<PAGE>
<PAGE>
- ----------------------------------------------------------------------
ANNUAL REPORT
August 31, 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
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
THE TRUSTS
CHAIRMAN'S LETTER 4
PORTFOLIO MANAGER'S
COMMENTARY
Focus Trust 6
Genesis Trust 8
Guardian Trust 10
Manhattan Trust 12
Partners Trust 14
GROWTH OF A DOLLAR
CHARTS
COMPARISON OF A
$10,000 INVESTMENT
Focus Trust 16
Genesis Trust 17
Guardian Trust 18
Manhattan Trust 19
Partners Trust 20
FINANCIAL STATEMENTS 22
FINANCIAL HIGHLIGHTS
PER SHARE DATA
Focus Trust 31
Genesis Trust 32
Guardian Trust 33
Manhattan Trust 34
Partners Trust 35
REPORT OF
INDEPENDENT
ACCOUNTANTS/AUDITORS 38
THE PORTFOLIOS
SCHEDULE OF
INVESTMENTS
TOP TEN HOLDINGS
Focus Portfolio 40
Genesis Portfolio 42
Guardian Portfolio 44
Manhattan Portfolio 47
Partners Portfolio 49
FINANCIAL STATEMENTS 54
FINANCIAL HIGHLIGHTS 64
REPORT OF
INDEPENDENT
ACCOUNTANTS/AUDITORS 67
DIRECTORY 69
OFFICERS AND
TRUSTEES 70
</TABLE>
3
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CHAIRMAN'S LETTER October 11, 1995
Dear Fellow Shareholder:
Over the last six months, the strong performance of both the stock and bond
markets more than compensated for the lackluster results of 1994, when stocks
struggled to stay even and bonds had their worst year since 1926.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P "500" INDEX* MSCI EAFE (INTERNATIONAL)* MERRILL LYNCH INDEX*
<S> <C> <C> <C>
Sep-94 -2.44% -3.15% -2.045%
Oct-94 -0.24% 0.08% -2.486%
Nov-94 -3.88% -4.74% -2.717%
Dec-94 -2.45% -4.14% -1.772%
Jan-95 0.07% -7.82% 0.447%
Feb-95 3.98% -8.08% 2.274%
Mar-95 7.04% -2.35% 3.942%
Apr-95 10.19% 1.32% 5.637%
May-95 14.60% 0.12% 11.020%
Jun-95 17.26% -1.65% 11.978%
Jul-95 21.15% 4.48% 11.196%
Aug-95 21.45% 0.50% 12.606%
</TABLE>
SOURCE: BLOOMBERG FINANCIAL SERVICES
It now appears that the U.S. economy has reached the long-discussed "soft
landing." The term "soft landing" is often used to describe an economy slowing
sufficiently to keep inflation in check, but not stalling into a recession.
While the market continues to reach new highs, some investors are tempted to
try their hands at "market timing." It seldom works and shareholders are best
served by simply focusing on their long-term objectives. We feel that through
careful security selection, opportunities still exist for growth to occur.
Internationally, we see good opportunities in markets such as Southeast Asia,
and in certain Latin American countries.
Long term, we believe the market holds opportunity for shareholders that have
the discipline to demand value as well as strong growth. The performance of our
Portfolios has been aided by several sectors
4
<PAGE>
including the Technology and Finance areas. We are now looking for value in the
stocks of laggard groups such as Retail, Energy and Insurance.
Please read the interviews with our portfolio managers and their discussion of
their investment strategies over the past fiscal year ended August 31st. If you
have any questions, please call us at 800-877-9700. As always, we remain
committed to serving your investment needs.
Sincerely,
/s/ Stanley Egener
Stanley Egener
Chairman of the Board
Neuberger&Berman Equity Trust
*The S&P "500" Index is an unmanaged index generally considered to be
representative of U.S. stock market activity.
The MSCI EAFE Index is an unmanaged index generally considered to be
representative of international stock market activity.
The Merrill Lynch 7-10 year Treasury Index is an unmanaged total return market
value index consisting of all coupon-bearing U.S. Treasury publicly placed debt
securities with maturities between 7 to 10 years.
Please note that indices do not take into account any fees or expenses of
investing in the individual securities that they track, and that individuals
cannot invest directly in any index. Data about these indices are prepared or
obtained by Neuberger&Berman Management Inc. and include reinvestment of all
dividends and capital gain distributions. Past performance does not guarantee
future results.
5
<PAGE>
PORTFOLIO MANAGER'S COMMENTARY
Neuberger&Berman
- ----------------------------------------------------------------------
Focus Trust
KENT SIMONS AND LARRY MARX -- CO-PORTFOLIO MANAGERS
Q
WHAT FACTORS INFLUENCED YOUR PORTFOLIO'S PERFORMANCE OVER
THE PAST FISCAL YEAR?
A One of the major reasons for our overall success has been
investors' passion for large-cap, cyclical companies, whose
export earnings benefited from a weak dollar. The Portfolio
was also positively influenced by lower interest rates and a
surge in the Technology sector.
As of August 31, our top five sectors were Financial Services (29.8%),
Technology (19.4%), Media and Entertainment (15.0%), Heavy Industry (12.1%)
and Health Care (8.2%).
Q
WHAT IS AN EXAMPLE OF A STOCK THAT HAS POSITIVELY AFFECTED
YOUR PORTFOLIO'S PERFORMANCE?
A One of our more recent purchases, Stone Container, has
appreciated 9.3% from our original purchase price, through
August 31, 1995. This growth occurred despite concerns over
rapidly increasing paper prices. We view Stone Container,
and the Paper industry in general, similar to the Technology
area last fall.
The general consensus for the Technology area at that time was that the
industry's growth rate was slowing down. However, the attractive valuations
of the stocks in our opinion more than offset any possible slow-down in
potential earnings growth. Currently, we are witnessing a slowdown in the
Paper industry, yet the industry stock valuations are still attractive. In
Stone Container's case, the company is reducing leverage, re-purchasing
stock, and product sales overseas remain strong, aided by a weak U.S. dollar.
6
<PAGE>
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Focus Trust (Cont'd)
Q
WHAT IS AN EXAMPLE OF A STOCK THAT HAS NEGATIVELY AFFECTED
YOUR PORTFOLIO'S PERFORMANCE?
A General Motors' ("GM") stock has lagged the markets as
investors have become concerned with the outlook for overall
car sales. We believe that: 1) the trend in car sales is
extremely difficult to predict with any degree of accuracy
and 2) that is not why we own GM anyway. The case for GM is
that we feel the company is improving its North American
Auto operations, and if the profitability of these changes
reaches targeted levels, the overall earnings of GM will be
substantially higher.
Q
WHAT IS AN EXAMPLE OF A STOCK THAT YOU HAVE BOUGHT DURING
THIS PERIOD?
A The addition of Neiman-Marcus Group is based on our
experience with its controlling shareholder, Harcourt
General. We believe that Harcourt's efforts to improve this
high-end department store, which have been ongoing for
several years, are now reaching fruition.
7
<PAGE>
PORTFOLIO MANAGER'S COMMENTARY
Neuberger&Berman
- ----------------------------------------------------------------------
Genesis Trust
JUDITH VALE -- PORTFOLIO MANAGER
Q
WHAT FACTORS INFLUENCED YOUR PORTFOLIO'S PERFORMANCE OVER
THE PAST FISCAL YEAR?
A Throughout this reporting period, we continued to evaluate
existing and prospective holdings according to their
individual business characteristics and market fundamentals.
With the potential threat of higher interest rates removed, investors were
able to focus on the growth potential of stocks. Initially, the major
beneficiary of this was the more liquid large-cap stocks. We were glad to see
the emphasis finally shift to small-cap stocks. Since there had been a
significant lag in performance among smaller-cap stocks, coupled with their
low price-to-earnings ratios, we found a lot of small-cap stocks that we
believe to be very undervalued and that had not participated in the earlier
parts of the equity market's rally. At the end of this fiscal year we began
to see an upturn in the small-cap markets. We are hopeful that this trend
will carry forward through the end of 1995.
The increased valuations of large-cap stocks, given the 1995 rally, simply
make the argument for small-cap stocks more compelling. After all, "two
innings do not make the game."
Q
WHAT IS AN EXAMPLE OF A STOCK THAT HAS POSITIVELY AFFECTED
YOUR PORTFOLIO'S PERFORMANCE?
A Small stock performance has been propelled in large part by
the Technology and Financial sectors. The Portfolio has a
number of positions in companies which use "applied
technology." These companies typically piggyback off some of
the explosive growth trends of Technology stocks, but
apparently with less of the risk.
For example, the Portfolio has a large position in a company called DH
Technology, which is a manufacturer of highly specialized printers. The
company receives little Wall Street research coverage, and the stock appears
undervalued to us. DH Technology generates
8
<PAGE>
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Genesis Trust (Cont'd)
a high return on assets, has a pristine balance sheet, and throws off a
healthy cash flow. If you owned a business, you'd really like to own and run
this one. The stock has performed well this year and is still very modestly
priced relative to the growth and return characteristics of the printer
business.
Q
WHAT ARE SOME STOCKS THAT HAVE NEGATIVELY AFFECTED YOUR
PORTFOLIO'S PERFORMANCE?
A The Portfolio's performance was negatively affected by its
holding in Lilly Industries, a manufacturer of industrial
coatings. The company experienced weakened demand trends and
margin pressure due to raw material price pressures.
Another company, Kellwood, saw its stock prices decline due to a continued
decrease in demand for woven shirts, combined with a costly phase-out of an
underperforming subsidiary. Unfortunately, these factors overshadowed
otherwise healthy gains in other company divisions.
9
<PAGE>
PORTFOLIO MANAGER'S COMMENTARY
Neuberger&Berman
- ----------------------------------------------------------------------
Guardian Trust
KENT SIMONS & LAWRENCE MARX III -- CO-PORTFOLIO MANAGERS
Q
WHAT FACTORS INFLUENCED YOUR PORTFOLIO'S PERFORMANCE OVER
THE PAST FISCAL YEAR?
A Two factors that influenced performance during this time
were the decline in interest rates and the strengthening of
corporate earnings. These conditions contributed to
Guardian's strong performance over this reporting period. We
believe, however, that our commitment to a value-oriented
investment approach was the dominant contributor to our
performance.
We continue to purchase securities with lower price-to-earnings multiples
than the stock market. Some industries are consistently measured on a
price-to-cash-flow basis, like Cable, Media and Cellular, so we use that
measure to determine value for those industries. However, other industries,
including Automobiles, Paper, Finance and Technology, are mostly evaluated on
a price-to-earnings basis. Overall, we are more instinctively drawn to buying
what we believe is the best company in an industry that's out-of-favor rather
than buying, say, the low multiple company in an industry that's in favor.
Q
WHAT ARE SOME EXAMPLES OF STOCKS THAT HAVE POSITIVELY
AFFECTED YOUR PORTFOLIO'S PERFORMANCE?
A The Portfolio's largest concentration (14.0%) was in
Technology stocks, an area that performed very well during
the period. We were able to profit from the Technology surge
by buying many of these stocks ahead of the crowd. An
example of a Technology stock we purchased based on a low
valuation was Texas Instruments. Texas Instruments has
appreciated 94% during the twelve month period from
September 1, 1994 to August 31, 1995. Although we have
trimmed our position in this stock, we believe it still
represents an attractive value based on its strong earnings.
10
<PAGE>
- ----------------------------------------------------------------------
Guardian Trust (Cont'd)
Another stock that performed well for us was Xerox Corp. The company now
sells a broad range of black & white and color copiers and duplicators. They
have also introduced a line of digital products, including their DocuTech
digital publishing system, which scans hard copy and converts it into a
digital format directly on a networked personal computer. The company's
overall sales growth was spurred by increased worldwide demand for their
digital products and color copiers and printers.
Q
WHAT IS AN EXAMPLE OF A STOCK THAT HAS NEGATIVELY AFFECTED
YOUR PORTFOLIO'S PERFORMANCE?
A The stocks we own in the HMO division of the Health Care
sector have not performed up to our expectations, although
we believe the long-term outlook for this sector is bullish
because rising health-care costs means the trend is away
from traditional health insurance coverage and toward HMO's.
Besides, the Government can't pass a law against getting
older, or sick, so demand for health care services will
always be there.
An example of a stock we own in managed health care is Humana. Humana's share
price declined in late June, along with other HMO stocks, as the Wall Street
community projected lower-than-expected earnings for the industry and as
Florida unveiled new Medicaid reimbursement rates. However, we are impressed
by Humana's chief operating officer, who had the vision to reduce his
company's exposure to the hospital business when he adeptly realized that new
plans to set prices for specific groups of medical problems would be
detrimental to future company profits. At Humana's current price ($18.25 as
of August 31), we believe any positive trends in this industry are not
reflected in the stock's price, representing a good long-term value
opportunity.
11
<PAGE>
PORTFOLIO MANAGER'S COMMENTARY
Neuberger&Berman
- ----------------------------------------------------------------------
Manhattan Trust
MARK R. GOLDSTEIN -- PORTFOLIO MANAGER
Q
WHAT FACTORS INFLUENCED YOUR PORTFOLIO'S PERFORMANCE OVER
THE PAST FISCAL YEAR?
A During this period, we believe the patience and discipline
we displayed throughout 1994 was rewarded. Specifically,
because many of our Portfolio's holdings are sensitive to
interest rates, we looked for any one of the following
market changes:
1) inflation fears to steady
2) bond yields to fall
3) slow-down of economic growth, or
4) improved corporate earnings growth
All four occurred and our returns have outpaced the market.
Interest rates aside, the earnings growth of the companies we own remains the
most important factor influencing the appreciation of securities. We continue
to be committed to paying a reasonable price for the stocks we believe have
growth potential. As an example, the type of stocks we buy represent
companies that have had earnings growth in the 15% - 20% range, have had a
high level of profitability, have generated excess cash flow, and have
entrepreneurial managements that are owners of company stock and seem to have
shareholder interest at heart.
Q
WHAT ARE SOME EXAMPLES OF STOCKS THAT HAVE POSITIVELY
AFFECTED YOUR PORTFOLIO'S PERFORMANCE?
A Among the strongest industry groups in the Portfolio were
Technology, Financial Services and Consumer Goods. An
example of an excellent Technology stock in our Portfolio is
Intel, one of the largest producers of microprocessors. Its
stock has positively affected the Portfolio's performance,
as strong demand for personal computers and greater
processing capacity for the individual units improved the
overall demand for microprocessors. The stock of one of
12
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Manhattan Trust (Cont'd)
our Financial Services holdings, CITICORP, has also continued to show growth
as the company builds upon the strength of its global consumer franchise.
Furthermore, the company announced a stock buyback in the second quarter of
1995, showing its renewed emphasis on enhancing shareholder value.
In the consumer area, Luxottica has been an extremely strong holding. This
low-cost producer of designer and non-designer eyeglass frames has
experienced strong double digit growth in both the U.S. and international
markets led by strong performance of the Giorgio Armani line of frames. The
company's purchase of the Lenscrafters division of U.S. Shoe offers them a
strong distribution arm in the U.S. and the opportunity to benefit in the
retail markup of their product. General Nutrition Centers was another strong
contributor to the Portfolio's positive performance. Demand for this
company's vitamins and nutritional products has been quite robust. The
company has also benefited from greater sales of its manufactured products
through its own stores.
Q
WHAT IS AN EXAMPLE OF A STOCK THAT HAS NEGATIVELY AFFECTED
YOUR PORTFOLIO'S PERFORMANCE?
A For us, the worst performing group of stocks was in the HMO
area. Concerns about declining pricing and higher than
anticipated use of medical sources caused many of the stocks
in this area to underperform. For example, U.S. Healthcare
suffered increased competition from the local Blue Cross
plan, which became more aggressive in going after market
share.
Overall, we have been pleased with the quality and returns of our holdings.
Further, there is no shortage of buying opportunities, even in this somewhat
lofty equity market. By investing in fast-growing companies with
entrepreneurial management and pristine balance sheets, we hope to be able to
continue to provide the shareholder with excellent long-term returns.
13
<PAGE>
PORTFOLIO MANAGER'S COMMENTARY
Neuberger&Berman
- ----------------------------------------------------------------------
Partners Trust
MICHAEL KASSEN AND ROBERT GENDELMAN -- CO-PORTFOLIO MANAGERS
Q
WHAT FACTORS INFLUENCED YOUR PORTFOLIO'S PERFORMANCE OVER
THE PAST FISCAL YEAR?
A The cautious optimism we showed for the equity markets
coming into 1995 has been met by one of the greatest
short-term rallies in stock market history. We, like other
managers, have benefited from this run-up. This was
accomplished, in part, from securities we purchased for the
Portfolio over the last year. We have not been chasing the
market, but rather watching some of the value selections we
made in months past become recognized by the market.
Q
WHAT ARE SOME EXAMPLES OF STOCKS THAT HAVE POSITIVELY
AFFECTED YOUR PORTFOLIO'S PERFORMANCE?
A Two sectors of the market in particular led to our strong
positive performance: Technology and Financial Services.
While the Portfolio was not overweighted in Technology, we
maintained a significant position in a number of excellent
stocks. In the Financial Services sector, leading stocks
included the following: Exel Ltd., a specialty property
casualty underwriter based in Bermuda; First USA, a rapidly
growing credit card issuer and processor; Countrywide
Credit, a leading mortgage originator; and CITICORP, whose
international positioning and growth prospects distinguish
it, in our opinion, from the average bank. While Financial
Services stocks have obviously benefited from the strong
bond market, we continue to believe this is an area that
offers many interesting and reasonably priced securities.
Q
WHAT IS AN EXAMPLE OF A STOCK THAT HAS NEGATIVELY AFFECTED
YOUR PORTFOLIO'S PERFORMANCE?
A An example of a stock which performed poorly during the past
fiscal year was Royal Caribbean. We have owned Royal
Caribbean since its public offering in 1993. We continue to
like the fundamentals of the cruise ship industry in general
and Royal Caribbean in
14
<PAGE>
- ----------------------------------------------------------------------
Partners Trust (Cont'd)
particular. Nonetheless, earnings estimates have drifted down for Royal
Caribbean in recent months, reflecting a somewhat more promotional industry
pricing environment. We have taken advantage of the ensuing weakness in the
stock to add to our positions and feel very good about the position over the
next year or two.
Q
WHAT IS AN EXAMPLE OF A STOCK THAT YOU HAVE BOUGHT DURING
THIS PERIOD?
A We initiated a position in Harley-Davidson within the last
couple of months which is a stock we've owned in the past
and sold and have now come back to. Even though we bought it
at a price that is higher than we previously sold it at, we
feel that it is a good value today. Why? Most importantly,
their core business, motorcycles, is doing great. We've been
told it's so hard to get a Harley, that if you were to place
an order today, you'd probably have to wait six or eight
months for one.
So why is it a "value"? The problem is the motorcycle business is three
quarters of the company's sales and about 98 percent of their earnings. They
also own a business called Holiday Rambler, which is in the recreational
vehicles business, which even in the best of times did not contribute very
much to the bottom line. Analysts that follow Harley are preoccupied, for
some reason, with the fortunes of this business, which hasn't done so well
lately. And we honestly think if this business went away totally, the stock
would be significantly higher because people could then devote their
attention to what a really wonderful business the motorcycle business appears
to be. You know, you have to say that very few businesses have their
customers tattooing their company's name on their body. That's a sign of
great loyalty.
15
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Focus Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
Focus Trust S&P "500"
<S> <C> <C>
1 Year +27.44% +21.42%
5 Year +19.19% +15.13%
10 Year +15.09% +15.17%
</TABLE>
<TABLE>
<CAPTION>
Focus Trust S&P "500"
<S> <C> <C>
1985 10000 10000
1986 11685 13914
1987 15430 18734
1988 13102 15365
1989 17603 21390
1990 16947 20294
1991 19651 25771
1992 21971 27816
1993 28168 32043
1994 31992 33808
1995 40770 41051
</TABLE>
The performance information for Neuberger&Berman Focus Trust is as of August
31, 1995. Neuberger&Berman Focus Trust started operating on August 30, 1993. It
has identical investment objectives and policies, and invests in the same
Portfolio as Neuberger&Berman Focus Fund ("Sister Fund"), which is also managed
by Neuberger&Berman Management Inc. The performance information shown in the
above chart for the period before August 30, 1993, is for the Sister Fund and
its predecessor. Neuberger&Berman Management Inc. voluntarily bears certain
expenses of the Fund so that its 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, until December 31, 1995. Returns would have been lower
had Neuberger&Berman Management Inc. not reimbursed these expenses.
The Fund's name prior to January 1, 1995 was Neuberger&Berman Selected
Sectors Trust. Prior to November 1, 1991, the investment policies of the
predecessor of the 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 may be
expected under the Fund's current investment policies.
*"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Trust and the return
on the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost.
The S&P "500" Index is an unmanaged index generally considered to be
representative of stock market activity. Please note that indices do not take
into account any fees and expenses of investing in the individual securities
that they track, and that individuals cannot invest directly in any index. These
data are derived by Neuberger&Berman Management Inc. and include reinvestment of
all dividends and capital gain distributions.
16
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Genesis Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
Genesis Trust Russell 2000
<S> <C> <C>
1 Year +19.51% +20.83%
5 Year +17.35% +19.01%
Life of Fund +12.61% +12.91%
</TABLE>
<TABLE>
<CAPTION>
Genesis Trust Russell 2000
<S> <C> <C>
1988 10000 10000
1989 13045 12113
1990 10236 9714
1991 13856 12749
1992 14562 13680
1993 18072 18130
1994 19061 19193
1995 22780 23191
</TABLE>
The performance information for Neuberger&Berman Genesis Trust is as of
August 31, 1995. Neuberger&Berman Genesis Trust started operating on August 26,
1993. It has identical investment objectives and policies, and invests in the
same Portfolio as Neuberger&Berman Genesis Fund ("Sister Fund"), which is also
managed by Neuberger&Berman Management Inc. The performance information shown in
the above chart for the period before August 26, 1993, is for the Sister Fund
and its predecessor which commenced operations on September 27, 1988.
Neuberger&Berman Management Inc. voluntarily bears certain expenses of the Fund
so that its 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,
until December 31, 1995. Returns would have been lower had Neuberger&Berman
Management Inc. not reimbursed these expenses.
*"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Trust and the return
on the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost. During the period May 1, 1995 through
August 31, 1995, Neuberger&Berman Management Inc. waived a portion of its
management fee for providing investment advisory and other services. Had
Neuberger&Berman Management Inc. not waived these fees, total returns would have
been less.
The Russell 2000 Index is an unmanaged index generally considered to be
representative of the 2,000 issuers having the smallest capitalization in the
Russell 3000 Index, representing approximately 7% of the Russell 3000 total
market capitalization. The smallest company's market capitalization is roughly
$13 million. These data are derived by Neuberger&Berman Management Inc. and
include reinvestment of all dividends and capital gain distributions. The risks
involved in seeking capital appreciation from investments principally in
companies with small market capitalization are set forth in the prospectus.
Please note that indices do not take into account any fees and expenses of
investing in the individual securities that they track, and that individuals
cannot invest directly in any index.
17
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Guardian Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
Guardian Trust S&P "500"
<S> <C> <C>
1 Year +24.01% +21.42%
5 Year +20.14% +15.13%
10 Year +15.66% +15.17%
</TABLE>
<TABLE>
Guardian Trust S&P "500"
<S> <C> <C>
1985 10000 10000
1986 12908 13914
1987 16350 18734
1988 14602 15365
1989 19552 21390
1990 17110 20294
1991 22325 25771
1992 25425 27816
1993 31232 32043
1994 34535 33808
1995 42828 41051
</TABLE>
The performance information for Neuberger&Berman Guardian Trust is as of
August 31, 1995. Neuberger&Berman Guardian Trust started operating on August 3,
1993. It has identical investment objectives and policies, and invests in the
same Portfolio as Neuberger&Berman Guardian Fund ("Sister Fund"), which is also
managed by Neuberger&Berman Management Inc. The performance information shown in
the above chart for the period before August 3, 1993, is for the Sister Fund and
its predecessor. Neuberger&Berman Management Inc. voluntarily bears certain
expenses of the Fund so that its 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, until December 31, 1995. Returns would have been lower
had Neuberger&Berman Management Inc. not reimbursed these expenses.
*"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Trust and the return
on the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost.
The S&P "500" Index is an unmanaged index generally considered to be
representative of stock market activity. Please note that indices do not take
into account any fees and expenses of investing in the individual securities
that they track, and that individuals cannot invest directly in any index. These
data are derived by Neuberger&Berman Management Inc. and include reinvestment of
all dividends and capital gain distributions.
18
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Manhattan Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
Manhattan S&P "500"
<S> <C> <C>
1 Year +25.90% +21.42%
5 Year +17.11% +15.13%
10 Year +15.02% +15.17%
</TABLE>
<TABLE>
<CAPTION>
Manhattan Trust S&P "500"
<S> <C> <C>
1985 10000 10000
1986 13696 13914
1987 18401 18734
1988 14760 15365
1989 21020 21390
1990 18400 20294
1991 23215 25771
1992 24315 27816
1993 31047 32043
1994 32195 33808
1995 40535 41051
</TABLE>
The performance information for Neuberger&Berman Manhattan Trust is as of
August 31, 1995. Neuberger&Berman Manhattan Trust started operating on August
30, 1993. It has identical investment objectives and policies, and invests in
the same Portfolio as Neuberger& Berman Manhattan Fund ("Sister Fund"), which is
also managed by Neuberger&Berman Management Inc. The performance information
shown in the above chart for the period before August 30, 1993, is for the
Sister Fund and its predecessor. Neuberger&Berman Management Inc. voluntarily
bears certain expenses of the Fund so that its 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, until December 31, 1995. Returns would have
been lower had Neuberger& Berman Management Inc. not reimbursed these expenses.
*"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Trust and the return
on the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost.
The S&P "500" Index is an unmanaged index generally considered to be
representative of stock market activity. Please note that indices do not take
into account any fees and expenses of investing in the individual securities
that they track, and that individuals cannot invest directly in any index. These
data are derived by Neuberger&Berman Management Inc. and include reinvestment of
all dividends and capital gain distributions.
19
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Partners Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
Partners Trust S&P "500"
<S> <C> <C>
1 Year +21.52% +21.42%
5 Year +16.06% +15.13%
10 Year +14.44% +15.17%
</TABLE>
<TABLE>
<CAPTION>
Partners Trust S&P "500"
<S> <C> <C>
1985 10000 10000
1986 13396 13914
1987 16903 18734
1988 14909 15365
1989 19633 21390
1990 18294 20294
1991 21593 25771
1992 23428 27816
1993 30024 32043
1994 31707 33808
1995 38530 41051
</TABLE>
The performance information for Neuberger&Berman Partners Trust is as of
August 31, 1995. Neuberger&Berman Partners Trust started operating on August 30,
1993. It has identical investment objectives and policies, and invests in the
same Portfolio as Neuberger&Berman Partners Fund ("Sister Fund"), which is also
managed by Neuberger&Berman Management Inc. The performance information shown in
the above chart for the period before August 30, 1993, is for the Sister Fund
and its predecessor. Neuberger&Berman Management Inc. voluntarily bears certain
expenses of the Fund so that its 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, until December 31, 1995. Returns would have been lower
had Neuberger&Berman Management Inc. not reimbursed these expenses.
*"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Trust and the return
on the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost.
The S&P "500" Index is an unmanaged index generally considered to be
representative of stock market activity. Please note that indices do not take
into account any fees and expenses of investing in the individual securities
that they track, and that individuals cannot invest directly in any index. These
data are derived by Neuberger&Berman Management Inc. and include reinvestment of
all dividends and capital gain distributions.
20
<PAGE>
(This page has been left blank intentionally.)
21
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
Neuberger&Berman
- ----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
FOCUS GENESIS
(000'S OMITTED EXCEPT PER SHARE AMOUNTS) TRUST TRUST
----------------------------
<S> <C> <C>
ASSETS
Investment in corresponding Portfolio, at
value (Note A) $ 14,427 $ 30,625
Deferred organization costs (Note A) 29 29
Receivable for Trust shares sold 76 --
Receivable from administrator -- net (Note
B) 7 2
----------------------------
14,539 30,656
----------------------------
LIABILITIES
Payable for Trust shares redeemed 49 3
Payable to administrator -- net (Note B) -- --
Accrued expenses 19 16
----------------------------
68 19
----------------------------
NET ASSETS at value $ 14,471 $ 30,637
----------------------------
NET ASSETS consist of:
Par value $ 1 $ 2
Paid-in capital in excess of par value 12,717 25,084
Accumulated undistributed net investment
income 25 --
Accumulated net realized gains on investment 115 523
Net unrealized appreciation in value of
investment 1,613 5,028
----------------------------
NET ASSETS at value $ 14,471 $ 30,637
----------------------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 1,004 2,421
----------------------------
NET ASSET VALUE, offering and redemption price per
share $14.41 $12.65
----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
August 31, 1995
- ----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
GUARDIAN MANHATTAN PARTNERS
TRUST TRUST TRUST
-------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment in corresponding Portfolio, at
value (Note A) $ 679,569 $ 35,492 $ 61,245
Deferred organization costs (Note A) 28 29 29
Receivable for Trust shares sold 3,939 89 124
Receivable from administrator -- net (Note
B) -- -- --
-------------------------------------------
683,536 35,610 61,398
-------------------------------------------
LIABILITIES
Payable for Trust shares redeemed 221 5 39
Payable to administrator -- net (Note B) 220 4 7
Accrued expenses 29 20 18
-------------------------------------------
470 29 64
-------------------------------------------
NET ASSETS at value $ 683,066 $ 35,581 $ 61,334
-------------------------------------------
NET ASSETS consist of:
Par value $ 49 $ 3 $ 5
Paid-in capital in excess of par value 583,106 28,770 50,562
Accumulated undistributed net investment
income 1,392 -- 241
Accumulated net realized gains on investment 6,187 835 3,012
Net unrealized appreciation in value of
investment 92,332 5,973 7,514
-------------------------------------------
NET ASSETS at value $ 683,066 $ 35,581 $ 61,334
-------------------------------------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 49,401 2,738 4,838
-------------------------------------------
NET ASSET VALUE, offering and redemption price per
share $13.83 $12.99 $12.68
-------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
STATEMENTS OF OPERATIONS
Neuberger&Berman
- ----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
FOCUS GENESIS
(000'S OMITTED) TRUST TRUST
------------------------
<S> <C> <C>
INVESTMENT INCOME
Investment income from corresponding Portfolio
(Note A) $ 76 $ 260
------------------------
Expenses:
Administration fee (Note B) 19 88
Amortization of deferred organization and
initial offering expenses (Note A) 10 10
Auditing fees 5 5
Custodian fees 10 10
Legal fees 3 3
Registration and filing fees 26 25
Shareholder reports 20 17
Shareholder servicing agent fees 17 17
Trustees' fees and expenses -- 1
Miscellaneous 1 1
Expenses from corresponding Portfolio (Note
A) 26 204
------------------------
Total expenses 137 381
Deduct -- expenses reimbursed by
administrator (Note B) (93 ) (69 )
------------------------
Total net expenses 44 312
------------------------
Net investment income (loss) 32 (52 )
------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
OPTION CONTRACTS WRITTEN FROM CORRESPONDING
PORTFOLIO (NOTE A)
Net realized gain on investments 110 482
Net realized gain on option contracts written 1 --
Change in net unrealized appreciation of
investments 1,542 4,936
------------------------
Net gain on investments and option
contracts written from corresponding
Portfolio (Note A) 1,653 5,418
------------------------
Net increase in net assets resulting from
operations $ 1,685 $ 5,366
------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
For the Year Ended August 31, 1995
- ----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
GUARDIAN MANHATTAN PARTNERS
TRUST TRUST TRUST
---------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Investment income from corresponding Portfolio
(Note A) $ 6,341 $ 222 $ 566
---------------------------------------------
Expenses:
Administration fee (Note B) 1,131 86 130
Amortization of deferred organization and
initial offering expenses (Note A) 10 10 10
Auditing fees 5 10 5
Custodian fees 9 10 10
Legal fees 6 3 3
Registration and filing fees 57 28 28
Shareholder reports 99 20 24
Shareholder servicing agent fees 19 17 18
Trustees' fees and expenses 7 1 1
Miscellaneous 1 1 1
Expenses from corresponding Portfolio (Note
A) 1,359 129 173
---------------------------------------------
Total expenses 2,703 315 403
Deduct -- expenses reimbursed by
administrator (Note B) (172 ) (87) (102 )
---------------------------------------------
Total net expenses 2,531 228 301
---------------------------------------------
Net investment income (loss) 3,810 (6) 265
---------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
OPTION CONTRACTS WRITTEN FROM CORRESPONDING
PORTFOLIO (NOTE A)
Net realized gain on investments 5,016 977 3,113
Net realized gain on option contracts written 9 -- --
Change in net unrealized appreciation of
investments 88,893 5,693 7,316
---------------------------------------------
Net gain on investments and option
contracts written from corresponding
Portfolio (Note A) 93,918 6,670 10,429
---------------------------------------------
Net increase in net assets resulting from
operations $ 97,728 $ 6,664 $ 10,694
---------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Neuberger&Berman
- ----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
FOCUS TRUST GENESIS TRUST
Year Year
Ended Ended
August 31, August 31,
(000'S OMITTED) 1995 1994 1995 1994
------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 32 $ 4 $ (52) $ (2)
Net realized gain (loss) on
investments sold and option
contracts written from
corresponding Portfolio (Note A) 111 (3) 482 (13)
Change in net unrealized
appreciation of investments from
corresponding Portfolio (Note A) 1,542 71 4,936 92
------------------------------------------------------
Net increase in net assets resulting
from operations 1,685 72 5,366 77
------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (11) -- -- --
Net realized gain on investments -- -- (11) --
------------------------------------------------------
Total distributions to shareholders (11) -- (11) --
------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 13,612 2,011 23,213 3,172
Proceeds from reinvestment of
dividends and distributions 11 1 11 --
Payments for shares redeemed (2,413) (517) (1,029) (187)
------------------------------------------------------
Net increase from Trust share
transactions 11,210 1,495 22,195 2,985
------------------------------------------------------
NET INCREASE IN NET ASSETS 12,884 1,567 27,550 3,062
NET ASSETS:
Beginning of year 1,587 20 3,087 25
------------------------------------------------------
End of year $ 14,471 $ 1,587 $ 30,637 $ 3,087
------------------------------------------------------
Accumulated undistributed net
investment income (loss) at end of
year $ 25 $ 4 $ -- $ (2)
------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 1,054 186 2,223 306
Issued on reinvestment of dividends
and distributions 1 -- 1 --
Redeemed (191) (48) (94) (18)
------------------------------------------------------
Net increase in shares outstanding 864 138 2,130 288
------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
26
<PAGE>
- ----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
GUARDIAN TRUST MANHATTAN TRUST PARTNERS TRUST
Year Year Year
Ended Ended Ended
August 31, August 31, August 31,
1995 1994 1995 1994 1995 1994
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 3,810 $ 243 $ (6) $ 9 $ 265 $ 9
Net realized gain (loss) on
investments sold and option
contracts written from
corresponding Portfolio (Note A) 5,025 (140) 977 (47) 3,113 33
Change in net unrealized
appreciation of investments from
corresponding Portfolio (Note A) 88,893 3,437 5,693 280 7,316 198
----------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 97,728 3,540 6,664 242 10,694 240
----------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (2,568) (93) (17) (1) (32) (1)
Net realized gain on investments -- (4) (69) -- (130) (1)
----------------------------------------------------------------------------------
Total distributions to shareholders (2,568) (97) (86) (1) (162) (2)
----------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 628,123 79,636 24,099 12,650 52,448 5,570
Proceeds from reinvestment of
dividends and distributions 2,565 97 86 1 153 2
Payments for shares redeemed (118,547) (7,741) (7,260) (846) (6,512) (1,135)
----------------------------------------------------------------------------------
Net increase from Trust share
transactions 512,141 71,992 16,925 11,805 46,089 4,437
----------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS 607,301 75,435 23,503 12,046 56,621 4,675
NET ASSETS:
Beginning of year 75,765 330 12,078 32 4,713 38
----------------------------------------------------------------------------------
End of year $ 683,066 $ 75,765 $ 35,581 $ 12,078 $ 61,334 $ 4,713
----------------------------------------------------------------------------------
Accumulated undistributed net
investment income (loss) at end of
year $ 1,392 $ 150 $ -- $ 8 $ 241 $ 8
----------------------------------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 52,405 7,399 2,196 1,247 4,960 558
Issued on reinvestment of dividends
and distributions 213 9 9 -- 15 --
Redeemed (9,940) (717) (632) (85) (584) (115)
----------------------------------------------------------------------------------
Net increase in shares outstanding 42,678 6,691 1,573 1,162 4,391 443
----------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Equity Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Focus Trust ("Focus," formerly Neuberger& Berman
Selected Sectors Trust), Neuberger&Berman Genesis Trust ("Genesis"),
Neuberger&Berman Guardian Trust ("Guardian"), Neuberger&Berman Manhattan
Trust ("Manhattan"), and Neuberger&Berman Partners Trust ("Partners")
(collectively, the "Funds") are separate series of Neuberger&Berman Equity
Trust (the "Trust"), a Delaware business trust organized pursuant to a Trust
Instrument dated May 6, 1993. The Trust is registered as a diversified,
open-end management investment company under the Investment Company Act of
1940, as amended, and its shares are registered under the Securities Act of
1933, as amended. The trustees of the Trust changed the name of
Neuberger&Berman Selected Sectors Trust to Neuberger&Berman Focus Trust,
effective January 1, 1995. The trustees of the Trust may establish additional
series or classes of shares without the approval of shareholders.
The assets of each series belong only to that series, and the liabilities
of each series are borne solely by that series and no other.
Each Fund seeks to achieve its investment objective by investing all of
its net investable assets in its corresponding Portfolio of Equity Managers
Trust (the "Portfolio") having the same investment objective and policies as
the Fund. The value of each Fund's investment in its corresponding Portfolio
reflects that Fund's proportionate interest in the net assets of that
Portfolio (1.49%, 21.54%, 14.73%, 5.50%, and 3.77%, for Focus, Genesis,
Guardian, Manhattan, and Partners, respectively, at August 31, 1995). The
performance of each Fund is directly affected by the performance of its
corresponding Portfolio. The financial statements of each Portfolio,
including the schedule of investments, are included elsewhere in this report
and should be read in conjunction with each Fund's financial statements.
2) PORTFOLIO VALUATION: Investments in each Portfolio of Equity Managers Trust
are valued by Equity Managers Trust as indicated in the notes following the
Portfolios' schedule of investments.
3) FEDERAL INCOME TAXES: Each series of the Trust is treated as a separate
entity for Federal income tax purposes. It is the policy of each Fund of the
Trust to continue to qualify as a regulated investment company by complying
with the provisions available to certain investment companies, as defined in
applicable sections of the Internal Revenue Code, and to make distributions
of taxable income (after reduction for any amounts available for Federal
income tax purposes as capital loss
28
<PAGE>
carryforwards) sufficient to relieve it from all, or substantially all,
Federal income taxes. Accordingly, each Fund paid no Federal income taxes and
no provision for Federal income taxes was required.
4) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Each Fund earns income, net of
Portfolio expenses, daily on its investment in its corresponding Portfolio.
Dividends and net realized capital gains, if any, are normally distributed in
December. Guardian generally distributes substantially all of its net
investment income at the end of each calendar quarter. Income dividends and
capital gain distributions to shareholders are recorded on the ex-dividend
date. To the extent that each Fund's net realized capital gains, if any, can
be offset by capital loss carryforwards, it is the policy of each Fund not to
distribute such gains.
Each Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a return of capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes are classified as
distributions in excess of net investment income or accumulated net realized
gains.
5) ORGANIZATION EXPENSES: Expenses incurred by each Fund in connection with its
organization are being amortized by each Fund on a straight-line basis over a
five-year period. At August 31, 1995, the unamortized balance of such
expenses amounted to $29,219, $29,111, $28,473, $29,218, and $29,220, for
Focus, Genesis, Guardian, Manhattan, and Partners, respectively.
6) EXPENSE ALLOCATION: The Funds bear all costs of operations. Expenses incurred
by the Trust with respect to any two or more Funds are allocated in
proportion to the net assets of such Funds, except where another more
appropriate allocation of expenses to each Fund can otherwise be made fairly.
Expenses directly attributable to a Fund are charged to that Fund.
7) OTHER: All net investment income and realized and unrealized capital gains
and losses of each Portfolio are allocated pro rata among its respective
Funds and any other investors in the Portfolio.
NOTE B -- ADMINISTRATION AND DISTRIBUTION FEES AND OTHER TRANSACTIONS
WITH AFFILIATES:
Each Fund retains Neuberger&Berman Management Incorporated ("Management") as
its administrator under an Administration Agreement ("Agreement") dated as of
August 3, 1993. Pursuant to this Agreement each Fund pays Management an
administration fee at the annual rate of .40% of that Fund's average daily net
assets and indirectly pays for investment management services through its
investment in its corresponding Portfolio. (See Note B of Notes to Financial
Statements of the Portfolios.) The Agreement provides that if with respect to
any fiscal year of each Fund, its
29
<PAGE>
total operating expenses plus its pro rata portion of its corresponding
Portfolio's operating expenses (including the fees payable to Management but
excluding interest, taxes, brokerage commissions, and extraordinary expenses)
("Operating Expenses") exceed the most restrictive of the expense limitations
imposed by securities laws of the states in which such Fund's shares are
qualified for sale, the administration fees for that fiscal year will be reduced
by the amount of such excess, provided that Management has no obligation to
reimburse the Fund for any such expenses that exceed the administration fee. The
most restrictive expense limitation to which each Fund is currently subject is
2 1/2% of the first $30 million of average daily net assets, 2% of the next $70
million of average daily net assets, and 1 1/2% of any additional average daily
net assets. No reduction in the administration fee as a result of the state
expense limitation was required for the year ended August 31, 1995.
In addition, Management has voluntarily undertaken until December 31, 1995,
to reimburse each Fund for its Operating Expenses which, in the aggregate,
exceed by more than .10% the expense ratio per annum of a certain other mutual
fund ("Sister Fund") which also invests in the same Portfolio. Prior to January
1, 1995, Management voluntarily reimbursed each Fund for its Operating Expenses
which exceeded the expense ratio of that Sister Fund. For the year ended August
31, 1995, expenses (net of reimbursement) incurred by each Fund amounted to
.96%, 1.42%, .90%, 1.06%, and .92%, of average daily net assets on an annualized
basis for Focus, Genesis, Guardian, Manhattan, and Partners, respectively.
All of the capital stock of Management is owned by individuals who are also
general partners of Neuberger&Berman, L.P. ("Neuberger"), a member firm of The
New York Stock Exchange and the sub-adviser to each Portfolio. Several
individuals who are officers and/or trustees of the Trust are also partners of
Neuberger and/or officers and/or directors of Management.
Each Fund also has a distribution agreement with Management, which receives
no compensation therefor and no commissions for sales or redemptions of shares
of beneficial interest of each Fund.
NOTE C -- INVESTMENT TRANSACTIONS:
During the year ended August 31, 1995, additions and reductions in each
Fund's investment in its corresponding Portfolio were as follows:
<TABLE>
<CAPTION>
ADDITIONS REDUCTIONS
- -----------------------------------------------------------------------------------
<S> <C> <C>
FOCUS $12,398,735 $1,193,307
GENESIS 23,072,624 927,662
GUARDIAN 563,476,433 58,339,854
MANHATTAN 21,749,982 5,023,036
PARTNERS 49,548,689 3,811,487
</TABLE>
30
<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 1993(2)
31, 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
31
<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>
PERIOD FROM
AUGUST 26,
1993(2)
YEAR ENDED AUGUST 31, TO AUGUST
1995 1994 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
32
<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 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 3,
YEAR ENDED AUGUST 1993(2)
31, TO AUGUST
1995 1994 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
33
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Manhattan 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>
PERIOD FROM
AUGUST 30,
YEAR ENDED AUGUST 1993(2)
31, TO AUGUST
1995 1994 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
34
<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>
PERIOD FROM
AUGUST 30,
YEAR ENDED AUGUST 1993(2)
31, TO AUGUST
1995 1994 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
35
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Equity Trust
1) Prior to January 1, 1995, its name was Neuberger&Berman Selected Sectors
Trust.
2) The date investment operations commenced.
3) Not annualized.
4) After reimbursement of expenses by the administrator as described in Note B
of Notes to Financial Statements. Had the administrator not undertaken such
action the annualized ratios to average daily net assets would have been:
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED AUGUST 31, AUGUST 30, 1993
FOCUS 1995 1994 TO AUGUST 31, 1993
--- ----- -----
<S> <C> <C> <C>
Expenses 2.50% 2.50% 2.50%
--- ----- -----
Net Investment Loss (.87%) (.73%) (1.53%)
--- ----- -----
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED AUGUST 31, AUGUST 3, 1993
GUARDIAN 1995 1994 TO AUGUST 31, 1993
--- ----- -----
<S> <C> <C> <C>
Expenses .96% 1.52% 2.50%
--- ----- -----
Net Investment Income (Loss) 1.29% .78% (.69%)
--- ----- -----
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED AUGUST 31, AUGUST 30, 1993
MANHATTAN 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%
--- ----- -----
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED AUGUST 31, AUGUST 30, 1993
PARTNERS 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 the administrator as described in Note B
of Notes to Financial Statements and the waiver of a portion of the management
fee as
36
<PAGE>
described in Note B of Notes to Financial Statements of Neuberger&Berman Genesis
Portfolio. Had Management not undertaken such action the annualized ratios to
average daily net assets would have been:
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED AUGUST 31, AUGUST 26, 1993
GENESIS 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.
+ 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 capital gain distributions, if any, were reinvested.
Results represent past performance and do not guarantee future results.
Investment returns and principal may fluctuate and shares when redeemed may be
worth more or less than original cost. Total return would be lower if
Management had not reimbursed certain expenses. For Genesis Trust, total
return would have been lower if Management had not waived a portion of the
management fee.
37
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Neuberger&Berman Equity Trust and
Shareholders of Neuberger&Berman Manhattan Trust
We have audited the accompanying statement of assets and liabilities of
Neuberger&Berman Manhattan Trust, as of August 31, 1995, and the related
statement of operations for the year then ended, and the statement of changes in
net assets and the financial highlights for each of the periods indicated. These
financial statements and financial highlights are the responsibility of the
Manhattan Trust's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Neuberger&Berman Manhattan Trust as of August 31, 1995, the results of its
operations for the year then ended, and the changes in its net assets and the
financial highlights for each of the periods indicated therein, in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
October 6, 1995
38
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees
Neuberger&Berman Equity Trust and
Shareholders of Neuberger&Berman Focus Trust
Shareholders of Neuberger&Berman Genesis Trust
Shareholders of Neuberger&Berman Guardian Trust and
Shareholders of Neuberger&Berman Partners Trust
We have audited the accompanying statements of assets and liabilities of the
Neuberger&Berman Focus Trust, Neuberger&Berman Genesis Trust, Neuberger&Berman
Guardian Trust, and Neuberger&Berman Partners Trust, four of the series
comprising Neuberger&Berman Equity Trust (the "Trust"), as of August 31, 1995,
and the related statements of operations for the year then ended and the
statements of changes in net assets and financial highlights for each of the
periods indicated therein. These financial statements and financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the above mentioned series of Neuberger&Berman Equity Trust at August 31,
1995, the results of their operations for the year then ended and the changes in
their net assets and financial highlights for each of the periods indicated
therein, in conformity with generally accepted accounting principles.
[SIGNATURE]
Ernst & Young L.L.P.
Boston, Massachusetts
September 29, 1995
39
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Focus Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
HOLDING PERCENTAGE
<C> <S> <C>
1. CITICORP 3.4%
2. Chrysler Corp. 3.3%
3. Neiman-Marcus Group 2.4%
4. Federal National Mortgage Association 2.4%
5. Foundation Health 2.4%
6. Texas Instruments 2.2%
7. Federal Home Loan Mortgage 2.1%
8. Ford Motor 2.1%
9. Travelers Group 2.0%
10. Countrywide Credit Industries 2.0%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
COMMON STOCKS (98.1%)
AUTOMOTIVE (7.2%)
600,000 Chrysler Corp. $ 32,325
650,000 Ford Motor 19,906
380,000 General Motors 17,860
-------------
70,091
-------------
DEFENSE & AEROSPACE (0.7%)
100,000 Boeing Co. 6,375
-------------
FINANCIAL SERVICES (29.8%)
231,700 Allmerica Property
& Casualty 5,590
225,000 American
International
Group 18,141
300,000 Bank of Boston 13,200
678,000 Capital One
Financial 17,628
495,000 CITICORP 32,856
875,000 Countrywide Credit
Industries 19,250
295,000 Dean Witter,
Discover 15,045
315,000 Federal Home Loan
Mortgage 20,239
248,000 Federal National
Mortgage
Association 23,653
200,000 First Fidelity
Bancorporation 13,075
230,700 First USA 10,612
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
220,000 Horace Mann
Educators $ 6,242
250,000 MBNA Corp. 8,875
250,000 Merrill Lynch 14,406
259,000 National Re 8,223
340,000 Penncorp Financial
Group 7,735
340,000 Signet Banking 8,883
526,400 Sphere Drake
Holdings 8,949
410,000 Travelers Group 19,680
88,500 Wells Fargo 16,494
-------------
288,776
-------------
HEALTH CARE (8.2%)
705,000 FHP International 17,449 (2)
680,000 Foundation Health 23,545 (2)
525,000 Humana Inc. 9,581 (2)
320,000 U.S. Healthcare 10,240
250,000 United Healthcare 10,562
272,800 Wellpoint Health
Networks 8,116 (2)
-------------
79,493
-------------
HEAVY INDUSTRY (13.7%)
150,000 Aluminum Co. of
America 8,569
350,000 American Power
Conversion 5,862 (2)
233,600 American Standard 6,453 (2)
200,000 Boise Cascade 8,575
225,000 Caraustar
Industries 4,880
205,000 Cleveland-Cliffs 9,276
500,000 Coltec Industries 7,500 (2)
550,000 LTV Corp. 8,594 (2)
150,000 Mead Corp. 9,206
300,000 Riverwood
International 7,800
785,000 Rollins Truck
Leasing 8,537
675,000 Stone Container 14,681
160,000 Temple-Inland 8,280
176,500 Tenneco Inc. 8,560
170,000 TNT Freightways 3,528
175,000 Willamette
Industries 12,031
-------------
132,332
-------------
MEDIA & ENTERTAINMENT (15.0%)
178,000 A.H. Belo 6,252
430,000 Bell Cablemedia
ADR 8,170 (2)
</TABLE>
40
<PAGE>
August 31, 1995
- --------------------------------------------------------------------------------
Focus Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
156,000 Capital Cities/ABC $ 17,940
865,000 Comcast Corp.
Class A Special 18,489
160,000 Comcast UK Cable
Partners Limited 2,510(2)
325,000 Harcourt General 13,528
400,000 International
CableTel 10,800(2)
450,000 Jones Intercable
Inc. Class A 6,356
120,000 King World
Productions 4,560(2)
200,000 Multimedia Inc. 8,500(2)
275,000 Scandinavian
Broadcasting
System 7,459
350,000 Time Warner 14,744
500,000 United
International
Holdings 8,938(2)
276,600 Vodafone Group ADR 11,583
100,000 Walt Disney 5,613
-------------
145,442
-------------
RETAIL (2.4%)
1,577,800 Neiman-Marcus
Group 23,667
-------------
TECHNOLOGY (19.4%)
275,000 Airtouch
Communications 8,938 (2)
85,000 Applied Materials 8,840 (2,3)
173,200 Arrow Electronics 9,396 (2)
173,000 Avnet, Inc. 8,910
300,000 Compaq Computer 14,325 (2)
225,000 Digital Equipment 9,394 (2)
150,000 EchoStar
Communications 2,400 (2)
100,000 Integrated Device
Technology 5,763
270,000 Intel Corp. 16,571
230,000 Micron Technology 17,681
465,000 National
Semiconductor 13,136 (2)
200,000 Palmer Wireless 4,600 (2)
156,400 Philips
Electronics 7,038
625,000 PriCellular Corp. 7,891 (2)
200,000 QUALCOMM Inc. 9,750 (2)
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
175,000 Rockwell
International $ 7,831
225,000 Seagate Technology 9,956(2)
250,000 Tele-
Communications
International 3,906(2)
286,000 Texas Instruments 21,414
-------------
187,740
-------------
UTILITIES (1.7%)
290,000 AT&T Corp. 16,385
-------------
TOTAL COMMON
STOCKS (COST
$640,701) 950,301
-------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
- ----------
<C> <S> <C>
CONVERTIBLE BONDS (0.1%)
$1,000,000 Scandinavian
Broadcasting
System SA, Cv.
Sub. Deb., 7.25%,
due 8/1/05 (COST
$1,000) 1,087
-------------
U.S. TREASURY SECURITIES (3.1%)
$31,010,000 U.S. Treasury
Bills, 5.33% -
5.61%, due
9/21/95 - 2/8/96
(COST $30,464) 30,471
-------------
SHORT-TERM CORPORATE NOTES (0.2%)
$2,300,000 General Electric
Capital Corp.,
5.60%, due 9/1/95
(COST $2,300) 2,300 (4)
-------------
TOTAL INVESTMENTS
(101.5%) (COST
$674,465) 984,159 (5)
Liabilities, less
cash, receivables
and other assets
[(1.5%)] (14,986 )
-------------
TOTAL NET ASSETS
(100.0%) $ 969,173
-------------
</TABLE>
41
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Genesis Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
HOLDING PERCENTAGE
<C> <S> <C>
1. BMC Industries 4.8%
2. Texas Industries 3.8%
3. DH Technology 3.5%
4. Alumax Inc. 3.2%
5. Coho Energy 2.7%
6. Pioneer Standard Electronics 2.7%
7. W.H. Brady 2.5%
8. Reynolds & Reynolds 2.5%
9. Offshore Logistics 2.4%
10. Houghton Mifflin 2.1%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
COMMON STOCKS (99.9%)
AGRICULTURE (0.9%)
38,500 Delta & Pine Land $ 1,271
-------------
AUTOMOTIVE (3.4%)
47,700 Donaldson Co. 1,210
67,800 Monaco Coach 915 (2)
160,000 TBC Corp. 1,520 (2)
65,000 Thor Industries 1,178
-------------
4,823
-------------
BANKING & FINANCE (4.7%)
63,000 Charter One
Financial 1,898
60,000 First Commerce 1,935
45,250 Mark Twain
Bancshares 1,584
42,777 ONBANCorp, Inc. 1,224
-------------
6,641
-------------
BUILDING, CONSTRUCTION &
FURNISHINGS (5.0%)
50,000 Oakwood Homes 1,600
110,000 Texas Industries 5,431
-------------
7,031
-------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
CHEMICALS (3.2%)
85,000 Lawter International $ 999
182,000 Lilly Industries 2,207
85,400 McWhorter
Technologies 1,270 (2)
-------------
4,476
-------------
CONSUMER PRODUCTS & SERVICES (3.6%)
92,000 Alltrista Corp. 1,840 (2)
253,600 Prime Hospitality 2,726 (2)
24,000 Richfood Holdings 581
-------------
5,147
-------------
DIAGNOSTIC EQUIPMENT (0.6%)
75,700 ADAC Laboratories 871
-------------
DIVERSIFIED (2.9%)
16,000 Marcus Corp. 504
53,500 Pentair, Inc. 2,434
65,200 Raven Industries 1,239
-------------
4,177
-------------
ELECTRONICS (12.6%)
184,200 BMC Industries 6,815
77,200 Dallas Semiconductor 1,834
108,000 Megatest Corp. 2,606 (2)
23,000 Oak Industries 681 (2)
22,500 Orbit Semiconductor 436 (2)
150,000 Pioneer Standard
Electronics 3,863
52,000 SCI Systems 1,612 (2)
-------------
17,847
-------------
ENERGY (8.3%)
188,000 Aquila Gas Pipeline 1,809
800,000 Coho Energy 3,900 (2)
134,200 Cross Timbers Oil 1,963
247,000 Offshore Logistics 3,396 (2)
56,000 Zeigler Coal Holding 707
-------------
11,775
-------------
ENTERTAINMENT (2.0%)
115,000 Bally Entertainment 1,394 (2)
60,300 Casino Data Systems 1,508
-------------
2,902
-------------
</TABLE>
42
<PAGE>
August 31, 1995
- --------------------------------------------------------------------------------
Genesis Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
INDUSTRIAL & COMMERCIAL
PRODUCTS & SERVICES (21.2%)
105,000 Alamo Group $ 1,877
125,000 AMTROL, Inc. 2,094
42,100 Dionex Corp. 2,137 (2)
72,100 Holophane Corp. 1,983 (2)
33,200 Juno Lighting 583
47,000 Kaydon Corp. 1,434
40,000 Libbey Inc. 910
127,400 Material Sciences 2,452 (2)
127,800 NN Ball & Roller 2,428
109,000 Reynolds & Reynolds 3,502
28,000 Roper Industries 952
72,900 U.S. Can 929 (2)
49,100 W.H. Brady 3,584
45,600 Watts Industries 1,129
55,000 Wolverine Tube 2,145 (2)
145,750 Woodhead Industries 2,059
-------------
30,198
-------------
INSURANCE (5.4%)
66,000 American Heritage
Life 1,328
120,000 Gryphon Holdings 1,740 (2)
46,000 Guaranty National 811
150,200 Mid-South Insurance 2,103
40,000 Orion Capital 1,680
-------------
7,662
-------------
MACHINERY & EQUIPMENT (1.6%)
39,600 Allied Products 856
48,300 Graco Inc. 1,479
-------------
2,335
-------------
METALS (7.4%)
135,000 Alumax Inc. 4,607 (2)
29,900 Cleveland-Cliffs 1,353
92,800 Commonwealth
Aluminum 2,250
128,500 Kentucky Electric
Steel 1,269 (2)
105,000 Steel of West
Virginia 971 (2)
-------------
10,450
-------------
MINING (0.5%)
40,000 INDRESCO Inc. 670 (2)
-------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
OFFICE EQUIPMENT (3.5%)
174,400 DH Technology $ 5,014 (2)
-------------
PUBLISHING & BROADCASTING
(5.7%)
86,000 Central Newspapers 2,440
60,000 Houghton Mifflin 2,933
65,000 McClatchy Newspapers 1,454
26,250 Pulitzer Publishing 1,273
-------------
8,100
-------------
RETAILING (1.8%)
135,000 Carr-Gottstein Foods 894 (2)
59,500 Schultz Sav-O Stores 1,733
-------------
2,627
-------------
TEXTILES & APPAREL (1.8%)
51,050 Kellwood Co. 1,072
33,000 St. John Knits 1,460
-------------
2,532
-------------
TRANSPORTATION, SHIPPING &
FREIGHT (3.8%)
52,250 Air Express
International 1,189
120,000 Harmon Industries 2,385
233,600 Maritrans Inc. 1,372
24,300 TNT Freightways 504
-------------
5,450
-------------
TOTAL COMMON STOCKS
(COST $108,413) 141,999
-------------
TOTAL INVESTMENTS
(99.9%) (COST
$108,413) 141,999 (5)
Cash, receivables
and other assets,
less liabilities
(0.1%) 161
-------------
TOTAL NET ASSETS
(100.0%) $ 142,160
-------------
</TABLE>
43
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Guardian Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
HOLDING PERCENTAGE
<C> <S> <C>
1. CITICORP 2.3%
2. Texas Instruments 2.2%
3. Chrysler Corp. 2.1%
4. Micron Technology 1.8%
5. Federal National Mortgage Association 1.8%
6. Foundation Health 1.7%
7. AT&T Corp. 1.6%
8. Capital Cities/ABC 1.5%
9. Comcast Corp. Class A Special 1.4%
10. Intel Corp. 1.3%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (85.5%)
AEROSPACE (0.6%)
400,000 Boeing Co. $ 25,500
------------
AUTOMOTIVE (4.1%)
1,800,000 Chrysler Corp. 96,975
1,446,000 Ford Motor 44,284
992,000 General Motors 46,624
------------
187,883
------------
BANKING (6.2%)
982,600 Bank of Boston 43,235
1,600,000 CITICORP 106,200
680,000 First Fidelity
Bancorporation 44,455
252,000 First Tennessee
National 13,356
880,000 Signet Banking 22,990
307,000 Wells Fargo 57,217
------------
287,453
------------
CONSUMER GOODS & SERVICES
(3.6%)
213,300 Anheuser Busch 12,185
1,082,200 Fruit of the Loom 25,432 (2)
590,000 Kellwood Co. 12,390
437,500 Mattel Inc. 12,687
318,000 Nike, Inc. 29,455
2,205,600 Owens-Illinois 30,051 (2)
1,000,000 PepsiCo, Inc. 45,250
------------
167,450
------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
DRUGS (2.2%)
430,000 Johnson & Johnson $ 29,670
496,000 Pfizer, Inc. 24,490
470,000 Schering-Plough 21,914
500,000 Zeneca Group ADR 25,875
------------
101,949
------------
FINANCIAL SERVICES (11.2%)
212,241 Alleghany Corp. 35,922 (2)
1,409,000 Capital One
Financial 36,634
2,292,800 Countrywide
Credit
Industries 50,441
849,600 Dean Witter,
Discover 43,329
700,000 Federal Home Loan
Mortgage 44,975
880,000 Federal National
Mortgage
Association 83,930
979,800 First USA 45,071
1,100,500 MBNA Corp. 39,068
835,000 Merrill Lynch 48,117
652,300 MGIC Investment 36,529
400,000 Reuters Holdings
ADR 20,950
510,000 Security Capital
Industrial Trust 8,160
1,040,000 Spieker
Properties 22,360
------------
515,486
------------
FOREST PRODUCTS & PAPER (6.2%)
390,000 Caraustar
Industries 8,458
550,000 Georgia-Pacific 49,500
503,700 Mead Corp. 30,914
676,300 Rayonier Inc. 25,953
315,000 Riverwood
International 8,190
2,200,000 Stone Container 47,850
825,000 Temple-Inland 42,694
400,000 Union Camp 22,750
737,000 Willamette
Industries 50,669
------------
286,978
------------
HEALTH CARE (4.6%)
2,230,000 Foundation Health 77,213 (2)
2,515,000 Humana Inc. 45,899 (2)
1,175,000 U.S. Healthcare 37,600
</TABLE>
44
<PAGE>
August 31, 1995
- --------------------------------------------------------------------------------
Guardian Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
600,000 United Healthcare $ 25,350
849,000 Wellpoint Health
Networks 25,258(2)
------------
211,320
------------
HEAVY INDUSTRY (3.3%)
40,000 Asea AB ADR 3,535
11,830 Asea Brown Boveri
(Ordinary
Shares) 12,478
2,765,000 Coltec Industries 41,475 (2)
700,000 Rockwell
International 31,325
872,600 Tenneco Inc. 42,321
450,000 Varity Corp. 20,475 (2)
------------
151,609
------------
INDUSTRIAL GOODS & SERVICES
(1.9%)
1,250,200 American Standard 34,537 (2)
629,100 Eaton Corp. 34,050
515,000 Goodyear Tire &
Rubber 20,600
------------
89,187
------------
INSURANCE (4.6%)
520,000 American
International
Group 41,925
292,500 Chubb Corp. 26,690
930,900 FHP International 23,040 (2)
233,000 General Re 34,630
763,000 National Re 24,225
263,500 Transatlantic
Holdings 18,445
880,000 Travelers Group 42,240
------------
211,195
------------
MEDIA & ENTERTAINMENT (8.2%)
870,000 A.H. Belo 30,559
608,500 Capital
Cities/ABC 69,977
100,000 Comcast Corp.
Class A 2,125
3,000,000 Comcast Corp.
Class A Special 64,125
400,000 Gannett Co. 21,400
173,400 Gaylord
Entertainment 4,812
820,000 Harcourt General 34,132
563,400 Jones Intercable
Inc. Class A 7,958 (2)
194,800 Omnicom Group 12,224
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
401,700 R.R. Donnelley $ 15,265
1,050,000 Time Warner 44,231
750,000 Times Mirror 22,969
682,000 United
International
Holdings 12,191(2)
900,000 Vodafone Group
ADR 37,687
------------
379,655
------------
MISCELLANEOUS (1.0%)
935,000 Cyprus Amax
Minerals 26,180
60,200 Fleetwood
Enterprises 1,181
360,000 Minnesota Mining
& Manufacturing 19,665
------------
47,026
------------
OIL & GAS (5.6%)
258,008 British Petroleum
ADS 23,253
219,200 Coastal Corp. 7,179
491,000 Kerr-McGee 27,005
360,000 MAPCO Inc. 19,215
750,500 Norsk Hydro ADS 31,709
1,100,000 Parker & Parsley
Petroleum 23,512
832,900 Seagull Energy 16,762 (2)
1,500,000 Unocal Corp. 43,687
950,000 Vastar Resources 29,688
600,000 Western Atlas 27,225 (2)
565,500 Zeigler Coal
Holding 7,139
------------
256,374
------------
RETAIL (2.0%)
1,465,000 Fingerhut Cos. 22,891
470,000 Gap Inc. 15,099
29,400 Limited, Inc. 544
510,000 May Department
Stores 21,611
1,252,700 Toys "R" Us 32,570 (2)
------------
92,715
------------
STEEL (0.8%)
553,100 AK Steel Holding 17,630 (2)
600,000 USX-U.S. Steel 19,650
------------
37,280
------------
</TABLE>
45
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman August 31, 1995
- --------------------------------------------------------------------------------
Guardian Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
TECHNOLOGY (14.0%)
465,000 Applied Materials $ 48,360 (2,3)
700,000 Arrow Electronics 37,975 (2)
460,000 Avnet, Inc. 23,690
250,000 Bay Networks 11,875 (2)
1,075,000 Compaq Computer 51,331 (2)
1,150,000 Digital Equipment 48,013 (2)
107,000 Hewlett-Packard 8,560
950,000 Intel Corp. 58,306
1,100,000 Micron Technology 84,563
1,719,900 National
Semiconductor 48,587 (2)
675,000 Perkin-Elmer 23,034
900,000 Philips
Electronics 40,500
1,100,000 Sequent Computer
Systems 25,988 (2)
788,500 Stratus Computer 22,078 (2)
1,360,000 Texas Instruments 101,830
100,000 Xerox Corp. 12,075 (3)
------------
646,765
------------
TELECOMMUNICATIONS (0.8%)
1,100,000 Airtouch
Communications 35,750 (2)
------------
TELEPHONE UTILITIES (1.6%)
1,340,000 AT&T Corp. 75,710
------------
TRANSPORTATION (3.0%)
800,000 Canadian Pacific 13,500
63,400 Conrail Inc. 4,264
524,700 Consolidated
Freightways 13,576
490,000 CSX Corp. 40,425
328,000 Delta Air Lines 24,395 (3)
650,000 Union Pacific 42,575
------------
138,735
------------
TOTAL COMMON
STOCKS (COST
$2,807,276) 3,946,020
------------
PREFERRED STOCKS (0.5%)
250,000 FHP
International,
5% 6,094
250,000 Philippine Long
Distance Cv.,
7%, GDS 14,500
------------
TOTAL PREFERRED
STOCKS (COST
$18,149) 20,594
------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Principal (000's
Amount omitted)
- ----------- ------------
<C> <S> <C>
CONVERTIBLE BONDS (0.9%)
$ 8,750,000 AMR Corp., Cv.
Deb., 6.125%,
due 11/1/24 $ 8,816
7,840,000 IntelCom Group,
Cv. Sub. Notes,
8.00%, due
9/17/98 6,795 (6)
15,000,000 International
CableTel Inc.,
Cv. Sub. Notes,
7.25%, due
4/15/05 17,250
5,649,000 Time Warner, Sub.
Cv. Deb., 8.75%,
due 1/10/15 5,868
------------
TOTAL CONVERTIBLE
BONDS (COST
$35,871) 38,729
------------
U.S. TREASURY SECURITIES
(15.8%)
$725,210,000 U.S. Treasury
Bills, 5.25% -
5.72%, due
9/7/95 - 2/22/96 713,171
15,000,000 U.S. Treasury
Notes, 8.00%,
due 5/15/01 16,331
------------
TOTAL U.S.
TREASURY
SECURITIES (COST
$727,889) 729,502
------------
SHORT-TERM CORPORATE NOTES
(0.0%)
$ 1,500,000 General Electric
Capital Corp.,
5.60%, due
9/1/95 (COST
$1,500) 1,500 (4)
------------
TOTAL INVESTMENTS
(102.7%) (COST
$3,590,685) 4,736,345 (5)
Liabilities, less
cash,
receivables and
other assets
[(2.7%)] (123,149 )
------------
TOTAL NET ASSETS
(100.0%) $ 4,613,196
------------
</TABLE>
46
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman August 31, 1995
- --------------------------------------------------------------------------------
Manhattan Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
HOLDING PERCENTAGE
<C> <S> <C>
1. Micron Technology 3.0%
2. Harrah's Entertainment 2.7%
3. CITICORP 2.7%
4. Wells Fargo 2.6%
5. Texas Instruments 2.3%
6. Motorola, Inc. 2.2%
7. United Healthcare 2.2%
8. GTECH Holdings 2.2%
9. SAP AG 2.0%
10. Intel Corp. 1.9%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
COMMON STOCKS (100.0%)
BUSINESS SERVICES (2.2%)
225,000 Staples Inc. $ 5,766 (2)
230,000 Viking Office
Products 8,280 (2)
-------------
14,046
-------------
CHEMICALS (1.0%)
114,000 Hercules Inc. 6,341
-------------
COMMUNICATIONS (9.9%)
220,000 Airtouch
Communications 7,150 (2)
5,720,000 Australis Media 3,354 (2)
245,000 CIDCO Inc. 8,575 (2)
490,000 Comcast Corp. Class
A Special 10,474
35,000 Mannesmann AG ADR 11,043
330,000 Tele-Communications,
Inc. Class A 6,105 (2)
82,500 Tele-Communications,
Inc. Class A
Liberty Media
Group 2,191 (2)
130,000 Time Warner 5,476
230,000 Vodafone Group ADR 9,631
-------------
63,999
-------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
CONSUMER GOODS & SERVICES (11.8%)
450,000 Authentic Fitness $ 9,956
260,000 CUC International 8,872 (2)
185,000 Franklin Quest 4,278 (2)
310,000 Industrie Natuzzi
ADR 10,850
130,000 Jones Apparel Group 4,517 (2)
250,000 Luxottica S.p.A.
ADR 11,438
249,000 Nine West 10,614 (2)
90,000 Philip Morris 6,716
465,000 Supercuts Inc. 4,447 (2)
150,000 Timberland Co. 4,369 (2)
-------------
76,057
-------------
DRUGS & HEALTH CARE (9.9%)
60,000 Columbia/HCA
Healthcare 2,820
490,000 Coventry Corp. 9,739 (2)
130,000 Foundation Health 4,501 (2)
460,000 Humana Inc. 8,395 (2)
125,000 PacifiCare Health
Systems Class B 7,156 (2)
110,000 R.P. Scherer 4,730 (2)
155,000 Teva Pharmaceutical
ADR 5,871
210,000 U.S. Healthcare 6,720
335,000 United Healthcare 14,154
-------------
64,086
-------------
ENTERTAINMENT (10.7%)
358,000 Argosy Gaming 5,101 (2)
200,000 Circus Circus
Enterprises 6,550 (2)
480,000 GTECH Holdings 13,920 (2)
555,000 Harrah's
Entertainment 17,691 (2)
367,500 Players
International 7,763 (2)
390,000 Promus Hotel 8,044 (2)
440,000 Showboat, Inc. 10,120
-------------
69,189
-------------
FINANCIAL SERVICES (16.1%)
120,000 Bankers Trust New
York 8,265
300,000 Bear Stearns 6,187
430,000 Capital One
Financial 11,180
265,000 CITICORP 17,589
</TABLE>
47
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman August 31, 1995
- --------------------------------------------------------------------------------
Manhattan Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
205,000 Finova Group $ 8,354
225,000 First USA 10,350
250,000 MBNA Corp. 8,875
125,000 Morgan Stanley
Group 10,859
220,000 Signet Banking 5,747
90,000 Wells Fargo 16,774
-------------
104,180
-------------
HOME BUILDERS (0.7%)
368,000 Schuler Homes 4,370 (2)
-------------
INSURANCE (8.5%)
190,000 ACE Ltd. 5,843
67,500 American
International
Group 5,442
155,000 Delphi Financial
Group 2,790 (2)
100,000 EXEL Ltd. 5,500
36,000 General Re 5,351
420,000 Life Partners Group 7,507
380,000 Penncorp Financial
Group 8,645
275,000 Sphere Drake
Holdings 4,675
129,400 Transatlantic
Holdings 9,058
-------------
54,811
-------------
PAPER (1.5%)
565,000 Abitibi-Price 9,464
-------------
RESTAURANTS (6.1%)
320,000 Au Bon Pain 2,880 (2)
350,000 Cheesecake Factory 10,019 (2)
425,000 HomeTown Buffet 5,047 (2)
395,000 IHOP Corp. 10,122 (2)
430,000 Sonic Corp. 8,815 (2)
404,000 Spaghetti Warehouse 2,172 (2,7)
-------------
39,055
-------------
RETAILING (7.9%)
220,000 Circuit City Stores 7,590
265,000 General Nutrition 11,064 (2)
350,000 Lechters Inc. 3,675 (2)
305,000 Price/Costco 5,147 (2)
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
440,000 Revco D.S. $ 8,690(2)
230,000 Rite Aid 6,440
330,000 Sports & Recreation 3,919(2)
295,000 Tops Appliance City 1,327(2)
180,000 Waban Inc. 3,397(2)
-------------
51,249
-------------
TECHNOLOGY (13.5%)
165,000 H & R Block 6,435
200,000 Intel Corp. 12,275
250,000 Micron Technology 19,219
190,000 Motorola, Inc. 14,203
86,000 SAP AG 13,098
340,000 Sensormatic
Electronics 7,140
200,000 Texas Instruments 14,975
-------------
87,345
-------------
TRANSPORTATION (0.2%)
50,000 RailTex Inc. 1,075 (2)
-------------
TOTAL COMMON STOCKS
(COST $488,468) 645,267
-------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
- ----------
<C> <S> <C>
U.S. TREASURY SECURITIES (2.2%)
$14,684,000 U.S. Treasury
Bills, 5.27% -
5.63%, due 9/7/95
- 2/15/96 (COST
$14,491) 14,495
-------------
TOTAL INVESTMENTS
(102.2%) (COST
$502,959) 659,762 (5)
Liabilities, less
cash, receivables
and other assets
[(2.2%)] (14,356 )
-------------
TOTAL NET ASSETS
(100.0%) $ 645,406
-------------
</TABLE>
48
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman August 31, 1995
- --------------------------------------------------------------------------------
Partners Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
HOLDING PERCENTAGE
<C> <S> <C>
1. Progressive Corp. 2.8%
2. EXEL Ltd. 2.7%
3. Georgia-Pacific 2.5%
4. Time Warner 2.5%
5. Comcast Corp. Class A Special 2.4%
6. Revco D.S. 2.4%
7. Texas Instruments 2.3%
8. W.R. Grace 2.1%
9. CITICORP 2.0%
10. Columbia/HCA Healthcare 2.0%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (95.9%)
AEROSPACE (1.6%)
425,000 Lockheed Martin $ 25,872
------------
AUTOMOBILE MANUFACTURING (1.7%)
500,000 Chrysler Corp. 26,938
------------
BANKING & FINANCIAL SERVICES (8.0%)
38,800 Bank of New York 1,688
300,000 BankAmerica Corp. 16,950
700,000 Capital One
Financial 18,200
500,000 CITICORP 33,187
900,000 Countrywide Credit
Industries 19,800
400,000 First USA 18,400
301,000 Household
International 16,894
101,500 Unidanmark A/S 4,633
------------
129,752
------------
BUILDING, CONSTRUCTION &
REFURNISHING (2.8%)
679,600 Lennar Corp. 13,167
1,180,000 USG Corp. 32,008 (2)
------------
45,175
------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
CHEMICALS (3.8%)
445,000 duPont $ 29,092
500,000 W.R. Grace 33,312
------------
62,404
------------
COMMUNICATIONS (0.9%)
350,000 Vodafone Group ADR 14,656
------------
DIVERSIFIED (5.3%)
770,000 Harley-Davidson 21,368
230,800 Kansas City
Southern
Industries 10,155
99,700 Mannesmann AG ADR 31,455
253,000 Monsanto Co. 24,003
------------
86,981
------------
ELECTRONICS (3.0%)
40,000 Advanced Micro
Devices 1,350
509,000 Loral Corp. 27,867
450,000 Raychem Corp. 19,744
------------
48,961
------------
ENTERTAINMENT (7.2%)
570,000 Harrah's
Entertainment 18,169 (2)
300,000 King World
Productions 11,400 (2)
900,000 Mirage Resorts 30,938 (2)
750,300 Royal Caribbean
Cruises 16,225
955,400 Time Warner 40,246
------------
116,978
------------
FOOD & DRUG STORES (2.4%)
1,940,000 Revco D.S. 38,315 (2)
------------
FOOD & TOBACCO (4.3%)
500,000 American Brands 21,000
265,000 Ralston-Purina
Group 13,780
</TABLE>
49
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Partners Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
774,280 RJR Nabisco
Holdings $ 22,067
500,000 Tyson Foods 12,875
------------
69,722
------------
HEALTH CARE (5.3%)
736,700 Alza Corp. 17,497 (2)
350,000 Biogen, Inc. 19,162 (2)
700,000 Columbia/HCA
Healthcare 32,900
925,000 Humana Inc. 16,881 (2)
------------
86,440
------------
INDUSTRIAL GOODS & SERVICES (6.8%)
642,500 AK Steel Holding 20,480 (2)
125,000 Crown Cork & Seal 5,625 (2)
500,000 Goodyear Tire &
Rubber 20,000
1,700,000 LTV Corp. 26,562 (2)
1,425,000 Owens-Illinois 19,416 (2)
400,000 XTRA Corp. 17,700
------------
109,783
------------
INSURANCE (9.0%)
97,800 20th Century
Industries 1,540 (2)
1,091,700 Equitable Cos. 28,111
800,000 EXEL Ltd. 44,000
624,875 Orion Capital 26,245
1,036,500 Progressive Corp. 45,995
------------
145,891
------------
MEDIA (3.1%)
519,700 American Media 3,118
7,107,000 Australis Media 4,168 (2)
1,800,000 Comcast Corp.
Class A Special 38,475
306,000 Videotron Holdings
ADS 4,475 (2)
------------
50,236
------------
MINING (1.0%)
2,800,000 Freeport-McMoRan 15,750
------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
OIL & GAS (6.5%)
525,000 Apache Corp. $ 15,291
400,000 Noble Affiliates 11,050
400,000 Occidental
Petroleum 8,700
635,300 Reading & Bates 7,703 (2)
340,000 Sonat Offshore
Drilling 11,645
462,000 Tejas Gas 22,984 (2)
78,200 Triton Energy 4,145 (2)
450,000 Unocal Corp. 13,106
600,000 YPF Sociedad
Anonima ADS 10,575
------------
105,199
------------
PAPER & FOREST PRODUCTS (5.5%)
555,800 Asia Pacific
Resources
International 4,933 (2)
1,036,100 Fort Howard 16,318 (2)
450,000 Georgia-Pacific 40,500
300,000 Louisiana Pacific 7,125
450,000 Scott Paper 20,869
------------
89,745
------------
PUBLISHING & BROADCASTING (1.2%)
378,500 Gannett Co. 20,250
------------
RAILROADS (0.8%)
200,000 Burlington
Northern 13,850
------------
REAL ESTATE (6.6%)
519,500 Beacon Properties 11,169
415,500 Crescent Real
Estate Equities 12,829
285,000 Glimcher Realty
Trust 5,985
467,300 Hospitality
Properties Trust 11,682
1,941,200 Host Marriott 22,324 (2)
316,700 Irvine Apartment
Communities 5,740
106,900 Security Capital
Pacific Trust 1,978
360,000 Simon Property
Group 8,865
</TABLE>
50
<PAGE>
August 31, 1995
- --------------------------------------------------------------------------------
Partners Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
376,800 Starwood Lodging
Trust $ 10,032(2)
423,100 Vornado Realty
Trust 15,708
------------
106,312
------------
RETAILING (0.2%)
75,000 Harcourt General 3,122
------------
RETAILING & APPAREL (5.0%)
515,000 Ann Taylor Stores 9,978 (2)
1,750,000 Price/Costco 29,531 (2)
400,400 Sears, Roebuck 12,963
736,300 Stop & Shop 17,856 (2)
400,000 Toys "R" Us 10,400 (2)
------------
80,728
------------
TECHNOLOGY (3.9%)
150,000 Compaq Computer 7,163 (2)
500,000 Texas Instruments 37,437
920,000 Western Digital 18,975 (2)
------------
63,575
------------
TOTAL COMMON
STOCKS (COST
$1,296,136) 1,556,635
------------
PREFERRED STOCKS (1.1%)
3,000,000 RJR Nabisco, Ser.
C, Dep. Shares
(COST $20,141) 18,000
------------
WARRANTS (0.0%)
180,000 American Media,
Expire May 1,
1997 (COST $0) 11 (2)
------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Units omitted)
- ---------- ------------
<C> <S> <C>
UNITS (0.0%)
34,000 Therapeutic
Discovery (Each
Unit consists of
1 share of
Therapeutic
Discovery and 1
Alza Corp.
Warrant) (COST
$206) $ 234 (2)
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
- ----------
<C> <S> <C>
CONVERTIBLE BONDS (0.7%)
$9,301,205 Australis Media,
Cv. Deb. 6,293 (2)
4,500,000 Apache Corp., Cv.
Sub. Deb., 6.00%,
due 1/15/02 5,164 (6)
------------
TOTAL CONVERTIBLE
BONDS (COST
$11,683) 11,457
------------
U.S. TREASURY SECURITIES (1.4%)
$22,930,000 U.S. Treasury
Bills, 5.35% -
5.42%, due
9/28/95 - 1/11/96
(COST $22,635) 22,637
------------
SHORT-TERM CORPORATE NOTES (0.5%)
$7,600,000 General Electric
Capital Corp.,
5.60%, due 9/1/95
(COST $7,600) 7,600 (4)
------------
TOTAL INVESTMENTS
(99.6%) (COST
$1,358,401) 1,616,574 (5)
Cash, receivables
and other assets,
less liabilities
(0.4%) 6,952
------------
TOTAL NET ASSETS
(100.0%) $ 1,623,526
------------
</TABLE>
51
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
August 31, 1995
- ----------------------------------------------------------------------
Equity Managers Trust
1) Investment securities of each Portfolio are valued at the latest sales price;
securities for which no sales were reported, unless otherwise noted, are
valued at the mean between the closing bid and asked prices.
2) Non-income producing security.
3) The following securities were held in escrow at August 31, 1995 to cover
outstanding call options written:
<TABLE>
<CAPTION>
SECURITIES AND MARKET VALUE PREMIUM ON MARKET VALUE
NEUBERGER&BERMAN SHARES OPTIONS OF SECURITIES OPTIONS OF OPTIONS
----------- --------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
FOCUS PORTFOLIO 85,000 Applied $ 8,840,000 $ 737,316 $ 2,613,750
Materials
October 1995 @
75
GUARDIAN PORTFOLIO 465,000 Applied $48,360,000 $4,033,554 $14,298,750
Materials
October 1995 @
75
300,000 Delta Air Lines $22,312,500 $2,095,491 $ 1,650,000
October 1995 @
70
100,000 Xerox Corp. $12,075,000 $1,496,950 $ 1,125,000
January 1996 @
115
</TABLE>
4) At cost, which approximates market value.
5) At August 31, 1995, selected Portfolio information on a Federal income tax
basis was as follows:
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
NEUBERGER&BERMAN COST APPRECIATION DEPRECIATION APPRECIATION
--------------- --------------- ------------ ---------------
<S> <C> <C> <C> <C>
FOCUS PORTFOLIO $ 674,859,000 $ 311,258,000 $ 1,958,000 $ 309,300,000
GENESIS PORTFOLIO 108,476,000 35,617,000 2,094,000 33,523,000
GUARDIAN PORTFOLIO 3,591,009,000 1,166,002,000 20,666,000 1,145,336,000
MANHATTAN PORTFOLIO 502,959,000 182,546,000 25,743,000 156,803,000
PARTNERS PORTFOLIO 1,360,859,000 271,322,000 15,607,000 255,715,000
</TABLE>
6) Security exempt from registration under the Securities Act of 1933. These
securities may be resold in transactions exempt from registration, normally
to qualified institutional buyers under Rule 144A. At August 31, 1995, these
securities amounted to $6,795,000 or .1% of net assets for Neuberger&Berman
Guardian Portfolio and $5,164,000 or .3% of net assets for Neuberger&Berman
Partners Portfolio.
7) Affiliated Issuer (see Note E of Notes to Financial Statements).
SEE NOTES TO FINANCIAL STATEMENTS
52
<PAGE>
(This page has been left blank intentionally.)
53
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
FOCUS GENESIS
(000'S OMITTED) PORTFOLIO PORTFOLIO
----------------------------
<S> <C> <C>
ASSETS
Investments in securities, at market value*
(Notes A & E) -- see Schedule of
Investments:
Unaffiliated issuers $ 984,159 $ 141,999
Non-controlled affiliated issuers -- --
----------------------------
984,159 141,999
Cash 96 178
Deferred organization costs (Note A) 25 6
Dividends and interest receivable 946 98
Other assets 11 5
Receivable for securities sold 5,747 389
----------------------------
990,984 142,675
----------------------------
LIABILITIES
Option contracts written, at market value
(Note A) 2,614 --
Payable for collateral on securities loaned
(Note A) 1,125 --
Payable for securities purchased 17,447 385
Payable to investment manager (Note B) 414 91
Accrued expenses 211 39
----------------------------
21,811 515
----------------------------
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL
INTERESTS $ 969,173 $ 142,160
----------------------------
NET ASSETS consist of:
Paid-in capital $ 661,355 $ 108,574
Net unrealized appreciation in value of
investments 307,818 33,586
----------------------------
NET ASSETS $ 969,173 $ 142,160
----------------------------
*Cost of investments:
Unaffiliated issuers $ 674,465 $ 108,413
Non-controlled affiliated issuers -- --
----------------------------
Total cost of investments $ 674,465 $ 108,413
----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
54
<PAGE>
August 31, 1995
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
GUARDIAN MANHATTAN PARTNERS
PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities, at market value*
(Notes A & E) -- see Schedule of
Investments:
Unaffiliated issuers $ 4,736,345 $ 657,590 $ 1,616,574
Non-controlled affiliated issuers -- 2,172 --
-------------------------------------------
4,736,345 659,762 1,616,574
Cash 32 1,047 6
Deferred organization costs (Note A) 75 28 52
Dividends and interest receivable 6,930 241 2,742
Other assets 50 9 29
Receivable for securities sold 19,031 1,592 17,342
-------------------------------------------
4,762,463 662,679 1,636,745
-------------------------------------------
LIABILITIES
Option contracts written, at market value
(Note A) 17,074 -- --
Payable for collateral on securities loaned
(Note A) 68,061 14,254 --
Payable for securities purchased 61,722 2,583 12,439
Payable to investment manager (Note B) 1,692 284 663
Accrued expenses 718 152 117
-------------------------------------------
149,267 17,273 13,219
-------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL
INTERESTS $ 4,613,196 $ 645,406 $ 1,623,526
-------------------------------------------
NET ASSETS consist of:
Paid-in capital $ 3,476,984 $ 488,603 $ 1,365,353
Net unrealized appreciation in value of
investments 1,136,212 156,803 258,173
-------------------------------------------
NET ASSETS $ 4,613,196 $ 645,406 $ 1,623,526
-------------------------------------------
*Cost of investments:
Unaffiliated issuers $ 3,590,685 $ 497,442 $ 1,358,401
Non-controlled affiliated issuers -- 5,517 --
-------------------------------------------
Total cost of investments $ 3,590,685 $ 502,959 $ 1,358,401
-------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
55
<PAGE>
STATEMENTS OF OPERATIONS
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
FOCUS GENESIS
(000'S OMITTED) PORTFOLIO PORTFOLIO
------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividend income -- unaffiliated issuers $ 10,468 $ 1,508
Interest income 1,097 77
Foreign taxes withheld (Note A) (14 ) --
------------------------
Total income 11,551 1,585
------------------------
Expenses:
Investment management fee (Note B) 3,758 1,135
Accounting fees 10 10
Amortization of deferred organization and
initial offering expenses (Note A) 9 2
Auditing fees 42 23
Custodian fees 172 79
Insurance expense 29 6
Legal fees 12 12
Trustees' fees and expenses 22 8
Miscellaneous 1 20
------------------------
Total expenses 4,055 1,295
Fee waived by the investment manager (Note
B) -- (45 )
------------------------
Total net expenses 4,055 1,250
------------------------
Net investment income 7,496 335
------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
OPTION CONTRACTS WRITTEN
Net realized gain on investments sold in
unaffiliated issuers 50,502 6,666
Net realized gain on option contracts written
(Note A) 230 --
Change in net unrealized appreciation of
investments 139,750 17,448
------------------------
Net gain on investments and option
contracts written 190,482 24,114
------------------------
Net increase in net assets resulting from
operations $ 197,978 $ 24,449
------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
56
<PAGE>
For the Year Ended August 31, 1995
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
GUARDIAN MANHATTAN PARTNERS
PORTFOLIO PORTFOLIO PORTFOLIO
---------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividend income -- unaffiliated issuers $ 51,872 $ 5,058 $ 20,126
Interest income 17,135 344 2,770
Foreign taxes withheld (Note A) (107 ) (66) (63 )
---------------------------------------------
Total income 68,900 5,336 22,833
---------------------------------------------
Expenses:
Investment management fee (Note B) 14,274 2,832 6,830
Accounting fees 10 10 10
Amortization of deferred organization and
initial offering expenses (Note A) 26 10 18
Auditing fees 48 46 44
Custodian fees 533 178 292
Insurance expense 109 23 60
Legal fees 18 12 12
Trustees' fees and expenses 88 19 42
Miscellaneous 4 -- 1
---------------------------------------------
Total expenses 15,110 3,130 7,309
Fee waived by the investment manager (Note
B) -- -- --
---------------------------------------------
Total net expenses 15,110 3,130 7,309
---------------------------------------------
Net investment income 53,790 2,206 15,524
---------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
OPTION CONTRACTS WRITTEN
Net realized gain on investments sold in
unaffiliated issuers 124,066 44,742 165,254
Net realized gain on option contracts written
(Note A) 328 -- --
Change in net unrealized appreciation of
investments 627,968 85,917 109,257
---------------------------------------------
Net gain on investments and option
contracts written 752,362 130,659 274,511
---------------------------------------------
Net increase in net assets resulting from
operations $ 806,152 $ 132,865 $ 290,035
---------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
57
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
FOCUS PORTFOLIO GENESIS PORTFOLIO
Year Year
Ended Ended
August 31, August 31,
(000'S OMITTED) 1995 1994 1995 1994
------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 7,496 $ 6,947 $ 335 $ 229
Net realized gain on investments
sold and option contracts written 50,732 38,653 6,666 5,489
Change in net unrealized
appreciation of investments 139,750 14,924 17,448 856
------------------------------------------------------
Net increase in net assets resulting
from operations 197,978 60,524 24,449 6,574
------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 157,842 74,559 34,636 38,613
Reductions (31,658) (64,027) (55,494) (25,172)
------------------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests 126,184 10,532 (20,858) 13,441
------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 324,162 71,056 3,591 20,015
NET ASSETS:
Beginning of year 645,011 573,955 138,569 118,554
------------------------------------------------------
End of year $ 969,173 $ 645,011 $ 142,160 $ 138,569
------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
58
<PAGE>
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
GUARDIAN PORTFOLIO MANHATTAN PORTFOLIO PARTNERS PORTFOLIO
Year Year Year
Ended Ended Ended
August 31, August 31, August 31,
1995 1994 1995 1994 1995 1994
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 53,790 $ 34,374 $ 2,206 $ 2,739 $ 15,524 $ 9,370
Net realized gain on investments
sold and option contracts written 124,394 26,444 44,742 25,341 165,254 87,647
Change in net unrealized
appreciation of investments 627,968 136,195 85,917 (9,119) 109,257 (24,098)
----------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 806,152 197,013 132,865 18,961 290,035 72,919
----------------------------------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 1,413,464 643,507 75,821 64,429 100,895 145,614
Reductions (86,756) (137,817) (85,015) (98,489) (107,688) (60,347)
----------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests 1,326,708 505,690 (9,194) (34,060) (6,793) 85,267
----------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 2,132,860 702,703 123,671 (15,099) 283,242 158,186
NET ASSETS:
Beginning of year 2,480,336 1,777,633 521,735 536,834 1,340,284 1,182,098
----------------------------------------------------------------------------------
End of year $ 4,613,196 $ 2,480,336 $ 645,406 $ 521,735 $ 1,623,526 $ 1,340,284
----------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
59
<PAGE>
NOTES TO FINANCIAL STATEMENTS
August 31, 1995
- ----------------------------------------------------------------------
Equity Managers Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Focus Portfolio ("Focus," formerly Neuberger&
Berman Selected Sectors Portfolio), Neuberger&Berman Genesis Portfolio
("Genesis"), Neuberger&Berman Guardian Portfolio ("Guardian"), Neuberger&
Berman Manhattan Portfolio ("Manhattan"), and Neuberger&Berman Partners
Portfolio ("Partners") (collectively, the "Portfolios") are separate series
of Equity Managers Trust ("Managers Trust"), a New York common law trust
organized as of December 1, 1992. Managers Trust is registered as a
diversified, open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"). The trustees of Managers
Trust changed the name of Neuberger&Berman Selected Sectors Portfolio to
Neuberger&Berman Focus Portfolio, effective January 1, 1995. Other regulated
investment companies sponsored by Neuberger&Berman Management Incorporated
("Management"), whose financial statements are not presented herein, also
invest in Managers Trust.
The assets of each series belong only to that series, and the liabilities
of each series are borne solely by that series and no other.
2) PORTFOLIO VALUATION: Investments are valued as indicated in the notes
following the Portfolios' schedule of investments.
3) FOREIGN CURRENCY TRANSLATION: The accounting records of the Portfolios are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars at the current rate of exchange of such currency against the U.S.
dollar to determine the value of investments, other assets and liabilities.
Purchase and sale prices of securities, and income and expenses are
translated into U.S. dollars at the prevailing rate of exchange on the
respective dates of such transactions.
4) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the
ex-dividend date and interest income, including accretion of discount on
short-term investments (adjusted for original issue discount, where
applicable), is recorded on the accrual basis. Realized gains and losses from
securities transactions are recorded on the basis of identified cost.
5) FEDERAL INCOME TAXES: Managers Trust intends to comply with the requirements
of the Internal Revenue Code of 1986, as amended. Each Portfolio of Managers
Trust also intends to conduct its operations so that each of its investors
will be able to qualify as a regulated investment company. Each Portfolio
will be
treated as a partnership for Federal income tax purposes and is therefore not
subject to Federal income tax.
6) FOREIGN TAXES: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
60
<PAGE>
7) ORGANIZATION EXPENSES: Expenses incurred by each Portfolio in connection with
its organization are being amortized by each Portfolio on a straight-line
basis over a five-year period. At August 31, 1995, the unamortized balance of
such expenses amounted to $25,483, $5,616, $74,763, $28,451, and $51,827, for
Focus, Genesis, Guardian, Manhattan, and Partners, respectively.
8) EXPENSE ALLOCATION: The Portfolios bear all costs of operations. Expenses
incurred by Managers Trust with respect to any two or more Portfolios are
allocated in proportion to the net assets of such Portfolios, except where
another more appropriate allocation of expenses to each Portfolio can
otherwise be made fairly. Expenses directly attributable to a Portfolio are
charged to that Portfolio.
9) CALL OPTIONS: Premiums received by each Portfolio upon writing a covered call
option are recorded in the liability section of each Portfolio's Statement of
Assets and Liabilities and are subsequently adjusted to the current market
value. When an option expires, is exercised or is closed, the Portfolio
realizes a gain or loss and the liability is eliminated. A Portfolio
continues to bear the risk of a decline in the price of the security during
the period, although any potential loss during the period would be reduced by
the amount of the option premium received. In general, written call options
may serve as a partial hedge against decreases in value in the underlying
securities to the extent of the premium received. All securities covering
outstanding options are held in escrow by the custodian bank.
Summary of Option Transactions for the Year Ended August 31, 1995:
<TABLE>
<CAPTION>
VALUE WHEN
FOCUS NUMBER WRITTEN
- --------------------------------------------------------------------------------------
<S> <C> <C>
CONTRACTS OUTSTANDING 8/31/94 1,300 $ 229,822
CONTRACTS WRITTEN 850 737,316
CONTRACTS EXPIRED (1,300) (229,822)
CONTRACTS EXERCISED 0 0
CONTRACTS CLOSED 0 0
-----------------------
CONTRACTS OUTSTANDING 8/31/95 850 $ 737,316
-----------------------
</TABLE>
<TABLE>
<CAPTION>
VALUE WHEN
GUARDIAN NUMBER WRITTEN
- --------------------------------------------------------------------------------------
<S> <C> <C>
CONTRACTS OUTSTANDING 8/31/94 0 $ 0
CONTRACTS WRITTEN 14,900 9,316,065
CONTRACTS EXPIRED (1,500) (145,495)
CONTRACTS EXERCISED (2,800) (1,191,304)
CONTRACTS CLOSED (1,950) (353,271)
-----------------------
CONTRACTS OUTSTANDING 8/31/95 8,650 $7,625,995
-----------------------
</TABLE>
10) SECURITY LENDING: Portfolio securities loans involve certain risks in the
event a borrower should fail financially, including delays or inability to
recover the lent securities or foreclose against the collateral. The
investment manager, under the supervision of Managers Trust's Board of
Trustees, monitors the creditworthiness
61
<PAGE>
of the parties to whom the Portfolios make security loans. The Portfolios
will not lend securities on which covered call options have been written, or
lend securities on terms which would prevent each of their investors from
qualifying as a regulated investment company. Portfolio securities loans to
Neuberger&Berman, L.P. ("Neuberger"), the Portfolios' principal broker, are
made in accordance with an exemptive order issued by the Securities and
Exchange Commission under the 1940 Act. The Portfolios receive cash as
collateral against the lent securities, which must be maintained at not less
than 100% of the market value of the lent securities during the period of the
loan. The Portfolios receive income earned on the lent securities and a
portion of the income earned on the cash collateral. During the year ended
August 31, 1995, Focus, Guardian, Manhattan, and Partners lent securities to
Neuberger. At August 31, 1995, cash collateral received by Focus, Guardian,
and Manhattan was equal to or in excess of 100% of the market value of the
loaned securities.
NOTE B -- MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
Each Portfolio retains Management as its investment manager under a
Management Agreement ("Agreement") dated as of August 2, 1993. For such
investment management services, each Portfolio (except Genesis) pays 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. Genesis pays
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.
Management has voluntarily agreed to waive a portion of the management fee borne
directly by Genesis and indirectly by Neuberger&Berman Genesis Trust to reduce
the fee by 0.10% per annum of average daily net assets of Genesis, effective May
1, 1995.
All of the capital stock of Management is owned by individuals who are also
general partners of Neuberger, a member firm of The New York Stock Exchange and
the sub-adviser to each Portfolio. Neuberger is retained by Management to
furnish it with investment recommendations and research information without cost
to each Portfolio. Several individuals who are officers and/or trustees of
Managers Trust are also partners of Neuberger and/or officers and/or directors
of Management.
62
<PAGE>
NOTE C -- SECURITIES TRANSACTIONS:
During the year ended August 31, 1995, there were purchase and sale
transactions (excluding short-term securities and option contracts written) as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
FOCUS $ 384,209,095 $ 257,077,856
GENESIS 48,526,111 66,075,856
GUARDIAN 1,670,608,244 761,251,870
MANHATTAN 234,114,169 240,387,171
PARTNERS 1,336,254,587 1,308,885,496
</TABLE>
During the year ended August 31, 1995, there were brokerage commissions on
securities paid to Neuberger and other brokers as follows:
<TABLE>
<CAPTION>
OTHER
NEUBERGER BROKERS TOTAL
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FOCUS $ 617,957 $ 413,288 $ 1,031,245
GENESIS 118,014 81,704 199,718
GUARDIAN 2,521,523 1,229,683 3,751,206
MANHATTAN 436,568 218,414 654,982
PARTNERS 3,092,789 1,515,367 4,608,156
</TABLE>
In addition, Neuberger's share of the total interest income earned for the
year ended August 31, 1995, from the collateralization of securities loaned to
or through Neuberger was $291,207, $1,252,190, $270,594, and $48,736, for Focus,
Guardian, Manhattan, and Partners, respectively.
NOTE D -- LINE OF CREDIT:
At August 31, 1995, Genesis had an unsecured $10,000,000 bank line of credit
with Morgan Guaranty Trust Company of New York ("Morgan") to be used only as a
temporary measure for extraordinary or emergency purposes. Borrowings under this
agreement bear interest at a rate based on the Morgan Bid Rate Program. For this
line
of credit, Genesis has been assessed a facility fee of .2% of the available line
of credit. No compensating balances are required. There were no loans
outstanding pursuant to this line of credit at August 31, 1995, nor has Genesis
utilized the line of credit at anytime to date.
NOTE E -- MANHATTAN PORTFOLIO -- INVESTMENTS IN NON-CONTROLLED AFFILIATES*:
<TABLE>
<CAPTION>
BALANCE OF BALANCE OF
SHARES HELD SHARES HELD VALUE
AUGUST 31, GROSS PURCHASES GROSS SALES AUGUST 31, AUGUST 31,
NAME OF ISSUER: 1994 AND ADDITIONS AND REDUCTIONS 1995 1995
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Spaghetti Warehouse 404,000 0 0 404,000 $2,172,000
</TABLE>
*Affiliated issuers, as defined in the 1940 Act, include issuers in which the
Portfolio held 5% or more of the outstanding voting securities.
63
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
FOCUS GENESIS
PORTFOLIO PORTFOLIO
PERIOD FROM PERIOD FROM
AUGUST 2, AUGUST 2,
1993 1993
YEAR ENDED TO AUGUST YEAR ENDED TO AUGUST
AUGUST 31, 31, AUGUST 31, 31,
1995 1994 1993 1995 1994 1993
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .57% .58% .58%(1) .94%(2) .98% 1.07%(1)
-------------------------------------------------------------------
Net Investment Income 1.05% 1.16% 1.46%(1) .25%(2) .18% .37%(1)
-------------------------------------------------------------------
Portfolio Turnover Rate 36% 52% 4% 37% 63% 3%
-------------------------------------------------------------------
Net Assets, End of Year (in
millions) $969.2 $645.0 $574.0 $142.2 $138.6 $118.6
-------------------------------------------------------------------
</TABLE>
1) Annualized.
2) Had Management not waived a portion of the management fee, the annualized
ratios to average daily net assets would have been:
<TABLE>
<CAPTION>
Year Ended
August 31,
GENESIS 1995
- ------------------------------------
<S> <C>
Expenses .97%
Net Investment
Income .22%
</TABLE>
64
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
GUARDIAN MANHATTAN
PORTFOLIO PORTFOLIO
PERIOD
PERIOD FROM
FROM AUGUST
AUGUST 2, 2, 1993
1993 TO
YEAR ENDED AUGUST TO AUGUST YEAR ENDED AUGUST
31, 31, AUGUST 31, 31,
1995 1994 1993 1995 1994 1993
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .48% .50% .51%(1) .59% .59% .59%(1)
-------------------------------------------------------------
Net Investment Income 1.72% 1.66% 2.45%(1) .42% .53% .55%(1)
-------------------------------------------------------------
Portfolio Turnover Rate 26% 24% 3% 44% 50% 3%
-------------------------------------------------------------
Net Assets, End of Year (in
millions) $4,613.2 $2,480.3 $1,777.6 $645.4 $521.7 $536.8
-------------------------------------------------------------
</TABLE>
1) Annualized.
65
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
PARTNERS
PORTFOLIO
PERIOD FROM
AUGUST 2,
1993
TO AUGUST
YEAR ENDED AUGUST 31, 31,
1995 1994 1993
------------------------------------
<S> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .53% .54% .54%(1)
------------------------------------
Net Investment Income 1.13% .75% 1.19%(1)
------------------------------------
Portfolio Turnover Rate 98% 75% 8%
------------------------------------
Net Assets, End of Year (in
millions) $1,623.5 $1,340.3 $1,182.1
------------------------------------
</TABLE>
1) Annualized.
66
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Equity Managers Trust and
Owners of Beneficial Interest of
Neuberger&Berman Manhattan Portfolio:
We have audited the accompanying statement of assets and liabilities of
Neuberger&Berman Manhattan Portfolio, including the schedule of investments, as
of August 31, 1995, and the related statement of operations for the year then
ended, and the statement of changes in net assets and the financial highlights
for each of the periods indicated. These financial statements and financial
highlights are the responsibility of the Portfolio's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Neuberger&Berman Manhattan Portfolio as of August 31, 1995, the results of its
operations for the year then ended, and the changes in its net assets and the
financial highlights for each of the periods indicated, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
October 6, 1995
67
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees
Equity Managers Trust and
Owners of Beneficial Interest of
Neuberger&Berman Focus Portfolio
Neuberger&Berman Genesis Portfolio
Neuberger&Berman Guardian Portfolio and
Neuberger&Berman Partners Portfolio
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of the Neuberger&Berman Focus Portfolio,
Neuberger&Berman Genesis Portfolio, Neuberger&Berman Guardian Portfolio, and
Neuberger&Berman Partners Portfolio, four of the series comprising Equity
Managers Trust (the "Trust"), as of August 31, 1995, the related statements of
operations for the year then ended and the statements of changes in net assets
and financial highlights for each of the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1995, by correspondence with the custodian and brokers or other
appropriate auditing procedures where replies from brokers were not received. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the above mentioned series of Equity Managers Trust at August 31, 1995, the
results of their operations for the year then ended and the changes in their net
assets and financial highlights for each of the periods indicated therein, in
conformity with generally accepted accounting principles.
[SIGNATURE]
Boston, Massachusetts Ernst & Young L.L.P.
September 29, 1995
68
<PAGE>
DIRECTORY
INVESTMENT MANAGER, ADMINISTRATOR
AND DISTRIBUTOR
Neuberger&Berman Management Incorporated
605 Third Avenue 2nd Floor
New York, NY 10158-0180
800-877-9700
Institutional Services 800-366-6264
SUB-ADVISER
Neuberger&Berman, L.P.
605 Third Avenue
New York, NY 10158-3698
CUSTODIAN AND SHAREHOLDER
SERVICING AGENT
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Address correspondence to:
Neuberger&Berman Funds
Institutional Services
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 M Street, NW
Washington, DC 20036-5891
INDEPENDENT ACCOUNTANTS/AUDITORS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
Notice to Shareholders (Unaudited)
For Neuberger&Berman Guardian Trust 46% of the dividends distributed during
the fiscal year ended August 31, 1995 qualifies for the dividend received
deduction for corporate shareholders. The Fund will notify shareholders in
January 1996 of the applicable percentage of qualifying dividends for corporate
shareholders for use in preparing 1995 income tax returns.
Neuberger&Berman Management Inc., Neuberger&Berman Focus Trust, Neuberger&Berman
Genesis Trust, Neuberger&Berman Guardian Trust, Neuberger&Berman Manhattan
Trust, and Neuberger&Berman Partners Trust are service marks of Neuberger&Berman
Management Inc.
- -C- 1995 Neuberger&Berman Management Inc.
69
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OFFICERS AND TRUSTEES
Stanley Egener
CHAIRMAN OF THE BOARD
AND TRUSTEE
Lawrence Zicklin
PRESIDENT AND TRUSTEE
Faith Colish
TRUSTEE
Donald M. Cox
TRUSTEE
Alan R. Gruber
TRUSTEE
Howard A. Mileaf
TRUSTEE
Edward I. O'Brien
TRUSTEE
John T. Patterson, Jr.
TRUSTEE
John P. Rosenthal
TRUSTEE
Cornelius T. Ryan
TRUSTEE
Gustave H. Shubert
TRUSTEE
Daniel J. Sullivan
VICE PRESIDENT
Michael J. Weiner
VICE PRESIDENT
Richard Russell
TREASURER
Claudia A. Brandon
SECRETARY
Stacy Cooper-Shugrue
ASSISTANT SECRETARY
C. Carl Randolph
ASSISTANT SECRETARY
70
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Neuberger&Berman Management Inc.
605 THIRD AVENUE 2ND FLOOR
NEW YORK, NY 10158-0180
SHAREHOLDER SERVICES
800.877.9700
INSTITUTIONAL SERVICES
800.366.6264
Statistics and projections in this report are derived from sources
deemed to be reliable but cannot be regarded as a representation of
future results of the Funds. This report is prepared for the general infor-
mation of shareholders and is not an offer of shares of the Funds.
Shares are sold only through the currently effective prospectus, which
must precede or accompany this report.
PRINTED ON RECYCLED PAPER
(recycle logo) NBETAR020895
WITH SOY BASED INKS
<PAGE>
