "business
day"), a statement of the NAV of each Series having been determined in the
manner set forth in the then-current Prospectus and Statement of
Additional Information ("SAI") of each Series. Each determination of NAV
shall take effect as of such time or times on each business day as set

forth in the then-current Prospectus of each Series and shall prevail
until the time as of which the next determination is made.

4. Upon receipt by the Trust at its principal place of
business of a written order from the Distributor, together with delivery
instructions, the Trust shall, if it elects to accept such order, as
promptly as practicable, cause the Shares purchased by such order to be
delivered in such amounts and in such names as the Distributor shall
specify, against payment therefor in such manner as may be acceptable to
the Trust. The Trust may, in its discretion, refuse to accept any order
for the purchase of Shares that the Distributor may tender to it.

5. (a) All sales literature and advertisements used
by the Distributor in connection with sales of Shares shall be subject to
approval by the Trust. The Trust authorizes the Distributor, in
connection with the sale or arranging for the sale of Shares of any
Series, to provide only such information and to make only such statements
or representations as are contained in the Series's then-current
Prospectus and SAI or in such financial and other statements furnished to
the Distributor pursuant to the next paragraph or as may properly be
included in sales literature or advertisements in accordance with the
provisions of the Securities Act of 1933 (the "1933 Act"), the 1940 Act
and applicable rules of self-regulatory organizations. Neither the Trust
nor any Series shall be responsible in any way for any information
provided or statements or representations made by the Distributor or its
representatives or agents other than the information, statements and
representations described in the preceding sentence.

(b) Each Series shall keep the Distributor fully
informed with regard to its affairs, shall furnish the Distributor with a
certified copy of all of its financial statements and a signed copy of
each report prepared for it by its independent auditors, and shall
cooperate fully in the efforts of the Distributor to negotiate and sell
Shares of such Series and in the Distributor's performance of all its
duties under this Agreement.

6. The Distributor, as agent of each Series and for the
account and risk of each Series, is authorized, subject to the direction
of the Trust, to redeem outstanding Shares of such Series when properly
tendered by shareholders pursuant to the redemption right granted to such
Series's shareholders by the Trust Instrument of the Trust, as from time
to time in effect, at a redemption price equal to the NAV per Share of
such Series next determined after proper tender and acceptance. The Trust
has delivered to the Distributor a copy of the Trust's Trust Instrument as
currently in effect and agrees to deliver to the Distributor any
amendments thereto promptly upon filing thereof with the Office of the
Secretary of State of the State of Delaware.

7. The Distributor shall assume and pay or reimburse
each Series for the following expenses of such Series: (i) costs of
preparing, printing and distributing reports, prospectuses and SAIs used

- 2 -

by such Series in connection with the sale or offering of its Shares and
all advertising and sales literature relating to such Series printed at
the instruction of the Distributor; and (ii) counsel fees and expenses in
connection with the foregoing. The Distributor shall also pay all its own
costs and expenses connected with the sale of Shares.

8. Each Series shall maintain a currently effective
Registration Statement on Form N-1A with respect to such Series and shall
file with the Securities and Exchange Commission (the "SEC") such reports
and other documents as may be required under the 1933 Act and the 1940 Act
or by the rules and regulations of the SEC thereunder.

Each Series represents and warrants that the Registration
Statement, post-effective amendments, Prospectus and SAI (excluding
statements relating to the Distributor and the services it provides that
are based upon written information furnished by the Distributor expressly
for inclusion therein) of such Series shall not contain any untrue
statement of material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and that all statements or information furnished to the
Distributor, pursuant to Section 5(b) hereof, shall be true and correct in
all material respects.

9. (a) This Agreement shall become effective on the
date hereof and shall remain in full force and effect until August 3, 1995
and may be continued from year to year thereafter; PROVIDED, that such
continuance shall be specifically approved each year by the Trustees or by
a majority of the outstanding voting securities of the Series, and in
either case, also by a majority of the Trustees who are not interested
persons of the Trust or the Distributor ("Disinterested Trustees"). This
Agreement may be amended as to any Series with the approval of the
Trustees or of a majority of the outstanding voting securities of such
Series; PROVIDED, that in either case, such amendment also shall be
approved by a majority of the Disinterested Trustees.

(b) Either party may terminate this Agreement
without the payment of any penalty, upon not more than sixty days' nor
less than thirty days' written notice delivered personally or mailed by
registered mail, postage prepaid, to the other party; PROVIDED, that in
the case of termination by any Series, such action shall have been
authorized (i) by resolution of the Trustees, or (ii) by vote of a
majority of the outstanding voting securities of such Series, or (iii) by
written consent of a majority of the Disinterested Trustees.

(d) Any question of interpretation of any term
or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by
reference to such term or provision of the 1940 Act and to interpretation

- 3 -

thereof, if any, by the United States courts or, in the absence of any
controlling decision of any such court, by rules, regulations or orders of
the SEC validly issued pursuant to the 1940 Act. Specifically, the terms
"interested persons," "assignment" and "vote of a majority of the
outstanding voting securities," as used in this Agreement, shall have the
meanings assigned to them by Section 2(a) of the 1940 Act. In addition,
when the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is modified, interpreted or relaxed by a rule,
regulation or order of the SEC, whether of special or of general
application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order. The Trust and the Distributor may from
time to time agree on such provisions interpreting or clarifying the
provisions of this Agreement as, in their joint opinion, are consistent
with the general tenor of this Agreement and with the specific provisions
of this Section 9(d). Any such interpretations or clarifications shall be
in writing signed by the parties and annexed hereto, but no such
interpretation or clarification shall be effective if in contravention of
any applicable federal or state law or regulations, and no such
interpretation or clarification shall be deemed to be an amendment of this
Agreement.

No term or provision of this Agreement shall be
construed to require the Distributor to provide distribution services to
any series of the Trust other than the Series, or to require any Series to
pay any compensation or expenses that are properly allocable, in a manner
approved by the Trustees, to a series of the Trust other than such Series.

(e) This Agreement is made and to be principally
performed in the State of New York, and except insofar as the 1940 Act or
other federal laws and regulations may be controlling, this Agreement
shall be governed by, and construed and enforced in accordance with, the
internal laws of the State of New York.

(f) This Agreement is made by the Trust solely
with respect to the Series, and the obligations created hereby are not
binding on any other series of the Trust, but bind only assets belonging
to the Series.

10. The Distributor or one of its affiliates may from
time to time deem it desirable to offer to the list of shareholders of
each Series the shares of other mutual funds for which it acts as
Distributor, including other series of the Trust or other products or
services; however, any such use of the list of shareholders of any Series
shall be made subject to such terms and conditions, if any, as shall be
approved by a majority of the Disinterested Trustees.

11. The Distributor shall look only to the assets of
a Series for the performance of this Agreement by the Trust on behalf of
such Series, and neither the Trustees nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally
liable therefor.

- 4 -

IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed by their duly authorized officers and under
their respective seals.

NEUBERGER & BERMAN
EQUITY TRUST

Attest: By: /s/ Michael J. Weiner
------------------------
Michael J. Weiner
/s/ Claudia A. Brandon Title: Vice President
-----------------------
Claudia A. Brandon
Secretary

NEUBERGER & BERMAN
MANAGEMENT INCORPORATED

Attest: By: /s/ Stanley Egener
-------------------------
Stanley Egener
/s/ Ellen Metzger Title: President
-----------------------
Ellen Metzger
Secretary

Dated: August 3, 1993

- 5 -

DISTRIBUTION AGREEMENT

SCHEDULE A

The Series of Neuberger & Berman Equity Trust currently subject
to this Agreement are as follows:

INITIAL SERIES

Neuberger & Berman Focus Trust
Neuberger & Berman Genesis Trust
Neuberger & Berman Guardian Trust
Neuberger & Berman Manhattan Trust
Neuberger & Berman Partners Trust

ADDITIONAL SERIES

Neuberger & Berman NYCDC Socially Responsive Trust

CUSTODIAN CONTRACT
Between
NEUBERGER & BERMAN EQUITY TRUST
and
STATE STREET BANK AND TRUST COMPANY

TABLE OF CONTENTS
-----------------
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page
----
1. Employment of Custodian and Property to be Held By It . . . . 1

2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian in the United States . . . . 2
2.1 Holding Securities . . . . . . . . . . . . . . . . . . 2
2.2 Delivery of Securities . . . . . . . . . . . . . . . . 2
2.3 Registration of Securities . . . . . . . . . . . . . . 5
2.4 Bank Accounts . . . . . . . . . . . . . . . . . . . . 5
2.5 Availability of Federal Funds . . . . . . . . . . . . 5
2.6 Collection of Income . . . . . . . . . . . . . . . . . 6
2.7 Payment of Fund Monies . . . . . . . . . . . . . . . . 6
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased . . . . . . . . . . . . . . . . . 8
2.9 Appointment of Agents . . . . . . . . . . . . . . . . 8
2.10 Deposit of Fund Assets in Securities System . . . . . 8
2.11 Fund Assets Held in the Custodian's
Direct Paper System . . . . . . . . . . . . . . . . . 9
2.12 Segregated Account . . . . . . . . . . . . . . . . . . 10
2.13 Ownership Certificates for Tax Purposes . . . . . . . 11
2.14 Proxies . . . . . . . . . . . . . . . . . . . . . . . 11
2.15 Communications Relating to Portfolio Securities . . . 11

3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States . . . . . . . . . . 12

3.1 Appointment of Foreign Sub-Custodians . . . . . . . 12
3.2 Assets to be Held . . . . . . . . . . . . . . . . . . 12
3.3 Foreign Securities Depositories . . . . . . . . . . . 12
3.4 Agreements with Foreign Banking Institutions . . . . . 12
3.5 Access of Independent Accountants of the Fund . . . . 13
3.6 Reports by Custodian . . . . . . . . . . . . . . . . . 13
3.7 Transactions in Foreign Custody Account . . . . . . . 13
3.8 Liability of Foreign Sub-Custodians . . . . . . . . . 14
3.9 Liability of Custodian . . . . . . . . . . . . . . . . 14
3.10 Reimbursement for Advances . . . . . . . . . . . . . . 15
3.11 Monitoring Responsibilities . . . . . . . . . . . . . 16
3.12 Branches of U.S. Banks . . . . . . . . . . . . . . . . 16
3.13 Foreign Exchange Transactions . . . . . . . . . . . . 17
3.13 Tax Law . . . . . . . . . . . . . . . . . . . . . . . 17

4. Payments for Sales or Repurchase or Redemptions
of Shares of the Fund . . . . . . . . . . . . . . . . . . . . 18

5. Proper Instructions . . . . . . . . . . . . . . . . . . . . . 19

6. Actions Permitted Without Express Authority . . . . . . . . . 19

7. Evidence of Authority . . . . . . . . . . . . . . . . . . . . 20

8. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income . . . . . . . . 20

9. Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

10. Opinion of Fund's Independent Accountants . . . . . . . . . . 21

11. Reports to Fund by Independent Public Accountants . . . . . . 21

12. Compensation of Custodian . . . . . . . . . . . . . . . . . . 21

13. Responsibility of Custodian . . . . . . . . . . . . . . . . . 22

14. Effective Period, Termination and Amendment . . . . . . . . . 23

15. Successor Custodian . . . . . . . . . . . . . . . . . . . . . 24

16. Interpretive and Additional Provisions . . . . . . . . . . . . 24

17. Additional Funds . . . . . . . . . . . . . . . . . . . . . . . 25

18. Massachusetts Law to Apply . . . . . . . . . . . . . . . . . . 25

19. Limitation of Trustee, Officer and Shareholder Liability . . . 25

20. No Liability of Other Portfolios . . . . . . . . . . . . . . . 26

21. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 26

22. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 26

23. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 26

24. Prior Contracts . . . . . . . . . . . . . . . . . . . . . . . 26

25. Shareholder Communications Election . . . . . . . . . . . . . 26

CUSTODIAN CONTRACT
------------------

This Contract between Neuberger & Berman Equity Trust, a business
trust organized and existing under the laws of Delaware, having its
principal place of business at 605 Third Avenue, New York, New York 10158
hereinafter called the "Fund", and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian",

WITNESSETH:

WHEREAS, the Fund is authorized to issue shares in separate
series, with each such series representing interests in a separate
portfolio of securities and other assets; and

WHEREAS, the Fund intends to initially offer shares in six
series, Neuberger & Berman Genesis Trust, Neuberger & Berman Guardian
Trust, Neuberger & Berman Partners Trust, Neuberger & Berman Manhattan
Trust, and Neuberger & Berman Selected Sectors Trust (such series together
with all other series subsequently established by the Fund and made
subject to this Contract in accordance with paragraph 17, being herein
referred to as the "Portfolio(s)");

NOW THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:

1. Employment of Custodian and Property to be Held by It
-----------------------------------------------------
The Fund hereby employs the Custodian as the custodian of the
assets of each Portfolio, including securities which the Fund, on behalf
of the applicable Portfolio desires to be held in places within the United
States ("domestic securities") and securities it desires to be held
outside the United States ("foreign securities") pursuant to the
provisions of the Trust Instrument. The Fund on behalf of each Portfolio
agrees to deliver to the Custodian all securities and cash of the
Portfolios, and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the
Portfolio(s) from time to time, and the cash consideration received by it
for such new or treasury shares of beneficial interest of the Fund
representing interests in the Portfolios, ("Shares") as may be issued or
sold from time to time. The Custodian shall not be responsible for any
property of a Portfolio held or received by the Portfolio and not
delivered to the Custodian.

Upon receipt of "Proper Instructions" (within the meaning of
Article 5), the Custodian shall on behalf of the applicable Portfolio(s)
from time to time employ one or more sub-custodians, located in the United
States but only in accordance with an applicable vote by the Board of

Trustees of the Fund on behalf of the applicable Portfolio(s), and
provided that the Custodian shall have no more or less responsibility or
liability to the Fund on account of any actions or omissions of any
sub-custodian so employed than any such sub-custodian has to the
Custodian. The Custodian may employ as sub-custodian for the Fund's
foreign securities on behalf of the applicable Portfolio(s) the foreign
banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.

2. Duties of the Custodian with Respect to Property of the Fund Held
By the Custodian in the United States
-----------------------------------------------------------------

2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of each Portfolio all non-cash
property, to be held by it in the United States including all
domestic securities owned by such Portfolio, other than (a)
securities which are maintained pursuant to Section 2.10 in a
clearing agency which acts as a securities depository or in a
book-entry system authorized by the U.S. Department of the
Treasury, collectively referred to herein as "Securities System"
and (b) commercial paper of an issuer for which State Street Bank
and Trust Company acts as issuing and paying agent ("Direct
Paper") which is deposited and/or maintained in the Direct Paper
System of the Custodian pursuant to Section 2.11.

2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by a Portfolio held by the Custodian or
in a Securities System account of the Custodian or in the
Custodian's Direct Paper book entry system account ("Direct Paper
System Account") only upon receipt of Proper Instructions from
the Fund on behalf of the applicable Portfolio, which may be
continuing instructions when deemed appropriate by the parties,
and only in the following cases:

1) Upon sale of such securities for the account of the
Portfolio and receipt of payment therefor;

2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered
into by the Portfolio;

3) In the case of a sale effected through a Securities
System, in accordance with the provisions of Section 2.10
hereof;

4) To the depository agent in connection with tender or
other similar offers for securities of the Portfolio;

5) To the issuer thereof or its agent when such securities
are called, redeemed, retired or otherwise become

payable; provided that, in any such case, the cash or
other consideration is to be delivered to the Custodian;

6) To the issuer thereof, or its agent, for transfer into
the name of the Portfolio or into the name of any nominee
or nominees of the Custodian or into the name or nominee
name of any agent appointed pursuant to Section 2.9 or
into the name or nominee name of any sub-custodian
appointed pursuant to Article 1; or for exchange for a
different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of
units; PROVIDED that, in any such case, the new
securities are to be delivered to the Custodian;

7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities
prior to receiving payment for such securities except as
may arise from the Custodian's own negligence or willful
misconduct;

8) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization
or readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;

9) In the case of warrants, rights or similar securities,
the surrender thereof in the exercise of such warrants,
rights or similar securities or the surrender of interim
receipts or temporary securities for definitive
securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;

10) For delivery in connection with any loans of securities
made by the Portfolio, BUT ONLY against receipt of
adequate collateral as agreed upon from time to time by
the Custodian and the Fund on behalf of the Portfolio,
which may be in the form of cash or obligations issued by
the United States government, its agencies or
instrumentalities, except that in connection with any
loans for which collateral is to be credited to the
Custodian's account in the book-entry system authorized
by the U.S. Department of the Treasury, the Custodian
will not be held liable or responsible for the delivery

of securities owned by the Portfolio prior to the receipt
of such collateral;

11) For delivery as security in connection with any
borrowings by the Fund on behalf of the Portfolio
requiring a pledge of assets by the Fund on behalf of the
Portfolio, BUT ONLY against receipt of amounts borrowed;

12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange Act") and
a member of The National Association of Securities
Dealers, Inc. ("NASD"), relating to compliance with the
rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any
similar organization or organizations, regarding escrow
or other arrangements in connection with transactions by
the Portfolio of the Fund;

13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian, and a Futures Commission Merchant registered
under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading
Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits
in connection with transactions by the Portfolio of the
Fund;

14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for a Portfolio, for delivery to such
Transfer Agent or to the holders of shares in connection
with distributions in kind, as may be described from time
to time in the currently effective prospectus and
statement of additional information of the Fund, related
to the Portfolio ("Prospectus"), in satisfaction of
requests by holders of Shares for repurchase or
redemption; and

15) For any other proper corporate purpose, BUT ONLY upon
receipt of, in addition to Proper Instructions from the
Fund on behalf of the applicable Portfolio, a certified
copy of a resolution of the Board of Trustees or of the
Executive Committee signed by an officer of the Fund and
certified by the Secretary or an Assistant Secretary,
specifying the securities of the Portfolio to be
delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or
persons to whom delivery of such securities shall be
made.

2.3 Registration of Securities. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in
the name of the Portfolio or in the name of any nominee of the
Fund on behalf of the Portfolio or of any nominee of the
Custodian which nominee shall be assigned exclusively to the
Portfolio, UNLESS the Fund has authorized in writing the
appointment of a nominee to be used in common with other
registered investment companies having the same investment
adviser as the Portfolio, or in the name or nominee name of any
agent appointed pursuant to Section 2.9 or in the name or nominee
name of any sub-custodian appointed pursuant to Article 1. All
securities accepted by the Custodian on behalf of the Portfolio
under the terms of this Contract shall be in "street name" or
other good delivery form. If, however, the Fund directs the
Custodian to maintain securities in "street name", the Custodian
shall utilize its best efforts only to timely collect income due
the Fund on such securities and to notify the Fund on a best
efforts basis only of relevant corporate actions including,
without limitation, pendency of calls, maturities, tender or
exchange offers.

2.4 Bank Accounts. The Custodian shall open and maintain a separate
bank account or accounts in the United States in the name of each
Portfolio of the Fund which shall contain only property held by
the Custodian as custodian for that Portfolio, subject only to
draft or order by the Custodian acting pursuant to the terms of
this Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or
for the account of the Portfolio, other than cash maintained by
the Portfolio in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of
1940. Funds held by the Custodian for a Portfolio may be
deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust
companies as it may in its discretion deem necessary or
desirable; PROVIDED, however, that every such bank or trust
company shall be qualified to act as a custodian under the
Investment Company Act of 1940 and that each such bank or trust
company and the funds to be deposited with each such bank or
trust company shall on behalf of each applicable Portfolio be
approved by vote of a majority of the Board of Trustees of the
Fund. Such funds shall be deposited by the Custodian in its
capacity as Custodian and shall be withdrawable by the Custodian
only in that capacity.

2.5 Availability of Federal Funds. Upon mutual agreement between the
Fund on behalf of each applicable Portfolio and the Custodian,
the Custodian shall, upon the receipt of Proper Instructions from
the Fund on behalf of a Portfolio, make federal funds available
to such Portfolio as of specified times agreed upon from time to
time by the Fund and the Custodian in the amount of checks

received in payment for Shares of such Portfolio which are
deposited into the Portfolio's account.

2.6 Collection of Income. Subject to the provisions of Section 2.3,
the Custodian shall collect on a timely basis all income and
other payments with respect to registered domestic securities
held hereunder to which each Portfolio shall be entitled either
by law or pursuant to custom in the securities business, and
shall collect on a timely basis all income and other payments
with respect to bearer domestic securities if, on the date of
payment by the issuer, such securities are held by the Custodian
or its agent and shall credit such income, as collected, to such
Portfolio's custodian account. Without limiting the generality
of the foregoing, the Custodian shall detach and present for
payment all coupons and other income items requiring presentation
as and when they become due and shall collect interest when due
on securities held hereunder. Collection of income due each
Portfolio on securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Custodian so
long as the securities are registered and remain in the name of
the Fund, the Custodian, or its nominee, or in the Depository
Trust Company account of the Custodian, but otherwise shall be
the responsibility of the Fund and the Custodian will have no
duty or responsibility in connection therewith, other than to
provide the Fund with such information or data as may be
necessary to assist the Fund in arranging for the timely delivery
to the Custodian of the income to which the Portfolio is properly
entitled.

2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from
the Fund on behalf of the applicable Portfolio, which may be
continuing instructions when deemed appropriate by the parties,
the Custodian shall pay out monies of a Portfolio in the
following cases only:

1) Upon the purchase of domestic securities, options,
futures contracts or options on futures contracts for the
account of the Portfolio but only (a) against the
delivery of such securities or evidence of title to such
options, futures contracts or options on futures
contracts to the Custodian (or any bank, banking firm or
trust company doing business in the United States or
abroad which is qualified under the Investment Company
Act of 1940, as amended, to act as a custodian and has
been designated by the Custodian as its agent for this
purpose) registered in the name of the Portfolio or in
the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer; (b) in
the case of a purchase effected through a Securities
System, in accordance with the conditions set forth in
Section 2.10 hereof; (c) in the case of a purchase
involving the Direct Paper System, in accordance with the

conditions set forth in Section 2.11; (d) in the case of
repurchase agreements entered into between the Fund on
behalf of the Portfolio and the Custodian, or another
bank, or a broker-dealer which is a member of NASD, (i)
against delivery of the securities either in certificate
form or through an entry crediting the Custodian's
account at the Federal Reserve Bank with such securities
or (ii) against delivery of the receipt evidencing
purchase by the Portfolio of securities owned by the
Custodian along with written evidence of the agreement by
the Custodian to repurchase such securities from the
Portfolio or (e) for transfer to a time deposit account
of the Fund in any bank, whether domestic or foreign;
such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank
pursuant to Proper Instructions from the Fund as defined
in Article 5;

2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section
2.2 hereof;

3) For the redemption or repurchase of Shares issued by the
Portfolio as set forth in Article 4 hereof;

4) For the payment of any expense or liability incurred by
the Portfolio, including but not limited to the following
payments for the account of the Portfolio: interest,
taxes, management, accounting, transfer agent and legal
fees, and operating expenses of the Fund whether or not
such expenses are to be in whole or part capitalized or
treated as deferred expenses;

5) For the payment of any dividends on Shares of the
Portfolio declared pursuant to the governing documents of
the Fund;

6) For payment of the amount of dividends received in
respect of securities sold short;

7) For any other proper purpose, BUT ONLY upon receipt of,
in addition to Proper Instructions from the Fund on
behalf of the Portfolio, a certified copy of a resolution
of the Board of Trustees or of the Executive Committee of
the Fund signed by an officer of the Fund and certified
by its Secretary or an Assistant Secretary, specifying
the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose
to be a proper purpose, and naming the person or persons
to whom such payment is to be made.

2.8 Liability for Payment in Advance of Receipt of Securities
Purchased. Except as specifically stated otherwise in this
Contract, in any and every case where payment for purchase of
domestic securities for the account of a Portfolio is made by the
Custodian in advance of receipt of the securities purchased in
the absence of specific written instructions from the Fund on
behalf of such Portfolio to so pay in advance, the Custodian
shall be absolutely liable to the Fund for such securities to the
same extent as if the securities had been received by the
Custodian.

2.9 Appointment of Agents. The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other
bank or trust company which is itself qualified under the
Investment Company Act of 1940, as amended, and its rules or
regulations to act as a custodian, as its agent to carry out such
of the provisions of this Article 2 as the Custodian may from
time to time direct; PROVIDED, however, that the appointment of
any agent shall not relieve the Custodian of its responsibilities
or liabilities hereunder.

2.10 Deposit of Fund Assets in Securities Systems. The Custodian may
deposit and/or maintain securities owned by a Portfolio in a
clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of
1934, which acts as a securities depository, or in the book-entry
system authorized by the U.S. Department of the Treasury and
certain federal agencies, collectively referred to herein as
"Securities System" in accordance with applicable Federal Reserve
Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:

1) The Custodian may keep securities of the Portfolio in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in
the Securities System which shall not include any assets
of the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;

2) The records of the Custodian with respect to securities
of the Portfolio which are maintained in a Securities
System shall identify by book-entry those securities
belonging to the Portfolio;

3) The Custodian shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from
the Securities System that such securities have been
transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such
payment and transfer for the account of the Portfolio.
The Custodian shall transfer securities sold for the
account of the Portfolio upon (i) receipt of advice from

the Securities System that payment for such securities
has been transferred to the Account, and (ii) the making
of an entry on the records of the Custodian to reflect
such transfer and payment for the account of the
Portfolio. Copies of all advices from the Securities
System of transfers of securities for the account of the
Portfolio shall identify the Portfolio, be maintained for
the Portfolio by the Custodian and be provided to the
Fund at its request. Upon request, the Custodian shall
furnish the Fund on behalf of the Portfolio confirmation
of each transfer to or from the account of the Portfolio
in the form of a written advice or notice and shall
furnish to the Fund on behalf of the Portfolio copies of
daily transaction sheets reflecting each day's
transactions in the Securities System for the account of
the Portfolio;

4) The Custodian shall provide the Fund for the Portfolio
with any report obtained by the Custodian (or by any
agent appointed by the Custodian pursuant to Section 2.9)
on the Securities System's accounting system, internal
accounting control and procedures for safeguarding
securities deposited in the Securities System;

5) The Custodian shall have received from the Fund on behalf
of the Portfolio the certificate required by Article 14
hereof;

6) Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to the
Fund for the benefit of the Portfolio for any loss or
damage to the Portfolio resulting from use of the
Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from
failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the
Securities System; at the election of the Fund, it shall
be entitled to be subrogated to the rights of the
Custodian with respect to any claim against the
Securities System or any other person which the Custodian
may have as a consequence of any such loss or damage if
and to the extent that the Portfolio has not been made
whole for any such loss or damage.

2.11 Fund Assets Held in the Custodian's Direct Paper System. The
Custodian may deposit and/or maintain securities owned by a
Portfolio in the Direct Paper System of the Custodian subject to
the following provisions:

1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper
Instructions from the Fund on behalf of the Portfolio;

2) The Custodian may keep securities of the Portfolio in the
Direct Paper System only if such securities are
represented in an account ("Account") of the Custodian in
the Direct Paper System which shall not include any
assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;

3) The records of the Custodian with respect to securities
of the Portfolio which are maintained in the Direct Paper
System shall identify by book-entry those securities
belonging to the Portfolio;

4) The Custodian shall pay for securities purchased for the
account of the Portfolio upon the making of an entry on
the records of the Custodian to reflect such payment and
transfer of securities to the account of the Portfolio.
The Custodian shall transfer securities sold for the
account of the Portfolio upon the making of an entry on
the records of the Custodian to reflect such transfer and
receipt of payment for the account of the Portfolio;

5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the
account of the Portfolio, in the form of a written advice
or notice, of Direct Paper on the next business day
following such transfer and shall furnish to the Fund on
behalf of the Portfolio copies of daily transaction
sheets reflecting each day's transaction in the
Securities System for the account of the Portfolio;

6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on the Custodian's system of
internal accounting control as the Fund may reasonably
request from time to time.

2.12 Segregated Account. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and
on behalf of each such Portfolio, into which account or accounts
may be transferred cash and/or securities, including securities
maintained in an account by the Custodian pursuant to Section
2.10 hereof, (i) in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the Exchange Act
and a member of the NASD (or any futures commission merchant
registered under the Commodity Exchange Act), relating to
compliance with the rules of The Options Clearing Corporation and
of any registered national securities exchange (or the Commodity

Futures Trading Commission or any registered contract market), or
of any similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the
Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written
by the Portfolio or commodity futures contracts or options
thereon purchased or sold by the Portfolio, (iii) for the
purposes of compliance by the Portfolio with the procedures
required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange
Commission relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper
corporate purposes, BUT ONLY, in the case of clause (iv), upon
receipt of, in addition to Proper Instructions from the Fund on
behalf of the applicable Portfolio, a certified copy of a
resolution of the Board of Trustees or of the Executive Committee
signed by an officer of the Fund and certified by the Secretary
or an Assistant Secretary, setting forth the purpose or purposes
of such segregated account and declaring such purposes to be
proper corporate purposes.

2.13 Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with receipt of
income or other payments with respect to domestic securities of
each Portfolio held by it and in connection with transfers of
securities.

2.14 Proxies. The Custodian shall, with respect to the domestic
securities held hereunder, cause to be promptly executed by the
registered holder of such securities, if the securities are
registered otherwise than in the name of the Portfolio or a
nominee of the Portfolio, all proxies, without indication of the
manner in which such proxies are to be voted, and shall promptly
deliver to the Portfolio such proxies, all proxy soliciting
materials and all notices relating to such securities.

2.15 Communications Relating to Portfolio Securities. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly
to the Fund for each Portfolio all written information
(including, without limitation, pendency of calls and maturities
of domestic securities and expirations of rights in connection
therewith and notices of exercise of call and put options written
by the Fund on behalf of the Portfolio and the maturity of
futures contracts purchased or sold by the Portfolio) received by
the Custodian from issuers of the securities being held for the
Portfolio. With respect to tender or exchange offers, the
Custodian shall transmit promptly to the Portfolio all written
information received by the Custodian from issuers of the
securities whose tender or exchange is sought and from the party
(or his agents) making the tender or exchange offer. If the
Portfolio desires to take action with respect to any tender

offer, exchange offer or any other similar transaction, the
Portfolio shall when reasonably possible notify the Custodian at
least three business days prior to the date on which the
Custodian is to take such action.

3. Duties of the Custodian with Respect to Property of the Fund Held
Outside of the United States
-----------------------------------------------------------------
3.1 Appointment of Foreign Sub-Custodians. The Fund hereby
authorizes and instructs the Custodian to employ as
sub-custodians for each Portfolio's securities and other assets
maintained outside the United States the foreign banking
institutions and foreign securities depositories designated on
Schedule A hereto ("foreign sub-custodians"). Upon receipt of
"Proper Instructions", as defined in Section 5 of this Contract,
together with a certified resolution of the Fund's Board of
Trustees, the Custodian and the Fund may agree to amend Schedule
A hereto from time to time to designate additional foreign
banking institutions and foreign securities depositories to act
as sub-custodian. Upon receipt of Proper Instructions, the Fund
may instruct the Custodian to cease the employment of any one or
more such sub-custodians for maintaining custody of a Portfolio's
assets.

3.2 Assets to be Held. The Custodian shall limit the securities and
other assets maintained in the custody of the foreign
sub-custodians to: (a) "foreign securities", as defined in
paragraph (c)(1) of Rule 17f-5 under the Investment Company Act
of 1940, and (b) cash and cash equivalents in such amounts as
the Custodian or the Fund may determine to be reasonably
necessary to effect a Portfolio's foreign securities
transactions. The Custodian shall identify on its books as
belonging to each Portfolio, the foreign securities of the
Portfolio held by each foreign sub-custodian.

3.3 Foreign Securities Depositories. Except as may otherwise be
agreed upon in writing by the Custodian and the Fund, assets of
each Portfolio shall be maintained in foreign securities
depositories only through arrangements implemented by the foreign
banking institutions serving as sub-custodians pursuant to the
terms hereof. Where possible, such arrangements shall include
entry into agreements containing the provisions set forth in
Section 3.4 hereof.

3.4 Agreements with Foreign Banking Institutions. Each agreement
with a foreign banking institution shall be substantially in the
form set forth in Exhibit 1 hereto and shall provide that: (a)
the assets of each Portfolio will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of
the foreign banking institution or its creditors or agent, except
a claim of payment for their safe custody or administration; (b)

beneficial ownership for the assets of each Portfolio will be
freely transferable without the payment of money or value other
than for custody or administration; (c) adequate records will be
maintained identifying the assets as belonging to each applicable
Portfolio; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent
permitted under applicable law the independent public accountants
for the Fund, will be given access to the books and records of
the foreign banking institution relating to its actions under its
agreement with the Custodian; and (e) assets of each Portfolio
held by the foreign sub-custodian will be subject only to the
instructions of the Custodian or its agents.

3.5 Access of Independent Accountants of the Fund. Upon request of
the Fund, the Custodian will use its best efforts to arrange for
the independent accountants of the Fund to be afforded access to
the books and records of any foreign banking institution employed
as a foreign sub-custodian insofar as such books and records
relate to the performance of such foreign banking institution
under its agreement with the Custodian.

3.6 Reports by Custodian. The Custodian will supply to the Fund from
time to time, as mutually agreed upon, statements in respect of
the securities and other assets of each Portfolio held by foreign
sub-custodians, including but not limited to an identification of
entities having possession of each Portfolio's securities and
other assets and advices or notifications of any transfers of
securities to or from each custodial account maintained by a
foreign banking institution for the Custodian on behalf of each
applicable Portfolio indicating, as to securities acquired for a
Portfolio, the identity of the entity having physical possession
of such securities.

3.7 Transactions in Foreign Custody Account. (a) Except as otherwise
provided in paragraph (b) of this Section 3.7, the provision of
Sections 2.2 and 2.7 of this Contract shall apply, MUTATIS
MUTANDIS to the foreign securities of the Fund held outside the
United States by foreign sub-custodians.

(b) Notwithstanding any provision of this Contract to the
contrary, settlement and payment for securities received for the
account of each applicable Portfolio and delivery of securities
maintained for the account of each applicable Portfolio may be
effected in accordance with the customary established securities
trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs,
including, without limitation, delivering securities to the
purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of
receiving later payment for such securities from such purchaser
or dealer.

(c) Securities maintained in the custody of a foreign
sub-custodian may be maintained in the name of such entity's
nominee to the same extent as set forth in Section 2.3 of this
Contract, and the Fund agrees to hold any such nominee harmless
from any liability as a holder of record of such securities.

3.8 Liability of Foreign Sub-Custodians. Each agreement pursuant to
which the Custodian employs a foreign banking institution as a
foreign sub-custodian shall require the institution to exercise
reasonable care in the performance of its duties and to
indemnify, and hold harmless, the Custodian and the Fund from and
against any loss, damage, cost, expense, liability or claim
arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund, it
shall be entitled to be subrogated to the rights of the Custodian
with respect to any claims against a foreign banking institution
as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Fund has not
been made whole for any such loss, damage, cost, expense,
liability or claim.

3.9 Liability of Custodian. The Custodian shall be liable for the
acts or omissions of a foreign banking institution to the same
extent as set forth with respect to sub-custodians generally in
this Contract and, regardless of whether assets are maintained in
the custody of a foreign banking institution, a foreign
securities depository or a branch of a U.S. bank as contemplated
by paragraph 3.12 hereof, the Custodian shall not be liable for
any loss, damage, cost, expense, liability or claim resulting
from nationalization, expropriation, currency restrictions, or
acts of war or terrorism or any loss where the sub-custodian has
otherwise exercised reasonable care. Notwithstanding the
foregoing provisions of this paragraph 3.9, in delegating custody
duties to State Street London Ltd., the Custodian shall not be
relieved of any responsibility to the Fund for any loss due to
such delegation, except such loss as may result from (a)
political risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization,
insurrection, civil strife or armed hostilities) or (b) other
losses (excluding a bankruptcy or insolvency of State Street
London Ltd. not caused by political risk) due to Acts of God,
nuclear incident or the like, in each case under circumstances
where the Custodian and State Street London Ltd. have exercised
reasonable care.

3.10 Reimbursement for Advances. If the Fund requires the Custodian
to advance cash or securities for any purpose for the benefit of
a Portfolio including the purchase or sale of foreign exchange or
of contracts for foreign exchange ("Advance"), or in the event
that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as

may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct ("Liability") then
in such event property equal in value to not more than 125% of
such Advance and accrued interest on the Advance or the
anticipated amount of such Liability, held at any time for the
account of the appropriate Portfolio by the Custodian or sub-
custodian may be held as security for such Liability or for such
Advance and accrued interest on the Advance. The Custodian shall
designate the security or securities constituting security for an
Advance or Liability (the "Designated Securities") by notice in
writing to the Fund (which may be sent by tested telefax or
telex). In the event the value of the Designated Securities shall
decline to less than 110% of the amount of such Advance and
accrued interest on the Advance or the anticipated amount of such
Liability, then the Custodian may designate in the same manner an
additional security for such obligation ("Additional
Securities"), but the aggregate value of the Designated
Securities and Additional Securities shall not be in excess of
125% of the amount of such Advance and the accrued interest on
the Advance or the anticipated amount of such Liability. At the
request of the Fund, on behalf of a Portfolio, the Custodian
shall agree to substitution of a security or securities which
have a value equal to the value of the Designated or Additional
Securities which the Fund desires be released from their status
as security, and such release from status as security shall be
effective upon the Custodian and the Fund agreeing in writing as
to the identity of the substituted security or securities, which
shall thereupon become Designated Securities.

Notwithstanding the above, the Custodian shall, at the request of
the Fund, on behalf of a Portfolio, immediately release from
their status as security any or all of the Designated Securities
or Additional Securities upon the Custodian's receipt from such
of Portfolio cash or cash equivalents in an amount equal to 100%
of the value of the Designated Securities or Additional
Securities that the Fund desires to be released from their status
as security pursuant to this Section. The applicable Portfolio
shall reimburse or indemnify the Custodian in respect of a
Liability and shall pay any Advances upon demand; provided,
however, that the Custodian first notified the Fund on behalf of
the Portfolio of such demand for repayment, reimbursement or
indemnification. If, upon notification, the Portfolio shall fail
to pay such Advance or interest when due or shall fail to
reimburse or indemnify the Custodian promptly in respect of a
Liability, the Custodian shall be entitled to dispose of the
Designated Securities and Additional Securities to the extent
necessary to obtain repayment, reimbursement or indemnification.
Interest, dividends and other distributions paid or received on
the Designated Securities and Additional Securities, other than
payments of principal or payments upon retirement, redemption or
repurchase, shall remain the property of the Portfolio, and shall
not be subject to this Section. To the extent that the

disposition of the Portfolio's property, designated as security
for such Advance or Liability, results in an amount less than
necessary to obtain repayment, reimbursement or indemnification,
the Portfolio shall continue to be liable to the Custodian for
the differences between the proceeds of the disposition of the
Portfolio's property, designated as security for such Advance or
Liability, and the amount of the repayment, reimbursement or
indemnification due to the Custodian and the Custodian shall have
the right to designate in the same manner described above an
additional security for such obligation which shall constitute
Additional Securities hereunder.

3.11 Monitoring Responsibilities. The Custodian shall furnish
annually to the Fund, during the month of June, information
concerning the foreign sub-custodians employed by the Custodian.
Such information shall be similar in kind and scope to that
furnished to the Fund in connection with the initial approval of
this Contract. In addition, the Custodian will promptly inform
the Fund in the event that the Custodian learns of a material
adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or
in the case of any foreign sub-custodian not the subject of an
exemptive order from the Securities and Exchange Commission is
notified by such foreign sub-custodian that there appears to be a
substantial likelihood that its shareholders' equity will decline
below $200 million (U.S. dollars or the equivalent thereof) or
that its shareholders' equity has declined below $200 million (in
each case computed in accordance with generally accepted U.S.
accounting principles).

3.12 Branches of U.S. Banks. (a) Except as otherwise set forth in
this Contract, the provisions hereof shall not apply where the
custody of a Portfolio's assets are maintained in a foreign
branch of a banking institution which is a "bank" as defined by
Section 2(a)(5) of the Investment Company Act of 1940 meeting the
qualification set forth in Section 26(a) of said Act. The
appointment of any such branch as a sub-custodian shall be
governed by paragraph 1 of this Contract.

(b) Cash held for each Portfolio of the Fund in the United
Kingdom shall be maintained in an interest bearing account
established for the Fund with the Custodian's London branch,
which account shall be subject to the direction of the Custodian,
State Street London Ltd. or both.

3.13 Foreign Exchange Transactions. (a) Upon receipt of Proper
Instructions, the Custodian shall settle foreign exchange
contracts or options to purchase and sell foreign currencies for
spot and future delivery on behalf of and for the account of a
Portfolio with such brokers, banks or trust companies other than
the Custodian ("Currency Brokers") as the Fund may determine and

direct pursuant to Proper Instructions or as the Custodian may
select ("Transactions Other Than As Principal").
(b). The Custodian shall not be obligated to enter into foreign
exchange transactions as principal ("Transactions As Principal").
However, if the Custodian has made available to the Fund its
services as a principal in foreign exchange transactions and
subject to any separate agreement between the parties relating to
such transactions, the Custodian shall enter into foreign
exchange contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf of and for the
account of a Portfolio, with the Custodian as principal.

(c) If, in a Transaction Other Than As Principal, a Currency
Broker is selected by the Fund, on behalf of a Portfolio, the
Custodian shall have no duty with respect to the selection of the
Currency Broker, or, so long as the Custodian acts in accordance
with Proper Instructions, for the failure of such Currency Broker
to comply with the terms of any contract or option. If, in a
Transaction Other Than As Principal, the Currency Broker is
selected by the Custodian or if the Custodian enters into a
Transaction As Principal, the Custodian shall be responsible for
the selection of the Currency Broker and the failure of such
Currency Broker to comply with the terms of nay contract or
option.

(d) In Transactions Other Than As Principal and Transactions
As Principal, the Custodian shall be responsible for any transfer
of cash, the transmission of instructions to and from a Currency
Broker, if any, the safekeeping of all certificates and other
documents and agreements evidencing or relating to such foreign
exchange transactions and the maintenance of proper records as
set forth in Section 9 of this Contract.

3.14 Tax Law. Except to the extent that imposition of any tax
liability arises from State Street's failure to perform in
accordance with the terms of this Section 3.14 or from the
failure of any sub-custodian to perform in accordance with the
terms of the applicable subcustody agreement, State Street shall
have no responsibility or liability for any obligations now or
hereafter imposed on each Portfolio by the tax law of the
domicile of each Portfolio or of any jurisdiction in which each
Portfolio is invested or any political subdivision thereof. It
shall be the responsibility of State Street to use due care to
perform such steps as are required to collect any tax refund, to
ascertain the appropriate rate of tax withholding and to provide
such information and documents as may be required to enable each
Portfolio to receive appropriate tax treatment under applicable
tax laws and any applicable treaty provisions. Unless otherwise
informed by each Portfolio, State Street, in performance of its
duties under this Section, shall be entitled to apply categorical
treatment of each Portfolio according to the nationality of each
Portfolio, the particulars of its organization and other relevant

details that shall be supplied by each Portfolio. State Street
shall be entitled to rely on any information supplied by each
Portfolio. State Street may engage reasonable professional
advisors disclosed to each Portfolio by State Street, which may
include attorneys, accountants or financial institutions in the
regular business of investment administration and may rely upon
advice received therefrom. It shall be the duty of each
Portfolio to inform State Street of any change in the
organization, domicile or other relevant fact concerning tax
treatment of each Portfolio and further to inform State Street if
each Portfolio is or becomes the beneficiary of any special
ruling or treatment not applicable to the general nationality and
category of entity of which each Portfolio is a part under
general laws and treaty provisions.

4. Payments for Sales or Repurchases or Redemptions of Shares of the
Fund
-----------------------------------------------------------------
The Custodian shall receive from the distributor for the Shares
or from the Transfer Agent of the Fund and deposit into the account of the
appropriate Portfolio such payments as are received for Shares of that
Portfolio issued or sold from time to time by the Fund. The Custodian
will provide timely notification to the Fund on behalf of each such
Portfolio and the Transfer Agent of any receipt by it of payments for
Shares of such Portfolio.

From such funds as may be available for the purpose but subject
to the limitations of the Trust Instrument and any applicable votes of the
Board of Trustees of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a
request for redemption or repurchase of their Shares. In connection with
the redemption or repurchase of Shares of a Portfolio, the Custodian is
authorized upon receipt of instructions from the Transfer Agent to wire
funds to or through a commercial bank designated by the redeeming
shareholders. In connection with the redemption or repurchase of Shares
of the Fund, the Custodian shall honor checks drawn on the Custodian by a
holder of Shares, which checks have been furnished by the Fund to the
holder of Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time
between the Fund and the Custodian.

5. Proper Instructions
-------------------
Proper Instructions as used throughout this Contract means a
writing signed or initialled by two or more person or persons as the Board
of Trustees shall have from time to time authorized. Each such writing
shall set forth the specific transaction or type of transaction involved,
including a specific statement of the purpose for which such action is
requested. Oral instructions will be considered Proper Instructions if

the Custodian reasonably believes them to have been given by a person
authorized to give such instructions with respect to the transaction
involved. The Fund shall cause all oral instructions to be confirmed in
writing. Upon receipt of a certificate of the Secretary or an Assistant
Secretary as to the authorization by the Board of Trustees of the Fund
accompanied by a detailed description of procedures approved by the Board
of Trustees, Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided that
the Fund and the Custodian are satisfied that such procedures afford
adequate safeguards for the Portfolios' assets. For purposes of this
Section, Proper Instructions shall include instructions received by the
Custodian pursuant to any three - party agreement which requires a
segregated asset account in accordance with Section 2.12.

6. Actions Permitted without Express Authority
-------------------------------------------
The Custodian may in its discretion, without express authority
from the Fund on behalf of each applicable Portfolio:

1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to
its duties under this Contract, PROVIDED that all such
payments shall be accounted for to the Fund on behalf of
the Portfolio;

2) surrender securities in temporary form for securities in
definitive form;

3) endorse for collection, in the name of the Portfolio,
checks, drafts and other negotiable instruments; and

4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the securities
and property of the Portfolio except as otherwise
directed by the Board of Trustees of the Fund.

7. Evidence of Authority
---------------------
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper
believed by it to be genuine and to have been properly executed by or on
behalf of the Fund. The Custodian may receive and accept a certified copy
of a vote of the Board of Trustees of the Fund as conclusive evidence (a)
of the authority of any person to act in accordance with such vote or (b)
of any determination or of any action by the Board of Trustees pursuant to
the Trust Instrument as described in such vote, and such vote may be
considered as in full force and effect until receipt by the Custodian of
written notice to the contrary.

8. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income
------------------------------------------------------------
If, and to the extent requested by the Fund, the Custodian shall
cooperate with and supply necessary information to the entity or entities
appointed by the Board of Trustees of the Fund to keep the books of
account of each Portfolio and/or compute the net asset value per share of
the outstanding shares of each Portfolio or, if directed in writing to do
so by the Fund on behalf of the Portfolio, shall itself keep such books of
account and/or compute such net asset value per share. If so directed,
the Custodian shall also calculate daily the net income of the Portfolio
as described in the Fund's currently effective prospectus related to such
Portfolio and shall advise the Fund and the Transfer Agent daily of the
total amounts of such net income and, if instructed in writing by an
officer of the Fund to do so, shall advise the Transfer Agent periodically
of the division of such net income among its various components. The
calculations of the net asset value per share and the daily income of each
Portfolio shall be made at the time or times described from time to time
in the Fund's currently effective prospectus related to such Portfolio.

9. Records
-------
The Custodian shall with respect to each Portfolio create and
maintain all records relating to its activities and obligations under this
Contract in such manner as will meet the obligations of the Fund under the
Investment Company Act of 1940, with particular attention to Section 31
thereof and Rules 31a-1 and 31a-2 thereunder. All such records shall be
the property of the Fund and shall at all times during the regular
business hours of the Custodian be open for inspection by duly authorized
officers, employees or agents of the Fund and employees and agents of the
Securities and Exchange Commission. The Custodian shall, at the Fund's
request, supply the Fund with a tabulation of securities owned by each
Portfolio and held by the Custodian and shall, when requested to do so by
the Fund and for such compensation as shall be agreed upon between the
Fund and the Custodian, include certificate numbers in such tabulations.

10. Opinion of Fund's Independent Accountant
----------------------------------------
The Custodian shall take all reasonable action, as the Fund on
behalf of each applicable Portfolio may from time to time request, to
obtain from year to year favorable opinions from the Fund's independent
accountants with respect to its activities hereunder in connection with
the preparation of the Fund's Form N-1A, and Form N-SAR or other annual
reports to the Securities and Exchange Commission and with respect to any
other requirements of such Commission.

11. Reports to Fund by Independent Public Accountants
-------------------------------------------------
The Custodian shall provide the Fund, on behalf of each Portfolio
at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal
accounting control and procedures for safeguarding securities, futures
contracts and options on futures contracts, including securities deposited
and/or maintained in a Securities System, relating to the services
provided by the Custodian under this Contract; such reports, shall be of
sufficient scope and in sufficient detail, as may reasonably be required
by the Fund to provide reasonable assurance that any material inadequacies
would be disclosed by such examination, and, if there are no such
inadequacies, the reports shall so state.

12. Compensation of Custodian
-------------------------
The Custodian shall be entitled to reasonable compensation for
its services and expenses as Custodian, as agreed upon from time to time
between the Fund on behalf of each applicable Portfolio and the Custodian.

13. Responsibility of Custodian
---------------------------
So long as and to the extent that it is in the exercise of
reasonable care, the Custodian shall not be responsible for the title,
validity or genuineness of any property or evidence of title thereto
received by it or delivered by it pursuant to this Contract and shall be
held harmless in acting upon any notice, request, consent, certificate or
other instrument reasonably believed by it to be genuine and to be signed
by the proper party or parties, including any futures commission merchant
acting pursuant to the terms of a three-party futures or options
agreement. The Custodian shall be held to the exercise of reasonable care
in carrying out the provisions of this Contract, but shall be kept
indemnified by and shall be without liability to the Fund for any action
taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel (who may be
counsel for the Fund) on all matters, and shall be without liability for
any action reasonably taken or omitted pursuant to such advice.

As a condition to the indemnification provided for in this
Section 13, if in any case the indemnifying party is asked to indemnify
and hold the indemnified party harmless, the indemnified party shall fully
and promptly advise the indemnifying party of all pertinent facts
concerning the situation in question, and shall use all reasonable care to
identify, and promptly notify the indemnifying party of, any situation
which presents or appears likely to present the probability of such a
claim for indemnification against the indemnifying party. The
indemnifying party shall be entitled, at its own expense, to participate
in the investigation and to be consulted as to the defense of any such
claim, and in such event, the indemnified party shall keep the
indemnifying party fully and currently informed of all developments

relating to such investigation or defense. At any time, the indemnifying
party shall be entitled at its own expense to conduct the defense of any
such claim, provided that the indemnifying party: (a) reasonably
demonstrates to the other party its ability to pay the full amount of
potential liability in connection with such claim and (b) first admits in
writing to the other party that such claim is one in respect of which the
indemnifying party is obligated to indemnify the other party hereunder.
Upon satisfaction of the foregoing conditions, the indemnifying party
shall take over complete defense of the claim, and the indemnified party
shall initiate no further legal or other expenses for which it shall seek
indemnification. The indemnified party shall in no case confess any claim
or make any compromise in any case in which the indemnifying party may be
asked to indemnify the indemnified party, except with the indemnifying
party's prior written consent.

If the Fund on behalf of a Portfolio requires the Custodian to
take any action with respect to securities, which action involves the
payment of money or which action may, in the opinion of the Custodian,
result in the Custodian or its nominee assigned to the Fund or the
Portfolio being liable for the payment of money or incurring liability of
some other form, the Fund on behalf of the Portfolio, as a prerequisite to
requiring the Custodian to take such action, shall provide indemnity to
the Custodian in an amount and form satisfactory to it.

14. Effective Period, Termination and Amendment
-------------------------------------------
This Contract shall become effective as of its execution, shall
continue in full force and effect with respect to each Portfolio until
terminated as hereinafter provided, may be amended at any time by mutual
agreement of the parties hereto and may be terminated by either party by
an instrument in writing delivered or mailed, postage prepaid to the other
party, such termination to take effect not sooner than thirty (30) days
after the date of such delivery or mailing; PROVIDED, however that the
Custodian shall not with respect to a Portfolio act under Section 2.10
hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees of the
Fund has approved the use of a particular Securities System by such
Portfolio as required by Rule 17f-4 under the Investment Company Act of
1940, as amended and that the Custodian shall not with respect to a
Portfolio act under Section 2.11 hereof in the absence of receipt of an
initial certificate of the Secretary or an Assistant Secretary that the
Board of Trustees has approved the initial use of the Direct Paper System
by such Portfolio and the receipt of an annual certificate of the
Secretary or an Assistant Secretary that the Board of Trustees has
reviewed the use by such Portfolio of the Direct Paper System; PROVIDED
FURTHER, however, that the Fund shall not amend or terminate this Contract
in contravention of any applicable federal or state regulations, or any
provision of the Trust Instrument, and further provided, that the Fund on
behalf of one or more of the Portfolios may at any time by action of its
Board of Trustees (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian, or (ii)

immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the
Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.

Upon termination of the Contract, the Fund on behalf of each
applicable Portfolio shall pay to the Custodian such compensation as may
be due as of the date of such termination and shall likewise reimburse the
Custodian for its costs, expenses and disbursements. Termination of the
Contract with respect to one Portfolio (but less than all of the
Portfolios) will not constitute termination of the Contract, and the terms
of the Contract continue to apply to the other Portfolios.

15. Successor Custodian
-------------------
If a successor custodian for the Fund, of one or more of the
Portfolios shall be appointed by the Board of Trustees of the Fund, the
Custodian shall, upon termination, deliver to such successor custodian at
the office of the Custodian, duly endorsed and in the form for transfer,
all securities of each applicable Portfolio then held by it hereunder and
shall transfer to an account of the successor custodian all of the
securities of each such Portfolio held in a Securities System.

If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote of the
Board of Trustees of the Fund, deliver at the office of the Custodian and
transfer such securities, funds and other properties in accordance with
such vote.

In the event that no written order designating a successor
custodian or certified copy of a vote of the Board of Trustees shall have
been delivered to the Custodian on or before the date when such
termination shall become effective, then the Custodian shall have the
right to deliver to a bank or trust company, which is a "bank" as defined
in the Investment Company Act of 1940, doing business in Boston,
Massachusetts, of its own selection, having an aggregate capital, surplus,
and undivided profits, as shown by its last published report, of not less
than $25,000,000, all securities, funds and other properties held by the
Custodian on behalf of each applicable Portfolio and all instruments held
by the Custodian relative thereto and all other property held by it under
this Contract on behalf of each applicable Portfolio and to transfer to an
account of such successor custodian all of the securities of each such
Portfolio held in any Securities System. Thereafter, such bank or trust
company shall be the successor of the Custodian under this Contract.

In the event that securities, funds and other properties remain
in the possession of the Custodian after the date of termination hereof
owing to failure of the Fund to procure the certified copy of the vote
referred to or of the Board of Trustees to appoint a successor custodian,
the Custodian shall be entitled to fair compensation for its services
during such period as the Custodian retains possession of such securities,

funds and other properties and the provisions of this Contract relating to
the duties and obligations of the Custodian shall remain in full force and
effect.

16. Interpretive and Additional Provisions
--------------------------------------
In connection with the operation of this Contract, the Custodian
and the Fund on behalf of each of the Portfolios, may from time to time
agree on such provisions interpretive of or in addition to the provisions
of this Contract as may in their joint opinion be consistent with the
general tenor of this Contract. Any such interpretive or additional
provisions shall be in a writing signed by both parties and shall be
annexed hereto, PROVIDED that no such interpretive or additional
provisions shall contravene any applicable federal or state regulations or
any provision of the Trust Instrument of the Fund. No interpretive or
additional provisions made as provided in the preceding sentence shall be
deemed to be an amendment of this Contract.

17. Additional Funds
----------------
In the event that the Fund establishes one or more series of
Shares in addition to Neuberger & Berman Genesis Trust, Neuberger & Berman
Guardian Trust, Neuberger & Berman Partners Trust, Neuberger & Berman
Manhattan Trust, and Neuberger & Berman Selected Sectors Trust with
respect to which it desires to have the Custodian render services as
custodian under the terms hereof, it shall so notify the Custodian in
writing, and if the Custodian agrees in writing to provide such services,
such series of Shares shall become a Portfolio hereunder.

18. Massachusetts Law to Apply
--------------------------
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth of
Massachusetts.

19. Limitation of Trustee, Officer and Shareholder Liability
--------------------------------------------------------
It is expressly agreed that the obligations of the Fund and each
Portfolio hereunder shall not be binding upon any of the Trustees,
officers, agents or employees of the Fund or upon the shareholders of any
Portfolio personally, but shall only bind the assets and property of the
Fund, as provided in its Trust Instrument. The execution and delivery of
this Contract have been authorized by the Trustees of the Fund, and this
Contract has been executed and delivered by an authorized officer of the
Fund acting as such; neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made
by any of them individually or to impose any liability on any of them

personally, but shall bind only the assets and property of the Fund, as
provided in its Trust Instrument.

20. No Liability of Other Portfolios
--------------------------------
Notwithstanding any other provision of this Contract, the parties
agree that the assets and liabilities of each Portfolio are separate and
distinct from the assets and liabilities of each other Portfolio and that
no Portfolio shall be liable or shall be charged for any debt, obligation
or liability of any other Portfolio, whether arising under this Contract
or otherwise.

21. Confidentiality
---------------
The Custodian agrees that all books, records, information and
data pertaining to the business of the Fund which are exchanged or
received pursuant to the negotiation or carrying out of this Contract
shall remain confidential, shall not be voluntarily disclosed to any
other person, except as may be required by law, and shall not be used by
the Custodian for any purpose not directly related to the business of the
Fund, except with the Fund's written consent.

22. Assignment
----------
Neither the Fund nor the Custodian shall have the right to assign
any of its rights or obligations under this Contract without the prior
written consent of the other party.

23. Severability
------------
If any provision of this Contract is held to be unenforceable as
a matter of law, the other terms and provisions hereof shall not be
affected thereby and shall remain in full force and effect.

24. Prior Contracts
---------------
This Contract supersedes and terminates, as of the date hereof,
all prior contracts between the Fund on behalf of each of the Portfolios,
or any predecessor(s) thereto, and the Custodian relating to the custody
of the Fund's assets.

25. Shareholder Communications Election
-----------------------------------
Securities and Exchange Commission Rule 14b-2 requires banks
which hold securities for the account of customers to respond to requests
by issuers of securities for the names, addresses and holdings of

beneficial owners of securities of that issuer held by the bank unless the
beneficial owner has expressly objected to disclosure of this information.
In order to comply with the rule, the Custodian needs the Fund to indicate
whether it authorizes the Custodian to provide the Fund's name, address,
and share position to requesting companies whose securities the Fund owns.
If the Fund tells the Custodian "no", the Custodian will not provide this
information to requesting companies. If the Fund tells the Custodian
"yes" or does not check either "yes" or "no" below, the Custodian is
required by the rule to treat the Fund as consenting to disclosure of this
information for all securities owned by the Fund or any funds or accounts
established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using the Fund's name and address for any
purpose other than corporate communications. Please indicate below
whether the Fund consents or objects by checking one of the alternatives
below.

YES [ ] The Custodian is authorized to release the Fund's
name, address, and share positions.

NO [x] The Custodian is not authorized to release the
Fund's name, address, and share positions.

IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and behalf by its duly authorized
representative and its seal to be hereunder affixed as of the 2nd day of
August, 1993.

ATTEST NEUBERGER & BERMAN EQUITY TRUST

/s/ Claudia A. Brandon /s/ Stanley Egener
---------------------- By ------------------------------
Claudia A. Brandon Stanley Egener
CEO

ATTEST STATE STREET BANK AND TRUST COMPANY

/s/ Officer /s/ Ronald E. Logue
_____________________ By ---------------------------------
Ronald E. Logue
Executive Vice President

TRANSFER AGENCY AND SERVICE AGREEMENT

between

NEUBERGER & BERMAN EQUITY TRUST

and

STATE STREET BANK AND TRUST COMPANY

TABLE OF CONTENTS
-----------------

Page
----

1. Terms of Appointment; Duties of the Bank . . . . . . . . 1

2. Fees and Expenses . . . . . . . . . . . . . . . . . 4

3. Representations and Warranties of the Bank . . . . . 4

4. Representations and Warranties of the Fund . . . . . 5

5. Data Access and Proprietary Information . . . . . . 5

6. Indemnification . . . . . . . . . . . . . . . . . . 7

7. Covenants of the Fund and the Bank . . . . . . . . . 8

8. Termination of Agreement . . . . . . . . . . . . . . 9

9. Additional Funds . . . . . . . . . . . . . . . . . . 10

10. Assignment . . . . . . . . . . . . . . . . . . . . . 10

11. Amendment . . . . . . . . . . . . . . . . . . . . . 10

12. Massachusetts Law to Apply . . . . . . . . . . . . . 10

13. Force Majeure . . . . . . . . . . . . . . . . . . . 11

14. Consequential Damages . . . . . . . . . . . . . . . 11

15. Merger of Agreement . . . . . . . . . . . . . . . . 11

16. Limitations of Liability of the Trustees,
Shareholders, Officers, Employees and Agent . . . . 11

17. Counterparts . . . . . . . . . . . . . . . . . . . . 11

18. Notices . . . . . . . . . . . . . . . . . . . . . . 11

TRANSFER AGENCY AND SERVICE AGREEMENT
-------------------------------------

AGREEMENT made as of the 2nd day of August, 1993, by and between NEUBERGER
& BERMAN EQUITY TRUST, a Delaware business trust, having its principal
office and place of business at 605 Third Avenue, New York, New York 10158
(the "Fund"), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts
trust company having its principal office and place of business at 225
Franklin Street, Boston, Massachusetts 02110 (the "Bank").

WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of
securities and other assets; and

WHEREAS, the Fund intends to initially offer shares in five series,
Neuberger & Berman Genesis Trust, Neuberger & Berman Guardian Trust,
Neuberger & Berman Partners Trust, Neuberger & Berman Manhattan Trust, and
Neuberger & Berman Selected Sectors Trust, (each such series, together
with all other Portfolios subsequently established by the Fund and made
subject to this Agreement in accordance with Article 9, being herein
referred to as a "Portfolio", and collectively as the "Portfolios");

WHEREAS, the Fund on behalf of the Portfolios desires to appoint the Bank
as its transfer agent, dividend disbursing agent, custodian of certain
retirement plans and agent in connection with certain other activities,
and the Bank desires to accept such appointment;

NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:

1. Terms of Appointment; Duties of the Bank
----------------------------------------
1.1 Subject to the terms and conditions set forth in this Agreement,
the Fund, on behalf of the Portfolios, hereby employs and
appoints the Bank to act as, and the Bank agrees to act as, its
transfer agent for the Fund's authorized and issued shares of
beneficial interest of the Fund representing interests in each of
the respective Portfolios ("Shares"), dividend disbursing agent,
custodian of certain retirement plans and agent in connection
with any accumulation, open-account or similar plans provided to
the shareholders of each of the respective Portfolios of the Fund
("Shareholders") and set out in the currently effective
prospectus and statement of additional information ("prospectus")
of the Fund on behalf of the applicable Portfolio, including
without limitation any periodic investment plan or periodic
withdrawal program.

1.2 The Bank agrees that it will perform the following services:

(a) In accordance with procedures established from time to
time by agreement between the Fund on behalf of each of

the Portfolios, as applicable, and the Bank, the Bank
shall:

(i) Receive for acceptance, orders for the
purchase of Shares, and promptly deliver
payment and appropriate documentation
thereof to the Custodian of the Fund
authorized pursuant to the Trust
Instrument of the Fund (the
"Custodian");

(ii) Pursuant to purchase orders, issue the
appropriate number of Shares and hold
such Shares in the appropriate
Shareholder account;

(iii) Receive for acceptance redemption
requests and redemption directions and
deliver the appropriate documentation
thereof to the Custodian:

(iv) At the appropriate time as and when it
receives monies paid to it by the
Custodian with respect to any
redemption, pay over or cause to be paid
over in the appropriate manner such
monies as instructed by the redeeming
Shareholders;

(v) Effect transfers of Shares by the
registered owners thereof upon receipt
of appropriate instructions;

(vi) Prepare and transmit (or credit the
appropriate shareholder account)
payments for dividends and distributions
declared by the Fund on behalf of the
applicable Portfolio;

(vii) Issue replacement certificates for
those certificates alleged to have been
lost, stolen or destroyed upon receipt
by the Bank of indemnification
satisfactory to the Bank and protecting
the Bank and the Fund, and the Bank at
its option, may issue replacement
certificates in place of mutilated
stock certificates upon presentation
thereof and without such indemnity;

(viii) Maintain records of account for and
advise the Fund and its Shareholders as
to the foregoing; and

(ix) Record the issuance of shares of the
Fund and maintain pursuant to SEC Rule
17Ad-10(e) a record of the total number
of shares of the Fund which are
authorized, based upon data provided to
it by the Fund, and issued and
outstanding. The Bank shall also
provide the Fund on a regular basis with
the total number of shares which are
authorized and issued and outstanding
and shall have no obligation, when
recording the issuance of shares, to
monitor the issuance of such Shares or
to take cognizance of any laws relating
to the issue or sale of such Shares,
which functions shall be the sole
responsibility of the Fund.

(b) In addition to and neither in lieu nor in contravention
of the services set forth in the above paragraph (a), the
Bank shall: (i) perform the customary services of a
transfer agent, dividend disbursing agent, custodian of
certain retirement plans and, as relevant, agent in
connection with accumulation, open-account or similar
plans (including without limitation any periodic
investment plan or periodic withdrawal program),
including but not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing
proxies, receiving and tabulating proxies, mailing
Shareholder reports and prospectuses to current
Shareholders, withholding taxes on U.S. resident and
non-resident alien accounts, preparing and filing U.S.
Treasury Department Forms 1099 and other appropriate
forms required with respect to dividends and
distributions by federal authorities for all
Shareholders, preparing and mailing confirmation forms
and statements of account to Shareholders for all
purchases and redemptions of Shares and other confirmable
transactions in Shareholder accounts, preparing and
mailing activity statements for Shareholders, and
providing Shareholder account information and (ii)
provide a system which will enable the Fund to monitor
the total number of Shares sold in each State.

(c) In addition, the Fund shall (i) identify to the Bank in
writing those transactions and assets to be treated as
exempt from blue sky reporting for each State and (ii)
verify the establishment of transactions for each State

on the system prior to activation and thereafter monitor
the daily activity for each State. The responsibility of
the Bank for the Fund's blue sky State registration
status is solely limited to the initial establishment
of transactions subject to blue sky compliance by the
Fund and the reporting of such transactions to the Fund
as provided above.

(d) Procedures as to who shall provide certain of these
services in Section 1 may be established from time to
time by agreement between the Fund on behalf of each
Portfolio and the Bank per the attached service
responsibility schedule. The Bank may at times perform
only a portion of these services and the Fund or its
agent may perform these services on the Fund's behalf.

(e) The Bank shall provide additional services on behalf of
the Fund (i.e., escheatment services) which may be agreed
upon in writing between the Fund and the Bank.

2. Fees and Expenses
-----------------
2.1 For the performance by the Bank pursuant to this Agreement, the
Fund, on behalf of each Portfolio agrees to pay the Bank an
annual maintenance fee for each Shareholder account as set out in
the initial fee schedule attached hereto. Such fees and
out-of-pocket expenses and advances identified under Section 2.2
below may be changed from time to time subject to mutual written
agreement between the Fund and the Bank.

2.2 In addition to the fee paid under Section 2.1 above, the Fund, on
behalf of the applicable Portfolio, agrees to reimburse the Bank
for out-of-pocket expenses, including but not limited to
confirmation production, postage, forms, telephone, microfilm,
microfiche, tabulating proxies, records storage, or advances
incurred by the Bank for the items set out in the fee schedule
attached hereto. In addition, any other expenses incurred by the
Bank at the request or with the consent of the Fund, will be
reimbursed by the Fund on behalf of the applicable Portfolio.

2.3 The Fund, on behalf of the applicable Portfolio, agrees to pay
all fees and reimbursable expenses within five days following the
mailing of the respective billing notice. Postage for mailing of
dividends, proxies, Fund reports and other mailings to all
Shareholder accounts shall be advanced to the Bank by the Fund at
least seven (7) days prior to the mailing date of such materials.

3. Representations and Warranties of the Bank
------------------------------------------
The Bank represents and warrants to the Fund that:

3.1 It is a trust company duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.

3.2 It is duly qualified to carry on its business in the Commonwealth
of Massachusetts.

3.3 It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement.

3.4 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.

3.5 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.

4. Representations and Warranties of the Fund
------------------------------------------
The Fund represents and warrants to the Bank that:

4.1 It is a business trust duly organized and existing and in good
standing under the laws of Delaware.

4.2 It is empowered under applicable laws and by its Trust Instrument
and By-Laws to enter into and perform this Agreement.

4.3 All corporate proceedings required by said Trust Instrument and
By-Laws have been taken to authorize it to enter into and perform
this Agreement.

4.4 It is an open-end management investment company registered under
the Investment Company Act of 1940, as amended.

4.5 A registration statement under the Securities Act of 1933, as
amended, on behalf of each of the Portfolios is currently
effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be
made, with respect to all Shares of the Fund being offered for
sale.

5. Data Access and Proprietary Information
---------------------------------------
5.1 The Fund acknowledges that the computer programs, screen formats,
report formats (except such screen formats and report formats as
may be necessary to respond to shareholder problems or
inquiries), interactive design techniques, and documentation
manuals furnished to the Fund by the Bank as part of the Fund's
ability to access certain Fund-related data ("Customer Data")

maintained by the Bank on data bases under the control and
ownership of the Bank or other third party ("Data Access
Services") constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary
Information") of substantial value to the Bank or other third
party. In no event shall Proprietary Information be deemed
Customer Data. The Fund agrees to treat all Proprietary
Information as proprietary to the Bank and further agrees that it
shall not divulge any Proprietary Information to any person or
organization except as may be provided hereunder. Without
limiting the foregoing, the Fund agrees for itself and its
employees and agents:

(a) to access Customer Data solely from locations as may be
designated in writing by the Bank and solely in
accordance with the Bank's applicable user documentation;

(b) to refrain from copying or duplicating in any way the
Proprietary Information;

(c) to refrain from obtaining unauthorized access to any
portion of the Proprietary Information, and if such
access is inadvertently obtained, to inform in a timely
manner of such fact and dispose of such information in
accordance with the Bank's instructions;

(d) to honor all reasonable written requests made by the Bank
to protect at the Bank's expense the rights of the Bank
in Proprietary Information at common law, under federal
copyright law and under other federal or state law.

Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Section 5. The obligations of this Section
shall survive any earlier termination of this Agreement.

5.2 If the Fund notifies the Bank that any of the Data Access
Services do not operate in material compliance with the most
recently issued user documentation for such services, the Bank
shall endeavor in a timely manner to correct such failure.
Organizations from which the Bank may obtain certain data
included in the Data Access Services are solely responsible for
the contents of such data and the Fund agrees to make no claim
against the Bank arising out of the contents of such third-party
data, including, but not limited to, the accuracy thereof. DATA
ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE
SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS
IS, AS AVAILABLE BASIS. THE BANK EXPRESSLY DISCLAIMS ALL
WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT
NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.

5.3 If the transactions available to the Fund include the ability to
originate electronic instructions to the Bank in order to (i)
effect the transfer or movement of cash or Shares or (ii)
transmit Shareholder information or other information (such
transactions constituting a "COEFI"), then in such event the Bank
shall be entitled to rely on the validity and authenticity of
such instruction without undertaking any further inquiry as long
as such instruction is undertaken in conformity with security
procedures established by the Bank from time to time.

6. Indemnification
---------------
6.1 The Bank shall not be responsible for, and the Fund shall on
behalf of the applicable Portfolio indemnify and hold the Bank
harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising
out of or attributable to:

(a) All actions of the Bank or its agents or subcontractors
required to be taken pursuant to this Agreement, provided
that such actions are taken in good faith and without
negligence or willful misconduct.

(b) The Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any
representation or warranty of the Fund hereunder.

(c) The reliance on or use by the Bank or its agents or
subcontractors of information, records, documents or
services which (i) are received by the Bank or its agents
or subcontractors, and (ii) have been prepared,
maintained or performed by the Fund or any other person
or firm on behalf of the Fund including but not limited
to any previous transfer agent or registrar.

(d) The reasonable reliance on, or the carrying out by the
Bank or its agents or subcontractors of any instructions
or requests of the Fund on behalf of the applicable
Portfolio.

(e) The offer or sale of Shares in violation of any
requirement under the federal securities laws or
regulations or the securities laws or regulations of any
state that such Shares be registered in such state or in
violation of any stop order or other determination or
ruling by any federal agency or any state with respect to
the offer or sale of such Shares in such state.

6.2 The Bank shall indemnify and hold the Fund and each Portfolio
thereof harmless from and against any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liability
arising out of or attributed to any action or failure or omission

to act by the Bank as a result of the lack of good faith,
negligence or willful misconduct.

6.3 At any time the Bank may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to
any matter arising in connection with the services to be
performed by the Bank under this Agreement, and the Bank and its
agents or subcontractors shall not be liable and shall be
indemnified by the Fund on behalf of the applicable Portfolio for
any action taken or omitted by it in reasonable reliance upon
such instructions or upon the opinion of such counsel. The Bank,
its agents and subcontractors shall be protected and indemnified
in acting upon any paper or document furnished by or on behalf of
the Fund, reasonably believed to be genuine and to have been
signed by the proper person or persons, or upon any instruction,
information, data, records or documents provided the Bank or its
agents or subcontractors by machine readable input, telex, CRT
data entry or other similar means authorized by the Fund, and
shall not be held to have notice of any change of authority of
any person, until receipt of written notice thereof from the
Fund. The Bank, its agents and subcontractors shall also be
protected and indemnified in recognizing stock certificates which
are reasonably believed to bear the proper manual or facsimile
signatures of the officers of the Fund, and the proper
countersignature of any former transfer agent or former
registrar, or of a co-transfer agent or co-registrar.

6.4 In order that the indemnification provisions contained in this
Section 6 shall apply, upon the assertion of a claim for which
either party may be required to indemnify the other, the party
seeking indemnification shall promptly notify the Fund of such
assertion, and shall keep the other party advised with respect to
all developments concerning such claim. The party who may be
required to indemnify shall have the option to participate with
the party seeking indemnification in the defense of such claim or
to defend against said claim in its own name or in the name of
the other party. The party seeking indemnification shall in no
case confess any claim or make any compromise in any case in
which the other party may be required to indemnify it except with
the other party's prior written consent.

7. Covenants of the Fund and the Bank
----------------------------------
7.1 The Fund shall on behalf of each Portfolio promptly furnish to
the Bank the following:

(a) A certified copy of the resolution of the Trustees of the
Fund authorizing the appointment of the Bank and the
execution and delivery of this Agreement.

(b) A copy of the Trust Instrument and By-Laws of the Fund
and all amendments thereto.

7.2 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of
stock certificates, check forms and facsimile signature
imprinting devices, if any; and for the preparation or use, and
for keeping account of, such certificates, forms and devices.

7.3 The Bank shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem
advisable. To the extent required by Section 31 of the
Investment Company Act of 1940, as amended, and the Rules
thereunder, the Bank agrees that all such records prepared or
maintained by the Bank relating to the services to be performed
by the Bank hereunder are the property of the Fund and will be
preserved, maintained and made available in accordance with such
Section and Rules, and will be surrendered promptly to the Fund
on and in accordance with its request.

7.4 The Bank and the Fund agree that all books, records, information
and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or the carrying
out of this Agreement shall remain confidential, and shall not be
voluntarily disclosed to any other person, except as may be
required by law.

7.5 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, the Bank will endeavor to notify
the Fund and to secure instructions from an authorized officer of
the Fund as to such inspection. The Bank reserves the right,
however, to exhibit the Shareholder records to any person
whenever it is advised by its counsel that it may be held liable
for the failure to exhibit the Shareholder records to such
person.

7.6 Notwithstanding any other provision of this Agreement, the
parties agree that the assets and liabilities of each Portfolio
of the Fund are separate and distinct from the assets and
liabilities of each other Portfolio and that no Portfolio shall
be liable or shall be charged for any debt, obligation or
liability of any other Portfolio, whether arising under this
Agreement or otherwise.

8. Termination of Agreement
------------------------
8.1 This Agreement may be terminated by either party upon one
hundred twenty (120) days written notice to the other.

8.2 Should the Fund exercise its right to terminate, all
out-of-pocket expenses associated with the movement of records
and material will be borne by the Fund on behalf of the
applicable Portfolio(s). Additionally, the Bank reserves the
right to charge for any other reasonable expenses associated with
such termination.

9. Additional Funds
----------------
In the event that the Fund establishes one or more series of
Shares in addition to Neuberger & Berman Genesis Fund, Neuberger
& Berman Guardian Fund, Neuberger & Berman partners Fund,
Neuberger & Berman Manhattan Fund, and Neuberger & Berman
Selected Sectors Fund, with respect to which it desires to have
the Bank render services as transfer agent under the terms
hereof, it shall so notify the Bank in writing, and if the Bank
agrees in writing to provide such services, such series of Shares
shall become a Portfolio hereunder.

10. Assignment
----------
10.1 Except as provided in Section 10.3 below, neither this Agreement
nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.

10.2 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and
assigns.

10.3 The Bank may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston Financial
Data Services, Inc., a Massachusetts corporation ("BFDS") which
is duly registered as a transfer agent pursuant to Section
17A(c)(l) of the Securities Exchange Act of 1934, as amended
("Section 17A(c)(1)"), (ii) a BFDS subsidiary duly registered as
a transfer agent pursuant to Section 17A(c)(l) or (iii) a BFDS
affiliate; provided, however, that the Bank shall be as fully
responsible to the Fund for the acts and omissions of any
subcontractor as it is for its own acts and omissions.

11. Amendment
---------
This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a
resolution of the Trustees of the Fund.

12. Massachusetts Law to Apply
--------------------------
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the
Commonwealth of Massachusetts.

13. Force Majeure
-------------
In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God,
strikes, equipment or transmission failure or damage reasonably
beyond its control, or other causes reasonably beyond its

control, such party shall not be liable for damages to the other
for any damages resulting from such failure to perform or
otherwise from such causes.

14. Consequential Damages
---------------------
Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this
Agreement.

15. Merger of Agreement
-------------------
This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to
the subject matter hereof whether oral or written.

16. Limitations of Liability of the Trustees, Shareholders, Officers,
Employees and Agent
-----------------------------------------------------------------
A copy of the Trust Instrument of the Fund is on file with the
Secretary of the State Of Delaware. The parties agree that
neither the Shareholders, Trustees, officers, employees nor any
agent of the Fund (other than the transfer agent) shall be liable
hereunder and that the parties to this Agreement other than the
Fund shall look solely to the Fund property for the performance
of this Agreement or payment of any claim under this Agreement.

17. Counterparts
------------
This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same
instrument.

18. Notices
-------
All notices, requests, consents and other communications
hereunder (collectively "communications") shall be in writing and
shall be personally delivered or mailed, first class postage
prepaid,

(a) if to the Fund, to

Neuberger & Berman Equity Trust
605 Third Avenue
New York, N.Y. 10158
Attention: Michael J. Weiner
Vice President

(b) if to the Bank, to

Boston Financial Data Services, Inc.
Two Heritage Drive
North Quincy, MA 02171
Attn: Paul Alsama

or such other address as either party shall have furnished to the
other in writing; PROVIDED that any communication may be sent by
"tested" telex or any other form of electronic transmission
capable of producing a permanent record and agreed upon by the
parties in writing.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.

NEUBERGER & BERMAN EQUITY TRUST

BY: /s/ Michael J. Weiner
--------------------------
Michael J. Weiner

ATTEST:

/s/ Claudia A. Brandon
------------------------
Claudia A. Brandon

STATE STREET BANK AND TRUST COMPANY

BY: /s/ Ronald E. Logue
-------------------------------
Ronald E. Logue
Executive Vice President

ATTEST:

/s/ Officer
-----------------------

STATE STREET BANK & TRUST COMPANY
FUND SERVICE RESPONSIBILITIES

Service Performed Responsibility
----------------- --------------

Bank Fund
---- ----
1. Receive orders for the X X
purchase of Shares. (if in writing) (if by phone)

2. Issue Shares and hold Shares X
in Shareholders accounts.

3. Receive redemption requests. X X
(if in writing) (if by phone)
4. Effect transactions 1-3 X
above directly with broker- (2 is always
dealers. BFDS)

5. Pay over monies to redeeming X
Shareholders.
6. Effect transfers of Shares. X

7. Prepare and transmit X
dividends and distributions.

8. Issue Replacement X
Certificates.
9. Reporting of abandoned X
property.

10. Maintain records of account. X
11. Maintain and keep a current X
and accurate control book
for each issue of
securities.

12. Mail proxies. X

13. Mail Shareholder reports. X
14. Mail prospectuses to current X
Shareholders.

15. Withhold taxes on U.S. X
resident and non-resident
alien accounts.
16. Prepare and file U.S. X
Treasury Department forms.

Service Performed Responsibility
----------------- --------------

Bank Fund
---- ----
17. Prepare and mail account and X
confirmation statements for
Shareholders.

18. Provide Shareholder account X
information.

19. Blue Sky reporting. X

* Such services are more fully described in Section 1.2 (a), (b) and
(c) of the Agreement.

NEUBERGER & BERMAN EQUITY TRUST

BY: /s/ Michael J. Weiner
------------------------------
Michael J. Weiner

ATTEST:

/s/ Claudia A. Brandon
--------------------------
Claudia A. Brandon

STATE STREET BANK AND TRUST COMPANY

BY: /s/ Ronald E. Logue
-------------------------------
Ronald E. Logue
Executive Vice President

ATTEST:

/s/Officer
--------------------------

VIA FEDERAL EXPRESS
-------------------
Sharon Baker Morin, Esq.
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171-2197

Dear Sharon:

Pursuant to section 9 of the transfer agency contract between
State Street Bank and Trust Company ("State Street") and Neuberger &
Berman Equity Trust dated as of August 2, 1993, we request that Neuberger
& Berman NYCDC Socially Responsive Trust ("SR Trust") be added as a
Portfolio governed by that transfer agency contract. The addition of SR
Trust is effective as of March 7, 1994. Please indicate State Street's
acceptance of this request by having a duly authorized officer of State
Street sign in the space indicated below.

Sincerely,

/s/ Michael J. Weiner
------------------------
Name: Michael J. Weiner
Title: Vice President
Neuberger & Berman Equity Trust

Accepted by State Street
Bank and Trust Company

/s/ Ronald E. Logue
--------------------------------
Name: Ronald E. Logue
Title: Executive Vice President

FIRST AMENDMENT TO THE
TRANSFER AGENCY AND SERVICE AGREEMENT

This First Amendment dated as of March 1, 1995 between NEUBERGER
& BERMAN EQUITY TRUST, a Delaware business trust, having its principal
office and place of business at 605 Third Avenue, 2nd Floor, New York, NY
10158-0006 (the "Fund") and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, having its principal office and place of
business at 225 Franklin Street, Boston, MA 02110 (the "Bank") is made to
the Transfer Agency and Service Agreement dated as of August 2, 1993
between the Fund and the Bank (the "Agreement").

WHEREAS, pursuant to Section 10.3 of the Agreement, the Bank has
subcontracted certain of its duties, such as the receipt of net orders for
Fund shares (the "Shares"), to Boston Financial Data Services, Inc.
("BFDS"); and

WHEREAS, BFDS provides its services through the DST System and
certain subsystems of DST, such as DFE (collectively, "DST"); and

WHEREAS, the Bank and the Fund desire to amend the terms and
conditions of the Agreement to provide for changes related to the use of
DST by the Fund and recordkeepers performing services for the Fund.

NOW, THEREFORE, in consideration of the promises and mutual
covenants hereinafter contained, the parties agree as follows:

ARTICLE 1. DUTIES OF THE BANK

The parties hereto agree that the Agreement is amended to add
Section 1.2(f) as follows:

Net orders may be transmitted to the Bank on DST or by
facsimile or telephone. The Bank is not authorized to
receive orders transmitted on DST from any party other
than (i) NBMI and (ii) those parties set forth on
Schedule A attached hereto, which shall be updated from
time to time by the Fund (the "Designated Parties").

The Bank shall receive written approval from the Fund
prior to authorizing any additional Designated Parties to
use DST to place orders for Fund Shares. A Designated
Party shall only be authorized to use DST to (i) transmit
net orders for the purchase and redemption of Shares and
(ii) review the account of that Designated Party's
historical transactions. NBMI and the Designated Parties
are authorized to place orders for trades received before
4:00 p.m. EST on a business day the New York Stock
Exchange is open for business ("Business Day"), up to
9:30 p.m. EST that Business Day. No transactions
occurring on a given Business Day are authorized to be
transmitted on DST on the next Business Day.

ARTICLE 2. MISCELLANEOUS

(a) All other terms and conditions of the Agreement remain in
full force and effect.

(b) Terms used herein but not defined herein shall have the
meanings set forth in the Agreement.

(c) This First Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same First Amendment.
Attest: NEUBERGER & BERMAN EQUITY TRUST

/s/ Stacy Cooper-Shugrue /s/ Daniel J.Sullivan
Stacy Cooper-Shugrue By: Daniel J. Sullivan
____________________________ ___________________________________
Assistant Secretary Title: Vice President

Attest: STATE STREET BANK AND TRUST COMPANY

/s/ S. Cesso /s/ Ronald E. Logue
____________________________ By: Ronald E. Logue
___________________________________
Title: Executive Vice President

- 2 -

SCHEDULE A

DESIGNATED PARTIES

HEWITT SERVICES

STATE STREET BANK AND TRUST COMPANY

FEDERATED RETIREMENT PLAN SERVICES

THE SHAREHOLDERS SERVICE GROUP

WILLIAM M. MERGER PLAN
PARTICIPANT SERVICES

ADMINISTRATION AGREEMENT

WHEREAS, the Trust desires to retain the Administrator to furnish
administrative services, including shareholder accounting, recordkeeping,
and other services to shareholders, to each Series listed in Schedule A
attached hereto, and to such other Series of the Trust hereinafter
established as agreed to from time to time by the parties, evidenced by an
addendum to Schedule A (hereinafter "Series" shall refer to each Series
which is subject to this Agreement and all agreements and actions
described herein to be made or taken by a Series shall be made or taken by
the Trust on behalf of the Series), and the Administrator is willing to
furnish such services,

NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties agree as follows:

1. SERVICES OF THE ADMINISTRATOR.

1.1 ADMINISTRATIVE SERVICES. The Administrator shall
supervise each Series's business and affairs and shall provide such
services required for effective administration of such Series as are not
provided by employees or other agents engaged by such Series; PROVIDED,
that the Administrator shall not have any obligation to provide under this
Agreement any direct or indirect services to a Series's shareholders, any
services related to the distribution of a Series's shares, or any other
services that are the subject of a separate agreement or arrangement
between a Series and the Administrator. Subject to the foregoing, in
providing administrative services hereunder, the Administrator shall:

1.1.1 OFFICE SPACE, EQUIPMENT AND FACILITIES.
Furnish without cost to each Series, or pay the cost of, such office
space, office equipment and office facilities as are adequate for the
Series's needs;

1.1.2 PERSONNEL. Provide, without remuneration
from or other cost to each Series, the services of individuals competent
to perform all of the Series's executive, administrative and clerical
functions that are not performed by employees or other agents engaged by
the Series or by the Administrator acting in some other capacity pursuant
to a separate agreement or arrangement with the Series;

1.1.3 AGENTS. Assist each Series in selecting
and coordinating the activities of the other agents engaged by the Series,
including the Series's shareholder servicing agent, custodian, independent
auditors and legal counsel;

1.1.4 TRUSTEES AND OFFICERS. Authorize and
permit the Administrator's directors, officers or employees who may be
elected or appointed as trustees or officers of the Trust to serve in such
capacities, without remuneration from or other cost to the Trust or any
Series;

1.1.5 BOOKS AND RECORDS. Assure that all
financial, accounting and other records required to be maintained and
preserved by each Series are maintained and preserved by it or on its
behalf in accordance with applicable laws and regulations; and

1.1.6 REPORTS AND FILINGS. Assist in the
preparation of (but not pay for) all periodic reports by each Series to
shareholders of such Series and all reports and filings required to
maintain the registration and qualification of the Series and the Series's
shares, or to meet other regulatory or tax requirements applicable to the
Series, under federal and state securities and tax laws.

1.2 SHAREHOLDER AND RELATED SERVICES. The Administrator
shall provide each of the following services as may be required by any
Series, its shareholders (each of which must be either a broker-dealer,
pension plan administrator, or other institution that provides certain
accounting, recordkeeping and other services to its accounts ("Accounts")
and which has entered into an administrative services agreement with the
Administrator (each, an "Institution"), or the Accounts, as specified;
PROVIDED, that the Administrator's obligation to furnish any service to
Accounts or Account holders of any Institution shall be dependent upon
receipt of all necessary information from that Institution:

1.2.1 PURCHASE ORDERS. Receive for acceptance,
as agent for the Series, orders from Institutions and Accounts for the
purchase of Series shares transmitted or delivered to the office of the
Administrator, note the time and date of each order when received,
promptly deliver payment for such purchases to the Series' custodian
("Custodian"), and coordinate with the Series or its designees for the
issuance of the appropriate number of shares so purchased to the
appropriate Institution or Account;

1.2.2 RECORDS. Maintain records of the number
of shares of each Series attributable to each Account (including name,
address and taxpayer identification number), record all changes to such
shares held in each Account on a daily basis, and furnish to each Series
each business day the total number of shares of such Series attributable
to all Accounts;

1.2.3 REDEMPTION REQUESTS. Receive for
acceptance requests and directions from Institutions and Accounts for the

- 2 -

redemption of Series shares transmitted or delivered to the office of the
Administrator, note the time and date of each request when received,
process such requests and directions in accordance with the redemption
procedures set forth in the then current Prospectus and Statement of
Additional Information ("SAI") of the Series, and deliver the appropriate
documentation to the Custodian;

1.2.3 WIRE TRANSFERS. Coordinate and implement
bank-to-bank wire transfers in connection with Series share purchases and
redemptions by Institutions;

1.2.4 REDEMPTION PAYMENTS. Upon receipt of
monies paid to it by the Custodian with respect to any redemption of
Series shares, pay or cause such monies to be paid pursuant to
instructions by the appropriate Account or Institution.

1.2.5 EXCHANGES. Receive and execute orders
from Accounts and Institutions to exchange shares by concurrent purchases
and redemptions of shares of a Series and shares of other Series or of
other investment companies or series thereof pursuant to each Series's
then current Prospectus and SAI;

1.2.6 DIVIDENDS. Based upon information
received from a Series regarding dividends or other distributions on
Series shares, calculate the dividend or distribution attributable to each
Account; if such dividend or distribution is payable in shares or by
reinvestment in shares, calculate such shares for each Account and record
same in the share records for each Account, and if such dividend or
distribution is payable in cash, upon receipt of monies therefor from the
Custodian, pay or cause such monies to be paid to the appropriate Account
or as such Account may direct;

1.2.7 INQUIRIES. Respond to telephonic, mail,
and in-person inquiries from Institutions, Account holders, or their
representatives requesting information regarding matters such as
shareholder account or transaction status, net asset value ("NAV") of
Series shares, Series performance, Series services, plans and options,
Series investment policies, Series portfolio holdings, and Series
distributions and taxation thereof;

1.2.8 COMPLAINTS. Deal with complaints and
correspondence of Institutions and Account holders directed to or brought
to the attention of the Administrator;

1.2.9 REPORTS; PROXIES. Distribute as
appropriate to all Account holders all Series reports, dividend and
distribution notices, and proxy material relating to any meeting of Series
shareholders, and soliciting, processing and tabulating proxies for such
meetings;

1.2.10 SPECIAL REPORTS. Generate or develop and
distribute special data, notices, reports, programs and literature

- 3 -

required by Institutions or by Account holders generally in light of
developments, such as changes in tax laws; and

1.2.11 AGENTS. Assist any institutional
servicing agent ("Agent") engaged by the Series in the development,
implementation and maintenance of the following special programs and
systems to enhance each Series's capability to service its shareholders
and Account holders servicing capability:

(a) Training programs for personnel of
such Agent;

(b) Joint programs with such Agent for
the development of systems software, shareholder information reports, and
other special reports;

(d) Automated clearing house transfer
procedures between shareholders and such Agent; and

(e) Touch-tone telephone information
and transaction systems for shareholders.

2. EXPENSES OF EACH SERIES.

2.1 EXPENSES TO BE PAID BY THE ADMINISTRATOR. The
Administrator shall pay all salaries, expenses and fees of the officers,
trustees, or employees of the Trust who are officers, directors or
employees of the Administrator. If the Administrator pays or assumes any
expenses of the Trust or a Series not required to be paid or assumed by
the Administrator under this Agreement, the Administrator shall not be
obligated hereby to pay or assume the same or any similar expense in the
future; PROVIDED, that nothing herein contained shall be deemed to relieve
the Administrator of any obligation to the Trust or to a Series under any
separate agreement or arrangement between the parties.

2.2 EXPENSES TO BE PAID BY THE SERIES. Each Series
shall bear all expenses of its operation, except those specifically
allocated to the Administrator under this Agreement or under any separate
agreement between such Series and the Administrator. Expenses to be borne
by such Series shall include both expenses directly attributable to the
operation of that Series and the offering of its shares, as well as the
portion of any expenses of the Trust that is properly allocable to such
Series in a manner approved by the trustees of the Trust ("Trustees").
Subject to any separate agreement or arrangement between the Trust or a
Series and the Administrator, the expenses hereby allocated to each
Series, and not to the Administrator, include, but are not limited to:

- 4 -

2.2.1 CUSTODY. All charges of depositories,
custodians, and other agents for the transfer, receipt, safekeeping, and
servicing of its cash, securities, and other property;

2.2.2 SHAREHOLDER SERVICING. All expenses of
maintaining and servicing shareholder accounts, including but not limited
to the charges of any shareholder servicing agent, dividend disbursing
agent or other agent (other than the Administrator hereunder) engaged by a
Series to service shareholder accounts;

2.2.3 SHAREHOLDER REPORTS. All expenses of
preparing, setting in type, printing and distributing reports and other
communications to shareholders of a Series;

2.2.4 PROSPECTUSES. All expenses of preparing,
setting in type, printing and mailing annual or more frequent revisions of
a Series's Prospectus and SAI and any supplements thereto and of supplying
them to shareholders of the Series and Account holders;

2.2.5 PRICING AND PORTFOLIO VALUATION. All
expenses of computing a Series's net asset value ("NAV") per share,
including any equipment or services obtained for the purpose of pricing
shares or valuing the Series's investment portfolio;

2.2.6 COMMUNICATIONS. All charges for equipment
or services used for communications between the Administrator or the
Series and any custodian, shareholder servicing agent, portfolio
accounting services agent, or other agent engaged by a Series;

2.2.7 LEGAL AND ACCOUNTING FEES. All charges
for services and expenses of a Series's legal counsel and independent
auditors;

2.2.8 TRUSTEES' FEES AND EXPENSES. All
compensation of Trustees other than those affiliated with the
Administrator, all expenses incurred in connection with such unaffiliated
Trustees' services as Trustees, and all other expenses of meetings of the
Trustees or committees thereof;

2.2.9 SHAREHOLDER MEETINGS. All expenses
incidental to holding meetings of shareholders, including the printing of
notices and proxy materials, and proxy solicitation therefor;

2.2.10 FEDERAL REGISTRATION FEES. All fees and
expenses of registering and maintaining the registration of the Trust and
each Series under the 1940 Act and the registration of each Series's
shares under the Securities Act of 1933 (the "1933 Act"), including all
fees and expenses incurred in connection with the preparation, setting in
type, printing, and filing of any Registration Statement, Prospectus and
SAI under the 1933 Act or the 1940 Act, and any amendments or supplements
that may be made from time to time;

- 5 -

2.2.11 STATE REGISTRATION FEES. All fees and
expenses of qualifying and maintaining the qualification of the Trust and
each Series and of each Series's shares for sale under securities laws of
various states or jurisdictions, and of registration and qualification of
each Series under all other laws applicable to a Series or its business
activities (including registering the Series as a broker-dealer, or any
officer of the Series or any person as agent or salesman of the Series in
any state);

2.2.12 SHARE CERTIFICATES. All expenses of
preparing and transmitting a Series's share certificates, if any;

2.2.13 CONFIRMATIONS. All expenses incurred in
connection with the issue and transfer of a Series's shares, including the
expenses of confirming all share transactions;

2.2.14 BONDING AND INSURANCE. All expenses of
bond, liability, and other insurance coverage required by law or
regulation or deemed advisable by the Trustees, including, without
limitation, such bond, liability and other insurance expense that may from
time to time be allocated to the Series in a manner approved by the
Trustees;

2.2.15 BROKERAGE COMMISSIONS. All brokers'
commissions and other charges incident to the purchase, sale or lending of
a Series's portfolio securities;

2.2.16 TAXES. All taxes or governmental fees
payable by or with respect to a Series to federal, state or other
governmental agencies, domestic or foreign, including stamp or other
transfer taxes;

2.2.17 TRADE ASSOCIATION FEES. All fees, dues
and other expenses incurred in connection with a Series's membership in
any trade association or other investment organization;

2.2.18 NONRECURRING AND EXTRAORDINARY EXPENSES.
Such nonrecurring and extraordinary expenses as may arise, including the
costs of actions, suits, or proceedings to which the Series is a party and
the expenses a Series may incur as a result of its legal obligation to
provide indemnification to the Trust's officers, Trustees and agents;

2.2.19 ORGANIZATIONAL EXPENSES. All
organizational expenses of each Series paid or assessed by the
Administrator, which such Series shall reimburse to the Administrator at
such time or times and subject to such condition or conditions as shall be
specified in the Prospectus and SAI pursuant to which such Series makes
the initial public offering of its shares; and

2.2.20 INVESTMENT ADVISORY SERVICES. Any fees
and expenses for investment advisory services that may be incurred or
contracted for by a Series.

- 6 -

3. ADMINISTRATION FEE.

3.1 FEE. As compensation for all services rendered,
facilities provided and expenses paid or assumed by the Administrator to
or for each Series under this Agreement, such Series shall pay the
Administrator an annual fee as set out in Schedule B to this Agreement.

3.2 COMPUTATION AND PAYMENT OF FEE. The administration
fee shall accrue on each calendar day, and shall be payable monthly on the
first business day of the next succeeding calendar month. The daily fee
accruals for each Series shall be computed by multiplying the fraction of
one divided by the number of days in the calendar year by the applicable
annual administration fee rate (as set forth in Schedule B hereto), and
multiplying this product by the NAV of such Series, determined in the
manner set forth in such Series's then-current Prospectus, as of the close
of business on the last preceding business day on which such Series's NAV
was determined.

3.3 STATE EXPENSE LIMITATION. If in any fiscal year a
Series's operating expenses plus such Series's pro rata portion of the
operating expenses of any portfolio of Equity Managers Trust in which such
Series invests all or substantially all of its assets ("Aggregate
Operating Expenses"), which includes any fees or expense reimbursements
payable to the Administrator pursuant to this Agreement and any
compensation payable to the Administrator pursuant to (i) the Management
Agreement between such portfolio and the Administrator, or (ii) any other
agreement or arrangement with respect to such Series, but excluding
interest, taxes, brokerage commissions, litigation and indemnification
expenses, and other extraordinary expenses not incurred in the ordinary
course of such Series's business) exceed the lowest applicable percentage
expense limitation imposed under the securities law and regulations of any
state in which such Series's shares are qualified for sale (the "State
Expense Limitation"), then the administration fee payable to the
Administrator under this Agreement by such Series shall be reduced by the
amount of such excess; PROVIDED, that the Administrator shall have no
obligation hereunder to reimburse the Series for any such expenses which
exceed such administration fee.

Any reduction in the administration fee shall be made
monthly, by annualizing the Aggregate Operating Expenses of such Series
for each month as of the last day of such month. An adjustment shall be
made on or before the last day of the first month of the next succeeding
fiscal year if Aggregate Operating Expenses for such Series's fiscal year
do not exceed the State Expense Limitation or if for such fiscal year
there is no applicable State Expense Limitation.

4. OWNERSHIP OF RECORDS. All records required to be maintained
and preserved by each Series pursuant to the provisions or rules or
regulations of the Securities and Exchange Commission ("SEC") under
Section 31(a) of the 1940 Act and maintained and preserved by the
Administrator on behalf of such Series are the property of such Series and
shall be surrendered by the Administrator promptly on request by the

- 7 -

Series; PROVIDED, that the Administrator may at its own expense make and
retain copies of any such records.

5. REPORTS TO ADMINISTRATOR. Each Series shall furnish or
otherwise make available to the Administrator such copies of that Series's
Prospectus, SAI, financial statements, proxy statements, reports, and
other information relating to its business and affairs as the
Administrator may, at any time or from time to time, reasonably require in
order to discharge its obligations under this Agreement.

6. REPORTS TO EACH SERIES. The Administrator shall prepare and
furnish to each Series such reports, statistical data and other
information in such form and at such intervals as such Series may
reasonably request.

7. OWNERSHIP OF SOFTWARE AND RELATED MATERIALS. All computer
programs, written procedures and similar items developed or acquired and
used by the Administrator in performing its obligations under this
Agreement shall be the property of the Administrator, and no Series will
acquire any ownership interest therein or property rights with respect
thereto.

8. CONFIDENTIALITY. The Administrator agrees, on its own behalf
and on behalf of its employees, agents and contractors, to keep
confidential any and all records maintained and other information obtained
hereunder which relates to any Series or to any of a Series's former,
current or prospective shareholders, EXCEPT that the Administrator may
deliver records or divulge information (a) when requested to do so by duly
constituted authorities after prior notification to and approval in
writing by such Series (which approval will not be unreasonably withheld
and may not be withheld by such Series where the Administrator advises
such Series that it may be exposed to civil or criminal contempt
proceedings or other penalties for failure to comply with such request) or
(b) whenever requested in writing to do so by such Series.

9. THE ADMINISTRATOR'S ACTIONS IN RELIANCE ON SERIES'
INSTRUCTIONS, LEGAL OPINIONS, ETC.; SERIES' COMPLIANCE WITH LAWS.

9.1 The Administrator may at any time apply to an
officer of the Trust for instructions, and may consult with legal counsel
for a Series or with the Administrator's own legal counsel, in respect of
any matter arising in connection with this Agreement; and the
Administrator shall not be liable for any action taken or omitted to be
taken in good faith in and with due care in accordance with such
instructions or with the advice or opinion of such legal counsel. The
Administrator shall be protected in acting upon any such instructions,
advice or opinion and upon any other paper or document delivered by a
Series or such legal counsel which the Administrator believes to be
genuine and to have been signed by the proper person or persons, and the
Administrator shall not be held to have notice of any change of status or
authority of any officer or representative of the Trust, until receipt of
written notice thereof from the Series.

- 8 -

9.2 Except as otherwise provided in this Agreement or in
any separate agreement between the parties and except for the accuracy of
information furnished to each Series by the Administrator, each Series
assumes full responsibility for the preparation, contents, filing and
distribution of its Prospectus and SAI, and full responsibility for other
documents or actions required for compliance with all applicable
requirements of the 1940 Act, the Securities Exchange Act of 1934, the
1933 Act, and any other applicable laws, rules and regulations of
governmental authorities having jurisdiction over such Series.

10. SERVICES TO OTHER CLIENTS. Nothing herein contained shall
limit the freedom of the Administrator or any affiliated person of the
Administrator to render administrative or shareholder services to other
investment companies, to act as administrator to other persons, firms, or
corporations, or to engage in other business activities.

11. LIMITATION OF LIABILITY REGARDING THE TRUST. The
Administrator shall look only to the assets of each Series for performance
of this Agreement by the Trust on behalf of such Series, and neither the
Trustees of the Trust ("Trustees") nor any of the Trust's officers,
employees or agents, whether past, present or future shall be personally
liable therefor.

12. INDEMNIFICATION BY SERIES. Each Series shall indemnify the
Administrator and hold it harmless from and against any and all losses,
damages and expenses, including reasonable attorneys' fees and expenses,
incurred by the Administrator that result from: (i) any claim, action,
suit or proceeding in connection with the Administrator's entry into or
performance of this Agreement with respect to such Series; or (ii) any
action taken or omission to act committed by the Administrator in the
performance of its obligations hereunder with respect to such Series; or
(iii) any action of the Administrator upon instructions believed in good
faith by it to have been executed by a duly authorized officer or
representative of the Trust with respect to such Series; PROVIDED, that
the Administrator shall not be entitled to such indemnification in respect
of actions or omissions constituting negligence or misconduct on the part
of the Administrator or its employees, agents or contractors. Before
confessing any claim against it which may be subject to indemnification by
a Series hereunder, the Administrator shall give such Series reasonable
opportunity to defend against such claim in its own name or in the name of
the Administrator.

13. INDEMNIFICATION BY THE ADMINISTRATOR. The Administrator
shall indemnify each Series and hold it harmless from and against any and
all losses, damages and expenses, including reasonable attorneys' fees and
expenses, incurred by such Series which result from: (i) the
Administrator's failure to comply with the terms of this Agreement with
respect to such Series; or (ii) the Administrator's lack of good faith in
performing its obligations hereunder with respect to such Series; or (iii)
the Administrator's negligence or misconduct or its employees, agents or
contractors in connection herewith with respect to such Series. A Series
shall not be entitled to such indemnification in respect of actions or

- 9 -

omissions constituting negligence or misconduct on the part of that Series
or its employees, agents or contractors other than the Administrator
unless such negligence or misconduct results from or is accompanied by
negligence or misconduct on the part of the Administrator, any affiliated
person of the Administrator, or any affiliated person of an affiliated
person of the Administrator. Before confessing any claim against it which
may be subject to indemnification hereunder, a Series shall give the
Administrator reasonable opportunity to defend against such claim in its
own name or in the name of the Trust on behalf of such Series.

14. EFFECT OF AGREEMENT. Nothing herein contained shall be
deemed to require the Trust or any Series to take any action contrary to
the Trust Instrument or By-laws of the Trust or any applicable law,
regulation or order to which it is subject or by which it is bound, or to
relieve or deprive the Trustees of their responsibility for and control of
the conduct of the business and affairs of the Series or Trust.

15. TERM OF AGREEMENT. The term of this Agreement shall begin
on the date first above written with respect to each Series listed in
Schedule A on the date hereof and, unless sooner terminated as hereinafter
provided, this Agreement shall remain in effect through August 3, 1995.
With respect to each Series added by execution of an Addendum to Schedule
A, the term of this Agreement shall begin on the date of such execution
and, unless sooner terminated as hereinafter provided, this Agreement
shall remain in effect to the date two years after such execution.
Thereafter, in each case this Agreement shall continue in effect with
respect to each Series from year to year, subject to the termination
provisions and all other terms and conditions hereof; PROVIDED, such
continuance with respect to a Series is approved at least annually by vote
or written consent of the Trustees, including a majority of the Trustees
who are not interested persons of either party hereto ("Disinterested
Trustees"); and PROVIDED FURTHER, that the Administrator shall not have
notified a Series in writing at least sixty days prior to the first
expiration date hereof or at least sixty days prior to any expiration date
in any year thereafter that it does not desire such continuation. The
Administrator shall furnish any Series, promptly upon its request, such
information as may reasonably be necessary to evaluate the terms of this
Agreement or any extension, renewal or amendment thereof.

16. AMENDMENT OR ASSIGNMENT OF AGREEMENT. Any amendment to this
Agreement shall be in writing signed by the parties hereto; PROVIDED, that
no such amendment shall be effective unless authorized on behalf of any
Series (i) by resolution of the Trustees, including the vote or written
consent of a majority of the Disinterested Trustees, or (ii) by vote of a
majority of the outstanding voting securities of such Series. This
Agreement shall terminate automatically and immediately in the event of
its assignment; provided, that with the consent of a Series, the
Administrator may subcontract to another person any of its
responsibilities with respect to such Series.

17. TERMINATION OF AGREEMENT. This Agreement may be terminated
at any time by either party hereto, without the payment of any penalty,

- 10 -

upon at least sixty days' prior written notice to the other party;
PROVIDED, that in the case of termination by any Series, such action shall
have been authorized (i) by resolution of the Trustees, including the vote
or written consent of the Disinterested Trustees, or (ii) by vote of a
majority of the outstanding voting securities of such Series.

18. NAME OF A SERIES. Each Series hereby agrees that if the
Administrator shall at any time for any reason cease to serve as
administrator to a Series, such Series shall, if and when requested by the
Administrator, eliminate from such Series's name the name "Neuberger &
Berman" and thereafter refrain from using the name "Neuberger & Berman" or
the initials "N&B" in connection with its business or activities, and the
foregoing agreement of each Series shall survive any termination of this
Agreement and any extension or renewal thereof.

19. INTERPRETATION AND DEFINITION OF TERMS. Any question of
interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of the Act
shall be resolved by reference to such term or provision of the 1940 Act
and to interpretation thereof, if any, by the United States courts or, in
the absence of any controlling decision of any such court, by rules,
regulations or orders of the SEC validly issued pursuant to the 1940 Act.
Specifically, the terms "vote of a majority of the outstanding voting
securities," "interested persons," "assignment" and "affiliated person,"
as used in this Agreement shall have the meanings assigned to them by
Section 2(a) of the 1940 Act. In addition, when the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement
is modified, interpreted or relaxed by a rule, regulation or order of the
SEC, whether of special or of general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.

20. CHOICE OF LAW. This Agreement is made and to be principally
performed in the State of New York, and except insofar as the Act or other
federal laws and regulations may be controlling, this Agreement shall be
governed by, and construed and enforced in accordance with, the internal
laws of the State of New York.

21. CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.

22. EXECUTION IN COUNTERPARTS. This Agreement may be executed
simultaneously in counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.

- 11 -

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their respective officers thereunto duly
authorized and their respective seals to be hereunto affixed, as of the
day and year first above written.

NEUBERGER & BERMAN EQUITY TRUST

Attest: By /s/ Michael J. Weiner
---------------------------
Michael J. Weiner
/s/ Claudia A. Brandon Vice President
------------------------- ---------------------------
Claudia A. Brandon Title
Secretary

NEUBERGER & BERMAN
MANAGEMENT INCORPORATED

Attest: By /s/ Stanley Egener
---------------------------
Stanley Egener
/s/ Ellen Metzger President
-------------------- ---------------------------
Ellen Metzger Title
Secretary

- 12 -

NEUBERGER & BERMAN EQUITY TRUST
ADMINISTRATION AGREEMENT

SCHEDULE A

The Series of Neuberger & Berman Equity Trust currently subject
to this Agreement are as follows:

INITIAL SERIES

Neuberger & Berman Focus Trust
Neuberger & Berman Genesis Trust
Neuberger & Berman Guardian Trust
Neuberger & Berman Manhattan Trust
Neuberger & Berman Partners Trust

ADDITIONAL SERIES

Neuberger & Berman NYCDC Socially Responsive Trust

NEUBERGER & BERMAN EQUITY TRUST
ADMINISTRATION AGREEMENT

SCHEDULE B

Compensation pursuant to Paragraph 3 of the Neuberger & Berman
Equity Trust Administration Agreement ("Agreement") shall be 0.40% per
annum of the average daily net assets of each Series, except Neuberger &
Berman NYCDC Socially Responsive Trust. Compensation pursuant to
Paragraph 3 of the Agreement for Neuberger & Berman NYCDC Socially
Responsive Trust shall be 0.05% per annum of the average daily net assets
of such Series.

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Financial
Highlights" in the Prospectus and "Reports to Shareholders", "Independent
Auditors/Accountants" and "Financial Statements" in the Statement of
Additional Information in Post-Effective Amendment Number 8 to the
Registration Statement (Form N-1A No. 33-64368) of Neuberger & Berman
Equity Trust, and to the incorporation by reference of our reports dated
September 29, 1995 on the Neuberger & Berman Genesis Trust, Neuberger &
Berman Focus Trust, Neuberger & Berman Guardian Trust and Neuberger &
Berman Partners Trust, four of the series comprising Neuberger & Berman
Equity Trust, and on Neuberger & Berman Genesis Portfolio, Neuberger &
Berman Focus Portfolio, Neuberger & Berman Guardian Portfolio and
Neuberger & Berman Partners Portfolio, four of the series comprising
Equity Managers Trust, included in the 1995 Annual Report to Shareholders
of Neuberger & Berman Equity Trust.

/s/ Ernst & Young LLP
ERNST & YOUNG LLP

Boston, Massachusetts
December 15, 1995

CONSENT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
Neuberger & Berman Equity Trust and Equity Managers Trust

We consent to the incorporation by reference in Part B. Statement of
Additional Information in Post-Effective amendment No. 8 to the
Registration Statement on Form N-1A of Neuberger & Berman Manhattan Trust,
and Neuberger & Berman NYCDC Socially Responsive Trust of our reports
dated October 6, 1995, on our audits of the financial statements and
financial highlights of the Neuberger & Berman Manhattan Trust and
Portfolio and Neuberger & Berman NYCDC Socially Responsive Trust and
Portfolio which reports are included in the Annual Reports to Shareholders
for the fiscal year ended August 31, 1995, which is incorporated by
reference in Part B of the Registration Statement.

We also consent to the reference to our Firm which respect to the
Neuberger & Berman Manhattan Trust and Portfolio and Neuberger & Berman
NYCDC Socially Responsive Trust and Portfolio under the captions
"Independent Auditors/Accountants" and "Financial Statements" in Part B of
the Registration Statement.

/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.

Boston, Massachusetts
December 15, 1995

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Focus Trust Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000906926
<NAME> NEUBERGER&BERMAN EQUITY TRUST
<SERIES>
<NUMBER> 04
<NAME> NEUBERGER&BERMAN FOCUS TRUST
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 14,427
<RECEIVABLES> 88
<ASSETS-OTHER> 29
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 14,544
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 73
<TOTAL-LIABILITIES> 73
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,718
<SHARES-COMMON-STOCK> 1,004
<SHARES-COMMON-PRIOR> 140
<ACCUMULATED-NII-CURRENT> 25
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 115
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,613
<NET-ASSETS> 14,471
<DIVIDEND-INCOME> 67
<INTEREST-INCOME> 9
<OTHER-INCOME> 0
<EXPENSES-NET> (44)
<NET-INVESTMENT-INCOME> 32
<REALIZED-GAINS-CURRENT> 111
<APPREC-INCREASE-CURRENT> 1,542
<NET-CHANGE-FROM-OPS> 1,685
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (11)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,054
<NUMBER-OF-SHARES-REDEEMED> (191)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 12,884
<ACCUMULATED-NII-PRIOR> 4
<ACCUMULATED-GAINS-PRIOR> (2)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 137
<AVERAGE-NET-ASSETS> 4,672
<PER-SHARE-NAV-BEGIN> 11.36
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 3.05
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.41
<EXPENSE-RATIO> .96
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Genesis Trust Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000906926
<NAME> NEUBERGER&BERMAN EQUITY TRUST
<SERIES>
<NUMBER> 03
<NAME> NEUBERGER&BERMAN GENESIS TRUST
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 30,625
<RECEIVABLES> 12
<ASSETS-OTHER> 29
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 30,666
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 29
<TOTAL-LIABILITIES> 29
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25,086
<SHARES-COMMON-STOCK> 2,421
<SHARES-COMMON-PRIOR> 291
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 523
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,028
<NET-ASSETS> 30,637
<DIVIDEND-INCOME> 248
<INTEREST-INCOME> 12
<OTHER-INCOME> 0
<EXPENSES-NET> (312)
<NET-INVESTMENT-INCOME> (52)
<REALIZED-GAINS-CURRENT> 482
<APPREC-INCREASE-CURRENT> 4,936
<NET-CHANGE-FROM-OPS> 5,366
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (11)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,223
<NUMBER-OF-SHARES-REDEEMED> (94)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 27,550
<ACCUMULATED-NII-PRIOR> (2)
<ACCUMULATED-GAINS-PRIOR> 5
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 381
<AVERAGE-NET-ASSETS> 21,921
<PER-SHARE-NAV-BEGIN> 10.59
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 2.08
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.01)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.65
<EXPENSE-RATIO> 1.42
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Guardian Trust Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000906926
<NAME> NEUBERGER&BERMAN EQUITY TRUST
<SERIES>
<NUMBER> 01
<NAME> NEUBERGER&BERMAN GUARDIAN TRUST
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 679,569
<RECEIVABLES> 3,940
<ASSETS-OTHER> 28
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 683,537
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 471
<TOTAL-LIABILITIES> 471
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 583,155
<SHARES-COMMON-STOCK> 49,401
<SHARES-COMMON-PRIOR> 6,723
<ACCUMULATED-NII-CURRENT> 1,392
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6,187
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 92,332
<NET-ASSETS> 683,066
<DIVIDEND-INCOME> 4,467
<INTEREST-INCOME> 1,874
<OTHER-INCOME> 0
<EXPENSES-NET> (2,531)
<NET-INVESTMENT-INCOME> 3,810
<REALIZED-GAINS-CURRENT> 5,025
<APPREC-INCREASE-CURRENT> 88,893
<NET-CHANGE-FROM-OPS> 97,728
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,568)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 52,405
<NUMBER-OF-SHARES-REDEEMED> (9,940)
<SHARES-REINVESTED> 213
<NET-CHANGE-IN-ASSETS> 607,301
<ACCUMULATED-NII-PRIOR> 150
<ACCUMULATED-GAINS-PRIOR> (97)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,703
<AVERAGE-NET-ASSETS> 282,669
<PER-SHARE-NAV-BEGIN> 11.27
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> 2.55
<PER-SHARE-DIVIDEND> (.12)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.83
<EXPENSE-RATIO> .90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Manhattan Trust Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000906926
<NAME> NEUBERGER&BERMAN EQUITY TRUST
<SERIES>
<NUMBER> 02
<NAME> NEUBERGER&BERMAN MANHATTAN TRUST
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 35,492
<RECEIVABLES> 97
<ASSETS-OTHER> 29
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 35,618
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 37
<TOTAL-LIABILITIES> 37
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 28,773
<SHARES-COMMON-STOCK> 2,738
<SHARES-COMMON-PRIOR> 1,165
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 835
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,973
<NET-ASSETS> 35,581
<DIVIDEND-INCOME> 206
<INTEREST-INCOME> 16
<OTHER-INCOME> 0
<EXPENSES-NET> (228)
<NET-INVESTMENT-INCOME> (6)
<REALIZED-GAINS-CURRENT> 977
<APPREC-INCREASE-CURRENT> 5,693
<NET-CHANGE-FROM-OPS> 6,664
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (17)
<DISTRIBUTIONS-OF-GAINS> (69)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,196
<NUMBER-OF-SHARES-REDEEMED> (632)
<SHARES-REINVESTED> 9
<NET-CHANGE-IN-ASSETS> 23,503
<ACCUMULATED-NII-PRIOR> 8
<ACCUMULATED-GAINS-PRIOR> (47)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 315
<AVERAGE-NET-ASSETS> 21,635
<PER-SHARE-NAV-BEGIN> 10.37
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 2.67
<PER-SHARE-DIVIDEND> (.01)
<PER-SHARE-DISTRIBUTIONS> (.04)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.99
<EXPENSE-RATIO> 1.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Partners Trust Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000906926
<NAME> NEUBERGER&BERMAN EQUITY TRUST
<SERIES>
<NUMBER> 05
<NAME> NEUBERGER&BERMAN PARTNERS TRUST
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 61,245
<RECEIVABLES> 137
<ASSETS-OTHER> 29
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 61,411
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 77
<TOTAL-LIABILITIES> 77
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 50,567
<SHARES-COMMON-STOCK> 4,838
<SHARES-COMMON-PRIOR> 447
<ACCUMULATED-NII-CURRENT> 241
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,012
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,514
<NET-ASSETS> 61,334
<DIVIDEND-INCOME> 504
<INTEREST-INCOME> 62
<OTHER-INCOME> 0
<EXPENSES-NET> (301)
<NET-INVESTMENT-INCOME> 265
<REALIZED-GAINS-CURRENT> 3,113
<APPREC-INCREASE-CURRENT> 7,316
<NET-CHANGE-FROM-OPS> 10,694
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (32)
<DISTRIBUTIONS-OF-GAINS> (130)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,960
<NUMBER-OF-SHARES-REDEEMED> (584)
<SHARES-REINVESTED> 15
<NET-CHANGE-IN-ASSETS> 56,621
<ACCUMULATED-NII-PRIOR> 8
<ACCUMULATED-GAINS-PRIOR> 38
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 403
<AVERAGE-NET-ASSETS> 32,613
<PER-SHARE-NAV-BEGIN> 10.54
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 2.19
<PER-SHARE-DIVIDEND> (.02)
<PER-SHARE-DISTRIBUTIONS> (.08)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.68
<EXPENSE-RATIO> .92
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman NYCDC Socially Responsive Trust Annual Report and is
qualified in its entirety by reference to such document.
</LEGEND>
<CIK> 0000906926
<NAME> NEUBERGER&BERMAN EQUITY TRUST
<SERIES>
<NUMBER> 06
<NAME> NEUBERGER&BERMAN NYCDC SOCIALLY RESPONSIVE TRUST
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 88,559
<RECEIVABLES> (11)
<ASSETS-OTHER> 34
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 88,582
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 39
<TOTAL-LIABILITIES> 39
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 73,811
<SHARES-COMMON-STOCK> 7,219
<SHARES-COMMON-PRIOR> 68,586
<ACCUMULATED-NII-CURRENT> 609
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 932
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 13,191
<NET-ASSETS> 88,543
<DIVIDEND-INCOME> 1,114
<INTEREST-INCOME> 251
<OTHER-INCOME> 0
<EXPENSES-NET> (442)
<NET-INVESTMENT-INCOME> 923
<REALIZED-GAINS-CURRENT> 1,705
<APPREC-INCREASE-CURRENT> 11,139
<NET-CHANGE-FROM-OPS> 13,767
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (740)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,994
<NUMBER-OF-SHARES-REDEEMED> (1,424)
<SHARES-REINVESTED> 75
<NET-CHANGE-IN-ASSETS> 19,957
<ACCUMULATED-NII-PRIOR> 426
<ACCUMULATED-GAINS-PRIOR> (772)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 628
<AVERAGE-NET-ASSETS> 73,460
<PER-SHARE-NAV-BEGIN> 10.43
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> 1.82
<PER-SHARE-DIVIDEND> (.11)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.27
<EXPENSE-RATIO> .60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Focus Portfolio Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000910055
<NAME> EQUITY MANAGERS TRUST
<SERIES>
<NUMBER> 04
<NAME> NEUBERGER&BERMAN FOCUS PORTFOLIO
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 674,465
<INVESTMENTS-AT-VALUE> 984,159
<RECEIVABLES> 6,693
<ASSETS-OTHER> 36
<OTHER-ITEMS-ASSETS> 96
<TOTAL-ASSETS> 990,984
<PAYABLE-FOR-SECURITIES> 17,447
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,364
<TOTAL-LIABILITIES> 21,811
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 557,907
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 15,139
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 88,309
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 307,818
<NET-ASSETS> 969,173
<DIVIDEND-INCOME> 10,454
<INTEREST-INCOME> 1,097
<OTHER-INCOME> 0
<EXPENSES-NET> (4,055)
<NET-INVESTMENT-INCOME> 7,496
<REALIZED-GAINS-CURRENT> 50,732
<APPREC-INCREASE-CURRENT> 139,750
<NET-CHANGE-FROM-OPS> 197,978
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 324,162
<ACCUMULATED-NII-PRIOR> 7,643
<ACCUMULATED-GAINS-PRIOR> 37,577
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,758
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,055
<AVERAGE-NET-ASSETS> 714,153
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .57
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Guardian Portfolio Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000910055
<NAME> EQUITY MANAGERS TRUST
<SERIES>
<NUMBER> 01
<NAME> NEUBERGER&BERMAN GUARDIAN PORTFOLIO
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 3,590,685
<INVESTMENTS-AT-VALUE> 4,736,345
<RECEIVABLES> 25,961
<ASSETS-OTHER> 125
<OTHER-ITEMS-ASSETS> 32
<TOTAL-ASSETS> 4,762,463
<PAYABLE-FOR-SECURITIES> 61,722
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 87,545
<TOTAL-LIABILITIES> 149,267
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,237,636
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 91,725
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 147,623
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,136,212
<NET-ASSETS> 4,613,196
<DIVIDEND-INCOME> 51,765
<INTEREST-INCOME> 17,135
<OTHER-INCOME> 0
<EXPENSES-NET> (15,110)
<NET-INVESTMENT-INCOME> 53,790
<REALIZED-GAINS-CURRENT> 124,394
<APPREC-INCREASE-CURRENT> 627,968
<NET-CHANGE-FROM-OPS> 806,152
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,132,860
<ACCUMULATED-NII-PRIOR> 37,935
<ACCUMULATED-GAINS-PRIOR> 23,229
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 14,274
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 15,110
<AVERAGE-NET-ASSETS> 3,123,421
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .48
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Manhattan Portfolio Annual Report and is qualified in
its entirety by reference to such document.
</LEGEND>
<CIK> 0000910055
<NAME> NEUBERGER&BERMAN MANHATTAN PORTFOLIO
<SERIES>
<NUMBER> 02
<NAME> EQUITY MANAGERS TRUST
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 502,959
<INVESTMENTS-AT-VALUE> 659,762
<RECEIVABLES> 1,833
<ASSETS-OTHER> 37
<OTHER-ITEMS-ASSETS> 1,047
<TOTAL-ASSETS> 662,679
<PAYABLE-FOR-SECURITIES> 2,583
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,690
<TOTAL-LIABILITIES> 17,273
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 406,837
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 5,190
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 76,576
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 156,803
<NET-ASSETS> 645,406
<DIVIDEND-INCOME> 4,992
<INTEREST-INCOME> 344
<OTHER-INCOME> 0
<EXPENSES-NET> (3,130)
<NET-INVESTMENT-INCOME> 2,206
<REALIZED-GAINS-CURRENT> 44,742
<APPREC-INCREASE-CURRENT> 85,917
<NET-CHANGE-FROM-OPS> 132,865
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 123,671
<ACCUMULATED-NII-PRIOR> 2,984
<ACCUMULATED-GAINS-PRIOR> 31,834
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,832
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,130
<AVERAGE-NET-ASSETS> 528,830
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Partners Portfolio Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000910055
<NAME> EQUITY MANAGERS TRUST
<SERIES>
<NUMBER> 05
<NAME> NEUBERGER&BERMAN PARTNERS PORTFOLIO
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 1,358,401
<INVESTMENTS-AT-VALUE> 1,616,574
<RECEIVABLES> 20,084
<ASSETS-OTHER> 81
<OTHER-ITEMS-ASSETS> 6
<TOTAL-ASSETS> 1,636,745
<PAYABLE-FOR-SECURITIES> 12,439
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 780
<TOTAL-LIABILITIES> 13,219
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,069,830
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 26,044
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 269,479
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 258,173
<NET-ASSETS> 1,623,526
<DIVIDEND-INCOME> 20,063
<INTEREST-INCOME> 2,770
<OTHER-INCOME> 0
<EXPENSES-NET> (7,309)
<NET-INVESTMENT-INCOME> 15,524
<REALIZED-GAINS-CURRENT> 165,254
<APPREC-INCREASE-CURRENT> 109,257
<NET-CHANGE-FROM-OPS> 290,035
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 283,242
<ACCUMULATED-NII-PRIOR> 10,520
<ACCUMULATED-GAINS-PRIOR> 104,225
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6,830
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7,309
<AVERAGE-NET-ASSETS> 1,378,999
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .53
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Genesis Portfolio Annual Report and is qualified in
its entirety by reference to such document.
</LEGEND>
<CIK> 0000910055
<NAME> EQUITY MANAGERS TRUST
<SERIES>
<NUMBER> 03
<NAME> NEUBERGER&BERMAN GENESIS PORTFOLIO
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 108,413
<INVESTMENTS-AT-VALUE> 141,999
<RECEIVABLES> 487
<ASSETS-OTHER> 11
<OTHER-ITEMS-ASSETS> 178
<TOTAL-ASSETS> 142,675
<PAYABLE-FOR-SECURITIES> 385
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 129
<TOTAL-LIABILITIES> 515
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 95,366
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 601
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 12,607
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33,586
<NET-ASSETS> 142,160
<DIVIDEND-INCOME> 1,508
<INTEREST-INCOME> 77
<OTHER-INCOME> 0
<EXPENSES-NET> (1,250)
<NET-INVESTMENT-INCOME> 335
<REALIZED-GAINS-CURRENT> 6,666
<APPREC-INCREASE-CURRENT> 17,448
<NET-CHANGE-FROM-OPS> 24,449
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,591
<ACCUMULATED-NII-PRIOR> 266
<ACCUMULATED-GAINS-PRIOR> 5,941
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,135
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,295
<AVERAGE-NET-ASSETS> 133,493
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .94
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Socially Repsonsive Portfolio Annual Report and is
qualified in its entirety by reference to such document.
</LEGEND>
<CIK> 0000910055
<NAME> EQUITY MANAGERS TRUST
<SERIES>
<NUMBER> 06
<NAME> NEUBERGER&BERMAN SOCIALLY RESPONSIVE PORTFOLIO
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 83,395
<INVESTMENTS-AT-VALUE> 97,603
<RECEIVABLES> 135
<ASSETS-OTHER> 24
<OTHER-ITEMS-ASSETS> 56
<TOTAL-ASSETS> 97,818
<PAYABLE-FOR-SECURITIES> 998
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 73
<TOTAL-LIABILITIES> 1,071
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 80,146
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 1,330
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,063
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,208
<NET-ASSETS> 96,747
<DIVIDEND-INCOME> 1,189
<INTEREST-INCOME> 269
<OTHER-INCOME> 0
<EXPENSES-NET> (533)
<NET-INVESTMENT-INCOME> 925
<REALIZED-GAINS-CURRENT> 1,842
<APPREC-INCREASE-CURRENT> 12,075
<NET-CHANGE-FROM-OPS> 14,842
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 283,242
<ACCUMULATED-NII-PRIOR> 405
<ACCUMULATED-GAINS-PRIOR> (779)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 431
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 533
<AVERAGE-NET-ASSETS> 78,399
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>