NEUBERGER&BERMAN
EQUITY TRUST
SUPPLEMENT TO THE PROSPECTUS DATED DECEMBER 15, 1997, AS AMENDED MAY
14, 1998
I. THE SECTION WHICH PROVIDES A SUMMARY OF THE FEATURES OF NEUBERGER&BERMAN
FOCUS TRUST (PAGE 4) IS REVISED TO READ AS FOLLOWS:
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FOCUS TRUST Value fund, more concentrated Invests principally in
portfolio than Guardian. common stocks selected
May invest without regard from 13 multi-industry
to market capitalization. sectors of the economy.
To maximize potential
return, the Portfolio
normally makes at least
90% of its investments in
not more than six sectors
of the economy believed by
the portfolio manager to
be undervalued.
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II. THE FOLLOWING DISCLOSURE REGARDING NEUBERGER&BERMAN FOCUS PORTFOLIO IS ADDED
TO PAGE 19 OF THE PROSPECTUS:
INVESTMENT PROGRAMS - NEUBERGER&BERMAN FOCUS PORTFOLIO
The Portfolio may invest in stocks of companies of any market
capitalization. For more information, see "Special Considerations of Small- and
Mid-Cap Company Stocks" on page 25.
III. THE FOLLOWING DISCLOSURE REGARDING NEUBERGER&BERMAN GUARDIAN PORTFOLIO IS
ADDED TO PAGE 21 OF THE PROSPECTUS:
INVESTMENT PROGRAMS - NEUBERGER&BERMAN GUARDIAN PORTFOLIO
For purposes of managing cash flow, the Portfolio at times may invest in
financial instruments, the return on which is intended to approximate the
performance of a recognized securities index, such as the S&P "500" Index. These
may include options and futures on securities indices, options on such futures,
and instruments structured as investment companies.
IV. THE PARAGRAPHS REGARDING THE PORTFOLIO MANAGEMENT OF NEUBERGER&BERMAN FOCUS
PORTFOLIO, NEUBERGER&BERMAN GUARDIAN PORTFOLIO AND NEUBERGER&BERMAN PARTNERS
PORTFOLIO IN THE SECTION "MANAGEMENT AND ADMINISTRATION - INVESTMENT MANAGER,
ADMINISTRATOR, DISTRIBUTOR, AND SUB-ADVISER" (PAGES 35-36) ARE
REVISED TO READ AS FOLLOWS:
<PAGE>
MANAGEMENT AND ADMINISTRATION
INVESTMENT MANAGER, ADMINISTRATOR, DISTRIBUTOR AND SUB-ADVISER
Neuberger&Berman FOCUS Portfolio -- Kent C. Simons is manager of the
Portfolio. Mr. Simons is Vice President of N&B Management and a principal of
Neuberger&Berman. Mr. Simons has had responsibility for Neuberger&Berman
FOCUS Portfolio since 1988.
Neuberger&Berman GUARDIAN Portfolio -- Kevin L. Risen and Rick White
are co-managers of the Portfolio. Mr. Risen is a Vice President of N&B
Management and a principal of Neuberger&Berman. Mr. Risen has had
responsibility for Neuberger&Berman GUARDIAN Portfolio since 1996, and during
the prior year, he was a portfolio manager for Neuberger&Berman. He was a
research analyst at Neuberger&Berman from 1992 to 1995. Mr. White is a Vice
President of N&B Management. He has had responsibility for Neuberger&Berman
GUARDIAN Portfolio since September 1998. From 1989 to September 1998, he was
a portfolio manager for a mutual fund managed by a prominent investment
adviser.
Neuberger&Berman PARTNERS Portfolio -- Michael M. Kassen, Robert I.
Gendelman, and S. Basu Mullick are co-managers of the Portfolio. Mr. Kassen,
Mr. Gendelman, and Mr. Mullick are Vice Presidents of N&B Management. Mr.
Kassen and Mr. Gendelman are principals of Neuberger&Berman. Mr. Kassen, Mr.
Gendelman and Mr. Mullick have had responsibility for Neuberger&Berman
PARTNERS Portfolio since June 1990, October 1994, and October 1998,
respectively. Mr. Kassen has been an employee of N&B Management since 1990.
Mr. Gendelman was a portfolio manager for another mutual fund manager from
1992 to 1993. Mr. Mullick was a portfolio manager for a prominent investment
adviser from 1993 to 1998.
V. THE FOLLOWING PARAGRAPHS ARE ADDED TO THE SECTION "DESCRIPTION OF
INVESTMENTS" ON PAGE 43 OF THE PROSPECTUS:
DESCRIPTION OF INVESTMENTS
OTHER INVESTMENT COMPANIES. Neuberger&Berman GUARDIAN Portfolio at times
may invest in instruments structured as investment companies to gain exposure to
the performance of a recognized securities index, such as the S&P "500" Index.
As a shareholder in an investment company, the Portfolio would bear its pro rata
share of that investment company's expenses. Investment in other funds may
involve the payment of substantial premiums above the value of such issuer's
portfolio securities. Neuberger&Berman GUARDIAN Portfolio does not intend to
invest in such funds unless, in the judgment of N&B Management, the potential
benefits of such investment justify the payment of any applicable premium or
sales charge.
The Portfolio's investment in such securities is limited to (i) 3% of the
total voting stock of any one investment company, (ii) 5% of the Portfolio's
total assets with respect to any one investment company and (iii) 10% of the
Portfolio's total assets in the aggregate.
<PAGE>
GENERAL RISKS OF OPTIONS, FUTURES AND FORWARD CONTRACTS. Neuberger &
Berman GUARDIAN Portfolio may use options and futures on securities indices, and
options on such futures, to increase its exposure to the broad equity markets.
Such contracts are often closed out prior to the delivery date. The primary
risks in using put and call options, futures contracts, and options on futures
contracts ("Financial Instruments") are (1) imperfect correlation or no
correlation between changes in market value of the securities index and the
prices of the Financial Instruments; (2) possible lack of a liquid secondary
market for Financial Instruments and the resulting inability to close them out
when desired; and (3) the fact that the use of Financial Instruments is a highly
specialized activity that involves skills, techniques, and risks (including
price volatility and a high degree of leverage) different from those associated
with selection of portfolio securities. When the Portfolio uses Financial
Instruments, it will place cash or appropriate liquid securities in a segregated
account or will "cover" its position, to the extent required by SEC staff
policy. Another risk of Financial Instruments is the possible inability of a
Portfolio to purchase or sell a security at a time that would otherwise be
favorable for it to do so, or the possible need for a Portfolio to sell a
security at a disadvantageous time, due to its need to maintain cover or to
segregate securities in connection with its use of Financial Instruments. Losses
that may arise from certain futures transactions are potentially unlimited.
The date of this Supplement is October 1, 1998.
<PAGE>
NEUBERGER&BERMAN
EQUITY TRUST
SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 15, 1997
I. THE FINAL PARAGRAPH IN THE SECTION "INVESTMENT INFORMATION - INVESTMENT
POLICIES AND LIMITATIONS" (PAGE 5) IS REVISED TO READ AS FOLLOWS:
Each Portfolio (except Neuberger&Berman GUARDIAN and Neuberger&Berman
SOCIALLY RESPONSIVE Portfolios) as an operating policy, does not intend to
invest in futures contracts and options thereon during the coming year. In
addition, although the Portfolios do not have policies limiting their investment
in warrants, no Portfolio currently intends to invest in warrants unless
acquired in units or attached to securities.
II. THE SECTION "FUTURES CONTRACTS AND OPTIONS THEREON" (PAGE 19) IS REVISED BY
ADDING THE FOLLOWING:
Neuberger&Berman GUARDIAN Portfolio may purchase and sell stock index
futures contracts, and may purchase and sell options thereon. For purposes of
managing cash flow, the managers may use such futures and options to increase
the Portfolio's exposure to the performance of a recognized securities index,
such as the S&P "500" Index.
III. THE SECTION HEADING "FUTURES, OPTIONS ON FUTURES, OPTIONS ON SECURITIES,
FORWARD CONTRACTS, AND OPTIONS ON FOREIGN CURRENCIES (COLLECTIVELY, `HEDGING
INSTRUMENTS') ON PAGE 19 IS REVISED TO READ "FUTURES, OPTIONS ON FUTURES,
OPTIONS ON SECURITIES AND INDICES, FORWARD CONTRACTS, AND OPTIONS ON FOREIGN
CURRENCIES (COLLECTIVELY, `FINANCIAL INSTRUMENTS') AND IS REVISED BY ADDING THE
FOLLOWING:
PUT AND CALL OPTIONS ON SECURITIES INDICES (NEUBERGER&BERMAN GUARDIAN
PORTFOLIO).
For purposes of managing cash flow, Neuberger & Berman GUARDIAN Portfolio
may purchase put and call options on securities indices to increase the
Portfolio's exposure to the performance of a recognize securities index, such as
the S&P "500" Index . All securities index options purchased by Neuberger &
Berman GUARDIAN Portfolio will be listed and traded on an exchange.
The Portfolio may write securities index options to close out positions in
such options that it has purchased. The Portfolio currently does not expect to
invest a substantial portion of its assets in securities index options.
Unlike a securities option, which gives the holder the right to purchase
or sell a specified security at a specified price, an option on a securities
index gives the holder the right to receive a cash "exercise settlement amount"
10
<PAGE>
equal to (1) the difference between the exercise price of the option and the
value of the underlying securities index on the exercise date (2) multiplied by
a fixed "index multiplier." A securities index fluctuates with changes in the
market values of the securities included in the index. Options on stock indices
are currently traded on the Chicago Board Options Exchange, the New York Stock
Exchange ("NYSE"), the American Stock Exchange, and other U.S. and foreign
exchanges.
The effectiveness of hedging through the purchase of securities index
options will depend upon the extent to which price movements in the securities
being hedged correlate with price movements in the selected securities index.
Perfect correlation is not possible because the securities held or to be
acquired by the Portfolio will not exactly match the composition of the
securities indices on which options are available.
Securities index options have characteristics and risks similar to those
of securities options, as discussed herein.
The date of this Supplement is October 1, 1998.
<PAGE>
NEUBERGER&BERMAN
EQUITY TRUST
SUPPLEMENT TO THE PROSPECTUS DATED DECEMBER 15, 1997, AS AMENDED MAY 14, 1998
I. THE SECTION "INVESTMENT PROGRAMS - NEUBERGER&BERMAN GUARDIAN PORTFOLIO" ON
PAGE 21 OF THE PROSPECTUS IS REVISED BY ADDING THE FOLLOWING PARAGRAPH:
For purposes of managing cash flow, the Portfolio at times may invest in
financial instruments, the return on which is intended to approximate the
performance of a recognized securities index, such as the S&P "500" Index. These
may include options and futures on securities indices, options on such futures,
and instruments structured as investment companies.
II. THE FOLLOWING PARAGRAPHS ARE ADDED TO THE SECTION "DESCRIPTION OF
INVESTMENTS" ON PAGE 43 OF THE PROSPECTUS:
DESCRIPTION OF INVESTMENTS
OTHER INVESTMENT COMPANIES. Neuberger&Berman GUARDIAN Portfolio at times
may invest in instruments structured as investment companies to gain exposure to
the performance of a recognized securities index, such as the S&P "500" Index.
As a shareholder in an investment company, the Portfolio would bear its pro rata
share of that investment company's expenses. Investment in other funds may
involve the payment of substantial premiums above the value of such issuer's
portfolio securities. Neuberger&Berman GUARDIAN Portfolio does not intend to
invest in such funds unless, in the judgment of N&B Management, the potential
benefits of such investment justify the payment of any applicable premium or
sales charge.
The Portfolio's investment in such securities is limited to (i) 3% of the
total voting stock of any one investment company, (ii) 5% of the Portfolio's
total assets with respect to any one investment company and (iii) 10% of the
Portfolio's total assets in the aggregate.
GENERAL RISKS OF OPTIONS, FUTURES AND FORWARD CONTRACTS. Neuberger &
Berman GUARDIAN Portfolio may use options and futures on securities indices, and
options on such futures, to increase its exposure to the broad equity markets.
Such contracts are often closed out prior to the delivery date. The primary
risks in using put and call options, futures contracts, and options on futures
contracts ("Financial Instruments") are (1) imperfect correlation or no
correlation between changes in market value of the securities index and the
prices of the Financial Instruments; (2) possible lack of a liquid secondary
market for Financial Instruments and the resulting inability to close them out
when desired; and (3) the fact that the use of Financial Instruments is a highly
specialized activity that involves skills, techniques, and risks (including
price volatility and a high degree of leverage) different from those associated
with selection of portfolio securities. When the Portfolio uses Financial
Instruments, it will place cash or appropriate liquid securities in a segregated
account or will "cover" its position, to the extent required by SEC staff
policy. Another risk of Financial Instruments is the possible inability of a
<PAGE>
Portfolio to purchase or sell a security at a time that would otherwise be
favorable for it to do so, or the possible need for a Portfolio to sell a
security at a disadvantageous time, due to its need to maintain cover or to
segregate securities in connection with its use of Financial Instruments. Losses
that may arise from certain futures transactions are potentially unlimited.
III. THE PARAGRAPH REGARDING THE PORTFOLIO MANAGEMENT OF NEUBERGER&BERMAN
PARTNERS PORTFOLIO IN THE SECTION "MANAGEMENT AND ADMINISTRATION - INVESTMENT
MANAGER, ADMINISTRATOR, DISTRIBUTOR, AND SUB-ADVISER" (PAGE 36) IS REVISED TO
READ AS FOLLOWS:
MANAGEMENT AND ADMINISTRATION
INVESTMENT MANAGER, ADMINISTRATOR, DISTRIBUTOR AND SUB-ADVISER
Neuberger&Berman PARTNERS Portfolio -- Michael M. Kassen, Robert I.
Gendelman, and S. Basu Mullick are co-managers of the Portfolio. Mr. Kassen,
Mr. Gendelman, and Mr. Mullick are Vice Presidents of N&B Management. Mr.
Kassen and Mr. Gendelman are principals of Neuberger&Berman. Mr. Kassen, Mr.
Gendelman and Mr. Mullick have had responsibility for Neuberger&Berman
PARTNERS Portfolio since June 1990, October 1994, and October 1998,
respectively. Mr. Kassen has been an employee of N&B Management since 1990.
Mr. Gendelman was a portfolio manager for another mutual fund manager from
1992 to 1993. Mr. Mullick was a portfolio manager for a prominent investment
adviser from 1993 to 1998.
The date of this Supplement is October 1, 1998.
<PAGE>
NEUBERGER&BERMAN
EQUITY TRUST
SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 15, 1997
I. THE FINAL PARAGRAPH IN THE SECTION "INVESTMENT INFORMATION - INVESTMENT
POLICIES AND LIMITATIONS" (PAGE 5) IS REVISED TO READ AS FOLLOWS:
Each Portfolio (except Neuberger&Berman GUARDIAN and Neuberger&Berman
SOCIALLY RESPONSIVE Portfolios) as an operating policy, does not intend to
invest in futures contracts and options thereon during the coming year. In
addition, although the Portfolios do not have policies limiting their investment
in warrants, no Portfolio currently intends to invest in warrants unless
acquired in units or attached to securities.
II. THE SECTION "FUTURES CONTRACTS AND OPTIONS THEREON" (PAGE 19) IS REVISED BY
ADDING THE FOLLOWING:
Neuberger&Berman GUARDIAN Portfolio may purchase and sell stock index
futures contracts, and may purchase and sell options thereon. For purposes of
managing cash flow, the managers may use such futures and options to increase
the Portfolio's exposure to the performance of a recognized securities index,
such as the S&P "500" Index.
III. THE SECTION HEADING "FUTURES, OPTIONS ON FUTURES, OPTIONS ON SECURITIES,
FORWARD CONTRACTS, AND OPTIONS ON FOREIGN CURRENCIES (COLLECTIVELY, `HEDGING
INSTRUMENTS') ON PAGE 19 IS REVISED TO READ "FUTURES, OPTIONS ON FUTURES,
OPTIONS ON SECURITIES AND INDICES, FORWARD CONTRACTS, AND OPTIONS ON FOREIGN
CURRENCIES (COLLECTIVELY, `FINANCIAL INSTRUMENTS') AND IS REVISED BY ADDING
THE FOLLOWING:
PUT AND CALL OPTIONS ON SECURITIES INDICES (NEUBERGER&BERMAN GUARDIAN
PORTFOLIO).
For purposes of managing cash flow, Neuberger & Berman GUARDIAN Portfolio
may purchase put and call options on securities indices to increase the
Portfolio's exposure to the performance of a recognize securities index, such as
the S&P "500" Index . All securities index options purchased by Neuberger &
Berman GUARDIAN Portfolio will be listed and traded on an exchange.
The Portfolio may write securities index options to close out positions in
such options that it has purchased. The Portfolio currently does not expect to
invest a substantial portion of its assets in securities index options.
Unlike a securities option, which gives the holder the right to purchase
or sell a specified security at a specified price, an option on a securities
<PAGE>
index gives the holder the right to receive a cash "exercise settlement amount"
equal to (1) the difference between the exercise price of the option and the
value of the underlying securities index on the exercise date (2) multiplied by
a fixed "index multiplier." A securities index fluctuates with changes in the
market values of the securities included in the index. Options on stock indices
are currently traded on the Chicago Board Options Exchange, the New York Stock
Exchange ("NYSE"), the American Stock Exchange, and other U.S. and foreign
exchanges.
The effectiveness of hedging through the purchase of securities index
options will depend upon the extent to which price movements in the securities
being hedged correlate with price movements in the selected securities index.
Perfect correlation is not possible because the securities held or to be
acquired by the Portfolio will not exactly match the composition of the
securities indices on which options are available.
Securities index options have characteristics and risks similar to those
of securities options, as discussed herein.
The date of this Supplement is October 1, 1998.
