NEUBERGER BERMAN EQUITY TRUST, 485BPOS, 1999-12-01

NEUBERGER BERMAN EQUITY TRUST
485BPOS, 1999-12-01

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As filed with the Securities and Exchange Commission on November 30, 1999
1933 Act Registration No. 033-64368
1940 Act Registration No. 811-7784

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No. [ ] [ ]
Post-Effective Amendment No. [ 26] [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]

Amendment No. [ 24] [ X ]

(Check appropriate box or boxes)

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

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

Michael M. Kassen, President
Neuberger Berman Equity Trust
605 Third Avenue, 2nd Floor
New York, New York 10158-0180

Arthur C. Delibert, Esq.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W., 2nd Floor
Washington, D.C. 20036-1800
(Names and Addresses of agents for service)

Approximate Date of Proposed Public Offering: Continuous

It is proposed that this filing will become effective:

[ ] immediately upon filing pursuant to paragraph (b)
[X] on December 1, 1999 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on ________________pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on _______________pursuant to paragraph (a)(2)

Neuberger Berman Equity Trust is a "master/feeder fund." This Post-Effective
Amendment No. 26 includes a signature page for the master fund, Equity Managers
Trust, and appropriate officers and trustees thereof.

<PAGE>

NEUBERGER BERMAN EQUITY TRUST

CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 26 ON FORM N-1A

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

Cover Sheet

Contents of Post-Effective Amendment No. 26 on Form N-1A

Neuberger Berman Century Trust

Neuberger Berman Focus Trust

Neuberger Berman Genesis Trust

Neuberger Berman Guardian Trust

Neuberger Berman International Trust

Neuberger Berman Manhattan Trust

Neuberger Berman Millennium Trust

Neuberger Berman Partners Trust

Neuberger Berman Regency Trust

Part A - Prospectus

Part B - Statement of Additional Information

Part C - Other Information

Signature Pages

Exhibit Index

No change is intended to be made by this Post-Effective Amendment No. 26 to the
prospectus or statement of additional information for the other series of
Neuberger Berman Equity Trust.

<PAGE>

<PAGE>
[PHOTO] NEUBERGER BERMAN

NEUBERGER BERMAN
EQUITY TRUST
- --------------------------------------------------------------------------------
PROSPECTUS DECEMBER 1, 1999

These securities, like the securities of all mutual
funds, have not been approved or disapproved by the
Securities and Exchange Commission, and the Securities
and Exchange Commission has not determined if this
prospectus is accurate or complete. Any representation
to the contrary is a criminal offense.

Century Trust
Focus Trust
Genesis Trust
Guardian Trust
International Trust
Manhattan Trust
Millennium Trust
Partners Trust
Regency Trust

<PAGE>
CONTENTS
- -----------------

<TABLE>
<C> <S>
NEUBERGER BERMAN EQUITY TRUST

PAGE 2 ...... Century Trust

6 ...... Focus Trust

12 ...... Genesis Trust

18 ...... Guardian Trust

24 ...... International Trust

30 ...... Manhattan Trust

36 ...... Millennium Trust

41 ...... Partners Trust

47 ...... Regency Trust

YOUR INVESTMENT

58 ...... Maintaining Your Account

60 ...... Share Prices

61 ...... Distributions and Taxes

63 ...... Fund Structure
</TABLE>

The "Neuberger Berman" name and logo are service
marks of Neuberger Berman, LLC. "Neuberger Berman
Management Inc." and the individual fund names in
this prospectus are either service marks or
registered trademarks of Neuberger Berman
Management Inc. -C-1999 Neuberger Berman Management
Inc.
<PAGE>
- ------------------------------------------------------------

FUND MANAGEMENT

All of the Neuberger Berman Equity Trusts are managed by Neuberger Berman
Management Inc., in conjunction with Neuberger Berman, LLC, as sub-adviser.
Together, the firms manage more than $51.3 billion in total assets (as of
September 30, 1999) and continue an asset management history that began in 1939.

RISK INFORMATION
This prospectus discusses principal risks of investing in fund shares. These and
other risks are discussed in detail in the Statement of Additional Information
(see back cover).

THESE FUNDS:

- - ARE DESIGNED FOR INVESTORS WITH LONG-TERM GOALS IN MIND

- - OFFER YOU THE OPPORTUNITY TO PARTICIPATE IN FINANCIAL MARKETS THROUGH
PROFESSIONALLY MANAGED STOCK PORTFOLIOS

- - ALSO OFFER THE OPPORTUNITY TO DIVERSIFY YOUR PORTFOLIO WITH FUNDS THAT INVEST
USING A VALUE OR A GROWTH APPROACH, OR A COMBINATION OF THE TWO

- - USE A MASTER/FEEDER STRUCTURE IN THEIR PORTFOLIOS; SEE PAGE 63 FOR INFORMATION
ON HOW IT WORKS

- - CARRY CERTAIN RISKS, INCLUDING THE RISK THAT YOU COULD LOSE MONEY IF FUND
SHARES ARE WORTH LESS THAN WHAT YOU PAID

- - ARE MUTUAL FUNDS, NOT BANK DEPOSITS, AND ARE NOT GUARANTEED OR INSURED BY THE
FDIC OR ANY OTHER
GOVERNMENT AGENCY

1
<PAGE>
[PHOTO]

NEUBERGER BERMAN
CENTURY TRUST
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
ABOVE: PORTFOLIO MANAGER BROOKE A. COBB
</TABLE>

"WE LOOK FOR THE LEADERS OF TODAY AND TOMORROW. MANY FAST-GROWING COMPANIES JOIN
THE LARGE-CAPITALIZATION SECTOR WITH YEARS OF GROWTH STILL AHEAD. OUR GOAL IS TO
IDENTIFY THEM EARLY, AND TO INVEST IN THE COMPANIES THAT ARE GOING TO BE THE
GROWTH LEADERS OF THE NEW CENTURY."

2
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

LARGE-CAP STOCKS
Large companies are usually well-established. They typically have a variety of
products and business lines, an experienced management team and a sound
financial base that can help them weather bad times.

Because of their size, large companies may grow at a slower rate than small
companies. But their returns have sometimes led those of smaller companies,
often with lower volatility.

GROWTH INVESTING
For growth investors, the aim is to invest in companies that are already
successful but could be even more so. Often, these stocks are in emerging or
rapidly growing industries.

While most growth stocks are known to investors, they may not yet have reached
their full potential. The growth investor looks for indications of continued
success.

[ICON]
THE FUND SEEKS LONG-TERM GROWTH OF CAPITAL; DIVIDEND INCOME IS A
SECONDARY GOAL.

To pursue these goals, the fund invests mainly in common stocks of
large-capitalization companies. The fund seeks to reduce risk by diversifying
among many companies, sectors and industries in order to moderate variability in
the fund's performance.

The manager employs a disciplined investment strategy when selecting growth
stocks. He seeks to buy companies with strong earnings growth and the potential
for higher earnings, priced at attractive levels relative to their growth rates.
Factors in identifying these firms may include:

- - solid balance sheets

- - earnings that have exceeded analysts' expectations

- - a strong position relative to competitors

- - a stock price that is reasonable in light of its growth rate

The manager also follows a disciplined selling strategy and may eliminate a
stock from the portfolio when the company's fundamentals deteriorate, a target
price is reached, or when it appears substantially less desirable than another
stock.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

Century Trust 3
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. In using certain derivatives to gain stock market exposure for excess
cash holdings, the fund increases its risk of loss.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate. There may be less information available about foreign issuers than
about domestic issuers.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term fixed-income investments. This could help the fund avoid
losses but may mean lost opportunities.

[ICON] Most of the fund's performance depends
on what happens in the stock market. The market's behavior is
unpredictable, particularly in the short term. Because of this, the
value of your investment will rise and fall, and you could lose money.

At times, large-cap stocks may lag other types of stocks in performance, which
could cause the fund to perform worse than certain other funds over a given time
period.

Because the prices of most growth stocks are based on future expectations, these
stocks tend to be more sensitive than value stocks to bad economic news and
negative earnings surprises. While the prices of any type of stock can rise and
fall rapidly, growth stocks in particular may underperform during periods when
the market favors value stocks. The fund's performance may also suffer if
certain stocks do not perform as the portfolio manager expected. To the extent
that the managers sell stocks before they reach their market peak, the fund may
miss out on opportunities for higher performance.

Through active trading, the fund may have a high portfolio turnover rate, which
can mean higher taxable distributions and lower performance due to increased
brokerage costs.

PERFORMANCE -- Because the fund is new it does not have performance to report.

4 Neuberger Berman
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT

BROOKE A. COBB is a Vice President of Neuberger Berman Management, a Managing
Director of Neuberger Berman, LLC, and has managed the fund since December 1999.
He joined Neuberger Berman, LLC in 1997. From 1992 to 1997, he was a portfolio
manager at several other firms.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For investment management services, the fund
will pay Neuberger Berman Management a fee at the annual rate of 0.550% of the
first $250 million of average net assets, 0.525% of the next $250 million,
0.500% of the next $250 million, 0.475% of the next $250 million, 0.450% of the
next $500 million, and 0.425% of average net assets in excess of $1.5 billion.

[ICON] The fund does not charge you any fees for
buying, selling, or exchanging shares, or for maintaining your
account. Your only fund cost is your share of annual operating ex-
penses. The expense example can help you compare costs among funds.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 0.95
PLUS: Distribution (12b-1) fees 0.10
Other expenses** 0.80
....
EQUALS: Total annual operating expenses 1.85
MINUS: Expense reimbursement 0.35
....
EQUALS: Net expenses 1.50
</TABLE>

* NEUBERGER BERMAN MANAGEMENT HAS CONTRACTUALLY AGREED TO REIMBURSE CERTAIN
EXPENSES OF THE FUND THROUGH 12/31/02, SO THAT THE TOTAL ANNUAL OPERATING
EXPENSES OF THE FUND ARE LIMITED TO 1.50% OF AVERAGE NET ASSETS. THIS
ARRANGEMENT DOES NOT COVER INTEREST, TAXES, BROKERAGE COMMISSIONS, AND
EXTRAORDINARY EXPENSES. THE FUND HAS AGREED TO REPAY NEUBERGER BERMAN
MANAGEMENT FOR EXPENSES REIMBURSED TO THE FUND PROVIDED THAT REPAYMENT DOES
NOT CAUSE THE FUND'S ANNUAL OPERATING EXPENSES TO EXCEED 1.50% OF ITS AVERAGE
NET ASSETS. ANY SUCH REPAYMENT MUST BE MADE WITHIN THREE YEARS AFTER THE YEAR
IN WHICH NEUBERGER BERMAN MANAGEMENT INCURRED THE EXPENSE. THE TABLE INCLUDES
COSTS PAID BY THE FUND AND ITS SHARE OF MASTER PORTFOLIO COSTS. FOR MORE
INFORMATION ON MASTER/FEEDER FUNDS, SEE "FUND STRUCTURE" ON PAGE 63.

** OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.

EXPENSE EXAMPLE

The example assumes that you invested $10,000 for the periods shown, that you
earned a hypothetical 5% total return each year, and that the fund's expenses
were those in the table above. Your costs would be the same whether you sold
your shares or continued to hold them at the end of each period. Actual
performance and expenses may be higher or lower.

<TABLE>
<CAPTION>
1 Year 3 Years
- ----------------------------------------------------------
<S> <C> <C>
Expenses $153 $474
</TABLE>

Because the fund is new it does not have financial highlights to report.

Century Trust 5
<PAGE>
[PHOTO]

NEUBERGER BERMAN
FOCUS TRUST
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NBFCX ABOVE: PORTFOLIO MANAGER KENT C. SIMONS
</TABLE>

"OUR INVESTMENT APPROACH FOR FOCUS TRUST INVOLVES LOOKING FOR COMPANIES THAT
HAVE LOW PRICE-TO-EARNINGS RATIOS, SOLID BALANCE SHEETS AND STRONG MANAGEMENT.
WE OFTEN FIND THAT THESE COMPANIES ARE CONCENTRATED IN CERTAIN SECTORS OF THE
ECONOMY, AND WE LOOK FURTHER WITHIN THESE SECTORS FOR OTHER COMPANIES THAT
MEET OUR CRITERIA."

6
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

INDUSTRY SECTORS
The economy is divided into sectors, each made up of related industries. By
focusing on several sectors at
a time, a fund can add a measure of diversification and still pursue the
performance potential of individual sectors.

This contrasts with an approach of limiting investment to one sector, which may
offer greater opportunity but also more risk. A sector may have above-average
performance during particular periods, but individual sectors also tend to move
up and down more than the broader market.

VALUE INVESTING
At any given time, there are companies whose stock prices are below the market
average, based on earnings, book value, or other financial measures. The value
investor examines these companies, searching for those that may rise in price
when other investors realize their worth.

[ICON]
THE FUND SEEKS LONG-TERM GROWTH OF CAPITAL.

To pursue this goal, the fund invests mainly in common stocks of companies of
any size that fall within the following sectors:

- - autos and housing

- - consumer goods and services

- - defense and aerospace

- - energy

- - financial services

- - health care

- - heavy industry

- - machinery and equipment

- - media and entertainment

- - retailing

- - technology

- - transportation

- - utilities

At any given time, the fund intends to place most of its assets in those sectors
on the list that the manager believes are undervalued. The fund generally
invests at least 90% of net assets in no more than six sectors. However, it does
not invest more than 50% of total assets in any one sector, or more than 25% of
total assets in any one industry.

The manager looks for undervalued companies. Factors in identifying these firms
may include above-average returns, an established market niche, and sound future
business prospects. This approach is designed to let the fund benefit from
potential increases in stock prices while limiting the risks typically
associated with investing in a small number
of sectors.

When a stock no longer meets the fund's investment criteria, the manager will
consider selling it.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

Focus Trust 7
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. In using certain derivatives to gain stock market exposure for excess
cash holdings, the fund increases its risk of loss.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

Because the fund typically focuses on a few sectors at a time, its performance
is likely to be disproportionately affected by the factors influencing those
sectors. These may include market, economic, political or regulatory
developments, among others. The fund's performance may also suffer if a sector
does not perform as the portfolio manager expected.

To the extent that the fund emphasizes a particular market capitalization, it
takes on the associated risks. Mid- and small-cap stocks tend to be more
volatile than large-cap stocks. At any given time, any one of these market
capitalizations may be out of favor with investors. If the fund emphasizes that
market capitalization, it could perform worse than certain other funds.

8 Neuberger Berman
<PAGE>
PERFORMANCE
- ------------------------------------------------------------

PERFORMANCE MEASURES
The information on this page provides different measures of the fund's total
return. Total return includes the effect of distributions as well as changes in
share price. The figures assume that all distributions were reinvested in the
fund.

As a frame of reference, the table includes broad-based indices of the entire
U.S. equity market and of the portion of the market the fund focuses on. The
fund's performance figures include all of its expenses; the indices do not
include costs of investment.

Because the fund had a policy of investing heavily in energy stocks prior to
November 1991, and invested mainly in large-cap stocks prior to September 1998,
its performance during those times would have been different if current policies
had been in effect.

[ICON] The charts below provide an indication of
the risks of investing in the fund. The bar chart shows how
performance has varied from year to year. The table below the chart
shows what the returns would equal if you averaged out actual performance over
various lengths of time and compares the return with that of a broad measure of
market performance. This information is based on past performance; it's not a
prediction of future results.

YEAR-BY-YEAR % RETURNS as of 12/31 each year*

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
1989 29.78%
'90 -5.92%
'91 24.66%
'92 21.10%
'93 19.60%
'94 0.93%
'95 36.03%
'96 16.29%
'97 24.15%
'98 13.17%
BEST
QUARTER:
Q4 '98,
up
34.52%
WORST
QUARTER:
Q3 '98,
down
27.48%
Year-to-date
performance
as of
9/30/99:
down 0.48%
</TABLE>

AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/98*

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
- ------------------------------------------------------------
<S> <C> <C> <C>
FOCUS TRUST 13.17 17.54 17.33
S&P 500 Index 28.52 24.02 19.16
Russell 1000 Value Index 15.63 20.86 17.38
</TABLE>

The S&P 500 is an unmanaged index of U.S. stocks.

The Russell 1000 Value Index is an unmanaged index of U.S. mid- and large-cap
value stocks.

* THE FUND BEGAN OPERATING IN AUGUST 1993. PERFORMANCE RESULTS FROM 1989 TO
AUGUST 1993 ARE ACTUALLY THOSE OF ANOTHER NEUBERGER BERMAN FUND THAT BEGAN
OPERATIONS IN 1955, AND INVESTS IN THE SAME PORTFOLIO OF SECURITIES. BECAUSE
THE OLDER FUND HAD MODERATELY LOWER EXPENSES, ITS PERFORMANCE TYPICALLY SHOULD
BE SLIGHTLY BETTER THAN FOCUS TRUST WOULD HAVE HAD. THAT OLDER FUND IS NOT
OFFERED IN THIS PROSPECTUS.

Focus Trust 9
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT

KENT C. SIMONS is a Vice President of Neuberger Berman Management and
a Managing Director of Neuberger Berman, LLC. He has managed the fund's assets
since 1988.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For the 12 months ended 8/31/99, the
management/administration fees paid to Neuberger Berman Management were 0.89% of
average net assets.

[ICON] The fund does not charge you any fees for
buying, selling, or exchanging shares, or for maintaining your
account. Your only fund cost is your share of annual operating
expenses. The expense example can help you compare costs among funds.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 0.89
PLUS: Distribution (12b-1) fees 0.10
Other expenses 0.09
....
EQUALS: Total annual operating expenses 1.08
</TABLE>

* NEUBERGER BERMAN MANAGEMENT REIMBURSES CERTAIN EXPENSES OF THE FUND SO THAT
ITS TOTAL ANNUAL OPERATING EXPENSES ARE NOT MORE THAN 0.20% ABOVE THOSE OF
ANOTHER NEUBERGER BERMAN FUND THAT INVESTS IN THE SAME PORTFOLIO OF
SECURITIES. THIS ARRANGEMENT DOES NOT COVER INTEREST, TAXES, BROKERAGE
COMMISSIONS, AND EXTRAORDINARY EXPENSES. UNDER THIS ARRANGEMENT, WHICH
NEUBERGER BERMAN MANAGEMENT CAN TERMINATE UPON SIXTY DAYS' NOTICE TO THE FUND,
TOTAL ANNUAL OPERATING EXPENSES OF THE FUND LAST YEAR WERE LIMITED TO 0.95% OF
THE FUND'S AVERAGE NET ASSETS. ACTUAL EXPENSES THIS YEAR MAY BE HIGHER OR
LOWER. THE TABLE INCLUDES COSTS PAID BY THE FUND AND ITS SHARE OF MASTER
PORTFOLIO COSTS. FOR MORE INFORMATION ON MASTER/FEEDER FUNDS, SEE "FUND
STRUCTURE" ON PAGE 63.

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses** $110 $343 $595 $1317
</TABLE>

** UNDER THE FUND'S EXPENSE REIMBURSEMENT ARRANGEMENT DESCRIBED IN THE FOOTNOTE
ABOVE, YOUR COSTS FOR THE ONE-, THREE-, FIVE- AND TEN-YEAR PERIODS WOULD BE
$97, $303, $525, AND $1166, RESPECTIVELY.

10 Neuberger Berman
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1995 1996 1997 1998 1999
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout each year indicated. You can see what the fund earned (or lost),
what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of
year 11.36 14.41 14.83 21.27 17.14
PLUS: Income from investment operations
Net investment income (loss) 0.05 0.06 0.01 0.03 (0.02)
Net gains/losses -- realized and
unrealized 3.05 0.46 6.49 (3.66) 6.53
Subtotal: income from investment
operations 3.10 0.52 6.50 (3.63) 6.51
MINUS: Distributions to shareholders
Income dividends 0.05 0.02 0.06 0.01 0.03
Capital gain distributions -- 0.08 -- 0.49 --
Subtotal: distributions to
shareholders 0.05 0.10 0.06 0.50 0.03
................................................
EQUALS: Share price (NAV) at end of year 14.41 14.83 21.27 17.14 23.62
- ------------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment income (loss) -- as they actually are as well as how
they would have been if certain expense reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 0.96 0.99 0.96 0.94 0.95
Gross expenses(1) 2.50 1.27 1.06 0.97 0.98
Expenses(2) -- 0.99 0.96 0.94 0.95
Net investment income (loss) -- actual 0.67 0.63 0.11 0.17 (0.07)
- ------------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over each year, assuming all
distributions were reinvested. The turnover rate reflects how actively the fund bought and sold securities.
Total return(3) (%) 27.44 3.62 43.93 (17.45) 38.07
Net assets at end of year (in millions of dollars) 14.5 55.6 160.9 193.2 216.0
Portfolio turnover rate (%) 36 39 63 64 57
</TABLE>

The figures above have been audited by Ernst & Young LLP, the fund's independent
auditors. Their report, along with full financial statements, appears in the
fund's most recent shareholder report (see back cover).

(1) SHOWS WHAT THIS RATIO WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE
REIMBURSEMENT.

(2) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER
9/1/95.
(3) WOULD HAVE BEEN LOWER IF NEUBERGER BERMAN MANAGEMENT HAD NOT REIMBURSED
CERTAIN EXPENSES.

Focus Trust 11
<PAGE>
[PHOTO]

NEUBERGER BERMAN
GENESIS TRUST
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NBGEX ABOVE: PORTFOLIO MANAGERS ROBERT W. D'ALELIO AND JUDITH M.
VALE
</TABLE>

"WE SEEK OUT SMALL COMPANIES THAT ARE LITTLE-KNOWN AND OFTEN FOUND IN LESS
GLAMOROUS INDUSTRIES. POTENTIAL FOR GROWTH IS ONE AREA WE FOCUS ON, BUT EQUALLY
IMPORTANT TO US IS EVIDENCE OF SOLID PERFORMANCE AND A PROVEN MANAGEMENT TEAM.
AND AS VALUE INVESTORS, WE LOOK FOR STOCKS THAT ARE SELLING AT ATTRACTIVE
PRICES."

12
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

SMALL-CAP STOCKS
Historically, stocks of smaller companies have not always moved in tandem with
those of larger companies. Over the last 40 years, small-caps have outperformed
large-caps more than 60% of the time. However, small-caps have often fallen more
severely during market downturns.

[ICON]
THE FUND SEEKS GROWTH OF CAPITAL.

To pursue this goal, the fund invests mainly in common stocks of
small-capitalization companies, which it defines as those with a total market
value of no more than $1.5 billion at the time the fund first invests in them.
The fund may continue to hold or add to a position in a stock after it has grown
beyond $1.5 billion. The fund seeks to reduce risk by diversifying among many
companies and industries.

The managers look for undervalued companies whose current product lines and
balance sheets are strong. Factors in identifying these firms may include:

- - above-average returns

- - an established market niche

- - circumstances that would make it difficult for new competitors to enter the
market

- - the ability to finance their own growth

- - sound future business prospects

This approach is designed to let the fund benefit from potential increases in
stock prices while limiting the risks typically associated with small-cap
stocks.

At times, the managers may emphasize certain sectors that they believe will
benefit from market or economic trends.

When a stock no longer meets the fund's investment criteria, the managers will
consider selling it.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

Genesis Trust 13
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

Stock prices of many smaller companies are based on future expectations. The
portfolio managers tend to focus on companies whose financial strength is
largely based on existing business lines rather than projected growth. While
this can help reduce risk, the fund is still subject to many of the risks of
small-cap investing. These include the risk that the fund's holdings may:

- - fluctuate more widely in price than the market as a whole

- - underperform other types of stocks or be difficult to sell when the economy is
not robust, during market downturns or when small-cap stocks are out of favor

- - be more affected than other types of stocks by the underperformance of a
sector that the managers decided to emphasize

With a value approach, there is also the risk that stocks may remain undervalued
during a given period. This may happen because value stocks as a category lose
favor with investors compared to growth stocks or because the managers failed to
anticipate which stocks or industries would benefit from changing market or
economic conditions.

14 Neuberger Berman
<PAGE>
PERFORMANCE
- ------------------------------------------------------------

As a frame of reference, the table includes a broad-based market index. The
fund's performance figures include all of its expenses; the index does not
include costs of investment.

[ICON] The charts below provide an indication
of the risks of investing in the fund. The bar chart shows how
performance has varied from year to year. The table below the chart
shows what the returns would equal if you averaged out actual performance over
various lengths of time and compares the return with that of a broad measure of
market performance. This information is based on past performance; it's not a
prediction of future results.

YEAR-BY-YEAR % RETURNS as of 12/31 each year*

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
1989 17.25%
'90 -16.24%
'91 41.55%
'92 15.62%
'93 14.37%
'94 -1.66%
'95 27.17%
'96 29.90%
'97 34.86%
'98 -6.98%
BEST
QUARTER:
Q1 '91,
up
25.05%
WORST
QUARTER:
Q3 '90,
down
21.81%
Year-to-date
performance
as of
9/30/99:
down 3.93%
</TABLE>

AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/98*

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C>
GENESIS TRUST (6.98) 15.30 14.12
Russell 2000 Index (2.55) 11.87 12.92
</TABLE>

The Russell 2000 is an unmanaged index of U.S. small-cap stocks.

* THE FUND BEGAN OPERATING IN AUGUST 1993. PERFORMANCE RESULTS FROM 1989 TO
AUGUST 1993 ARE ACTUALLY THOSE OF ANOTHER NEUBERGER BERMAN FUND THAT BEGAN
OPERATIONS IN 1988, AND INVESTS IN THE SAME PORTFOLIO OF SECURITIES. BECAUSE
THE OLDER FUND HAD MODERATELY LOWER EXPENSES, ITS PERFORMANCE TYPICALLY SHOULD
BE SLIGHTLY BETTER THAN GENESIS TRUST WOULD HAVE HAD. THAT OLDER FUND IS NOT
OFFERED IN THIS PROSPECTUS.

Genesis Trust 15
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT

JUDITH M. VALE and ROBERT W. D'ALELIO are Vice Presidents of Neuberger Berman
Management and Managing Directors of Neuberger Berman, LLC. Vale and D'Alelio
have been senior members of the Small Cap Group since 1992 and 1996,
respectively. Vale has co-managed the fund's assets since 1994. D'Alelio joined
the firm in 1996 and has co-managed the fund's assets since 1997. From 1988 to
1996, he was a senior portfolio manager at another firm.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For the 12 months ended 8/31/99, the
management/administration fees paid to Neuberger Berman Management
were 1.12% of average
net assets.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 1.12
PLUS: Distribution (12b-1) fees None
Other expenses 0.11
....
EQUALS: Total annual operating expenses 1.23
</TABLE>

* THE FIGURES IN THE TABLE ARE BASED ON LAST YEAR'S EXPENSES. ACTUAL EXPENSES
THIS YEAR MAY BE HIGHER OR LOWER. THE TABLE INCLUDES COSTS PAID BY THE FUND
AND ITS SHARE OF MASTER PORTFOLIO COSTS. FOR MORE INFORMATION ON MASTER/FEEDER
FUNDS, SEE "FUND STRUCTURE" ON PAGE 63.

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses $125 $390 $676 $1489
</TABLE>

16 Neuberger Berman
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1995 1996 1997 1998 1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout each year indicated. You can see what the fund earned (or lost), what
it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of year 10.59 12.65 14.99 21.45 17.28
PLUS: Income from investment operations
Net investment income (loss) (0.01) (0.02) (0.01) 0.12 0.13
Net gains/losses -- realized and unrealized 2.08 2.68 6.61 (4.14) 3.17
Subtotal: income from investment operations 2.07 2.66 6.60 (4.02) 3.30
MINUS: Distributions to shareholders
Income dividends -- -- -- -- 0.12
Capital gain distributions 0.01 0.32 0.14 0.15 0.20
Subtotal: distributions to shareholders 0.01 0.32 0.14 0.15 0.32
......................................................
EQUALS: Share price (NAV) at end of year 12.65 14.99 21.45 17.28 20.26
- ---------------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment income (loss) -- as they actually are as well as how
they would have been if certain expense reimbursement/waiver and offset arrangements had not been in effect.
Net expenses -- actual 1.42 1.38 1.25 1.17 1.23
Gross expenses(1) 1.78 1.65 1.35 1.19 --
Expenses(2) -- 1.38 1.26 1.17 1.23
Net investment income (loss) -- actual (0.24) (0.27) (0.16) 0.68 0.54
- ---------------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over each year, assuming all
distributions were reinvested. The turnover rate reflects how actively the fund bought and sold securities.
Total return (%) 19.51(3) 21.44(3) 44.31(3) (18.88)(3) 19.15
Net assets at end of year (in millions of dollars) 30.6 65.2 382.7 704.5 591.1
Portfolio turnover rate (%) 37 21 18 18 33
</TABLE>

(1) SHOWS WHAT THIS RATIO WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE
REIMBURSEMENT/WAIVER.

(2) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS; THE MANAGEMENT FEE WAIVER IS INCLUDED, HOWEVER. THIS
CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER 9/1/95.
(3) WOULD HAVE BEEN LOWER IF NEUBERGER BERMAN MANAGEMENT HAD NOT REIMBURSED
CERTAIN EXPENSES
AND/OR WAIVED A PORTION OF THE MANAGEMENT FEE.

Genesis Trust 17
<PAGE>
[PHOTO]

NEUBERGER BERMAN
GUARDIAN TRUST
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NBGTX ABOVE: PORTFOLIO MANAGERS KEVIN L. RISEN AND ALLAN "RICK"
WHITE
</TABLE>

"WE LOOK FOR ESTABLISHED COMPANIES WHOSE INTRINSIC VALUE, BY OUR MEASURE, HAS
YET TO BE DISCOVERED BY THE MAJORITY OF INVESTORS. IN MANAGING OVERALL RISK, WE
MAKE A CONSCIOUS EFFORT TO DETERMINE THE RISK/REWARD SCENARIO OF EACH INDIVIDUAL
HOLDING AS WELL AS ITS IMPACT AT THE PORTFOLIO LEVEL."

18
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

LARGE-CAP STOCKS
Large companies are usually well-established. They may have a variety of
products and business lines and a sound financial base that can help them
weather bad times.

Compared to smaller companies, large companies can be less responsive to changes
and opportunities. At the same time, their returns have sometimes led those of
smaller companies, often with lower volatility.

[ICON]
THE FUND SEEKS LONG-TERM GROWTH OF CAPITAL; CURRENT INCOME IS A
SECONDARY GOAL.

To pursue these goals, the fund invests mainly in common stocks of
large-capitalization companies. Because the managers tend to find that
undervalued stocks may be more common in certain sectors of the economy at a
given time, the fund may emphasize those sectors.

The fund seeks to reduce risk by diversifying among a large number of companies
across many different industries and economic sectors, and by managing its
overall exposure to a wide variety of risk factors.

The managers look for well managed companies whose stock prices are undervalued.
Factors in identifying these firms may include:

- - solid balance sheets

- - above-average returns

- - low valuation measures, such as price-to-earnings ratios

- - strong competitive positions

When a stock no longer meets the fund's investment criteria, the managers will
consider selling it.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

Guardian Trust 19
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

At times, large-cap stocks may lag other types of stocks in performance, which
could cause the fund to perform worse than certain other funds over a given time
period.

To the extent that a value approach dictates an emphasis on certain sectors of
the market at any given time, the fund's performance is likely to be
disproportionately affected by the economic, market, and other developments that
may influence those sectors. The fund's performance may also suffer if a sector
does not perform as the portfolio managers expected.

20 Neuberger Berman
<PAGE>
PERFORMANCE
- ------------------------------------------------------------

DISTRIBUTION HISTORY
In keeping with its goal, the fund has paid an income distribution every quarter
since December 1993, the year of its inception. It has also paid an annual
capital gain distribution during the same period. Of course, the fund cannot
guarantee that it will continue to make these distributions.

YEAR-BY-YEAR % RETURNS as of 12/31 each year*

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
1989 21.50%
'90 -4.71%
'91 34.33%
'92 19.01%
'93 13.52%
'94 1.52%
'95 31.99%
'96 17.74%
'97 17.83%
'98 2.36%
BEST
QUARTER:
Q4 '98,
up
23.16%
WORST
QUARTER:
Q3 '98,
down
26.19%
Year-to-date
performance
as of
9/30/99:
down 3.38%
</TABLE>

AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/98*

<TABLE>
1 Year 5 Years 10 Years
- ------------------------------------------------------------
GUARDIAN TRUST 2.36 13.73 14.86
<S> <C> <C> <C>
S&P 500 Index 28.52 24.02 19.16
Russell 1000 Value Index 15.63 20.86 17.38
</TABLE>

The S&P 500 Index is an unmanaged index of U.S. stocks.

The Russell 1000 Value Index is an unmanaged index of U.S. mid- and large-cap
value stocks.

* THE FUND BEGAN OPERATING IN AUGUST 1993. PERFORMANCE RESULTS FROM 1989 TO
AUGUST 1993 ARE ACTUALLY THOSE OF ANOTHER NEUBERGER BERMAN FUND THAT BEGAN
OPERATIONS IN 1950, AND INVESTS IN THE SAME PORTFOLIO OF SECURITIES. BECAUSE
THE OLDER FUND HAD MODERATELY LOWER EXPENSES, ITS PERFORMANCE TYPICALLY SHOULD
BE SLIGHTLY BETTER THAN GUARDIAN TRUST WOULD HAVE HAD. THAT OLDER FUND IS NOT
OFFERED IN THIS PROSPECTUS.

Guardian Trust 21
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT

KEVIN L. RISEN and ALLAN R. WHITE III are Vice Presidents of Neuberger Berman
Management and Managing Directors of Neuberger Berman, LLC. Risen has co-managed
the fund's assets since 1996. He joined Neuberger Berman in 1992 as an analyst,
and has been a portfolio manager since 1995. White has been co-manager of the
fund since September 1998, when he joined the firm. From 1989 to 1998 he was a
portfolio manager at another firm.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For the 12 months ended 8/31/99, the
management/administration fees paid to Neuberger Berman Management
were 0.84% of average
net assets.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 0.84
PLUS: Distribution (12b-1) fees None
Other expenses 0.04
....
EQUALS: Total annual operating expenses 0.88
</TABLE>

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses $90 $281 $488 $1084
</TABLE>

22 Neuberger Berman
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1995 1996 1997 1998 1999
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout each year indicated. You can see what the fund earned (or lost), what it
distributed to investors, and how its share price changed.
Share price (NAV) at beginning of year 11.27 13.83 14.24 19.47 14.24
PLUS: Income from investment operations
Net investment income 0.13 0.16 0.08 0.09 0.12
Net gains/losses -- realized and unrealized 2.55 0.55 5.48 (3.93) 3.57
Subtotal: income from investment operations 2.68 0.71 5.56 (3.84) 3.69
MINUS: Distributions to shareholders
Income dividends 0.12 0.14 0.10 0.10 0.10
Capital gain distributions -- 0.16 0.23 1.29 1.47
Subtotal: distributions to shareholders 0.12 0.30 0.33 1.39 1.57
........................................................
EQUALS: Share price (NAV) at end of year 13.83 14.24 19.47 14.24 16.36
- -------------------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment income -- as they actually are as well as how they would
have been if certain expense reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 0.90 0.92 0.88 0.87 0.88
Gross expenses(1) 0.96 0.92 -- -- --
Expenses(2) -- 0.92 0.88 0.87 0.88
Net investment income -- actual 1.35 1.26 0.47 0.50 0.65
- -------------------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over each year, assuming all distributions
were reinvested. The turnover rate reflects how actively the fund bought and sold securities.
Total return (%) 24.01(3) 5.19(3) 39.56 (20.88) 26.07
Net assets at end of year (in millions of dollars) 683.1 1,340.1 2,269.8 1,529.5 1,251.2
Portfolio turnover rate (%) 26 37 50 60 73
</TABLE>

(1) SHOWS WHAT THIS RATIO WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE
REIMBURSEMENT.

(2) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER
9/1/95.
(3) Would have been lower if Neuberger Berman Management had not reimbursed
certain expenses.

Guardian Trust 23
<PAGE>
NEUBERGER BERMAN
INTERNATIONAL TRUST
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NBITX PORTFOLIO MANAGER VALERIE CHANG
ASSOCIATE MANAGER BENJAMIN E. SEGAL
</TABLE>

"IN IDENTIFYING ATTRACTIVE STOCKS FROM AMONG THE MANY THOUSANDS
CURRENTLY AVAILABLE OUTSIDE THE U.S., IT'S IMPORTANT TO HAVE A CLEAR
STRATEGY. THIS FUND USES A COMBINATION OF GROWTH AND VALUE CRITERIA,
WHILE ALSO CONSIDERING LARGER SCALE ECONOMIC FACTORS."

24
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

FOREIGN STOCKS
There are many promising opportunities for investment outside the U.S. These
foreign markets often respond to different factors, and therefore tend to follow
cycles that are different from each other.

For this reason, many investors put a portion of their portfolios in foreign
investments as a way of gaining further diversification. While foreign stock
markets can be risky, investors gain an opportunity to add potential long-term
growth.

GROWTH VS.

VALUE INVESTING

Value investors seek stocks trading at below market average prices based on
earnings, book value, or other financial measures before other investors
discover their worth. Growth investors seek companies that are already
successful but may not have reached their full potential.

[ICON]
THE FUND SEEKS LONG-TERM GROWTH OF CAPITAL BY INVESTING PRIMARILY IN
COMMON STOCKS OF FOREIGN COMPANIES.

To pursue this goal, the fund invests mainly in foreign companies of any size,
including companies in developed and emerging industrialized markets. The fund
defines a foreign company as one that is organized outside of the United States
and conducts the majority of its business abroad.

The fund seeks to reduce risk by diversifying among many industries. Although it
has the flexibility to invest a significant portion of its assets in one country
or region, it generally intends to remain well-diversified across countries and
geographical regions.

In picking stocks, the manager looks for well-managed companies that show
potential for above-average growth or whose stock prices are undervalued.
Factors in identifying these firms may include strong fundamentals, such as
attractive cash flows and balance sheets, as well as prices that are reasonable
in light of projected earnings growth. The manager also considers the outlooks
for various countries and regions around the world, examining economic, market,
social, and political conditions.

When a stock no longer meets the fund's investment criteria, the managers will
consider selling it.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

International Trust 25
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Borrowing, securities lending, and derivatives could create leverage, meaning
that certain gains or losses could be amplified, increasing share price
movements. The fund may use derivatives for hedging and for speculation. Hedging
could reduce the fund's losses from currency fluctuations, but could also reduce
its gains. In using certain derivatives to gain stock market exposure for excess
cash holdings, the fund increases its risk of loss. A derivative instrument
could fail to perform as expected. Any speculative investment could cause a loss
for the fund.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

[ICON] Most of the fund's performance depends
on what happens in international stock markets. The behavior of these
markets is unpredictable, particularly in the short term. Because of
this, the value of your investment will rise and fall, sometimes sharply, and
you could lose money.

Foreign stocks are riskier than comparable U.S. stocks. This is in part because
foreign markets are less developed and foreign governments, economies, laws, tax
codes and securities firms may be less stable. There is also a higher chance
that key information will be unavailable, incomplete, or inaccurate. As a
result, foreign stocks can fluctuate more widely in price than comparable U.S.
stocks, and they may also be less liquid. These risks are generally greater in
emerging markets. Over a given period of time, foreign stocks may underperform
U.S. stocks -- sometimes for years. The fund could also under-perform if the
manager invests in countries or regions whose economic performance falls short.

Changes in currency exchange rates bring an added dimension of risk. Currency
fluctuations could erase investment gains or add to investment losses.

To the extent that the fund invests in a type of stock, it takes on the risks
associated with that type. Growth stocks may suffer more than value stocks
during market downturns, while value stocks may remain undervalued. Mid- and
small-cap stocks tend to be less liquid and more volatile than large-cap stocks.
Any type of stock may underperform any other during a given period.

26 Neuberger Berman
<PAGE>
PERFORMANCE
- ------------------------------------------------------------

As a frame of reference, the table includes a broad-based market index. The
fund's performance figures include all of its expenses; the index does not
include costs of investment.

Because the fund had a policy of investing primarily in mid- and large-cap
stocks prior to September 1998, its performance during that time would have been
different if current policies had been in effect.

[ICON] The charts below provide an indication of
the risks of investing in the fund. The bar chart shows how
performance has varied from year to year. The table below the chart
shows what the returns would equal if you averaged out actual performance over
various lengths of time and compares the return with a broad measure of market
performance. This information is based on past performance; it's not a
prediction of future results.

YEAR-BY-YEAR % RETURNS as of 12/31 each year*

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
1989
'90
'91
'92
'93
'94
'95 7.88%
'96 23.69%
'97 11.21%
'98 2.70%
BEST
QUARTER:
Q1 '98,
up
17.90%
WORST
QUARTER:
Q3 '98,
down
25.92%
Year-to-date
performance
as of
9/30/99: up
16.49%
</TABLE>

AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/98*

<TABLE>
<CAPTION>
Since
Inception
1 Year 6/15/94
- ----------------------------------------------------------
<S> <C> <C>
INTERNATIONAL TRUST 2.70 9.53
EAFE Index 20.33 8.50
</TABLE>

The EAFE is an unmanaged index of stocks from Europe, Australasia, and the Far
East.

* THE FUND BEGAN OPERATING IN JUNE 1998. PERFORMANCE RESULTS FROM JUNE 1994 TO
JUNE 1998 ARE ACTUALLY THOSE OF ANOTHER NEUBERGER BERMAN FUND THAT BEGAN
OPERATIONS IN 1994, AND INVESTS IN THE SAME PORTFOLIO OF SECURITIES. BECAUSE
THE OLDER FUND HAD MODERATELY LOWER EXPENSES, ITS PERFORMANCE TYPICALLY SHOULD
BE SLIGHTLY BETTER THAN INTERNATIONAL TRUST WOULD HAVE HAD. THAT OLDER FUND IS
NOT OFFERED IN THIS PROSPECTUS.

International Trust 27
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT

VALERIE CHANG is a Vice President of Neuberger Berman Management and Managing
Director of Neuberger Berman, LLC. She joined the firm in 1996 as the fund's
assistant portfolio manager and has managed it since 1997. She began her career
in 1990 in banking, and from 1995 to 1996 was a senior securities analyst at
another firm.

BENJAMIN E. SEGAL is a Vice President of Neuberger Berman Management and a Vice
President of Neuberger Berman, LLC and has been the fund's Associate Manager
since January 1999. He was an assistant portfolio manager at another firm from
1997 to 1998. Prior to 1997 he held positions in international finance and
consulting.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For the 12 months ended 8/31/99, the
management/administration fees paid to Neuberger Berman Management
were 1.25% of average
net assets.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------
ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 1.25
PLUS: Distribution (12b-1) fees None
Other expenses 4.73
....
EQUALS: Total annual operating expenses 5.98
</TABLE>

* NEUBERGER BERMAN MANAGEMENT REIMBURSES CERTAIN EXPENSES OF THE FUND SO THAT
THE TOTAL ANNUAL OPERATING EXPENSES OF THE FUND ARE NOT MORE THAN 0.10% ABOVE
THOSE OF ANOTHER NEUBERGER BERMAN FUND THAT INVESTS IN THE SAME PORTFOLIO OF
SECURITIES BUT NOT TO EXCEED 1.70% OF AVERAGE NET ASSETS. THIS ARRANGEMENT
CAN BE TERMINATED UPON SIXTY DAYS' NOTICE TO THE FUND. IN ADDITION, THE
ARRANGEMENT DOES NOT COVER INTEREST, TAXES, BROKERAGE COMMISSIONS, AND
EXTRAORDINARY EXPENSES. THE TABLE INCLUDES COSTS PAID BY THE FUND AND ITS
SHARE OF MASTER PORTFOLIO COSTS. FOR MORE INFORMATION ON MASTER/FEEDER FUNDS,
SEE "FUND STRUCTURE" ON PAGE 63.

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses*** $595 $1768 $2918 $5695
</TABLE>

*** UNDER THE FUND'S EXPENSE REIMBURSEMENT ARRANGEMENT DESCRIBED IN THE FOOTNOTE
ABOVE, YOUR COSTS FOR THE ONE-, THREE-, FIVE- AND TEN-YEAR PERIODS WOULD BE
$173, $536, $923 AND $2009, RESPECTIVELY.

28 Neuberger Berman
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1998(1) 1999
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout each year indicated. You can see what the fund earned
(or lost), what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of year 17.13 13.87
PLUS: Income from investment operations
Net investment loss (0.02) (0.07)
Net gains/losses -- realized and unrealized (3.24) 3.12
Subtotal: income from investment operations (3.26) 3.05
...........
EQUALS: Share price (NAV) at end of year 13.87 16.92
- ------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment loss -- as they actually are as well as
how they would have been if certain expense reimbursement and offset arrangements had not been
in effect.
Net expenses -- actual 1.70(2) 1.70
Gross expenses(3) 6.02(2) 5.98
Expenses(4) 1.70(2) 1.70
Net investment loss -- actual (0.54)(2) (0.49)
- ------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over each year, assuming
all distributions were reinvested. The turnover rate reflects how actively the fund bought and
sold securities.
Total return(5)(%) (19.03)(6) 21.99
Net assets at end of year (in millions of dollars) 1.8 2.4
Portfolio turnover rate (%) 46 94
</TABLE>

(1) PERIOD FROM 6/29/98 (BEGINNING OF OPERATIONS) TO 8/31/98.

(2) ANNUALIZED.

(3) SHOWS WHAT THIS RATIO WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE
REIMBURSEMENT.

(4) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER
9/1/95.

(5) WOULD HAVE BEEN LOWER IF NEUBERGER BERMAN MANAGEMENT HAD NOT REIMBURSED
CERTAIN EXPENSES.

(6) NOT ANNUALIZED.

International Trust 29
<PAGE>
[PHOTO]

NEUBERGER BERMAN
MANHATTAN TRUST
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NBMTX ABOVE: PORTFOLIO MANAGERS JENNIFER K. SILVER AND BROOKE A.
COBB
</TABLE>

"WITHOUT QUESTION, WE ARE GROWTH INVESTORS. WE LOOK FOR COMPANIES THAT WE THINK
WILL DELIVER POSITIVE EARNINGS SURPRISES, PARTICULARLY THOSE WITH THE POTENTIAL
TO DO SO CONSISTENTLY. IDEALLY, WE WANT TO IDENTIFY COMPANIES THAT WILL SOMEDAY
RANK AMONG THE FORTUNE 500."

30
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

MID-CAP STOCKS
Mid-cap stocks have historically shown risk/return characteristics that are in
between those of small- and large-cap stocks. Their prices can rise and fall
substantially, although they have the potential to offer comparatively
attractive long-term returns.

Mid-caps are less widely followed on Wall Street than large-caps, which can make
it comparatively easier to find attractive stocks that are not overpriced.

GROWTH INVESTING

For growth investors, the aim is to invest in companies that are already
successful but could be even more so. Often, these stocks are in emerging or
rapidly growing industries and may not yet have reached their full potential.
The growth investor looks for indications of continued success.

[ICON]
THE FUND SEEKS GROWTH OF CAPITAL.

To pursue this goal, the fund invests mainly in common stocks of
mid-capitalization companies. The fund seeks to reduce risk by diversifying
among many companies, industries, and sectors.

The managers look for fast-growing companies that are in new or rapidly evolving
industries. Factors in identifying these firms may include:

- - above-average growth of earnings

- - earnings that have exceeded analysts' expectations

The managers may also look for other characteristics in a company, such as
financial strength, a strong position relative to competitors and a stock price
that is reasonable in light of its growth rate.

The managers follow a disciplined selling strategy, and may drop a stock from
the portfolio when it reaches a target price, fails to perform as expected, or
appears substantially less desirable than another stock.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

Manhattan Trust 31
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

By focusing on mid-cap stocks, the fund is subject to their risks, including the
risk its holdings may:

- - fluctuate more widely in price than the market as a whole

- - underperform other types of stocks or be difficult to sell when the economy is
not robust, during market downturns, or when mid-cap stocks are out of favor

Because the prices of most growth stocks are based on future expectations, these
stocks tend to be more sensitive than value stocks to bad economic news and
negative earnings surprises. Growth stocks may also underperform during periods
when the market favors value stocks. The fund's performance may also suffer if
certain stocks do not perform as the portfolio managers expected. To the extent
that the managers sell stocks before they reach their market peak, the fund may
miss out on opportunities for higher performance.

Through active trading, the fund may have a high portfolio turnover rate, which
can mean higher tax-
able distributions and lower performance due to
increased brokerage costs.

32 Neuberger Berman
<PAGE>
PERFORMANCE
- ------------------------------------------------------------

Because the fund had a policy of investing in stocks of all capitalizations and
used a comparatively more value-oriented investment approach prior to July 1997,
its performance would have been different if current policies had been in
effect.

YEAR-BY-YEAR % RETURNS as of 12/31 each year*

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
1989 29.09%
'90 -8.05%
'91 30.89%
'92 17.77%
'93 10.02%
'94 -3.43%
'95 30.82%
'96 9.74%
'97 29.33%
'98 15.91%
BEST
QUARTER:
Q4 '98,
up
27.34%
WORST
QUARTER:
Q3 '98,
down
21.35%
Year-to-date
performance
as of
9/30/99: up
0.47%
</TABLE>

AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/98*

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
- ------------------------------------------------------------
<S> <C> <C> <C>
MANHATTAN TRUST 15.91 15.76 15.39
Russell Midcap Growth Index 17.86 17.34 17.30
S&P 500 Index 28.52 24.02 19.16
</TABLE>

The Russell Midcap Growth Index is an unmanaged index of U.S. mid-cap growth
stocks.

The S&P 500 is an unmanaged index of U.S. stocks.

* THE FUND BEGAN OPERATING IN AUGUST 1993. PERFORMANCE RESULTS FROM 1989 TO
AUGUST 1993 ARE ACTUALLY THOSE OF ANOTHER FUND THAT NEUBERGER BERMAN
MANAGEMENT HAS ADVISED SINCE 1979, AND THAT INVESTS IN THE SAME PORTFOLIO OF
SECURITIES. BECAUSE THE OLDER FUND HAD MODERATELY LOWER EXPENSES, ITS
PERFORMANCE TYPICALLY SHOULD BE SLIGHTLY BETTER THAN MANHATTAN TRUST WOULD
HAVE HAD. THAT OLDER FUND IS NOT OFFERED IN THIS PROSPECTUS.

Manhattan Trust 33
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT

JENNIFER K. SILVER is a Vice President of Neuberger Berman Management and a
Managing Director of Neuberger Berman, LLC. Currently the Director of the Growth
Equity Group, she has been co-manager of the fund since joining the firm in
1997. From 1981 to 1997, she was an analyst and a portfolio manager at another
firm.

BROOKE A. COBB is a Vice President of Neuberger Berman Management and a Managing
Director of Neuberger Berman, LLC. He has been co-manager of the fund since
joining the firm in 1997. From 1972 to 1997, he was a portfolio manager at
several other firms.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For the 12 months ended 8/31/99, the
management/administration fees paid to Neuberger Berman Management
were 0.93% of average
net assets.

[ICON] The fund does not charge you any fees for
buying, selling, or exchanging shares, or
for maintaining your account. Your only
fund cost is your share of annual operating expenses.
The expense example can help you compare costs
among funds.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 0.93
PLUS: Distribution (12b-1) fees None
Other expenses 0.25
....
EQUALS: Total annual operating expenses 1.18
</TABLE>

* NEUBERGER BERMAN MANAGEMENT REIMBURSES CERTAIN EXPENSES OF THE FUND SO THAT
ITS TOTAL ANNUAL OPERATING EXPENSES ARE NOT MORE THAN 0.10% ABOVE THOSE OF
ANOTHER NEUBERGER BERMAN FUND THAT INVESTS IN THE SAME PORTFOLIO OF
SECURITIES. THIS ARRANGEMENT DOES NOT COVER INTEREST, TAXES, BROKERAGE
COMMISSIONS, AND EXTRAORDINARY EXPENSES. UNDER THIS ARRANGEMENT, WHICH
NEUBERGER BERMAN MANAGEMENT CAN TERMINATE UPON SIXTY DAYS' NOTICE TO THE
FUND, TOTAL ANNUAL OPERATING EXPENSES OF THE FUND LAST YEAR WERE LIMITED TO
1.11% OF THE FUND'S AVERAGE NET ASSETS. ACTUAL EXPENSES THIS YEAR MAY BE
HIGHER OR LOWER. THE TABLE INCLUDES COSTS PAID BY THE FUND AND ITS SHARE OF
MASTER PORTFOLIO COSTS. FOR MORE INFORMATION ON MASTER/FEEDER FUNDS, SEE
"FUND STRUCTURE" ON PAGE 63.

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses** $120 $375 $649 $1432
</TABLE>

** UNDER THE FUND'S EXPENSE REIMBURSEMENT ARRANGEMENT DESCRIBED IN THE FOOTNOTE
ABOVE, YOUR COSTS FOR THE ONE-, THREE-, FIVE- AND TEN-YEAR PERIODS WOULD BE
$113, $353, $612 AND $1352, RESPECTIVELY.

34 Neuberger Berman
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1995 1996 1997 1998 1999
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout each year indicated. You can see what the fund earned (or lost), what
it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of
year 10.37 12.99 12.18 15.77 11.61
PLUS: Income from investment operations
Net investment (loss) -- (0.04) (0.04) (0.07) (0.11)
Net gains/losses -- realized and
unrealized 2.67 (0.34) 4.55 (1.40) 4.29
Subtotal: income from investment
operations 2.67 0.38 4.51 (1.47) 4.18
MINUS: Distributions to shareholders
Income dividends 0.01 -- -- -- --
Capital gain distributions 0.04 0.43 0.92 2.69 0.77
Subtotal: distributions to
shareholders 0.05 0.43 0.92 2.69 0.77
................................................
EQUALS: Share price (NAV) at end of year 12.99 12.18 15.77 11.61 15.02
- -------------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment (loss) -- as they actually are as well as how they
would have been if certain expense reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 1.06 1.08 1.09 1.04 1.11
Gross expenses(1) 1.46 1.25 1.23 1.15 1.18
Expenses(2) -- 1.08 1.09 1.04 1.11
Net investment loss -- actual (0.03) (0.38) (0.30) (0.52) (0.61)
- -------------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over each year, assuming all
distributions were reinvested. The turnover rate reflects how actively the fund bought and sold securities.
Total return(3) (%) 25.90 (2.98) 38.84 (11.23) 36.24
Net assets at end of year (in millions of dollars) 35.6 48.2 51.1 46.1 45.3
Portfolio turnover rate (%) 44 53 89 90 115
</TABLE>

The figures above have been audited by PricewaterhouseCoopers LLP, the fund's
independent accountants. Their report, along with full financial statements,
appears in the fund's most recent shareholder report (see back cover).

(1) SHOWS WHAT THIS RATIO WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE
REIMBURSEMENT.

(2) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER
9/1/95.

(3) WOULD HAVE BEEN LOWER IF NEUBERGER BERMAN MANAGEMENT HAD NOT REIMBURSED
CERTAIN EXPENSES.

Manhattan Trust 35
<PAGE>
[PHOTO]

NEUBERGER BERMAN
MILLENNIUM TRUST
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
ABOVE: PORTFOLIO MANAGERS JENNIFER K. SILVER AND MICHAEL F.
MALOUF
</TABLE>

"WE MAKE IT OUR BUSINESS TO TRACK DOWN PROMISING SMALL-CAP COMPANIES WHEREVER
THEY MAY BE. AS A RESULT, THIS FUND ENABLES INVESTORS WHO CAN ACCEPT THE RISKS
OF SMALL-CAP STOCKS TO PURSUE THE POTENTIAL FOR LONG-TERM GROWTH THAT
SMALL-CAPS MAY PROVIDE."

36
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

SMALL-CAP STOCKS
Historically, stocks of smaller companies have
not always moved in tandem with those of larger companies. Over the last 40
years, small-caps have outperformed large-caps more than
60% of the time. However,
small-caps have often
fallen more severely during
market downturns.

GROWTH INVESTING
For growth investors, the aim is to invest in companies that are already
successful but could be even more so. Often, these stocks are in emerging or
rapidly growing industries.

While most growth stocks are known to investors, they may not yet have reached
their full potential. The growth investor looks for indications of continued
success.

[ICON]
THE FUND SEEKS GROWTH OF CAPITAL.

The managers take a growth approach to selecting stocks, looking for new
companies that are in the developmental stage as well as older companies that
appear poised to grow because of new products, markets or management. Factors in
identifying these firms may include financial strength, a strong position
relative to competitors and a stock price that is reasonable in light of its
growth rate.

The managers follow a disciplined selling strategy and may drop a stock from the
portfolio when it reaches a target price, fails to perform as expected, or
appears substantially less desirable than another stock.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

Millennium Trust 37
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

By focusing on small-cap stocks, the fund is subject to many of their risks,
including the risk its holdings may:

- - fluctuate more widely in price than the market as a whole

- - underperform other types of stocks or be difficult to sell when the economy is
not robust, during market downturns, or when small-cap stocks are out of favor

- - be more affected by the performance of those sectors in which small-cap growth
stocks may be concentrated

Through active trading, the fund may have a high portfolio turnover rate, which
can mean higher tax-
able distributions and lower performance due to
increased brokerage costs.

PERFORMANCE -- Because the fund is in its first calendar year of operations,
performance charts are not included.

38 Neuberger Berman
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT

MICHAEL F. MALOUF AND JENNIFER K. SILVER are Vice Presidents of Neuberger Berman
Management and Managing Directors of Neuberger Berman, LLC. They have co-managed
the fund since its inception in 1998. Silver has been Director of the Growth
Equity Group since 1997 and was an analyst and a portfolio manager at another
firm from 1981 to 1997. Malouf joined the firm in 1998. From 1991 to 1998, he
was a portfolio manager at another firm.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services.

For investment management services, the fund pays Neuberger Berman Management a
fee at the annual rate of 0.85% of the first $250 million of average 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.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 1.25
PLUS: Distribution (12b-1) fees 0.10
Other expenses 12.14
....
EQUALS: Total annual operating expenses 13.49
MINUS: Expense reimbursement** 11.74
....
EQUALS: Net expenses 1.75
</TABLE>

* THE TABLE INCLUDES COSTS PAID BY THE FUND AND ITS SHARE OF MASTER PORTFOLIO
COSTS. FOR MORE INFORMATION ON MASTER/FEEDER FUNDS, SEE "FUND STRUCTURE" ON
PAGE 63.

** NEUBERGER BERMAN MANAGEMENT HAS CONTRACTUALLY AGREED TO REIMBURSE CERTAIN
EXPENSES OF THE FUND THROUGH 12/31/09 SO THAT THE TOTAL ANNUAL OPERATING
EXPENSES OF THE FUND ARE LIMITED TO 1.75% OF AVERAGE NET ASSETS. THIS
ARRANGEMENT DOES NOT COVER INTEREST, TAXES, BROKERAGE COMMISSIONS, AND
EXTRAORDINARY EXPENSES. THE FUND HAS AGREED TO REPAY NEUBERGER BERMAN
MANAGEMENT THROUGH 12/31/00 FOR EXPENSES REIMBURSED TO THE FUND THROUGH
12/31/99 PROVIDED THAT REPAYMENT DOES NOT CAUSE THE FUND'S ANNUAL OPERATING
EXPENSES TO EXCEED 1.75% OF ITS AVERAGE NET ASSETS.

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses $178 $551 $949 $2062
</TABLE>

Millennium Trust 39
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 1999(1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout the period indicated. You can see what the fund earned (or lost),
what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of period 10.00
PLUS: Income from investment operations
Net investment loss (0.10)
Net gains/losses -- realized and unrealized 8.30
Subtotal: income from investment operations 8.20
.......................................
EQUALS: Share price (NAV) at end of period 18.20
- ----------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment loss -- as they actually are as well as how they
would have been if certain expense reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 1.75(2)
Gross expenses(3) 13.39(2)
Expenses(4) 1.76(2)
Net investment loss -- actual (1.24)(2)
- ----------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over the period, assuming all
distributions were reinvested. The turnover rate reflects how actively the fund bought and sold
securities.
Total return(5) (%) 82.00(6)
Net assets at end of period (in millions of dollars) 2.2
Portfolio turnover rate (%) 208
</TABLE>

(1) PERIOD FROM 11/4/98 (BEGINNING OF OPERATIONS) TO 8/31/99.

(2) ANNUALIZED.

(3) SHOWS WHAT THIS RATIO WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE
REIMBURSEMENT.

(4) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER
9/1/95.

(5) WOULD HAVE BEEN LOWER IF NEUBERGER BERMAN MANAGEMENT HAD NOT REIMBURSED
CERTAIN EXPENSES.

(6) NOT ANNUALIZED.

40 Neuberger Berman
<PAGE>
[PHOTO]

NEUBERGER BERMAN
PARTNERS TRUST
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NBPTX ABOVE: PORTFOLIO MANAGERS ROBERT I. GENDELMAN AND S. BASU
MULLICK
</TABLE>

"OUR GOAL IS TO FIND COMPANIES THAT WE BELIEVE ARE UNDERVALUED RELATIVE TO THEIR
EARNINGS POTENTIAL, WHERE WE SEE A GAP BETWEEN THE ACTUAL PRICE OF A STOCK AND
ITS INTRINSIC VALUE. WHEN A COMPANY GROWS IN VALUE AND/OR THE VALUATION GAP
CLOSES, THE SUCCESS OF OUR STRATEGY IS REALIZED."

41
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

MID- AND LARGE-
CAP STOCKS

Mid-cap stocks have historically performed more like small-caps than like large-
caps. Their prices can rise and fall substantially, although they have the
potential to offer attractive long-term returns.

Large companies are usually well-established. Compared to mid-cap companies,
they may be less responsive to change, but their returns have sometimes led
those of mid-cap companies, often with lower volatility.

[ICON]
THE FUND SEEKS GROWTH OF CAPITAL.

To pursue this goal, the fund invests mainly in common stocks of mid- to
large-capitalization companies. The fund seeks to reduce risk by diversifying
among many companies and industries.

The managers look for well-managed companies whose stock prices are undervalued.
Factors in identifying these firms may include:

- - strong fundamentals, such as a company's financial, operational and
competitive positions

- - consistent cash flow

- - a sound earnings record through all phases of the market cycle

The managers may also look for other characteristics in a company, such as a
strong position relative to competitors, a high level of stock ownership among
management, and a recent sharp decline in stock price that appears to be the
result of a short-term market overreaction to negative news.

The fund generally considers selling a stock when it reaches the managers'
target price, when it fails to perform as expected, or when other opportunities
appear more attractive.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

42 Neuberger Berman
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

To the extent that the fund emphasizes mid- or large-cap stocks, it takes on the
associated risks. Mid-cap stocks tend to be more volatile than large-cap stocks,
and are usually more sensitive to economic and market factors. At any given
time, one or both groups of stocks may be out of favor with investors.

Through active trading, the fund may have a high portfolio turnover rate, which
can mean higher tax-
able distributions and lower performance due to
increased brokerage costs.

Partners Trust 43
<PAGE>
PERFORMANCE
- ------------------------------------------------------------

YEAR-BY-YEAR % RETURNS as of 12/31 each year*

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
1989 22.78%
'90 -5.11%
'91 22.36%
'92 17.52%
'93 15.45%
'94 -0.99%
'95 35.15%
'96 26.45%
'97 29.10%
'98 6.14%
BEST
QUARTER:
Q4 '98,
up
16.27%
WORST
QUARTER:
Q3 '98,
down
14.71%
Year-to-date
performance
as of
9/30/99:
down 1.27%
</TABLE>

AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/98*

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
- ------------------------------------------------------------
<S> <C> <C> <C>
PARTNERS TRUST 6.14 18.32 16.19
S&P 500 Index 28.52 24.02 19.16
Russell 1000 Value Index 15.63 20.86 17.38
</TABLE>

The S&P 500 Index is an unmanaged index of U.S. stocks.

The Russell 1000 Value Index is an unmanaged index of U.S. mid- and large-cap
value stocks.

* THE FUND BEGAN OPERATING IN AUGUST 1993. PERFORMANCE RESULTS FROM 1989 TO
AUGUST 1993 ARE ACTUALLY THOSE OF ANOTHER FUND THAT NEUBERGER BERMAN
MANAGEMENT HAS ADVISED SINCE 1975, AND THAT INVESTS IN THE SAME PORTFOLIO OF
SECURITIES. BECAUSE THE OLDER FUND HAD MODERATELY LOWER EXPENSES, ITS
PERFORMANCE TYPICALLY SHOULD BE SLIGHTLY BETTER THAN PARTNERS TRUST WOULD HAVE
HAD. THAT OLDER FUND IS NOT OFFERED IN THIS PROSPECTUS.

44 Neuberger Berman
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT

ROBERT I. GENDELMAN AND S. BASU MULLICK are Vice Presidents of Neuberger
Berman Management and Managing Directors of Neuberger Berman, LLC. Gendelman has
been manager of the fund since 1994, and was joined by Mullick in 1998.
Gendelman was a portfolio manager at another firm from 1992 to 1993, as was
Mullick from 1993 to 1998.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For the 12 months ended 8/31/99, the
management/administration fees paid to Neuberger Berman Management were 0.85% of
average net assets.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 0.85
PLUS: Distribution (12b-1) fees None
Other expenses 0.06
....
EQUALS: Total annual operating expenses 0.91
</TABLE>

* THE FIGURES IN THE TABLE ARE BASED ON LAST YEAR'S EXPENSES. ACTUAL EXPENSES
THIS YEAR MAY BE HIGHER OR LOWER. THE TABLE INCLUDES COSTS PAID BY THE FUND
AND ITS SHARE OF MASTER PORTFOLIO COSTS. FOR MORE INFORMATION ON
MASTER/FEEDER FUNDS, SEE "FUND STRUCTURE" ON PAGE 63.

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses $ 93 $290 $504 $1120
</TABLE>

Partners Trust 45
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1995 1996 1997 1998 1999
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout each year indicated. You can see what the fund earned (or lost), what it distributed to
investors, and how its share price changed.
Share price (NAV) at beginning of year 10.54 12.68 13.39 18.80 15.24
PLUS: Income from investment operations
Net investment income 0.05 0.08 0.07 0.11 0.16
Net gains/losses -- realized and unrealized 2.19 1.59 6.06 (1.82) 3.77
Subtotal: income from investment operations 2.24 1.67 6.13 (1.71) 3.93
MINUS: Distributions to shareholders
Income dividends 0.02 0.07 0.08 0.08 --
Capital gain distributions 0.08 0.89 0.64 1.77 0.46
Subtotal: distributions to shareholders 0.10 0.96 0.72 1.85 0.46
............................................................
EQUALS: Share price (NAV) at end of year 12.68 13.39 18.80 15.24 18.71
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment income -- as they actually are as well as how they would have been if
certain expense reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 0.92 0.94 0.91 0.90 0.91
Gross expenses(1) 1.24 1.06 0.94 0.91 --
Expenses(2) -- 0.94 0.91 0.90 0.91
Net investment income -- actual 0.81 0.84 0.64 0.70 0.83
- -------------------------------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over each year, assuming all distributions were
reinvested. The turnover rate reflects how actively the fund bought and sold securities.
Total return (%) 21.52(3) 13.76(3) 47.11(3) (10.15)(3) 25.91
Net assets at end of year (in millions of dollars) 61.3 128.5 470.6 729.7 850.1
Portfolio turnover rate (%) 98 96 77 109 132
</TABLE>

(1) SHOWS WHAT THIS RATIO WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE
REIMBURSEMENT.

(2) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER
9/1/95.

(3) WOULD HAVE BEEN LOWER IF NEUBERGER BERMAN MANAGEMENT HAD NOT REIMBURSED
CERTAIN EXPENSES.

46 Neuberger Berman
<PAGE>
[PHOTO]

NEUBERGER BERMAN
REGENCY TRUST
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NBREX ABOVE: PORTFOLIO MANAGERS ROBERT I. GENDELMAN AND S. BASU
MULLICK
</TABLE>

"WE FOCUS ON THE MID-CAP SECTOR OF THE MARKET BECAUSE WE BELIEVE THERE ARE
NUMEROUS OPPORTUNITIES THERE TO FIND LESS WELL-KNOWN VALUES. WE LOOK FOR
LEADERSHIP COMPANIES WITH STRONG FUNDAMENTALS WHOSE UNDERLYING VALUE IS NOT YET
REFLECTED IN THEIR STOCK PRICES."

47
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

Mid-caps are less widely followed on Wall Street than
large-caps, which can make it comparatively easier to find attractive stocks
that are not overpriced.

[ICON]
THE FUND SEEKS GROWTH OF CAPITAL.

To pursue this goal, the fund invests mainly in common stocks of
mid-capitalization companies. The fund seeks to reduce risk by diversifying
among different companies and industries.

The managers look for well-managed companies whose stock prices are undervalued.
Factors in identifying these firms may include:

- - strong fundamentals, such as a company's financial, operational, and
competitive positions

- - consistent cash flow

- - a sound earnings record through all phases of the market cycle

The fund generally considers selling a stock when it reaches the managers'
target price, when it fails to perform as expected, or when other opportunities
appear more attractive.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

48 Neuberger Berman
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term fixed-
income investments. This could help the fund avoid losses but may mean lost
opportunities.

By focusing on mid-cap stocks, the fund is subject to their risks, including the
risk its holdings may:

- - fluctuate more widely in price than the market as
a whole

- - underperform other types of stocks or be difficult to sell when the economy is
not robust, during market downturns, or when mid-cap stocks are out of favor

Through active trading, the fund may have a high portfolio turnover rate, which
can mean higher taxable distributions and lower performance due to increased
brokerage costs.

PERFORMANCE -- Because the fund is new it does not have performance to report.

Regency Trust 49
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT

ROBERT I. GENDELMAN AND S. BASU MULLICK are Vice
Presidents of Neuberger Berman Management and Managing Directors of Neuberger
Berman, LLC. They have co-managed the fund since its inception in 1999.
Gendelman was a portfolio manager at another firm from 1992 to 1993, as was
Mullick from 1993 to 1998.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For investment management services, the fund
will pay Neuberger Berman Management a fee at the annual rate of 0.55% of the
first $250 million of average net assets, 0.525% of the next $250 million,
0.500% of the next $250 million, 0.475% of the next $250 million, 0.450% of the
next $500 million, and 0.425% of average net assets in excess of $1.5 billion.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 0.95
PLUS: Distribution (12b-1) fees 0.10
Other expenses** 0.88
....
EQUALS: Total annual operating expenses 1.93
MINUS: Expense reimbursement 0.43
....
EQUALS: Net expenses 1.50
</TABLE>

* NEUBERGER BERMAN MANAGEMENT HAS CONTRACTUALLY AGREED TO REIMBURSE CERTAIN
EXPENSES OF THE FUND THROUGH 12/31/02, SO THAT THE TOTAL ANNUAL OPERATING
EXPENSES OF THE FUND ARE LIMITED TO 1.50% OF AVERAGE NET ASSETS OR NOT MORE
THAN .20% ABOVE THE TOTAL ANNUAL OPERATING EXPENSES OF ANOTHER NEUBERGER
BERMAN FUND THAT INVESTS IN THE SAME PORTFOLIO OF SECURITIES, WHICHEVER IS
LESS. THIS ARRANGEMENT DOES NOT COVER INTEREST, TAXES, BROKERAGE COMMISSIONS,
AND EXTRAORDINARY EXPENSES. THE FUND HAS AGREED TO REPAY NEUBERGER BERMAN
MANAGEMENT FOR EXPENSES REIMBURSED TO THE FUND PROVIDED THAT REPAYMENT DOES
NOT CAUSE THE FUND'S ANNUAL OPERATING EXPENSES TO EXCEED 1.50% OF ITS AVERAGE
NET ASSETS. ANY SUCH REPAYMENT MUST BE MADE WITHIN THREE YEARS AFTER THE YEAR
IN WHICH NEUBERGER BERMAN MANAGEMENT INCURRED THE EXPENSE. THE TABLE INCLUDES
COSTS PAID BY THE FUND AND ITS SHARE OF MASTER PORTFOLIO COSTS. FOR MORE
INFORMATION ON MASTER/FEEDER FUNDS, SEE "FUND STRUCTURE" ON PAGE 63.

** OTHER EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years
- ------------------------------------------------------------
<S> <C> <C>
Expenses $153 $474
</TABLE>

50 Neuberger Berman
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1999(1)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout the period indicated. You can see what the fund earned (or
lost), what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning of period 10.00
PLUS: Income from investment operations
Net investment income 0.01
Net gains/losses -- realized and unrealized (0.25)
Subtotal: income from investment operations (0.24)
.......
EQUALS: Share price (NAV) at end of period 9.76
- -----------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment income -- as they actually are as well as how
they would have been if certain expense reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 1.50(2)
Gross expenses(3) 129.45(2)
Expenses(4) 1.51(2)
Net investment income -- actual 0.57(2)
- -----------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over the period, assuming all
distributions were reinvested. The turnover rate reflects how actively the fund bought and sold
securities.
Total return (%) (2.40)(5)(6)
Net assets at end of period (in millions of dollars) 0.4
Portfolio turnover rate (%) 42
</TABLE>

(1) PERIOD FROM 6/10/99 (BEGINNING OF OPERATIONS) TO 8/31/99.

(2) ANNUALIZED.

(3) SHOWS WHAT THIS RATIO WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE
REIMBURSEMENT.

(4) SHOWS WHAT EXPENSES WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE OFFSET
ARRANGEMENTS. THIS CALCULATION IS REQUIRED FOR ALL PERIODS ENDING AFTER
9/1/95.

(5) WOULD HAVE BEEN LOWER IF NEUBERGER BERMAN MANAGEMENT HAD NOT REIMBURSED
CERTAIN EXPENSES.

(6) NOT ANNUALIZED.

Regency Trust 51
<PAGE>

[This page is intentionally blank]
52
<PAGE>

[This page is intentionally blank]
53
<PAGE>

[This page is intentionally blank]
54
<PAGE>

[This page is intentionally blank]
55
<PAGE>

[This page is intentionally blank]
56
<PAGE>

[This page is intentionally blank]
57
<PAGE>
YOUR INVESTMENT

MAINTAINING YOUR
ACCOUNT
- ------------------------------------------------------------

YOUR INVESTMENT PROVIDER
The fund shares described in this prospectus are available only through
investment providers such as banks, brokerage firms, workplace retirement
programs, and financial advisers.

The fees and policies outlined in this prospectus are set by the funds and by
Neuberger Berman Management. However, most of the information you'll need for
managing your investment will come from your investment provider. This includes
information on how to buy and sell shares, investor services, and additional
policies.

In exchange for the services it offers, your investment provider may charge
fees, which are in addition to those described in this prospectus.

To buy or sell shares of any of the funds described in this prospectus, contact
your investment provider. All investments must be made in U.S. dollars, and
investment checks must be drawn on a U.S. bank. The funds do not issue
certificates for shares.

Most investment providers allow you to take advantage of the Neuberger Berman
fund exchange program, which is designed for moving money from one Neuberger
Berman fund to another through an exchange of shares. However, this privilege
can be withdrawn from any investor that we believe is trying to "time the
market" or is otherwise making exchanges that we judge to be excessive. Frequent
exchanges can interfere with fund management and affect costs and performance
for other shareholders.

Under certain circumstances, the funds reserve the right to:

- - suspend the offering of shares

- - reject any exchange or investment order

- - change, suspend, or revoke the exchange privilege

- - satisfy an order to sell fund shares with securities rather than cash, for
certain very large orders

- - suspend or postpone the redemption of shares on days when trading on the New
York Stock Exchange is restricted, or as otherwise permitted by the SEC

58 Neuberger Berman
<PAGE>
- ------------------------------------------------------------

BUYING SHARES BEFORE
A DISTRIBUTION

The money a fund earns, either as income or as capital gains, is reflected in
its share price until the fund distributes the money. At that time, the amount
of the distribution is deducted from the share price. The amount of the
distribution is either reinvested in additional fund shares or paid to
shareholders in cash.

Because of this, if you buy shares just before a fund makes a distribution,
you'll end up getting some of your investment back as a taxable distribution.
You can avoid this situation by waiting to invest until after the distribution
has been made.

Generally, if you're investing in a tax-advantaged account, there are no tax
consequences to you.

The proceeds from the shares you sold are generally sent out the next business
day after your order is executed, and nearly always within three business days.
There are two cases in which proceeds may be delayed beyond this time:

- - in unusual circumstances where the law allows additional time if needed

- - if a check you wrote to buy shares hasn't cleared by the time you sell those
shares

If you think you may need to sell shares soon after buying them, you can avoid
the check clearing time (which may be up to 15 days) by investing by wire or
certified check.

DISTRIBUTION AND SHAREHOLDER SERVICING FEES -- Neuberger Berman Century Trust,
Focus Trust, Millennium Trust and Regency Trust have adopted a plan under which
each fund pays 0.10% of its average net assets every year to support share
distribution and shareholder servicing. These fees increase the cost of
investing in the funds. If used to support distribution, they could result in
higher overall costs over the long term than other types of sales charges.

Your Investment 59
<PAGE>
SHARE PRICES
- ------------------------------------------------------------

SHARE PRICE CALCULATIONS
A fund's share price is the total value of its assets minus its liabilities,
divided by the total number of shares. Because the value of a fund's securities
changes every business day, the share price usually changes as well.

When valuing portfolio securities, the funds use market prices. However, in rare
cases, events that occur after certain markets have closed may render these
prices unreliable.

When the fund believes a market price does not reflect a security's true value,
the fund may substitute for the market price a fair-value estimate derived
through methods approved by its trustees. A fund may also use these methods to
value certain types of illiquid securities.

Because these funds do not have initial sales charges, the price you pay for
each share of a fund is the fund's net asset value per share. Similarly, because
these funds charge no fees for selling shares, they pay you the full share price
when you sell shares. Remember that your investment provider may charge fees for
its services.

The funds are open for business every day the New York Stock Exchange is open.
The Exchange is closed on all national holidays and Good Friday; fund shares
will not be priced on those days. In general, every buy or sell order you place
will go through at the next share price to be calculated after your order has
been accepted; check with your investment provider to find out by what time your
order must be received in order to be processed the same day. Each fund
calculates its share price as of the end of regular trading on the Exchange on
business days, usually 4:00 p.m. eastern time. Depending on when your investment
provider accepts orders, it's possible that the fund's share price could change
on days when you are unable to buy or sell shares.

Also, because foreign markets may be open on days when U.S. markets are closed,
the value of foreign securities owned by a fund could change on days when you
can't buy or sell fund shares. Remember, though, any purchase or sale takes
place at the next share price calculated after your order is received.

60 Neuberger Berman
<PAGE>
DISTRIBUTIONS
AND TAXES
- ------------------------------------------------------------

TAXES AND YOU
The taxes you actually owe on distributions and transactions can vary with many
factors, such as your tax bracket, how long you held your shares, and whether
you owe alternative minimum tax.

How can you figure out your tax liability on fund distributions and share
transactions? One helpful tool is the tax statement that your investment
provider sends you every January. It details the distributions you received
during the past year and shows their tax status. A separate statement covers
your share transactions.

Most importantly, consult your tax professional. Everyone's tax situation is
different, and your professional should be able to help you answer any questions
you may have.

DISTRIBUTIONS -- Each fund pays out to shareholders any net income and net
capital gains. Ordinarily, the funds make any distributions once a year (in
December), except for Guardian Trust, which typically distributes any net income
quarterly.

Consult your investment provider about whether your income and capital gain
distributions from a fund will be reinvested in that fund or paid to you
in cash.

HOW DISTRIBUTIONS ARE TAXED -- Except for tax-advantaged retirement accounts and
other tax-exempt investors, all fund distributions you receive are generally
taxable to you, regardless of whether you take them in cash or reinvest them.
Fund distributions to Roth IRAs, other individual retirement accounts and
qualified retirement plans generally are tax-free. Eventual withdrawals from a
Roth IRA of those amounts also may be tax-free, while withdrawals from other
retirement accounts and plans generally are subject to tax.

Distributions are taxable in the year you receive them. In some cases,
distributions you receive in January are taxable as if they had been paid the
previous year. Your tax statement (see sidebar) will help clarify this for you.

Income distributions and net short-term capital gain distributions are generally
taxed as regular income. Distributions of other capital gains are generally
taxed as long-term capital gains. The tax treatment of capital gain
distributions depends on how long the fund held the securities it sold, not when
you bought your shares of the fund or whether you reinvested your distributions.

Your Investment 61
<PAGE>
DISTRIBUTIONS
AND TAXES CONTINUED
- -------------------------------------------------------------------

EURO AND YEAR 2000
ISSUES

Like other mutual funds, the funds could be affected by problems relating to the
conversion of European currencies into the Euro, which extends from 1/1/99 to
7/1/02, and the ability of computer systems to recognize the year 2000.

At Neuberger Berman, we are taking steps to ensure that our own computer systems
are compliant with Euro and Year 2000 issues and to determine that the systems
used by our major service providers are also compliant. We are also making
efforts to determine whether companies in the funds' portfolios will be affected
by either issue.

At the same time, it is impossible to know whether these problems, which could
disrupt fund operations and investments if uncorrected, have been adequately
addressed until the dates in question arrive.

HOW SHARE TRANSACTIONS ARE TAXED -- When you sell or exchange fund shares, you
generally realize a taxable gain or loss. The exception, once again, is
tax-advantaged retirement accounts.

UNCASHED CHECKS -- When you receive a check, you may want to deposit or cash it
right away, as you will not receive interest on uncashed checks.

62 Neuberger Berman
<PAGE>
FUND STRUCTURE
- ------------------------------------------------------------

Each of the funds in this prospectus uses a "master/feeder" structure.

Rather than investing directly in securities, each fund is a "feeder fund,"
meaning that it invests in a corresponding "master portfolio." The master
portfolio in turn invests in securities, using the strategies described in this
prospectus. One potential benefit of this structure is lower costs, since the
expenses of the master portfolio can be shared with any other feeder funds. In
this prospectus we have used the word "fund" to mean a feeder fund and its
master portfolio.

For reasons relating to costs or a change in investment goal, among others, a
feeder fund could switch to another master portfolio or decide to manage its
assets itself. No fund in this prospectus is currently contemplating such a
move.

Your Investment 63
<PAGE>
- -------------------------------------------------------------------

NOTES

64
<PAGE>
65
<PAGE>
- --------------------------------------------

NOTES

66
<PAGE>
67
<PAGE>
- --------------------------------------------

NOTES

68
<PAGE>
69
<PAGE>
OBTAINING INFORMATION
You can obtain a shareholder report, SAI, and other information from your
investment provider, or from:

NEUBERGER BERMAN
MANAGEMENT INC.
605 Third Avenue 2nd floor
New York, NY 10158-0180
800-877-9700
212-476-8800

Broker/Dealer and
Institutional Services:
800-366-6264

Web site:
www.nbfunds.com
Email:
[email protected]

SECURITIES AND EXCHANGE COMMISSION
Washington, DC
20549-6009
800-SEC-0330 (Public
Reference Section)

Web site:
www.sec.gov

You can request copies of documents from the SEC for the cost of a duplicating
fee, or view documents at the SEC's Public Reference Room in Washington.

NEUBERGER BERMAN EQUITY TRUST

- - No load

- - No front-end sales charge

If you'd like further details on any of these funds, you can request a free copy
of the following documents:

SHAREHOLDER REPORTS -- Published twice a year, the shareholder reports offer
information about the fund's recent performance, including:

- - a discussion by the portfolio manager(s) about strategies and market
conditions

- - fund performance data and financial statements

- - complete portfolio holdings

STATEMENT OF ADDITIONAL INFORMATION -- The SAI contains more comprehensive
information on these funds, including:

- - various types of securities and practices, and their risks

- - investment limitations and additional policies

- - information about each fund's management and business structure

The SAI is hereby incorporated by reference into this prospectus, making it
legally part of the prospectus.

Investment manager:
NEUBERGER BERMAN MANAGEMENT INC.
Sub-adviser:
NEUBERGER BERMAN, LLC

[LOGO]

NEUBERGER BERMAN MANAGEMENT INC.
605 Third Avenue 2nd Floor
New York, NY 10158-0180

[RECYCLE LOGO] NMLRR0561299 SEC file number: 811-7784

<PAGE>
[PHOTO] NEUBERGER BERMAN

NEUBERGER BERMAN
GUARDIAN TRUST-SM-
- --------------------------------------------------------------------------------
PROSPECTUS DECEMBER 1, 1999

<TABLE>
<C> <S>
NEUBERGER BERMAN EQUITY TRUST

PAGE 2 ...... Guardian Trust

YOUR INVESTMENT

8 ...... Maintaining Your Account

10 ...... Share Prices

11 ...... Distributions and Taxes

13 ...... Fund Structure
</TABLE>

The "Neuberger Berman" name and logo are service
marks of Neuberger Berman, LLC. "Neuberger Berman
Management Inc." and the fund name in this
prospectus are either service marks or registered
trademarks of Neuberger Berman Management Inc.
-C-1999 Neuberger Berman Management Inc.
<PAGE>
- ------------------------------------------------------------

FUND MANAGEMENT
The fund is managed by Neuberger Berman Management Inc., in conjunction with
Neuberger Berman, LLC, as sub-adviser. Together, the firms manage more than
$51.3 billion in total assets (as of September 30, 1999) and continue an asset
management history that began in 1939.

RISK INFORMATION
This prospectus discusses principal risks of investment in fund shares. These
and other risks are discussed in detail in the Statement of Additional
Information (see back cover).

THIS FUND:

- - IS DESIGNED FOR INVESTORS WITH LONG-TERM GOALS IN MIND

- - OFFERS YOU THE OPPORTUNITY TO PARTICIPATE IN FINANCIAL MARKETS THROUGH A
PROFESSIONALLY MANAGED STOCK PORTFOLIO

- - ALSO OFFERS THE OPPORTUNITY TO DIVERSIFY YOUR PORTFOLIO WITH A FUND THAT
INVESTS USING A VALUE APPROACH

- - USES A MASTER/FEEDER STRUCTURE IN ITS PORTFOLIO; SEE PAGE 13 FOR INFORMATION
ON HOW IT WORKS

- - CARRIES CERTAIN RISKS, INCLUDING THE RISK THAT YOU COULD LOSE MONEY IF FUND
SHARES ARE WORTH LESS THAN WHAT YOU PAID

- - IS A MUTUAL FUND, NOT A BANK DEPOSIT, AND IS NOT GUARANTEED OR INSURED BY THE
FDIC OR ANY OTHER
GOVERNMENT AGENCY

1
<PAGE>
NEUBERGER BERMAN
GUARDIAN TRUST
- --------------------------------------------------------------------------------

<TABLE>
<C> <S>
Ticker Symbol: NBGTX PORTFOLIO MANAGERS KEVIN L. RISEN AND ALLAN "RICK" WHITE
</TABLE>

2
<PAGE>
GOAL & STRATEGY
- ------------------------------------------------------------

LARGE-CAP STOCKS
Large companies are usually well-established. They may have a variety of
products and business lines and a sound financial base that can help them
weather bad times.

[ICON]
THE FUND SEEKS LONG-TERM GROWTH OF CAPITAL; CURRENT INCOME IS A
SECONDARY GOAL.

The managers look for well managed companies whose stock prices are undervalued.
Factors in identifying these firms may include:

- - solid balance sheets

- - above-average returns

- - low valuation measures, such as price-to-earnings ratios

- - strong competitive positions

When a stock no longer meets the fund's investment criteria, the managers will
consider selling it.

The fund has the ability to change its goal without shareholder approval,
although it does not currently intend to do so.

Guardian Trust 3
<PAGE>
MAIN RISKS
- ------------------------------------------------------------

OTHER RISKS
The fund may use certain practices and securities involving additional risks.

Although they may add diversification, foreign securities can be riskier,
because foreign markets tend to be more volatile and currency exchange rates
fluctuate.

When the fund anticipates adverse market, economic, political or other
conditions, it may temporarily depart from its goal and invest substantially in
high-quality short-term investments. This could help the fund avoid losses but
may mean lost opportunities.

At times, large-cap stocks may lag other types of stocks in performance, which
could cause the fund to perform worse than certain other funds over a given time
period.

4 Neuberger Berman
<PAGE>
PERFORMANCE
- ------------------------------------------------------------

YEAR-BY-YEAR % RETURNS as of 12/31 each year*

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
1989 21.50
'90 -4.71
'91 34.33
'92 19.01
'93 13.52
'94 1.52
'95 31.99
'96 17.74
'97 17.83
'98 2.36
BEST
QUARTER:
Q4 '98,
up
23.16%
WORST
QUARTER:
Q3 '98,
down
26.19%
Year-to-date
performance
as of
9/30/99:
down 3.38%
</TABLE>

AVERAGE ANNUAL TOTAL % RETURNS as of 12/31/98*

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
- ------------------------------------------------------------
<S> <C> <C> <C>
GUARDIAN TRUST 2.36 13.73 14.86
S&P 500 Index 28.52 24.02 19.16
Russell 1000 Value Index 15.63 20.86 17.38
</TABLE>

The S&P 500 Index is an unmanaged index of U.S. stocks.

The Russell 1000 Value Index is an unmanaged index of U.S. mid- and large-cap
value stocks.
* THE FUND BEGAN OPERATING IN AUGUST 1993. PERFORMANCE RESULTS FROM 1989 TO
AUGUST 1993 ARE ACTUALLY THOSE OF ANOTHER NEUBERGER BERMAN FUND THAT BEGAN
OPERATIONS IN 1950, AND INVESTS IN THE SAME PORTFOLIO OF SECURITIES. BECAUSE
THE OLDER FUND HAD MODERATELY LOWER EXPENSES, ITS PERFORMANCE TYPICALLY SHOULD
BE SLIGHTLY BETTER THAN GUARDIAN TRUST WOULD HAVE BEEN. THAT OLDER FUND IS NOT
OFFERED IN THIS PROSPECTUS.

Guardian Trust 5
<PAGE>
INVESTOR EXPENSES
- ------------------------------------------------------------

MANAGEMENT
KEVIN L. RISEN and ALLAN R. WHITE III are Vice Presidents of Neuberger Berman
Management and Managing Directors of Neuberger Berman, LLC. Risen has co-managed
the fund's assets since 1996. He joined Neuberger Berman in 1992 as an analyst,
and has been a portfolio manager since 1995. White has been co-manager of the
fund since September 1998, when he joined the firm. From 1989 to 1998 he was a
portfolio manager at another firm.

NEUBERGER BERMAN MANAGEMENT is the fund's investment manager, administrator, and
distributor. It engages Neuberger Berman, LLC as sub-adviser to provide
management and related services. For the 12 months ended 8/31/99, the
management/administration fees paid to Neuberger Berman Management
were 0.84% of average
net assets.

FEE TABLE

SHAREHOLDER FEES None
- -------------------------------------------------------

ANNUAL OPERATING EXPENSES (% of average net assets)*

These are deducted from fund assets, so you pay them indirectly.

<TABLE>
<S> <C> <C>
Management fees 0.84
PLUS: Distribution (12b-1) fees None
Other expenses 0.04
....
EQUALS: Total annual operating expenses 0.88
</TABLE>

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses $90 $281 $488 $1084
</TABLE>

6 Neuberger Berman
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Year Ended August 31, 1995 1996 1997 1998 1999
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA ($)
Data apply to a single share throughout each year indicated. You can see what the fund earned (or lost),
what it distributed to investors, and how its share price changed.
Share price (NAV) at beginning
of year 11.27 13.83 14.24 19.47 14.24
Income from investment
PLUS: operations
Net investment income 0.13 0.16 0.08 0.09 0.12
Net gains/losses -- realized and
unrealized 2.55 0.55 5.48 (3.93) 3.57
Subtotal: income from investment
operations 2.68 0.71 5.56 (3.84) 3.69
MINUS: Distributions to shareholders
Income dividends 0.12 0.14 0.10 0.10 0.10
Capital gain distributions -- 0.16 0.23 1.29 1.47
Subtotal: distributions to
shareholders 0.12 0.30 0.33 1.39 1.57
..................................................
EQUALS: Share price (NAV) at end of year 13.83 14.24 19.47 14.24 16.36
- -----------------------------------------------------------------------------------------------------------
RATIOS (% of average net assets)
The ratios show the fund's expenses and net investment income -- as they actually are as well as how they
would have been if certain expense reimbursement and offset arrangements had not been in effect.
Net expenses -- actual 0.90 0.92 0.88 0.87 0.88
Gross expenses(1) 0.96 0.92 -- -- --
Expenses(2) -- 0.92 0.88 0.87 0.88
Net investment income -- actual 1.35 1.26 0.47 0.50 0.65
- -----------------------------------------------------------------------------------------------------------
OTHER DATA
Total return shows how an investment in the fund would have performed over each year, assuming all
distributions were reinvested. The turnover rate reflects how actively the fund bought and sold securities.
Total return (%) 24.01(3) 5.19(3) 39.56 (20.88) 26.07
Net assets at end of year (in millions of dollars) 683.1 1,340.1 2,269.8 1,529.5 1,251.2
Portfolio turnover rate (%) 26 37 50 60 73
</TABLE>

(1) SHOWS WHAT THIS RATIO WOULD HAVE BEEN IF THERE HAD BEEN NO EXPENSE
REIMBURSEMENT.

Guardian Trust 7
<PAGE>
YOUR INVESTMENT

MAINTAINING YOUR
ACCOUNT
- ------------------------------------------------------------

YOUR INVESTMENT PROVIDER
The fund shares described in this prospectus are
available through investment providers such as banks, brokerage firms, workplace
retirement programs, and financial advisers.

The fees and policies outlined in this prospectus are set by the fund and by
Neuberger Berman Management. However, most of the information you'll need for
managing your investment will come from your investment provider. This includes
information on how to buy and sell shares, investor services, and additional
policies.

In exchange for the services it offers, your investment provider may charge
fees, which are in addition to those described in this
prospectus.

To buy or sell shares of the fund described in this prospectus, contact your
investment provider. All investments must be made in U.S. dollars, and
investment checks must be drawn on a U.S. bank. The fund does not issue
certificates for shares.

8 Neuberger Berman
<PAGE>
- ------------------------------------------------------------

BUYING SHARES BEFORE
A DISTRIBUTION
The money the fund earns, either as income or as capital gains, is reflected
in its share price until the fund distributes the money. At that time, the
amount of the distribution is deducted from the share price. The amount of the
distribution is either reinvested in additional fund shares or paid to
shareholders in cash.

Because of this, if you buy shares just before the fund makes a distribution,
you'll end up getting some of your investment back as a taxable distribution.
You can avoid this situation by waiting to invest until after the distribution
has been made.

Generally, if you're investing in a tax-advantaged account, there are no tax
consequences to you.

Under certain circumstances, the fund reserves the right to:

- - suspend the offering of shares

- - reject any exchange or investment order

- - change, suspend, or revoke the exchange privilege

- - satisfy an order to sell fund shares with securities rather than cash, for
certain very large orders

- - suspend or postpone the redemption of shares on days when trading on the New
York Stock Exchange is restricted, or as otherwise permitted by the SEC

The proceeds from the shares you sold are generally sent out the next business
day after your order is executed, and nearly always within three business
days. There are two cases in which proceeds may be delayed beyond this time:

- - in unusual circumstances where the law allows additional time if needed

- - if a check you wrote to buy shares hasn't cleared by the time you sell those
shares

If you think you may need to sell shares soon after buying them, you can avoid
the check clearing time (which may be up to 15 days) by investing by wire or
certified check.

Your Investment 9
<PAGE>
SHARE PRICES
- ------------------------------------------------------------

SHARE PRICE CALCULATIONS
The fund's share price is the total value of its assets minus its liabilities,
divided by the total number of shares. Because the value of the fund's
securities changes every business day, the share price usually changes as well.

When valuing portfolio securities, the fund uses market prices. However, in rare
cases, events that occur after certain markets have closed may render these
prices unreliable.

When the fund believes a market price does not reflect a security's true value,
the fund may substitute for the market price a fair-value estimate derived
through methods approved by its trustees. The fund may also use these methods to
value certain types of illiquid securities.

Because the fund does not have a sales charge, the price you pay for each share
of the fund is the fund's net asset value per share. Similarly, because the fund
does not charge any fee for selling shares, the fund pays you the full share
price when you sell shares. Remember that your investment provider may charge
fees for its services.

The fund is open for business every day the New York Stock Exchange is open. The
Exchange is closed on all national holidays and Good Friday; fund shares will
not be priced on those days. In general, every buy or
sell order you place will go through at the next share price to be calculated
after your order has been accepted; check with your investment provider to find
out by what time your order must be received in order to be processed the same
day. The fund calculates its share price as of the end of regular trading on the
Exchange on business days, usually 4:00 p.m. eastern time. Depending on when
your investment provider accepts orders, it's possible that the fund's share
price could change on days when you are unable to buy or sell shares.

Also, because foreign markets may be open on days when U.S. markets are closed,
the value of foreign securities owned by the fund could change on days when you
can't buy or sell fund shares. Remember, though, any purchase or sale takes
place at the next share price calculated after your order is received.

10 Neuberger Berman
<PAGE>
DISTRIBUTIONS
AND TAXES
- ------------------------------------------------------------

TAXES AND YOU
The taxes you actually owe on distributions and transactions can vary with many
factors, such as your tax bracket, how long you held your shares and whether you
owe alternative minimum tax.

Most importantly, consult your tax professional. Everyone's tax situation is
different, and your professional should be able to help you answer any questions
you may have.

DISTRIBUTIONS -- The fund pays out to shareholders any net income and net
capital gains. Ordinarily, the fund distributes any net income quarterly.

Consult your investment provider about whether your income and capital gain
distributions from the fund will be reinvested in the fund or paid to you
in cash.

Your Investment 11
<PAGE>
DISTRIBUTIONS
AND TAXES CONTINUED
- -------------------------------------------------------------------

EURO AND YEAR 2000 ISSUES
Like other mutual funds, the fund could be affected by problems relating to the
conversion of European currencies into the Euro, which extends from 1/1/99 to
7/1/02, and the ability of computer systems to recognize the year 2000.

At Neuberger Berman, we are taking steps to ensure that our own computer
systems are compliant with Euro and Year 2000 issues and to determine that the
systems used by our major service providers are also compliant. We are also
making efforts to determine whether companies in the fund's portfolio will be
affected by either issue.

HOW SHARE TRANSACTIONS ARE TAXED -- When you sell or exchange fund shares, you
generally realize a taxable gain or loss. The exception, once again, is tax-
advantaged retirement accounts.

UNCASHED CHECKS -- When you receive a check, you may want to deposit or cash it
right away, as you will not receive interest on uncashed checks.

12 Neuberger Berman
<PAGE>
FUND STRUCTURE
- ------------------------------------------------------------

The fund uses a "master/feeder" structure.

Rather than investing directly in securities, the fund is a "feeder fund,"
meaning that it invests in a corresponding "master portfolio." The master
portfolio in turn invests in securities, using the strategies described in this
prospectus. One potential benefit of this structure is lower costs, since the
expenses of the master portfolio can be shared with any other feeder funds. In
this prospectus we have used the word "fund" to mean the feeder fund and its
master portfolio.

For reasons relating to costs or a change in investment goal, among others, the
feeder fund could switch to another master portfolio or decide to manage its
assets itself. The fund is not currently contemplating such a move.

Your Investment 13
<PAGE>
- ------------------------------------------------------------

OBTAINING INFORMATION
You can obtain a shareholder report, SAI, and other information from your
investment provider, or from:

NEUBERGER BERMAN
MANAGEMENT INC.
605 Third Avenue 2nd Floor
New York, NY 10158-0180
800-877-9700
212-476-8800

Broker/Dealer and
Institutional Services:
800-366-6264

Web site:
www.nbfunds.com
Email:
[email protected]

SECURITIES AND EXCHANGE COMMISSION
Washington, DC
20549-6009
800-SEC-0330 (Public
Reference Section)

Web site:
www.sec.gov

You can request copies of documents from the SEC for the cost of a duplicating
fee, or view documents at the SEC's Public Reference Room in Washington.

NEUBERGER BERMAN GUARDIAN TRUST

- - No load

- - No sales charges

- - No 12b-1 fees

If you'd like further details about this fund, you can request a free copy
of the following documents:

SHAREHOLDER REPORTS -- Published twice a year, the shareholder reports offer
information about the fund's recent performance, including:

- - a discussion by the portfolio managers about strategies and market conditions

- - fund performance data and financial statements

- - complete portfolio holdings

STATEMENT OF ADDITIONAL INFORMATION -- The SAI contains more comprehensive
information about this fund, including:

- - various types of securities and practices, and their risks

- - investment limitations and additional policies

- - information about the fund's management and business structure

The SAI is hereby incorporated by reference into this prospectus, making it
legally part of the prospectus.

Investment manager:
NEUBERGER BERMAN MANAGEMENT INC.
Sub-adviser:
NEUBERGER BERMAN, LLC

[LOGO]

NEUBERGER BERMAN MANAGEMENT INC.
605 Third Avenue 2nd Floor
New York, NY 10158-0180

[RECYCLE LOGO] NMLRR0621299 SEC file number: 811-7784

<PAGE>

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

NEUBERGER BERMAN EQUITY TRUST AND PORTFOLIOS

STATEMENT OF ADDITIONAL INFORMATION

DATED DECEMBER 1, 1999

Neuberger Berman Manhattan Trust Neuberger Berman Genesis Trust
(and Neuberger Berman Manhattan (and Neuberger Berman Genesis
Portfolio) Portfolio)

Neuberger Berman Focus Trust Neuberger Berman Guardian Trust
(and Neuberger Berman Focus (and Neuberger Berman Guardian
Portfolio) Portfolio)

Neuberger Berman Partners Trust Neuberger Berman Socially Responsive
(and Neuberger Berman Partners) Trust (and Neuberger Berman Socially
Portfolio) Responsive Portfolio)

Neuberger Berman Millennium Trust Neuberger Berman International Trust
(and Neuberger Berman Millennium (and Neuberger Berman International
Portfolio) Portfolio)

Neuberger Berman Century Trust Neuberger Berman Regency Trust
(and Neuberger Berman Century (and Neuberger Berman Regency
Portfolio) Portfolio)

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

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

Neuberger Berman Manhattan Trust, Neuberger Berman Genesis Trust,
Neuberger Berman Focus Trust, Neuberger Berman Guardian Trust, Neuberger Berman
Partners Trust, Neuberger Berman Socially Responsive Trust, Neuberger Berman
Millennium Trust, Neuberger Berman International Trust, Neuberger Berman Century
Trust and Neuberger Berman Regency Trust (each a "Fund") are no-load mutual
funds that offer shares pursuant to a Prospectus dated December 1, 1999. The
Funds invest all of their net investable assets in Neuberger Berman Manhattan
Portfolio, Neuberger Berman Genesis Portfolio, Neuberger Berman Focus Portfolio,
Neuberger Berman Guardian Portfolio, Neuberger Berman Partners Portfolio,
Neuberger Berman Socially Responsive Portfolio, Neuberger Berman Millennium
Portfolio, Neuberger Berman International Portfolio, Neuberger Berman Century
Portfolio and Neuberger Berman Regency Portfolio (each a "Portfolio"),
respectively.

<PAGE>

An investor can buy, own, and sell Fund shares only through an account
with an administrator, broker-dealer, or other institution that provides
accounting, recordkeeping, and other services to investors and that has an
administrative services agreement with Neuberger Berman Management Incorporated
(each an "Institution").

The Funds' Prospectus provides basic information that an investor should
know before investing. You can get a free copy of the Prospectus from Neuberger
Berman Management Inc. ("NB Management"), Institutional Services, 605 Third
Avenue, 2nd Floor, New York, NY 10158-0180, or by calling 800-877-9700.

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

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

The "Neuberger Berman" name and logo are service marks of Neuberger
Berman, LLC. "Neuberger Berman Management Inc." and the fund and portfolio names
in this SAI are either service marks or registered trademarks of Neuberger
Berman Management Inc. (C)1999 Neuberger Berman Management Inc.

<PAGE>

TABLE OF CONTENTS
Page

INVESTMENT INFORMATION.......................................................1
Investment Policies and Limitations....................................1
Temporary Defensive Position...........................................5
Investment Insight.....................................................6
Neuberger Berman ManhattanPortfolio..............................6
Neuberger Berman GenesisPortfolio................................7
Neuberger Berman FocusPortfolio..................................9
Neuberger Berman Guardian Portfolio.............................10
Neuberger Berman PartnersPortfolio..............................12
Neuberger Berman Socially ResponsivePortfolio...................14
Neuberger Berman MillenniumPortfolio............................15
Neuberger Berman RegencyPortfolio...............................17
Neuberger Berman InternationalPortfolio.........................18
Neuberger Berman FocusPortfolio.......................................43
Neuberger Berman Socially ResponsivePortfolio

PERFORMANCE INFORMATION.....................................................48
Total Return Computations.............................................49
Comparative Information...............................................50
Other Performance Information.........................................51

CERTAIN RISK CONSIDERATIONS.................................................52

TRUSTEES AND OFFICERS.......................................................52

INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES...........................59
Investment Manager and Administrator..................................59
Management and Administration Fees....................................61
Sub-Adviser...........................................................64
Investment Companies Managed..........................................65
Management and Control of NB Management...............................67

DISTRIBUTION ARRANGEMENTS...................................................68
Distributor...........................................................68

i
<PAGE>

Distribution and Shareholder Services Plan............................68

ADDITIONAL PURCHASE INFORMATION.............................................69
Share Prices and Net Asset Value......................................69

ADDITIONAL EXCHANGE INFORMATION.............................................70

ADDITIONAL REDEMPTION INFORMATION...........................................71
Suspension of Redemptions.............................................71
Redemptions in Kind...................................................71

DIVIDENDS AND OTHER DISTRIBUTIONS...........................................72

ADDITIONAL TAX INFORMATION..................................................72
Taxation of the Funds.................................................72
Taxation of the Portfolios............................................73
Taxation of the Funds'Shareholders....................................76

PORTFOLIO TRANSACTIONS......................................................76
Portfolio Turnover....................................................84

REPORTS TO SHAREHOLDERS.....................................................84

ORGANIZATION, CAPITALIZATION AND OTHER MATTERS..............................85

CUSTODIAN AND TRANSFER AGENT................................................87

INDEPENDENT AUDITORS/ACCOUNTANTS............................................88

LEGAL COUNSEL...............................................................88

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.........................88

REGISTRATION STATEMENT......................................................93

ii
<PAGE>

FINANCIAL STATEMENTS........................................................93

Appendix A...................................................................1
RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER........................1

iii
<PAGE>

INVESTMENT INFORMATION

Each Fund is a separate operating series of Neuberger Berman Equity Trust
("Trust"), a Delaware business trust that is registered with the Securities and
Exchange Commission ("SEC") as a diversified, open-end management investment
company. Each Fund seeks its investment objective by investing all of its net
investable assets in a Portfolio of Equity Managers Trust or, in the case of
Neuberger Berman International Trust, in a Portfolio of Global Managers Trust
that has an investment objective identical to, and a name similar to, that of
the Fund. Each Portfolio, in turn, invests in securities in accordance with an
investment objective, policies, and limitations identical to those of its
corresponding Fund. (Equity Managers Trust and Global Managers Trust ("Managers
Trusts") are open-end management investment companies managed by NB Management;
the Managers Trusts together with the Trust, are referred to below as the
"Trusts.").

The following information supplements the discussion in the Prospectus of
the investment objective, policies, and limitations of each Fund and Portfolio.
The investment objective and, unless otherwise specified, the investment
policies and limitations of each Fund and Portfolio are not fundamental. Any
investment objective, policy or limitation that is not fundamental may be
changed by the trustees of the Trust ("Fund Trustees") or of the corresponding
Managers Trusts ("Portfolio Trustees") without shareholder approval. The
fundamental investment policies and limitations of a Fund or a Portfolio may not
be changed without the approval of the lesser of:

(1) 67% of the total units of beneficial interest ("shares") of the Fund
or Portfolio represented at a meeting at which more than 50% of the outstanding
Fund or Portfolio shares are represented, or

(2) a majority of the outstanding shares of the Fund or Portfolio.

These percentages are required by the Investment Company Act of 1940
("1940 Act") and are referred to in this SAI as a "1940 Act majority vote."
Whenever a Fund is called upon to vote on a change in a fundamental investment
policy or limitation of its corresponding Portfolio, the Fund casts its votes in
proportion to the votes of its shareholders at a meeting thereof called for that
purpose.

INVESTMENT POLICIES AND LIMITATIONS. Each Fund (except Neuberger Berman Socially
Responsive, Neuberger Berman Millennium, and Neuberger Berman International
Trusts) has the following fundamental investment policy, to enable it to invest
in its corresponding Portfolio:

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

Neuberger Berman Socially Responsive Trust and Neuberger Berman Millennium
Trust have the following fundamental investment policy, to enable each to invest
in its corresponding Portfolio:

1
<PAGE>

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

Neuberger Berman International Trust has the following fundamental
investment policy, to enable it to invest in its corresponding Portfolio:

Notwithstanding any other investment policy of the Fund, the Fund may
invest all of its net investable assets in an open-end management
investment company having substantially the same investment objective,
policies, and limitations as the Fund.

All other fundamental investment policies and limitations and the
non-fundamental investment policies and limitations of each Fund are identical
to those of its corresponding Portfolio. Therefore, although the following
discusses the investment policies and limitations of the Portfolios, it applies
equally to their corresponding Funds.

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

The following investment policies and limitations are fundamental and
apply to all Portfolios unless otherwise indicated:

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

BORROWING (NEUBERGER BERMAN INTERNATIONAL PORTFOLIO). The Portfolio may
not borrow money, except that the Portfolio may (i) borrow money from banks for
temporary or emergency purposes and for leveraging or investment and (ii) enter
into reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33-1/3% of the value of its total assets (including
the amount borrowed) less liabilities (other than borrowings). If at any time
borrowings exceed 33-1/3% of the value of the Portfolio's total assets, the
Portfolio will reduce its borrowings within three days (excluding Sundays and
holidays) to the extent necessary to comply with the 33-1/3% limitation.

2. COMMODITIES (ALL PORTFOLIOS EXCEPT NEUBERGER BERMAN INTERNATIONAL
PORTFOLIO). No Portfolio may purchase physical commodities or contracts thereon,
unless acquired as a result of the ownership of securities or instruments, but

2
<PAGE>

this restriction shall not prohibit a Portfolio from purchasing futures
contracts or options (including options on futures contracts, but excluding
options or futures contracts on physical commodities) or from investing in
securities of any kind.

COMMODITIES (NEUBERGER BERMAN INTERNATIONAL PORTFOLIO). The Portfolio may
not purchase physical commodities or contracts thereon, unless acquired as a
result of the ownership of securities or instruments, but this restriction shall
not prohibit the Portfolio from purchasing futures contracts, options (including
options on futures contracts, but excluding options or futures contracts on
physical commodities), foreign currencies or forward contracts, or from
investing in securities of any kind.

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

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

5. LENDING. No Portfolio may lend any security or make any other loan
if, as a result, more than 33-1/3% of its total assets (taken at current value)
would be lent to other parties, except, in accordance with its investment
objective, policies, and limitations, (i) through the purchase of a portion of
an issue of debt securities or (ii) by engaging in repurchase agreements.

6. REAL ESTATE (ALL PORTFOLIOS EXCEPT NEUBERGER BERMAN INTERNATIONAL
PORTFOLIO). No Portfolio may purchase real estate unless acquired as a result of
the ownership of securities or instruments, but this restriction shall not
prohibit a Portfolio from purchasing securities issued by entities or investment
vehicles that own or deal in real estate or interests therein or instruments
secured by real estate or interests therein.

REAL ESTATE (NEUBERGER BERMAN INTERNATIONAL PORTFOLIO). This Portfolio may
not invest any part of its total assets in real estate or interests in real
estate unless acquired as a result of the ownership of securities or
instruments, but this restriction shall not prohibit the Portfolio from
purchasing readily marketable securities issued by entities or investment
vehicles that own or deal in real estate or interests therein or instruments
secured by real estate or interests therein.

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

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

3
<PAGE>

For purposes of the limitation on commodities, the Portfolios do not
consider foreign currencies or forward contracts to be physical commodities.

The following investment policies and limitations are non-fundamental and
apply to all Portfolios unless otherwise indicated:

1. BORROWING (ALL PORTFOLIOS EXCEPT NEUBERGER BERMAN INTERNATIONAL
PORTFOLIO). None of these Portfolios may purchase securities if outstanding
borrowings, including any reverse repurchase agreements, exceed 5% of its total
assets.

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

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

4. FOREIGN SECURITIES (ALL PORTFOLIOS EXCEPT NEUBERGER BERMAN
INTERNATIONAL, NEUBERGER BERMAN MILLENNIUM AND NEUBERGER BERMAN CENTURY
PORTFOLIOS). None of these Portfolios may invest more than 10% of the value of
its total assets in securities of foreign issuers, provided that this limitation
shall not apply to foreign securities denominated in U.S. dollars, including
American Depositary Receipts ("ADRs").

FOREIGN SECURITIES (NEUBERGER BERMAN MILLENNIUM AND NEUBERGER BERMAN
CENTURY PORTFOLIOS). Neither Portfolio may invest more than 20% of the value of
its total assets in securities of foreign issuers, provided that this limitation
shall not apply to foreign securities denominated in U.S. dollars, including
American Depositary Receipts ("ADRs").

5. ILLIQUID SECURITIES. No Portfolio may purchase any security if, as a
result, more than 15% of its net assets would be invested in illiquid
securities. Illiquid securities include securities that cannot be sold within
seven days in the ordinary course of business for approximately the amount at
which the Portfolio has valued the securities, such as repurchase agreements
maturing in more than seven days.

6. PLEDGING (NEUBERGER BERMAN GENESIS AND NEUBERGER BERMAN GUARDIAN
PORTFOLIOS). Neither of these Portfolios may pledge or hypothecate any of its
assets, except that (i) Neuberger Berman Genesis Portfolio may pledge or
hypothecate up to 15% of its total assets to collateralize a borrowing permitted
under fundamental policy 1 above or a letter of credit issued for a purpose set
forth in that policy and (ii) each Portfolio may pledge or hypothecate up to 5%
of its total assets in connection with its entry into any agreement or
arrangement pursuant to which a bank furnishes a letter of credit to
collateralize a capital commitment made by the Portfolio to a mutual insurance
company of which the Portfolio is a member. The other Portfolios are not subject
to any restrictions on their ability to pledge or hypothecate assets and may do
so in connection with permitted borrowings.

4
<PAGE>

7. SECTOR CONCENTRATION (NEUBERGER BERMAN FOCUS PORTFOLIO). This
Portfolio may not invest more than 50% of its total assets in any one
economic sector.

8. INVESTMENTS IN ANY ONE ISSUER (NEUBERGER BERMAN INTERNATIONAL
PORTFOLIO). At the close of each quarter of this Portfolio's taxable year, (i)
no more than 25% of its total assets may be invested in the securities of a
single issuer, and (ii) with regard to 50% of its total assets, no more than 5%
of its total assets may be invested in the securities of a single issuer. These
limitations do not apply to U.S. Government securities, as defined for tax
purposes, or securities of another regulated investment company ("RIC").

9. SOCIAL POLICY (NEUBERGER BERMAN SOCIALLY RESPONSIVE PORTFOLIO). The
portfolio may not purchase securities of issuers who derive more than 5% of
their total revenue from alcohol, tobacco, gambling or weapons, or that are
involved in nuclear power.

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.

TEMPORARY DEFENSIVE POSITION. For temporary defensive purposes, each Portfolio
(except Neuberger Berman Socially Responsive Portfolio and Neuberger Berman
International Portfolio) may invest up to 100% of its total assets in cash and
cash equivalents, U.S. Government and Agency Securities, commercial paper and
certain other money market instruments, as well as repurchase agreements
collateralized by the foregoing.

Any part of Neuberger Berman Socially Responsive Portfolio's assets may be
retained temporarily in investment grade fixed income securities of
non-governmental issuers, U.S. Government and Agency Securities, repurchase
agreements, money market instruments, commercial paper, and cash and cash
equivalents when NB Management believes that significant adverse market,
economic political, or other circumstances require prompt action to avoid
losses. In addition, the feeder funds that invest in Neuberger Berman Socially
Responsive Portfolio deal with large institutional investors, and the Portfolio
may hold such instruments pending investment or payout when the Portfolio has
received a large influx of cash due to sales of Neuberger Berman Socially
Responsive Fund shares, or shares of another fund which invests in the
Portfolio, or when it anticipates a substantial redemption. Generally, the
foregoing temporary investments for Neuberger Berman Socially Responsive
Portfolio are selected with a concern for the social impact of each investment.

For temporary defensive purposes, Neuberger Berman International Portfolio
may invest up to 100% of its total assets in short-term foreign and U.S.
investments, such as cash or cash equivalents, commercial paper, short-term bank
obligations, government and agency securities, and repurchase agreements.
Neuberger Berman International Portfolio may also invest in such instruments to
increase liquidity or to provide collateral to be held in segregated accounts.

5
<PAGE>

INVESTMENT INSIGHT

Neuberger Berman's commitment to its asset management approach is
reflected in the more than $125 million the organization's employees and their
families have invested in the Neuberger Berman mutual funds.

NEUBERGER BERMAN MANHATTAN PORTFOLIO

INVESTMENT PROGRAM

Invests in common stocks of mid-capitalization companies that are in new
or rapidly evolving industries. Seeks growth of capital by investing in
companies with financial strength, above-average growth of earnings, earnings
that have exceeded analysts' expectations, a strong position relative to
competitors and a stock price that is reasonable in light of its growth rate.

MID-CAP GROWTH STOCK INVESTMENTS

The portfolio co-managers consider themselves growth stock investors in
the purest sense of the term. By that, they mean they want to own the stocks of
companies that are growing earnings faster than the average American business
and, ideally, faster than the competitors in their respective industries. Their
exhaustive research efforts are focused on the mid-cap universe and,
specifically, stocks that are in new or rapidly evolving industries. The kind of
fast-growth companies the portfolio co-managers favor generally do not trade at
below market average price-to-earnings ratios. However, they do look for
companies trading at reasonable levels compared to their growth rates.

AN INTENSIVE RESEARCH EFFORT

The portfolio co-managers love stocks with positive earnings surprises.
Their extensive research has revealed that the stocks of companies that have
consistently beaten Wall Street earnings estimates have also tended to offer
greater potential for long-term capital appreciation. To find these companies

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they scour the mid-cap growth stock universe to isolate stocks whose most recent
earnings have beaten consensus expectations. Then, the real work begins, where
through diligent fundamental research they strive to identify those companies
most likely to record a string of positive earnings surprises. Their ultimate
goal is to invest today in the fast growing mid-sized companies that they
believe are poised to become tomorrow's Fortune 500.

A DISCIPLINED SELL PROCESS

"We are dispassionate sellers," says one portfolio co-manager. "If a stock
does not live up to our earnings expectations or if we believe its valuation has
become excessive, we will sell and direct the assets to another opportunity we
find more attractive." A stock will also be sold when it reaches its target
price. They prefer to broadly diversify the portfolio's assets among many
different companies and industries rather than heavily concentrating its
holdings in just a few of the fastest growing industry sectors. This broad
diversification helps to manage the overall risk inherent in a portfolio of
equity securities.[OBJECT OMITTED]

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<PAGE>

[GRAPHIC OMITTED]

MANHATTAN INVESTORS CAN EXPECT:

o Mid-cap growth stock investments
o An intensive research effort
o A disciplined sell process

INVESTMENT INSIGHT

Without question, the portfolio co-managers are growth stock investors.
They look for companies believed capable of delivering positive earnings
surprises, particularly those with the potential to do so consistently. Ideally,
they seek to identify companies that will someday rank among the Fortune 500.

NEUBERGER BERMAN GENESIS PORTFOLIO

INVESTMENT PROGRAM

Invests mainly in common stocks of small-capitalization companies. Seeks
undervalued companies whose current product lines and balance sheets are strong.
The Portfolio regards companies with market capitalizations of up to $1.5
billion at the time of investment as small-cap companies.

A SMALL-CAP VALUE BIAS

The portfolio co-managers employ a value bias in their stock selection
process. They comb the universe of small-cap stocks specifically looking for
those they consider cheap compared to the market as a whole. Depending on
current market conditions, they sometimes find stocks that are cheap on an
absolute basis as well. They primarily choose from a universe of small-cap
companies whose total market valuation is less than $1.5 billion at the time of
initial investment. The characteristics they look for may include above average
returns, established market niches, high barriers to entry, strong capital
bases, and sound future business prospects.

A PHILOSOPHY THAT CONTRADICTS POPULAR INVESTMENT TRENDS

The portfolio co-managers focus on strong companies in industry niches
that are often overlooked by investors because they lack an exciting new product
or innovation. They aren't interested in buying experimental or cutting-edge
technology names that often trade on high future expectations but have no
established record of earnings. The rationale behind their approach is that
companies in what may be considered "unexciting" industries to some, such as
utilities and oil services, are a safer point of entry into the small-cap
universe because, as they put it, "if there's not a lot of expectation built
into a company, then it tends not to disappoint."

SMALL COMPANIES, POTENTIALLY BIG OPPORTUNITIES

The portfolio co-managers favor the small-cap arena because they think it
abounds with opportunities for the long-term investor, specifically small-caps'
potential ability to grow earnings dramatically over time. According to one

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portfolio co-manager, "Unlike large-cap stocks, small-cap companies are starting
from a very low base and therefore may have the ability to grow dramatically."

INVESTMENT PROCESS

(Qualitative Analysis

(Meetings with Company Executives One-on-One

o 300 Face-to-Face Meetings per Year

o Heavy Phone Contact

(Quantitative Characteristics

o Low Price-to-Earnings Ratio

o Low Price-to-Cash Flow Ratio

GENESIS INVESTORS CAN EXPECT:

o A small-cap value bias
o A philosophy that contradicts popular investment trends
o Small companies, potentially big opportunities

INVESTMENT INSIGHT

The portfolio co-managers seek out small companies that are not well known
and often found in unglamorous industries. Future growth is one area they focus
on, but equally important to them is evidence of solid performance and a proven
management team. As value investors, they look for stocks that are selling at
attractive prices.

THE RISKS INVOLVED IN SEEKING CAPITAL APPRECIATION FROM INVESTMENTS
PRIMARILY IN COMPANIES WITH SMALL MARKET CAPITALIZATION ARE SET FORTH IN THE
PROSPECTUS.

NEUBERGER BERMAN FOCUS PORTFOLIO

INVESTMENT PROGRAM

Seeks long-term growth of capital. Invests principally in common stocks
selected from 13 multi-industry sectors of the economy. To maximize potential
return, the Portfolio normally makes at least 90% or more of its investments in
not more than six sectors it identifies as undervalued.

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EMPHASIS ON QUALITY, UNDERVALUED COMPANIES OF ALL MARKET CAPITALIZATIONS

The portfolio manager selects companies with solid fundamentals that he
considers undervalued by the marketplace. Specifically, he looks for industry
leaders with above-average earnings, established market niches, and sound future
business prospects. He believes these types of organizations come in all sizes,
therefore he does not limit his selections to any particular capitalization
range.

A CONCENTRATED PORTFOLIO

In addition to his value bias, the portfolio manager concentrates his
efforts on six out of 13 possible economic sectors. Although the portfolio is
built one stock at a time, he has found that the conditions leading to an
individual stock being undervalued similarly affect other companies in the same
industries or sectors. Thus, an emphasis on relatively few sectors is a natural
outgrowth of the fund's stock selection process. The portfolio manager won't
dedicate more than 50% of assets to any one sector and no more than 25% of
assets to any one industry.

BOTTOM-UP, VALUE-ORIENTED STOCK SELECTION PROCESS

The portfolio manager's bottom-up approach focuses on stocks that are
currently out of favor, due to temporary setbacks. He also likes stocks that
have been largely ignored by Wall Street, but that he believes still offer good
long-term growth potential. He prefers to buy companies that are industry
leaders, not those that he believes are undervalued for good reasons such as
poor management or limited growth prospects. Ideal investment candidates are
financially sound companies that have little or no debt and exhibit high returns
on equity.

THOROUGH RESEARCH EFFORT

He believes it's the management teams that drive companies and how they
react to changes in their respective industries. As he explains, "The only way
to come to those conclusions is to meet with the people behind the stocks we
like." Furthermore, he does not rely on a company's initial merits after its
stock has been purchased. Instead, he prefers to revisit its fundamentals
regularly and then, as a reality check, look back at the company's performance
to see if it's consistently delivering.

10
<PAGE>

INVESTMENT PROCESS

(Qualitative Analysis

o Meeting with Company Executives One-on-One

(Monitor Exposure to Economic Conditions

o Interest Rate Changes

(Sector Analysis

(Stock Universe

o Quantitative Analysis

FOCUS INVESTORS CAN EXPECT:

o Emphasis on quality, undervalued companies of all market capitalizations
o A concentrated portfolio
o Bottom-up, value-oriented stock selection process
o Thorough research efforts

INVESTMENT INSIGHT

The investment approach for the Focus Fund involves looking for companies
that have low price-to-earnings ratios, solid balance sheets and strong
management. The portfolio manager often finds that these companies are
concentrated in certain sectors of the economy, which prompts him to look
further within these sectors for other companies that meet his criteria.

NEUBERGER BERMAN GUARDIAN PORTFOLIO

INVESTMENT PROGRAM

11
<PAGE>

Seeks long term growth of capital and, secondarily, current income.
Invests primarily in stocks of long-established companies considered to be
undervalued in comparison to stocks of similar companies. Using a value-oriented
investment approach in selecting securities, the Portfolio looks for such
factors as low price-to-earnings ratios, strong balance sheets, solid
management, and consistent earnings.

DISCIPLINED, LARGE-CAP VALUE ORIENTATION

As part of its stock selection process, the portfolio pursues a
disciplined, value-driven investment style, which is Neuberger Berman's historic
strength. Specifically, the portfolio co-managers seek large-capitalization
companies whose stock prices are substantially undervalued. Characteristics of
these firms may include: solid balance sheets, above-average returns, low
valuations, and consistent earnings.

BOTTOM-UP APPROACH TO STOCK SELECTION

According to one of the portfolio co-managers, "Cheap stocks are
plentiful, but true investment bargains are a rare find." To uncover them, the
portfolio co-managers scour a universe of stocks consisting of the bottom 20% of
the market in terms of valuation. Those deemed by the managers as inexpensive
and poised for a turnaround are placed under consideration. They look for
financially sound, well-managed companies that are undervalued relative to their
earnings potential and the market as a whole.

A BROAD VIEW OF RISK MANAGEMENT

Managing risk involves carefully monitoring the way the stocks in the
portfolio react to one another as well as to outside factors. Companies that are
in completely different sectors may in fact react similarly to certain economic,
market or international events. In their efforts to consider these
relationships, the portfolio co-managers use quantitative analysis to evaluate
these factors and their impact on the overall portfolio. It is a process they

12
<PAGE>

believe is a crucial component in controlling risk and one that evolves over
time as new holdings are introduced to the portfolio.

A STRONG SELL DISCIPLINE

The portfolio co-managers will generally make an initial investment in a
stock of between 1-4% of total net assets. A higher weighting indicates that
they believe their research gives them an "edge" over Wall Street analysts, or
they believe the stock has an uncovered value that others may have overlooked.
Once a stock grows beyond the high side of that range, gains are harvested and
the holding is reduced to about 3% of total net assets.

INVESTMENT PROCESS

(Portfolio Risk Management

o Monitor Portfolio's Exposure

(Selection Criteria

o Improving Financials

o Superior Management

o Discount Valuations to the Market

(Stock Universe

o Large-Cap Value

GUARDIAN INVESTORS CAN EXPECT:

o Disciplined, large-cap value orientation
o Bottom-up approach to stock selection
o Broad view of risk management
o Strong sell discipline

INVESTMENT INSIGHT

The portfolio co-managers look for established companies whose intrinsic
value, by their measure, is undiscovered among the majority of investors. In
managing overall risk, a conscious effort is made to determine the risk/reward
scenario of each individual holding as well as its impact at the portfolio
level.

NEUBERGER BERMAN PARTNERS PORTFOLIO

13
<PAGE>

INVESTMENT PROGRAM

Invests principally in common stocks of established companies, using the
value-oriented investment approach. Seeks growth of capital through an
investment approach that is designed to increase capital with reasonable risk.
Seeks securities believed to be undervalued based on strong fundamentals such as
a low price-to-earnings ratio, consistent cash flow, and a company's sound track
record through all phases of the market cycle.

UNDISCOVERED VALUES IN THE MID- TO LARGE-CAP ARENA

The Partners' portfolio co-managers comb the universe of mid- and
large-cap stocks in search of those that have yet to be "discovered" by the
majority of investors. They generally shy away from big, well-known companies
because they believe it is harder to gain a competitive edge in a stock that is
covered by many analysts. The managers prefer to focus their efforts outside of
the Fortune 100, where they think many investment bargains abound.

STRONG COMPANIES AT REASONABLE PRICES

Like many of their value-oriented peers, the co-managers try to buy
quality stocks for substantially less than their estimated market values.
However, they differ in their approach by applying another layer of analysis to
their value strategy. For example, in addition to searching for stocks trading
at below market price-to-earnings ratios, they also focus on companies with
strong fundamentals, consistent cash flows, sound track records through all
phases of the market cycle and those selling at the low end of their trading

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<PAGE>

ranges. They are not interested in buying cheap stocks if they don't meet these
other measures of value as well.

SOLID RESEARCH

The portfolio co-managers believe that through "exhaustive research
efforts, good companies selling for less than their true worth can be
identified." To do this the portfolio co-managers spend a lot of time
interviewing senior company managers. Their philosophy is that when they sit
across the table from a CEO or CFO and question him or her about the company,
they get to know it quite well. They find that there's simply no substitute for
that kind of firsthand knowledge. In addition, the portfolio co-managers
carefully examine a company's financial statements and contact its suppliers and
competitors. While this type of analysis requires a lot of extra legwork, they
believe it's worth the effort.

INVESTMENT PROCESS

(Executive Management Team Evaluation

o Proven Track Record

o Strategic Plan

o Inside Ownership

(Value Stock Universe

o Qualitative Evaluation: Catalyst for Change

(Stock Universe

o Quantitative Analysis

PARTNERS INVESTORS CAN EXPECT:

o Undiscovered values in the mid- to large-cap arena
o Strong companies at reasonable prices
o Solid research

INVESTMENT INSIGHT

The portfolio co-managers seek companies they believe are undervalued
relative to their earnings potential--where there is a gap between the actual
price of a stock and its intrinsic value in the marketplace. When a company
grows in value or the valuation gap closes, the success of their strategy is
realized.

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<PAGE>

NEUBERGER BERMAN SOCIALLY RESPONSIVE PORTFOLIO

INVESTMENT PROGRAM

Seeks long-term capital appreciation through investments primarily in
securities of companies that meet both financial criteria and social policy. The
portfolio co-managers initially screen companies using a value investing
criteria, then look for companies that show leadership in major areas of social
impact such as the environment, workplace diversity and employment.

FINANCIALLY SOUND COMPANIES WITH A SOCIAL CONSCIENCE

The portfolio co-managers look for the stocks of mid- to large-cap
companies that first meet their stringent financial criteria. Their social
screens are then applied to these stocks. The ones considered worthy from a
financial standpoint are then evaluated using a proprietary database that
develops and monitors information on companies in various categories of social
criteria. Ideal investment candidates are companies that show leadership in the
areas of the environment, workplace diversity and employment. Other
considerations are based on companies' records in other areas of concern,
including public health, type of products, and corporate citizenship.

A TRADITIONAL VALUE APPROACH

The portfolio co-managers' initial financial screens select companies
using a traditional value approach. They look for undervalued companies with
solid balance sheets, strong management, consistent cash flows, and other
value-related factors, such as low price-to-earnings and low price-to-book
ratios. Their value approach examines these companies, searching for those that
may rise in price before other investors realize their worth. They strongly
believe in helping investors put their money to work, while supporting companies
that follow principles of good corporate citizenship.

AN EVER-EVOLVING JOURNEY ON THE PATH TO GOOD CORPORATE CITIZENSHIP

The portfolio co-managers believe that most socially responsive investors
are not utopians. They do not expect instant perfection, but rather look for
signs that a company is evolving and moving toward a corporate commitment to
excellence. As they put it, "Good corporate citizenship is one of those things
that is a journey, not a destination. We've been working in this field for some
time, and know that the social records of most companies are written in shades
of gray. We are pleased to see that more and more companies are coming to
realize that change is a positive force for them."

INVESTMENT PROCESS

(Social Policy

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<PAGE>

(Quantitative Financial Criteria

o Low Price-to-Earnings Ratio (relative & absolute)

o Strong Balance Sheet

o Free Cash Flow

o Risk Management

(Stock Universe

o Focus Screens

SOCIALLY RESPONSIVE INVESTORS CAN EXPECT:

o Financially sound companies with a social conscience
o A traditional value approach
o An ever-evolving journey on the path to good corporate citizenship

INVESTMENT INSIGHT

The portfolio co-managers believe that sound practices in areas like
employment and the environment can have a positive impact on a company's bottom
line. They look for companies that meet value-investing criteria and also show a
commitment to uphold or improve their standards of corporate citizenship.

NEUBERGER BERMAN MILLENNIUM PORTFOLIO

INVESTMENT PROGRAM

Invests primarily in equity securities of small-sized domestic companies
(up to $1.5 billion in market capitalization at time of investment). Seeks
growth of capital and looks for new companies that are in the developmental
stage as well as older companies that appear poised to grow because of new
products, markets or management.

DISCIPLINED STOCK SELECTION PROCESS

The portfolio co-managers employ a three-tiered disciplined investment
process. It begins with a search for fast growing, small companies that exhibit
sustainable earnings growth of at least 15%. Next, they assess a company's
financial and managerial wherewithal to capitalize on opportunities and grow its
business, despite occasional setbacks. Finally, the managers determine whether

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<PAGE>

or not a stock's price is reasonable. Their analysis attempts to avoid companies
considered overvalued relative to their earnings growth rate.

LONG-TERM GROWTH POTENTIAL OF SMALL-CAP STOCKS

Simply put, a small company might become a mid-sized one rapidly with the
launch of a single blockbuster product. And, since the potential growth of a
small company is often uninhibited by several layers of management, it might be
able to bring new products or services to the market quickly. What adds to the
attractiveness of small-cap stocks is the fact that they're generally less
researched than large-caps, which presents the managers with more opportunities
to find good companies that are not yet recognized by many investors.
Small-caps, however, are more risky than other securities due to their
volatility and greater sensitivity to market trends, company news and industry
developments.

RISK MANAGEMENT

"We abide by three rules for managing risk: pay only reasonable prices,
remain emotionally detached, and stay diversified", says one of the portfolio
co-managers about their risk-management strategy. First, the Fund focuses on
rapidly growing companies that are selling at reasonable prices relative to
their growth prospects. This is done in an effort to avoid those stocks whose
valuations are out of line with their growth rates because we believe they are
often the most susceptible to steep declines caused by fundamental
disappointments or during a market downturn. Second, our portfolio co-managers
remain emotionally detached from their stock picks. When deteriorating
fundamentals are discovered in a company, the portfolio co-managers take quick
and decisive action to eliminate it from the portfolio. And third, to limit
downside risk, the portfolio co-managers expect to invest in a diversified
portfolio across an array of sectors and industries. No single stock represents
more than 5% of total assets, measured at the time of investment.

INVESTMENT PROCESS

SCREENS

(3 Price Is this stock price reasonable?

(2 Utility Can the company go the distance?

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Financial Strength

Management Depth and Talent

(1 Growth Are earnings growing rapidly?

15%+ Annual Growth Rates

Positive Earnings Surprises

MILLENNIUM INVESTORS CAN EXPECT:

o Disciplined stock selection process
o Long-term growth potential of small-cap stocks
o Risk management

INVESTMENT INSIGHT

The portfolio co-managers of the Millennium Fund make it their business to
track down promising small-cap companies wherever they may exist. As a result,
this fund enables investors who can accept the risks of small-cap stocks to
pursue the potential for long-term growth that small-caps may provide.

NEUBERGER BERMAN REGENCY PORTFOLIO

INVESTMENT PROGRAM

Seeks growth of capital by investing mainly in common stocks of
mid-capitalization companies. The Portfolio seeks to reduce risk by diversifying
among different companies and industries.

MID-CAP COMPANIES WITH MARKET LEADERSHIP

Regency's portfolio co-managers search the mid-cap stock universe for
companies with a dominant market share in their industry. Historically,
businesses with market leadership have delivered significant returns for
shareholders over the long term. While this may not always be the case,
discovering such middle-weight champions before the rest of Wall Street does can
yield substantial payoffs for investors. Of course, there can be no assurance
that the managers will select the right stocks every time. Remember that the
stocks of mid-cap companies may be more volatile, and entail more risk, than the
stocks of larger companies.

BOTTOM-UP APPROACH TO STOCK SELECTION

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The portfolio co-managers' extensive bottom-up approach begins with
financial screens that are used to search for undervalued securities with
compelling fundamentals. Then, in-depth company and industry analyses are
conducted, followed by interviews with company managements and their
competitors, customers, and suppliers. In this stage, reviewing strategic plans
and evaluating management are critical steps. After applying these financial and
qualitative screens the portfolio co-managers then seek to identify a catalyst
for change that could improve a stock's valuation. These catalysts are generally
managerial, operational, structural or financial in nature and include changes
in company management, new corporate strategies, changes in the business mix,
and improving financials, among others. The remaining candidates are then ranked
on a risk/reward basis. Stocks with the most compelling risk/reward ratios are
placed in the portfolio, while stocks that are currently not a good portfolio
fit, are placed on a monitor list for further evaluation.

BROAD VIEW OF RISK MANAGEMENT

In order to reduce risk on the buy side, the managers look for reasonably
priced stocks, diversify investments across an array of industries, and avoid
making large sector bets. On the sell side, stocks are sold when they reach
their price target, do not perform as expected, or are considered less
attractive than other opportunities.

INVESTMENT PROCESS

STOCK UNIVERSE
o Financial Analysis

VALUE STOCK UNIVERSE
o Qualitative Evaluation
o Catalyst for change

EXECUTIVE MANAGEMENT TEAM EVALUATION
o Proven Track Record
o Strategic Plan
o Inside Ownership

REGENCY INVESTORS CAN EXPECT:

o Mid-cap companies with market leadership
o Bottom-up approach to stock selection
o Broad view of risk management

INVESTMENT INSIGHT

The portfolio co-managers' ultimate goal is to find undervalued companies
that have not yet been discovered by the majority of investors, or better yet,
to buy "great companies at a great price." They attempt to do this by focusing

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on the mid-cap segment of the market because it tends to be less followed than
the large-cap segment by Wall Street analysts.

NEUBERGER BERMAN INTERNATIONAL PORTFOLIO

Equity portfolios consisting solely of domestic investments generally have
not enjoyed the higher returns foreign opportunities can offer. Over the past
thirty years, for example, the average growth rates of many foreign economies
have outpaced that of the United States. While the United States accounted for
almost 66% of the world's total securities market capitalization in 1970, it
accounted for less than 30% of that total at the end of 1996 -- or less than a
third of the dollar value of the world's available stocks and bonds.(1)

Over time, a number of international equity markets have outperformed
their U.S. counterpart. Although there are no guarantees, foreign markets could
continue to provide attractive investment opportunities.

In addition, according to Morgan Stanley Capital International, the
leading companies in any given sector are not always U.S.-based. For example,
all ten of the largest construction companies, nine of the ten largest banks and
seven of the ten largest automobile companies are based outside of the United
States.

A principal advantage of investing overseas is diversification. A
diversified portfolio gives investors the opportunity to pursue increased
overall return while reducing risk. It is prudent to diversify by taking
advantage of investment opportunities in more than one country's stock or bond
market. By investing in several countries through a worldwide portfolio,
investors can lower their exposure and vulnerability to weakness in any one
market. Investors should be aware, however, that international investing is not
a guarantee against market risk and may be affected by the economic and other
factors described in the Prospectus. These include the prospects of individual
companies and other risks such as currency fluctuations or controls,
expropriation, nationalization and confiscatory taxation.

Furthermore, buying foreign stocks and bonds can be difficult for the
individual investor and involves many decisions. Accessing international markets
is complicated; few individuals have the time or resources to evaluate
thoroughly foreign companies and markets or the ability to incur the high
transaction costs of direct investment in such markets. A mutual fund investing
in foreign securities offers an investor broad diversification at a relatively
low cost.

At least 65% of the Portfolio's total assets normally are invested in
equity securities of foreign issuers. The Portfolio invests primarily in equity
securities of companies located in developed foreign economies, as well as in
"emerging markets." NB Management's investment process includes a combination of
a top-down or macro-economic analysis and a bottom-up, micro-economic approach,

- ------------------------------
(1) Source: Morgan Stanley Capital International.

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as well as a blend of growth and value investment styles. The Portfolio may use
leverage to facilitate transactions it enters into for hedging purposes.

INVESTMENT PROGRAM

Seeks long-term growth of capital by investing primarily in common stocks
of foreign companies of any capitalization, including companies in developed and
emerging industrialized markets. Invests in well-managed companies that show
potential for above-average growth or whose stock price is undervalued.

A COMBINATION OF TOP-DOWN AND BOTTOM-UP APPROACHES TO INVESTING

The portfolio manager's top-down view of various regions and countries
helps her choose the areas that offer the best relative value. As she explains,
"We are value-added investors, not "closet" indexers. We will overweight the
portfolio with securities from countries we believe have the best investment
potential and underweight those we think have limited prospects." Her bottom-up
perspective seeks well-managed companies with strong fundamentals, such as
attractive cash flows, strong balance sheets, and solid earnings growth. The
Fund has no capitalization constraints and thus can invest in companies of all
sizes.

A BLEND OF GROWTH AND VALUE INVESTMENT STYLES

The portfolio manager uses a blend of styles to reduce the risk of
significant losses when a particular style falls out of favor with investors.
The growth component highlights rapidly growing companies in niche industries
with unique products or services, while the value component focuses on
undervalued, out-of-favor companies that she believes are poised for a
turnaround.

HIGH POTENTIAL REWARDS WITH COMMENSURATE RISKS

The portfolio invests in equity securities of both developed and emerging
markets. While the potential rewards are high, so are the associated risks.
Foreign markets are often less developed and foreign governments and economic

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infrastructures may not be as stable compared to the U.S. Other international
risks, such as currency exchange rate and interest rate fluctuations, could
result in greater volatility than domestic funds.

AN ADDED LEVEL OF DIVERSIFICATION

Domestic and foreign markets generally do not all move in the same
direction at the same time and are subject to different sets of risk factors.
Investors with exposure to more than a single market can potentially offset
losses in one market with gains in another. While foreign markets can be
inherently risky, investors who include international securities in their
portfolios can benefit from an additional layer of diversification along with
the potential for long-term growth.

INVESTMENT PROCESS

1. Screen International Universe

2. Quantitative and Qualitative Evaluation

3. Review Prime Buy Ideas

4. Portfolio Construction

INTERNATIONAL INVESTORS CAN EXPECT:

o A combination of top-down and bottom-up approaches to investing
o A blend of growth and value investment styles
o High potential rewards with commensurate risks
o An added level of portfolio diversification

INVESTMENT INSIGHT

In identifying attractive stocks from among the many thousands currently
available outside the U.S., it's important to have a clear strategy. The
International Portfolio uses a combination of growth and value criteria, while
also considering larger scale economic factors.

CURRENCY RISK MANAGEMENT

Exchange rate movements and volatility are important factors in
international investing. The portfolio manager believes in actively managing the
Portfolio's currency exposure, in an effort to capitalize on foreign currency
trends and to reduce overall portfolio volatility. Currency risk management is
performed separately from equity analysis. The portfolio manager uses a
combination of economic analysis to guide the Portfolio's longer-term posture
and quantitative trend analysis to assist in timing decisions with respect to
whether (or when) to invest in instruments denominated in a particular foreign

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currency, or whether (or when) to hedge particular foreign currencies in which
liquid foreign exchange markets exist.

To illustrate the importance of including an international component in a
well-diversified portfolio, below are the annual returns for the S&P 500 Index
and the EAFE(R) Index for the years 1984-1998. In seven of the past fifteen
years, international stocks (as represented by the EAFE Index) have outperformed
U.S. stocks (as represented by the S&P 500 Index), in some cases by a
significant margin. Conversely, in other years, U.S. stocks have substantially
outperformed international stocks. Investors with exposure to both domestic and
international issues can minimize losses because gains in one market can offset
losses in another.

ANNUAL TOTAL RETURNS FOR EAFE AND S&P 500 (1984-1998):(2)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Year 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
- ------------------------------------------------------------------------------------------------------------------------
S&P 500 28.52% 33.32% 22.90% 37.44% 1.36% 10.03% 7.61% 30.34% -3.11% 31.59% 16.50% 5.18% 18.62% 31.64% 6.22%
- ------------------------------------------------------------------------------------------------------------------------
EAFE 20.33% 2.06% 6.36% 11.55% 8.06% 32.94% -11.85% 12.50% -23.20% 10.80% 28.59% 24.93% 69.94% 56.72% 7.86%
- ------------------------------------------------------------------------------------------------------------------------

</TABLE>

Of course, these historical results may not continue in the future.
Investors should keep in mind the greater risks inherent in foreign
markets, such as currency exchange fluctuations, interest rates, and
potentially adverse economic and political conditions.

* * * * *

- ------------------------------
(2) Total return includes reinvestment of all dividends and other
distributions. The EAFE(R) Index, also known as the Morgan Stanley Capital
International Europe, Australasia, Far East Index, is an unmanaged index of over
1,000 foreign stock prices and is translated into U.S. dollars. The S&P "500"
Index is an unmanaged index generally considered to be representative of U.S.
stock market activity. Indices do not take into account brokerage commissions or
other fees and expenses of investing in the individual securities that they
track. Data about the performance of these indices are prepared or obtained by
NB Management.

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<PAGE>

Each Portfolio invests in a wide array of stocks, and no single stock
makes up more than a small fraction of any Portfolio's total assets. Of course,
each Portfolio's holdings are subject to change.

ADDITIONAL INVESTMENT INFORMATION

Some or all of the Portfolios, as indicated below, may make the following
investments, among others; some of which are part of the Portfolios' principal
investment strategies and some of which are not. The principal risks of each
Portfolio's principal strategies are discussed in the prospectus. They may not
buy all of the types of securities or use all of the investment techniques that
are described.

ILLIQUID SECURITIES (ALL PORTFOLIOS). Illiquid securities are securities
that cannot be expected to be sold within seven days at approximately the price
at which they are valued. These may include unregistered or other restricted
securities and repurchase agreements maturing in greater than seven days.
Illiquid securities may also include commercial paper under section 4(2) of the
1933 Act, as amended, and Rule 144A securities (restricted securities that may
be traded freely among qualified institutional buyers pursuant to an exemption
from the registration requirements of the securities laws); these securities are
considered illiquid unless NB Management, acting pursuant to guidelines
established by the trustees of the Managers Trusts, determines they are liquid.
Generally, foreign securities freely tradable in their principal market are not
considered restricted or illiquid. Illiquid securities may be difficult for a
Portfolio to value or dispose of due to the absence of an active trading market.
The sale of some illiquid securities by the Portfolios may be subject to legal
restrictions which could be costly to the Portfolios.

POLICIES AND LIMITATIONS. Each Portfolio may invest up to 15% of its
net assets in illiquid securities.

REPURCHASE AGREEMENTS (ALL PORTFOLIOS). In a repurchase agreement, a
Portfolio purchases securities from a bank that is a member of the Federal
Reserve System (or, in the case of Neuberger Berman International Portfolio,
also from a foreign bank or a U.S. branch or agency of a foreign bank) or from a
securities dealer that agrees to repurchase the securities from the Portfolio at
a higher price on a designated future date. Repurchase agreements generally are
for a short period of time, usually less than a week. Costs, delays, or losses
could result if the selling party to a repurchase agreement becomes bankrupt or
otherwise defaults. NB Management monitors the creditworthiness of sellers. If
Neuberger Berman International Portfolio enters into a repurchase agreement
subject to foreign law and the counter-party defaults, that Portfolio may not
enjoy protections comparable to those provided to certain repurchase agreements
under U.S. bankruptcy law and may suffer delays and losses in disposing of the
collateral as a result.

POLICIES AND LIMITATIONS. Repurchase agreements with a maturity of more
than seven days are considered to be illiquid securities. No Portfolio may enter
into a repurchase agreement with a maturity of more than seven days if, as a
result, more than 15% of the value of its net assets would then be invested in
such repurchase agreements and other illiquid securities. A Portfolio may enter
into a repurchase agreement only if (1) the underlying securities are of a type
that the Portfolio's investment policies and limitations would allow it to
purchase directly, (2) the market value of the underlying securities, including

25
<PAGE>

accrued interest, at all times equals or exceeds the repurchase price, and (3)
payment for the underlying securities is made only upon satisfactory evidence
that the securities are being held for the Portfolio's account by its custodian
or a bank acting as the Portfolio's agent.

SECURITIES LOANS (ALL PORTFOLIOS). Each Portfolio may lend securities to
banks, brokerage firms, and other institutional investors judged creditworthy by
NB Management, provided that cash or equivalent collateral, equal to at least
100% of the market value of the loaned securities, is continuously maintained by
the borrower with the Portfolio. The Portfolio may invest the cash collateral
and earn income, or it may receive an agreed upon amount of interest income from
a borrower who has delivered equivalent collateral. During the time securities
are on loan, the borrower will pay the Portfolio an amount equivalent to any
dividends or interest paid on such securities. These loans are subject to
termination at the option of the Portfolio or the borrower. The Portfolio may
pay reasonable administrative and custodial fees in connection with a loan and
may pay a negotiated portion of the interest earned on the cash or equivalent
collateral to the borrower or placing broker. The Portfolio does not have the
right to vote securities on loan, but would terminate the loan and regain the
right to vote if that were considered important with respect to the investment.
NB Management believes the risk of loss on these transactions is slight because,
if a borrower were to default for any reason, the collateral should satisfy the
obligation. However, as with other extensions of secured credit, loans of
portfolio securities involve some risk of loss of rights in the collateral
should the borrower fail financially.

POLICIES AND LIMITATIONS. Each Portfolio may lend portfolio securities
with a value not exceeding 33-1/3% of its total assets to banks, brokerage
firms, or other institutional investors judged creditworthy by NB Management.
Borrowers are required continuously to secure their obligations to return
securities on loan from a Portfolio by depositing collateral in a form
determined to be satisfactory by the Portfolio Trustees. The collateral, which
must be marked to market daily, must be equal to at least 100% of the market
value of the loaned securities, which will also be marked to market daily.
Securities lending by Neuberger Berman Socially Responsive Portfolio is not
subject to the Social Policy.

RESTRICTED SECURITIES AND RULE 144A SECURITIES (ALL PORTFOLIOS). Each
Portfolio may invest in restricted securities, which are securities that may not
be sold to the public without an effective registration statement under the 1933
Act. Before they are registered, such securities may be sold only in a privately
negotiated transaction or pursuant to an exemption from registration. In
recognition of the increased size and liquidity of the institutional market for
unregistered securities and the importance of institutional investors in the
formation of capital, the SEC has adopted Rule 144A under the 1933 Act. Rule
144A is designed to facilitate efficient trading among institutional investors
by permitting the sale of certain unregistered securities to qualified
institutional buyers. To the extent privately placed securities held by a
Portfolio qualify under Rule 144A and an institutional market develops for those
securities, the Portfolio likely will be able to dispose of the securities
without registering them under the 1933 Act. To the extent that institutional
buyers become, for a time, uninterested in purchasing these securities,
investing in Rule 144A securities could increase the level of a Portfolio's
illiquidity. NB Management, acting under guidelines established by the Portfolio
Trustees, may determine that certain securities qualified for trading under Rule

26
<PAGE>

144A are liquid. Regulation S under the 1933 Act permits the sale abroad of
securities that are not registered for sale in the United States.

Where registration is required, a Portfolio may be obligated to pay all or
part of the registration expenses, and a considerable period may elapse between
the decision to sell and the time the Portfolio may be permitted to sell a
security under an effective registration statement. If, during such a period,
adverse market conditions were to develop, the Portfolio might obtain a less
favorable price than prevailed when it decided to sell. Restricted securities
for which no market exists are priced by a method that the Portfolio Trustees
believe accurately reflects fair value.

POLICIES AND LIMITATIONS. To the extent restricted securities, including
Rule 144A securities, are illiquid, purchases thereof will be subject to each
Portfolio's 15% limit on investments in illiquid securities.

REVERSE REPURCHASE AGREEMENTS (ALL PORTFOLIOS). In a reverse repurchase
agreement, a Portfolio sells portfolio securities subject to its agreement to
repurchase the securities at a later date for a fixed price reflecting a market
rate of interest. There is a risk that the counter-party to a reverse repurchase
agreement will be unable or unwilling to complete the transaction as scheduled,
which may result in losses to the Portfolio.

POLICIES AND LIMITATIONS. Reverse repurchase agreements are considered
borrowings for purposes of each Portfolio's investment policies and limitations
concerning borrowings. While a reverse repurchase agreement is outstanding, a
Portfolio will deposit in a segregated account with its custodian cash or
appropriate liquid securities, marked to market daily, in an amount at least
equal to the Portfolio's obligations under the agreement.

LEVERAGE (NEUBERGER BERMAN INTERNATIONAL PORTFOLIO). The Portfolio may
make investments while borrowings are outstanding. Leverage creates an
opportunity for increased total return but, at the same time, creates special
risk considerations. For example, leverage may amplify changes in the
Portfolio's and its corresponding Fund's net asset values ("NAVs"). Although the
principal of such borrowings will be fixed the Portfolio's assets may change in
value during the time the borrowing is outstanding. Leverage from borrowing
creates interest expenses for the Portfolio. To the extent the income derived
from securities purchased with borrowed funds exceeds the interest the Portfolio
will have to pay, the Portfolio's total return will be greater than it would be
if leverage were not used. Conversely, if the income from the assets obtained
with borrowed funds is not sufficient to cover the cost of leveraging, the net
income of the Portfolio will be less than it would be if leverage were not used,
and therefore the amount available for distribution to the Fund's shareholders
as dividends will be reduced. Reverse repurchase agreements create leverage and
are considered borrowings for the purposes of the Portfolio's investment
limitations.

POLICIES AND LIMITATIONS. Generally, the Portfolio does not intend to use
leverage for investment purposes. It may, however, use leverage to purchase
securities needed to close out short sales entered into for hedging purposes and
to facilitate other hedging transactions.

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<PAGE>

FOREIGN SECURITIES (ALL PORTFOLIOS). Each Portfolio may invest in U.S.
dollar-denominated securities of foreign issuers and foreign branches of U.S.
banks, including negotiable certificates of deposit ("CDs"), bankers'
acceptances and commercial paper. Foreign issuers are issuers organized and
doing business principally outside the U.S. and include banks, non-U.S.
goverments, and quasi-governmental organizations. While investments in foreign
securities are intended to reduce risk by providing further diversification,
such investments involve sovereign and other risks, in addition to the credit
and market risks normally associated with domestic securities. These additional
risks include the possibility of adverse political and economic developments
(including political instability, nationalization, expropriation, or
confiscatory taxation) and the potentially adverse effects of unavailability of
public information regarding issuers, less governmental supervision and
regulation of financial markets, reduced liquidity of certain financial markets,
and the lack of uniform accounting, auditing, and financial reporting standards
or the application of standards that are different or less stringent than those
applied in the United States.

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

Foreign securities often trade with less frequency and in less volume than
domestic securities and therefore may exhibit greater price volatility.
Additional costs associated with an investment in foreign securities may include
higher custodial fees than apply to domestic custody arrangements and
transaction costs of foreign currency conversions.

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

28
<PAGE>

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

The Portfolios may invest in ADRs, EDRs, GDRs, and IDRs. ADRs (sponsored
or unsponsored) are receipts typically issued by a U.S. bank or trust company
evidencing its ownership of the underlying foreign securities. Most ADRs are
denominated in U.S. dollars and are traded on a U.S. stock exchange. Issuers of
the securities underlying sponsored ADRs, but not unsponsored ADRs, are
contractually obligated to disclose material information in the United States.
Therefore, the market value of unsponsored ADRs may not reflect the effect of
such information. EDRs and IDRs are receipts typically issued by a European bank
or trust company evidencing its ownership of the underlying foreign securities.
GDRs are receipts issued by either a U.S. or non-U.S. banking institution
evidencing its ownership of the underlying foreign securities and are often
denominated in U.S. dollars.

POLICIES AND LIMITATIONS. In order to limit the risks inherent in
investing in foreign currency denominated securities, a Portfolio (except
Neuberger Berman International, Neuberger Berman Millennium and Neuberger Berman
Century Portfolios) may not purchase any such security if, as a result, more
than 10% of its total assets (taken at market value) would be invested in
foreign currency denominated securities. Each of Neuberger Berman Millennium and
Neuberger Berman Century Portfolios may not purchase foreign currency
denominated securities if, as a result, more than 20% of its total assets (taken
at market value) would be invested in such securities. Within those limitations,
however, no Portfolio is restricted in the amount it may invest in securities
denominated in any one foreign currency. Neuberger Berman International
Portfolio invests primarily in foreign securities.

Investments in securities of foreign issuers are subject to each
Portfolio's quality standards. Each Portfolio (except Neuberger Berman
International Portfolio) may invest only in securities of issuers in countries
whose governments are considered stable by NB Management.

FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES (NEUBERGER BERMAN
INTERNATIONAL PORTFOLIO). The Portfolio may purchase securities on a when-issued
basis and may purchase or sell securities on a forward commitment basis. These
transactions involve a commitment by the Portfolio to purchase or sell
securities at a future date (ordinarily within two months, although the
Portfolio may agree to a longer settlement period). The price of the underlying
securities (usually expressed in terms of yield) and the date when the
securities will be delivered and paid for (the settlement date) are fixed at the
time the transaction is negotiated. When-issued purchases and forward commitment
transactions are negotiated directly with the other party, and such commitments
are not traded on exchanges.

When-issued purchases and forward commitment transactions enable the
Portfolio to "lock in" what NB Management believes to be an attractive price or
yield on a particular security for a period of time, regardless of future

29
<PAGE>

changes in interest rates. For instance, in periods of rising interest rates and
falling prices, the Portfolio might sell securities it owns on a forward
commitment basis to limit its exposure to falling prices. In periods of falling
interest rates and rising prices, the Portfolio might purchase a security on a
when-issued or forward commitment basis and sell a similar security to settle
such purchase, thereby obtaining the benefit of currently higher yields. If the
seller fails to complete the sale, the Portfolio may lose the opportunity to
obtain a favorable price.

The value of securities purchased on a when-issued or forward commitment
basis and any subsequent fluctuations in their value are reflected in the
computation of the Portfolio's NAV starting on the date of the agreement to
purchase the securities. Because the Portfolio has not yet paid for the
securities, this produces an effect similar to leverage. The Portfolio does not
earn interest on securities it has committed to purchase until the securities
are paid for and delivered on the settlement date. When the Portfolio makes a
forward commitment to sell securities it owns, the proceeds to be received upon
settlement are included in the Portfolio's assets. Fluctuations in the market
value of the underlying securities are not reflected in the Portfolio's NAV as
long as the commitment to sell remains in effect.

POLICIES AND LIMITATIONS. The Portfolio will purchase securities on a
when-issued basis or purchase or sell securities on a forward commitment basis
only with the intention of completing the transaction and actually purchasing or
selling the securities. If deemed advisable as a matter of investment strategy,
however, the Portfolio may dispose of or renegotiate a commitment after it has
been entered into. The Portfolio also may sell securities it has committed to
purchase before those securities are delivered to the Portfolio on the
settlement date. The Portfolio may realize capital gains or losses in connection
with these transactions.

When the Portfolio purchases securities on a when-issued or forward
commitment basis, the Portfolio will deposit in a segregated account with its
custodian, until payment is made, appropriate liquid securities having a value
(determined daily) at least equal to the amount of the Portfolio's purchase
commitments. In the case of a forward commitment to sell portfolio securities,
the custodian will hold the portfolio securities themselves in a segregated
account while the commitment is outstanding. These procedures are designed to
ensure that the Portfolio maintains sufficient assets at all times to cover its
obligations under when-issued purchases and forward commitment transactions.

FUTURES, OPTIONS ON FUTURES, OPTIONS ON SECURITIES AND INDICES,
FORWARD CONTRACTS, AND OPTIONS ON FOREIGN CURRENCIES
(COLLECTIVELY, "FINANCIAL INSTRUMENTS")

FUTURES CONTRACTS AND OPTIONS THEREON (ALL PORTFOLIOS). Each of Neuberger
Berman Socially Responsive, Neuberger Berman Millennium and Neuberger Berman
Century Portfolios may purchase and sell interest rate futures contracts, stock
and bond index futures contracts, and foreign currency futures contracts and may
purchase and sell options thereon in an attempt to hedge against changes in the
prices of securities or, in the case of foreign currency futures and options
thereon, to hedge against changes in prevailing currency exchange rates. Because
the futures markets may be more liquid than the cash markets, the use of futures
contracts permits each Portfolio to enhance portfolio liquidity and maintain a
defensive position without having to sell portfolio securities. These Portfolios

30
<PAGE>

view investment in (i) interest rate and securities index futures and options
thereon as a maturity management device and/or a device to reduce risk or
preserve total return in an adverse environment for the hedged securities, and
(ii) foreign currency futures and options thereon as a means of establishing
more definitely the effective return on, or the purchase price of, securities
denominated in foreign currencies that are held or intended to be acquired by
the Portfolio.

Neuberger Berman International Portfolio may enter into futures contracts
on currencies, debt securities, interest rates, and securities indices that are
traded on exchanges regulated by the Commodity Futures Trading Commission
("CFTC") or on foreign exchanges. Trading on foreign exchanges is subject to the
legal requirements of the jurisdiction in which the exchange is located and to
the rules of such foreign exchange.

Neuberger Berman International Portfolio may sell futures contracts in
order to offset a possible decline in the value of its portfolio securities.
When a futures contract is sold by the Portfolio, the value of the contract will
tend to rise when the value of the portfolio securities declines and will tend
to fall when the value of such securities increases. The Portfolio may purchase
futures contracts in order to fix what NB Management believes to be a favorable
price for securities the Portfolio intends to purchase. If a futures contract is
purchased by the Portfolio, the value of the contract will tend to change
together with changes in the value of such securities. To compensate for
differences in historical volatility between positions Neuberger Berman
International Portfolio wishes to hedge and the standardized futures contracts
available to it, the Portfolio may purchase or sell futures contracts with a
greater or lesser value than the securities it wishes to hedge.

With respect to currency futures, Neuberger Berman International Portfolio
may sell a futures contract or a call option, or it may purchase a put option on
such futures contract, if NB Management anticipates that exchange rates for a
particular currency will fall. Such a transaction will be used as a hedge (or,
in the case of a sale of a call option, a partial hedge) against a decrease in
the value of portfolio securities denominated in that currency. If NB Management
anticipates that a particular currency will rise, Neuberger Berman International
Portfolio may purchase a currency futures contract or a call option to protect
against an increase in the price of securities which are denominated in that
currency and which the Portfolio intends to purchase. The Portfolio may also
purchase a currency futures contract or a call option thereon for non-hedging
purposes when NB Management anticipates that a particular currency will
appreciate in value, but securities denominated in that currency do not present
an attractive investment and are not included in the Portfolio.

For purposes of managing cash flow, each Portfolio may purchase and sell
stock index futures contracts, and may purchase and sell options thereon, to
increase its exposure to the performance of a recognized securities index, such
as the S&P 500 Index.

31
<PAGE>

underlying the contract at a specified price at a specified future time. Certain
futures, including stock and bond index futures, are settled on a net cash
payment basis rather than by the sale and delivery of the securities underlying
the futures.

U.S. futures contracts (except certain currency futures) are traded on
exchanges that have been designated as "contract markets" by the CFTC; futures
transactions must be executed through a futures commission merchant that is a
member of the relevant contract market. In both U.S. and foreign markets, an
exchange's affiliated clearing organization guarantees performance of the
contracts between the clearing members of the exchange.

Although futures contracts by their terms may require the actual delivery
or acquisition of the underlying securities or currency, in most cases the
contractual obligation is extinguished by being offset before the expiration of
the contract. A futures position is offset by buying (to offset an earlier sale)
or selling (to offset an earlier purchase) an identical futures contract calling
for delivery in the same month. This may result in a profit or loss. While
futures contracts entered into by a Portfolio will usually be liquidated in this
manner, the Portfolio may instead make or take delivery of underlying securities
whenever it appears economically advantageous for it to do so.

"Margin" with respect to a futures contract is the amount of assets that
must be deposited by a Portfolio with, or for the benefit of, a futures
commission merchant in order to initiate and maintain the Portfolio's futures
positions. The margin deposit made by the Portfolio when it enters into a
futures contract ("initial margin") is intended to assure its performance of the
contract. If the price of the futures contract changes -- increases in the case
of a short (sale) position or decreases in the case of a long (purchase)
position -- so that the unrealized loss on the contract causes the margin
deposit not to satisfy margin requirements, the Portfolio will be required to
make an additional margin deposit ("variation margin"). However, if favorable
price changes in the futures contract cause the margin deposit to exceed the
required margin, the excess will be paid to the Portfolio. In computing their
NAVs, the Portfolios mark to market the value of their open futures positions.
Each Portfolio also must make margin deposits with respect to options on futures
that it has written (but not with respect to options on futures that it has
purchased). If the futures commission merchant holding the margin deposit goes
bankrupt, the Portfolio could suffer a delay in recovering its funds and could
ultimately suffer a loss.

An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in the contract (a long position if
the option is a call and a short position if the option is a put) at a specified
exercise price at any time during the option exercise period. The writer of the
option is required upon exercise to assume a short futures position (if the
option is a call) or a long futures position (if the option is a put). Upon
exercise of the option, the accumulated cash balance in the writer's futures
margin account is delivered to the holder of the option. That balance represents
the amount by which the market price of the futures contract at exercise
exceeds, in the case of a call, or is less than, in the case of a put, the
exercise price of the option. Options on futures have characteristics and risks
similar to those of securities options, as discussed herein.

Although each Portfolio believes that the use of futures contracts will
benefit it, if NB Management's judgment about the general direction of the
markets or about interest rate or currency exchange rate trends is incorrect,
the Portfolio's overall return would be lower than if it had not entered into

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<PAGE>

any such contracts. The prices of futures contracts are volatile and are
influenced by, among other things, actual and anticipated changes in interest or
currency exchange rates, which in turn are affected by fiscal and monetary
policies and by national and international political and economic events. At
best, the correlation between changes in prices of futures contracts and of
securities being hedged can be only approximate due to differences between the
futures and securities markets or differences between the securities or
currencies underlying a Portfolio's futures position and the securities held by
or to be purchased for the Portfolio. The currency futures market may be
dominated by short-term traders seeking to profit from changes in exchange
rates. This would reduce the value of such contracts used for hedging purposes
over a short-term period. Such distortions are generally minor and would
diminish as the contract approaches maturity.

Because of the low margin deposits required, futures trading involves an
extremely high degree of leverage; as a result, a relatively small price
movement in a futures contract may result in immediate and substantial loss, or
gain, to the investor. Losses that may arise from certain futures transactions
are potentially unlimited.

Most U.S. futures exchanges limit the amount of fluctuation in the price
of a futures contract or option thereon during a single trading day; once the
daily limit has been reached, no trades may be made on that day at a price
beyond that limit. The daily limit governs only price movements during a
particular trading day, however; it thus does not limit potential losses. In
fact, it may increase the risk of loss, because prices can move to the daily
limit for several consecutive trading days with little or no trading, thereby
preventing liquidation of unfavorable futures and options positions and
subjecting traders to substantial losses. If this were to happen with respect to
a position held by a Portfolio, it could (depending on the size of the position)
have an adverse impact on the NAV of the Portfolio.

POLICIES AND LIMITATIONS. Neuberger Berman Socially Responsive, Neuberger
Berman Millennium and Neuberger Berman Century Portfolios each may purchase and
sell futures contracts and may purchase and sell options thereon in an attempt
to hedge against changes in the prices of securities or, in the case of foreign
currency futures and options thereon, to hedge against prevailing currency
exchange rates. These Portfolios do not engage in transactions in futures and
options on futures for speculation. The use of futures and options on futures by
Neuberger Berman Socially Responsive Portfolio is not subject to the Social
Policy.

Neuberger Berman International Portfolio may purchase and sell futures for
BONA FIDE hedging purposes, as defined in regulations of the CFTC, and for
non-hedging purposes (i.e., in an effort to enhance income). The Portfolio may
also purchase and write put and call options on such futures contracts for BONA
FIDE hedging and non-hedging purposes.

CALL OPTIONS ON SECURITIES (ALL PORTFOLIOS). Neuberger Berman Millennium,
Century, Socially Responsive and International Portfolios may write covered call

33
<PAGE>

options and may purchase call options on securities. Each of the other
Portfolios may write covered call options and may purchase call options in
related closing transactions. The purpose of writing call options is to hedge
(i.e., to reduce, at least in part, the effect of price fluctuations of
securities held by the Portfolio on the Portfolio's and its corresponding Fund's
NAVs) or to earn premium income. Portfolio securities on which call options may
be written and purchased by a Portfolio are purchased solely on the basis of
investment considerations consistent with the Portfolio's investment objective.

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

The writing of covered call options is a conservative investment technique
that is believed to involve relatively little risk but is capable of enhancing
the Portfolios' total return. When writing a covered call option, a Portfolio,
in return for the premium, gives up the opportunity for profit from a price
increase in the underlying security above the exercise price, but conversely
retains the risk of loss should the price of the security decline.

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

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

POLICIES AND LIMITATIONS. Each Portfolio may write covered call options
and may purchase call options in related closing transactions. Each Portfolio
writes only "covered" call options on securities it owns (in contrast to the
writing of "naked" or uncovered call options, which the Portfolios will not do).

A Portfolio would purchase a call option to offset a previously written
call option. Each of Neuberger Berman Millennium, Century and Socially
Responsive Portfolios also may purchase a call option to protect against an
increase in the price of the securities it intends to purchase. The use of call
options on securities by Neuberger Berman Socially Responsive Portfolio is not
subject to the Social Policy. Neuberger Berman International Portfolio may
purchase call options for hedging or non-hedging purposes.

PUT OPTIONS ON SECURITIES (NEUBERGER BERMAN MILLENNIUM, CENTURY, SOCIALLY
RESPONSIVE AND INTERNATIONAL PORTFOLIOS). Each of these Portfolios may write and
purchase put options on securities. Each of Neuberger Berman Millennium,
Century, Socially Responsive or International Portfolios will receive a premium
for writing a put option, which obligates the Portfolio to acquire a security at
a certain price at any time until a certain date if the purchaser decides to

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exercise the option. The Portfolio may be obligated to purchase the underlying
security at more than its current value.

When Neuberger Berman Millennium, Century, Socially Responsive or
International Portfolio purchases a put option, it pays a premium to the writer
for the right to sell a security to the writer for a specified amount at any
time until a certain date. The Portfolio would purchase a put option in order to
protect itself against a decline in the market value of a security it owns.

Portfolio securities on which put options may be written and purchased by
Neuberger Berman Millennium, Century, Socially Responsive or International
Portfolio are purchased solely on the basis of investment considerations
consistent with the Portfolio's investment objective. When writing a put option,
the Portfolio, in return for the premium, takes the risk that it must purchase
the underlying security at a price that may be higher than the current market
price of the security. If a put option that the Portfolio has written expires
unexercised, the Portfolio will realize a gain in the amount of the premium.

POLICIES AND LIMITATIONS. Neuberger Berman Millennium, Century, Socially
Responsive and International Portfolios generally write and purchase put options
on securities for hedging purposes (i.e., to reduce, at least in part, the
effect of price fluctuations of securities held by the Portfolio on the
Portfolio's and its corresponding Fund's NAVs). However, Neuberger Berman
International Portfolio also may use put options for non-hedging purposes. The
use of put options on securities by Neuberger Berman Socially Responsive
Portfolio is not subject to the Social Policy.

GENERAL INFORMATION ABOUT SECURITIES OPTIONS. The exercise price of an
option may be below, equal to, or above the market value of the underlying
security at the time the option is written. Options normally have expiration
dates between three and nine months from the date written. American-style
options are exercisable at any time prior to their expiration date. Neuberger
Berman International Portfolio also may purchase European-style options, which
are exercisable only immediately prior to their expiration date. The obligation
under any option written by a Portfolio terminates upon expiration of the option
or, at an earlier time, when the Portfolio offsets the option by entering into a
"closing purchase transaction" to purchase an option of the same series. If an
option is purchased by a Portfolio and is never exercised or closed out, the
Portfolio will lose the entire amount of the premium paid.

Options are traded both on U.S. national securities exchanges and in the
over-the-counter ("OTC") market. Neuberger Berman International Portfolio also
may purchase and sell options that are traded on foreign exchanges.
Exchange-traded options are issued by a clearing organization affiliated with
the exchange on which the option is listed; the clearing organization in effect
guarantees completion of every exchange-traded option. In contrast, OTC options
are contracts between a Portfolio and a counter-party, with no clearing
organization guarantee. Thus, when a Portfolio sells (or purchases) an OTC
option, it generally will be able to "close out" the option prior to its
expiration only by entering into a closing transaction with the dealer to whom
(or from whom) the Portfolio originally sold (or purchased) the option. There
can be no assurance that the Portfolio would be able to liquidate an OTC option
at any time prior to expiration. Unless a Portfolio is able to effect a closing
purchase transaction in a covered OTC call option it has written, it will not be

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able to liquidate securities used as cover until the option expires or is
exercised or until different cover is substituted. In the event of the
counter-party's insolvency, a Portfolio may be unable to liquidate its options
position and the associated cover. NB Management monitors the creditworthiness
of dealers with which a Portfolio may engage in OTC options transactions.

The premium received (or paid) by a Portfolio when it writes (or
purchases) an option is the amount at which the option is currently traded on
the applicable market. The premium may reflect, among other things, the current
market price of the underlying security, the relationship of the exercise price
to the market price, the historical price volatility of the underlying security,
the length of the option period, the general supply of and demand for credit,
and the interest rate environment. The premium received by a Portfolio for
writing an option is recorded as a liability on the Portfolio's statement of
assets and liabilities. This liability is adjusted daily to the option's current
market value.

Closing transactions are effected in order to realize a profit (or
minimize a loss) on an outstanding option, to prevent an underlying security
from being called, or to permit the sale or the put of the underlying security.
Furthermore, effecting a closing transaction permits Neuberger Berman
Millennium, Socially Responsive or International Portfolio to write another call
option on the underlying security with a different exercise price or expiration
date or both. There is, of course, no assurance that a Portfolio will be able to
effect closing transactions at favorable prices. If a Portfolio cannot enter
into such a transaction, it may be required to hold a security that it might
otherwise have sold (or purchase a security that it would not have otherwise
bought), in which case it would continue to be at market risk on the security.

A Portfolio will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more than the premium
received from writing the call or put option. Because increases in the market
price of a call option generally reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option is
likely to be offset, in whole or in part, by appreciation of the underlying
security owned by the Portfolio; however, the Portfolio could be in a less
advantageous position than if it had not written the call option.

A Portfolio pays brokerage commissions or spreads in connection with
purchasing or writing options, including those used to close out existing
positions. From time to time, Neuberger Berman Millennium, Socially Responsive
or International Portfolio may purchase an underlying security for delivery in
accordance with an exercise notice of a call option assigned to it, rather than
delivering the security from its portfolio. In those cases, additional brokerage
commissions are incurred.

The hours of trading for options may not conform to the hours during which
the underlying securities are traded. To the extent that the options markets
close before the markets for the underlying securities, significant price and
rate movements can take place in the underlying markets that cannot be reflected
in the options markets.

POLICIES AND LIMITATIONS. Each Portfolio may use American-style options.
Neuberger Berman International Portfolio also may purchase European-style
options and may purchase and sell options that are traded on foreign exchanges.

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

The use of put and call options by Neuberger Berman Socially Responsive
Portfolio is not subject to the Social Policy.

PUT AND CALL OPTIONS ON SECURITIES INDICES. Neuberger Berman International
Portfolio may purchase put and call options on securities indices for the
purpose of hedging against the risk of price movements that would adversely
affect the value of the Portfolio's securities or securities the Portfolio
intends to buy. The Portfolio may write securities index options to close out
positions in such options that it has purchased.

For purposes of managing cash flow, each Portfolio may purchase put and
call options on securities indices to increase the Portfolio's exposure to the
performance of a recognized securities index, such as the S&P 500 Index.

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"
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.

POLICIES AND LIMITATIONS. Neuberger Berman International Portfolio may
purchase put and call options on securities indices for the purpose of hedging.
All securities index options purchased by the Portfolio will be listed and
traded on an exchange. The Portfolio currently does not expect to invest a
substantial portion of its assets in securities index options.

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securities index options purchased by the Portfolios will be listed and traded
on an exchange.

FOREIGN CURRENCY TRANSACTIONS (ALL PORTFOLIOS). Each Portfolio may enter
into contracts for the purchase or sale of a specific currency at a future date
(usually less than one year from the date of the contract) at a fixed price
("forward contracts"). The Portfolios also may engage in foreign currency
exchange transactions on a spot (i.e., cash) basis at the spot rate prevailing
in the foreign currency exchange market.

The Portfolios (other than Neuberger Berman International Portfolio) enter
into forward contracts in an attempt to hedge against changes in prevailing
currency exchange rates. The Portfolios do not engage in transactions in forward
contracts for speculation; they view investments in forward contracts as a means
of establishing more definitely the effective return on, or the purchase price
of, securities denominated in foreign currencies. Forward contract transactions
include forward sales or purchases of foreign currencies for the purpose of
protecting the U.S. dollar value of securities held or to be acquired by a
Portfolio or protecting the U.S. dollar equivalent of dividends, interest, or
other payments on those securities.

Forward contracts are traded in the interbank market directly between
dealers (usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are charged at any
stage for trades; foreign exchange dealers realize a profit based on the
difference (the spread) between the prices at which they are buying and selling
various currencies.

At the consummation of a forward contract to sell currency, a Portfolio
may either make delivery of the foreign currency or terminate its contractual
obligation to deliver by purchasing an offsetting contract. If the Portfolio
chooses to make delivery of the foreign currency, it may be required to obtain
such currency through the sale of portfolio securities denominated in such
currency or through conversion of other assets of the Portfolio into such
currency. If the Portfolio engages in an offsetting transaction, it will incur a
gain or a loss to the extent that there has been a change in forward contract
prices. Closing purchase transactions with respect to forward contracts are
usually made with the currency dealer who is a party to the original forward
contract.

NB Management believes that the use of foreign currency hedging
techniques, including "proxy-hedges," can provide significant protection of NAV
in the event of a general rise in the U.S. dollar against foreign currencies.
For example, the return available from securities denominated in a particular
foreign currency would diminish if the value of the U.S. dollar increased
against that currency. Such a decline could be partially or completely offset by
an increase in value of a hedge involving a forward contract to sell that
foreign currency or a proxy-hedge involving a forward contract to sell a
different foreign currency whose behavior is expected to resemble the currency
in which the securities being hedged are denominated but which is available on
more advantageous terms.

However, a hedge or proxy-hedge cannot protect against exchange rate risks
perfectly, and, if NB Management is incorrect in its judgment of future exchange
rate relationships, a Portfolio could be in a less advantageous position than if
such a hedge had not been established. If a Portfolio uses proxy-hedging, it may

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experience losses on both the currency in which it has invested and the currency
used for hedging if the two currencies do not vary with the expected degree of
correlation. Using forward contracts to protect the value of a Portfolio's
securities against a decline in the value of a currency does not eliminate
fluctuations in the prices of the underlying securities. Because forward
contracts are not traded on an exchange, the assets used to cover such contracts
may be illiquid. A Portfolio may experience delays in the settlement of its
foreign currency transactions.

Neuberger Berman International Portfolio may purchase securities of an
issuer domiciled in a country other than the country in whose currency the
instrument is denominated. The Portfolio may invest in securities denominated in
the European Currency Unit ("ECU"), which is a "basket" consisting of a
specified amount of the currencies of certain of the member states of the
European Union. The specific amounts of currencies comprising the ECU may be
adjusted by the Council of Ministers of the European Union from time to time to
reflect changes in relative values of the underlying currencies. The market for
ECUs may become illiquid at times of uncertainty or rapid change in the European
currency markets, limiting the Portfolio's ability to prevent potential losses.
In addition, Neuberger Berman International Portfolio may invest in securities
denominated in other currency baskets.

POLICIES AND LIMITATIONS. The Portfolios (other than Neuberger Berman
International Portfolio) may enter into forward contracts for the purpose of
hedging and not for speculation. The use of forward contracts by Neuberger
Berman Socially Responsive Portfolio is not subject to the Social Policy.

Neuberger Berman International Portfolio may enter into forward contracts
for hedging or non-hedging purposes. When the Portfolio engages in foreign
currency transactions for hedging purposes, it will not enter into forward
contracts to sell currency or maintain a net exposure to such contracts if their
consummation would obligate the Portfolio to deliver an amount of foreign
currency materially in excess of the value of its portfolio securities or other
assets denominated in that currency. Neuberger Berman International Portfolio
may also purchase and sell forward contracts for non-hedging purposes when NB
Management anticipates that a foreign currency will appreciate or depreciate in
value, but securities in that currency do not present attractive investment
opportunities and are not held in the Portfolio's investment portfolio.

OPTIONS ON FOREIGN CURRENCIES (ALL PORTFOLIOS). Each Portfolio may write
and purchase covered call and put options on foreign currencies. Neuberger
Berman International Portfolio may write (sell) put and covered call options on
any currency in order to realize greater income than would be realized on
portfolio securities alone.

Currency options have characteristics and risks similar to those of
securities options, as discussed herein. Certain options on foreign currencies
are traded on the OTC market and involve liquidity and credit risks that may not
be present in the case of exchange-traded currency options.

POLICIES AND LIMITATIONS. A Portfolio would use options on foreign
currencies to protect against declines in the U.S. dollar value of portfolio
securities or increases in the U.S. dollar cost of securities to be acquired or
to protect the U.S. dollar equivalent of dividends, interest, or other payments

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<PAGE>

on those securities. In addition, Neuberger Berman International Portfolio may
purchase put and call options on foreign currencies for non-hedging purposes
when NB Management anticipates that a currency will appreciate or depreciate in
value, but securities denominated in that currency do not present attractive
investment opportunities and are not included in the Portfolio. The use of
options on currencies by Neuberger Berman Socially Responsive Portfolio is not
subject to the Social Policy.

REGULATORY LIMITATIONS ON USING FINANCIAL INSTRUMENTS. To the extent a
Portfolio sells or purchases futures contracts or writes options thereon or
options on foreign currencies that are traded on an exchange regulated by the
CFTC other than for bona fide hedging purposes (as defined by the CFTC), the
aggregate initial margin and premiums on those positions (excluding the amount
by which options are "in-the-money") may not exceed 5% of the Portfolio's net
assets.

COVER FOR FINANCIAL INSTRUMENTS. Securities held in a segregated account
cannot be sold while the futures, options, or forward strategy covered by those
securities is outstanding, unless they are replaced with other suitable assets.
As a result, segregation of a large percentage of a Portfolio's assets could
impede portfolio management or the Portfolio's ability to meet current
obligations. A Portfolio may be unable to promptly dispose of assets which
cover, or are segregated with respect to, an illiquid futures, options, or
forward position; this inability may result in a loss to the Portfolio.

POLICIES AND LIMITATIONS. Each Portfolio will comply with SEC guidelines
regarding "cover" for Financial Instruments and, if the guidelines so require,
set aside in a segregated account with its custodian the prescribed amount of
cash or appropriate liquid securities.

GENERAL RISKS OF FINANCIAL INSTRUMENTS. The primary risks in using
Financial Instruments are (1) imperfect correlation or no correlation between
changes in market value of the securities or currencies held or to be acquired
by a Portfolio and the prices of Financial Instruments; (2) possible lack of a
liquid secondary market for Financial Instruments and the resulting inability to
close out Financial Instruments when desired; (3) the fact that the skills
needed to use Financial Instruments are different from those needed to select a
Portfolio's securities; (4) the fact that, although use of Financial Instruments
for hedging purposes can reduce the risk of loss, they also can reduce the
opportunity for gain, or even result in losses, by offsetting favorable price
movements in hedged investments; and (5) the possible inability of a Portfolio
to purchase or sell a portfolio security at a time that would otherwise be
favorable for it to do so, or the possible need for a Portfolio to sell a
portfolio security at a disadvantageous time, due to its need to maintain cover
or to segregate securities in connection with its use of Financial Instruments.
There can be no assurance that a Portfolio's use of Financial Instruments will
be successful.

Each Portfolio's use of Financial Instruments may be limited by the
provisions of the Internal Revenue Code of 1986, as amended ("Code"), with which
it must comply if its corresponding Fund is to continue to qualify as a
regulated investment company ("RIC"). See "Additional Tax Information."
Financial Instruments may not be available with respect to some currencies,
especially those of so-called emerging market countries.

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POLICIES AND LIMITATIONS. NB Management intends to reduce the risk of
imperfect correlation by investing only in Financial Instruments whose behavior
is expected to resemble or offset that of a Portfolio's underlying securities or
currency. NB Management intends to reduce the risk that a Portfolio will be
unable to close out Financial Instruments by entering into such transactions
only if NB Management believes there will be an active and liquid secondary
market.

SHORT SALES (NEUBERGER BERMAN INTERNATIONAL PORTFOLIO). Neuberger Berman
International Portfolio may attempt to limit exposure to a possible decline in
the market value of portfolio securities through short sales of securities that
NB Management believes possess volatility characteristics similar to those being
hedged. The Portfolio also may use short sales in an attempt to realize gain. To
effect a short sale, the Portfolio borrows a security from a brokerage firm to
make delivery to the buyer. The Portfolio then is obliged to replace the
borrowed security by purchasing it at the market price at the time of
replacement. Until the security is replaced, the Portfolio is required to pay
the lender any dividends and may be required to pay a premium or interest.

Neuberger Berman International Portfolio will realize a gain if the
security declines in price between the date of the short sale and the date on
which the Portfolio replaces the borrowed security. The Portfolio will incur a
loss if the price of the security increases between those dates. The amount of
any gain will be decreased, and the amount of any loss increased, by the amount
of any premium or interest the Portfolio is required to pay in connection with
the short sale. A short position may be adversely affected by imperfect
correlation between movements in the price of the securities sold short and the
securities being hedged.

Neuberger Berman International Portfolio also may make short sales
against-the-box, in which it sells securities short only if it owns or has the
right to obtain without payment of additional consideration an equal amount of
the same type of securities sold.

The effect of short selling on the Portfolio is similar to the effect of
leverage. Short selling may amplify changes in the Portfolio's and Neuberger
Berman International Trust's NAVs. Short selling may also produce higher than
normal portfolio turnover, which may result in increased transaction costs to
the Portfolio.

POLICIES AND LIMITATIONS. Under applicable guidelines of the SEC staff, if
the Portfolio engages in a short sale (other than a short sale against-the-box),
it must put in a segregated account (not with the broker) an amount of cash or
appropriate liquid securities equal to the difference between (1) the market
value of the securities sold short at the time they were sold short and (2) any
cash or securities required to be deposited as collateral with the broker in
connection with the short sale (not including the proceeds from the short sale).
In addition, until the Portfolio replaces the borrowed security, it must daily
maintain the segregated account at such a level that (1) the amount deposited in
it plus the amount deposited with the broker as collateral equals the current
market value of the securities sold short, and (2) the amount deposited in it
plus the amount deposited with the broker as collateral is not less than the
market value of the securities at the time they were sold short.

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FIXED INCOME SECURITIES (ALL PORTFOLIOS). While the emphasis of the
Portfolios' investment programs is on common stocks and other equity securities,
the Portfolios may also invest in money market instruments, U.S. Government and
Agency Securities, and other fixed income securities. Each Portfolio may invest
in investment grade corporate bonds and debentures; Neuberger Berman Partners,
International, Century and Regency Portfolios each may invest in corporate debt
securities rated below investment grade.

U.S. Government Securities are obligations of the U.S. Treasury backed by
the full faith and credit of the United States. U.S. Government Agency
Securities are issued or guaranteed by U.S. Government agencies or by
instrumentalities of the U.S. Government, such as the Government National
Mortgage Association, Fannie Mae (also known as Federal National Mortgage
Association), Freddie Mac (also known as Federal Home Loan Mortgage
Corporation), Student Loan Marketing Association (commonly known as "Sallie
Mae"), and the Tennessee Valley Authority. Some U.S. Government Agency
Securities are supported by the full faith and credit of the United States,
while others may by supported by the issuer's ability to borrow from the U.S.
Treasury, subject to the Treasury's discretion in certain cases, or only by the
credit of the issuer. U.S. Government Agency Securities include U.S. Government
Agency mortgage-backed securities. The market prices of U.S. Government and
Agency Securities are not guaranteed by the Government.

"Investment grade" debt securities are those receiving one of the four
highest ratings from Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's ("S&P"), or another nationally recognized statistical rating organization
("NRSRO") or, if unrated by any NRSRO, deemed by NB Management to be comparable
to such rated securities ("Comparable Unrated Securities"). Securities rated by
Moody's in its fourth highest rating category (Baa) or Comparable Unrated
Securities may be deemed to have speculative characteristics.

The ratings of an NRSRO represent its opinion as to the quality of
securities it undertakes to rate. Ratings are not absolute standards of quality;
consequently, securities with the same maturity, coupon, and rating may have
different yields. Although the Portfolios may rely on the ratings of any NRSRO,
the Portfolios primarily refer to ratings assigned by S&P and Moody's, which are
described in Appendix A to this SAI.

Fixed income securities are subject to the risk of an issuer's inability
to meet principal and interest payments on its obligations ("credit risk") and
are subject to price volatility due to such factors as interest rate
sensitivity, market perception of the creditworthiness of the issuer, and market
liquidity ("market risk"). The value of the fixed income securities in which a
Portfolio may invest is likely to decline in times of rising market interest
rates. Conversely, when rates fall, the value of a Portfolio's fixed income
investments is likely to rise. Foreign debt securities are subject to risks
similar to those of other foreign securities.

Lower-rated securities are more likely to react to developments affecting
market and credit risk than are more highly rated securities, which react
primarily to movements in the general level of interest rates. Debt securities
in the lowest rating categories may involve a substantial risk of default or may
be in default. Changes in economic conditions or developments regarding the
individual issuer are more likely to cause price volatility and weaken the
capacity of the issuer of such securities to make principal and interest

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payments than is the case for higher-grade debt securities. An economic downturn
affecting the issuer may result in an increased incidence of default. The market
for lower-rated securities may be thinner and less active than for higher-rated
securities. Pricing of thinly traded securities requires greater judgment than
pricing of securities for which market transactions are regularly reported. NB
Management will invest in lower-rated securities only when it concludes that the
anticipated return on such an investment to Neuberger Berman Partners,
International, Century or Regency Portfolio warrants exposure to the additional
level of risk.

POLICIES AND LIMITATIONS. Each Portfolio normally may invest up to 35% of
its total assets in debt securities. Neuberger Berman Partners, Century and
Regency Portfolios each may invest up to 15% of its net assets in corporate debt
securities rated below investment grade or Comparable Unrated Securities.
Neuberger Berman International Portfolio may invest in domestic and foreign debt
securities of any rating, including those rated below investment grade and
Comparable Unrated Securities.

Subsequent to its purchase by a Portfolio, an issue of debt securities may
cease to be rated or its rating may be reduced, so that the securities would no
longer be eligible for purchase by that Portfolio. In such a case, Neuberger
Berman Millennium Portfolio and Neuberger Berman Socially Responsive Portfolio
each will engage in an orderly disposition of the downgraded securities. Each
other Portfolio (except Neuberger Berman International Portfolio) will engage in
an orderly disposition of the downgraded securities to the extent necessary to
ensure that the Portfolio's holdings of securities rated below investment grade
and Comparable Unrated Securities will not exceed 5% of its net assets (15% in
the case of Neuberger Berman Partners, Century and Regency Portfolios). NB
Management will make a determination as to whether Neuberger Berman
International Portfolio should dispose of the downgraded securities.

COMMERCIAL PAPER (ALL PORTFOLIOS). Commercial paper is a short-term debt
security issued by a corporation or bank, usually for purposes such as financing
current operations. Each Portfolio may invest in commercial paper that cannot be
resold to the public without an effective registration statement under the 1933
Act. While restricted commercial paper normally is deemed illiquid, NB
Management may in certain cases determine that such paper is liquid, pursuant to
guidelines established by the Portfolio Trustees.

POLICIES AND LIMITATIONS. The Portfolios may invest in commercial paper
only if it has received the highest rating from S&P (A-1) or Moody's (P-1) or is
deemed by NB Management to be of comparable quality. Neuberger Berman
International Portfolio may invest in such commercial paper as a defensive
measure, to increase liquidity, or as needed for segregated accounts.

ZERO COUPON SECURITIES (NEUBERGER BERMAN PARTNERS, MILLENNIUM, SOCIALLY
RESPONSIVE, CENTURY AND REGENCY PORTFOLIOS). Each of these Portfolios may invest
in zero coupon securities, which are debt obligations that do not entitle the
holder to any periodic payment of interest prior to maturity or that specify a
future date when the securities begin to pay current interest. Zero coupon
securities are issued and traded at a discount from their face amount or par

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value. This discount varies depending on prevailing interest rates, the time
remaining until cash payments begin, the liquidity of the security, and the
perceived credit quality of the issuer.

The discount on zero coupon securities ("original issue discount") must be
taken into income ratably by each such Portfolio prior to the receipt of any
actual payments. Because its corresponding Fund must distribute substantially
all of its net income (including its share of the Portfolio's accrued original
issue discount) to its shareholders each year for income and excise tax
purposes, each such Portfolio may have to dispose of portfolio securities under
disadvantageous circumstances to generate cash, or may be required to borrow, to
satisfy its corresponding Fund's distribution requirements. See "Additional Tax
Information."

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

CONVERTIBLE SECURITIES (ALL PORTFOLIOS). Each Portfolio may invest in
convertible securities. A convertible security is a bond, debenture, note,
preferred stock, or other security that may be converted into or exchanged for a
prescribed amount of common stock of the same or a different issuer within a
particular period of time at a specified price or formula. Convertible
securities generally have features of both common stocks and debt securities. A
convertible security entitles the holder to receive the interest paid or accrued
on debt or the dividend paid on preferred stock until the convertible security
matures or is redeemed, converted or exchanged. Before conversion, such
securities ordinarily provide a stream of income with generally higher yields
than common stocks of the same or similar issuers, but lower than the yield on
non-convertible debt. Convertible securities are usually subordinated to
comparable-tier non-convertible securities but rank senior to common stock in a
corporation's capital structure. The value of a convertible security is a
function of (1) its yield in comparison to the yields of other securities of
comparable maturity and quality that do not have a conversion privilege and (2)
its worth if converted into the underlying common stock.

The price of a convertible security often reflects variations in the price
of the underlying common stock in a way that non-convertible debt may not.
Convertible securities are typically issued by smaller capitalization companies
whose stock prices may be volatile. A convertible security may be subject to
redemption at the option of the issuer at a price established in the security's
governing instrument. If a convertible security held by a Portfolio is called
for redemption, the Portfolio will be required to convert it into the underlying
common stock, sell it to a third party or permit the issuer to redeem the
security. Any of these actions could have an adverse effect on the Portfolio's
and its corresponding Fund's ability to achieve their investment objectives.

POLICIES AND LIMITATIONS. Neuberger Berman Socially Responsive Portfolio
may invest up to 20% of its net assets in convertible securities. The Portfolio
does not intend to purchase any convertible securities that are not investment
grade. Convertible debt securities are subject to each Portfolio's investment
policies and limitations concerning fixed income securities.

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

SWAP AGREEMENTS (NEUBERGER BERMAN INTERNATIONAL AND CENTURY PORTFOLIOS).
Each of these Portfolios may enter into swap agreements to manage or gain
exposure to particular types of investments (including equity securities or
indices of equity securities in which the Portfolio otherwise could not invest
efficiently). In a swap agreement, one party agrees to make regular payments
equal to a floating rate on a specified amount in exchange for payments equal to
a fixed rate, or a different floating rate, on the same amount for a specified
period.

Swap agreements may involve leverage and may be highly volatile; depending
on how they are used, they may have a considerable impact on the Portfolio's
performance. The risks of swap agreements depend upon the other party's
creditworthiness and ability to perform, as well as the Portfolio's ability to
terminate its swap agreements or reduce its exposure through offsetting
transactions. Swap agreements may be illiquid. The swap market is relatively new
and is largely unregulated.

POLICIES AND LIMITATIONS. In accordance with SEC staff requirements, each
of Neuberger Berman International and Century Portfolios will segregate cash or
appropriate liquid securities in an amount equal to its obligations under swap
agreements; when an agreement provides for netting of the payments by the two
parties, the Portfolio will segregate only the amount of its net obligation, if
any.

JAPANESE INVESTMENTS (NEUBERGER BERMAN INTERNATIONAL PORTFOLIO). All of
the Portfolios may invest in foreign securities, including securities of
Japanese issuers. From time to time, Neuberger Berman International Portfolio
may invest a significant portion of its assets in securities of Japanese
issuers. The performance of the Portfolio may therefore be significantly
affected by events influencing the Japanese economy and the exchange rate
between the Japanese yen and the U.S. dollar. Japan has experienced a severe
recession, including a decline in real estate values and other events that
adversely affected the balance sheets of many financial institutions and
indicate that there may be structural weaknesses in the Japanese financial
system. The effects of this economic downturn may be felt for a considerable
period and are being exacerbated by the currency exchange rate. Japan is heavily
dependent on foreign oil. Japan is located in a seismically active area, and
severe earthquakes may damage important elements of the country's
infrastructure. Japan's economic prospects may be affected by the political and
military situations of its near neighbors, notably North and South Korea, China
and Russia.

OTHER INVESTMENT COMPANIES. Neuberger Berman International Portfolio may
invest in the shares of other investment companies. Such investment may be the
most practical or only manner in which the Portfolio can participate in certain
foreign markets because of the expenses involved or because other vehicles for
investing in those countries may not be available at the time the Portfolio is

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ready to make an investment. Each 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, a 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. The Portfolios do not intend to invest in such funds
unless, in the judgment of NB Management, the potential benefits of such
investment justify the payment of any applicable premium or sales charge.

POLICIES AND LIMITATIONS. Each 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.

INDEXED SECURITIES (NEUBERGER BERMAN INTERNATIONAL PORTFOLIO). Neuberger
Berman International Portfolio may invest in indexed securities whose values are
linked to currencies, interest rates, commodities, indices, or other financial
indicators. Most indexed securities are short- to intermediate-term fixed income
securities whose values at maturity or interest rates rise or fall according to
the change in one or more specified underlying instruments. The value of indexed
securities may increase or decrease if the underlying instrument appreciates,
and they may have return characteristics similar to direct investment in the
underlying instrument. Indexed securities may be more volatile than the
underlying instrument itself.

NEUBERGER BERMAN FOCUS PORTFOLIO - DESCRIPTION OF ECONOMIC SECTORS.

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

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

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

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

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

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

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

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

(8) MACHINERY AND EQUIPMENT SECTOR: Companies engaged in the research,
development, or manufacture of products, processes, or services relating to
electrical equipment, machinery, pollution control, or construction services,

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<PAGE>

including transformers, motors, turbines, hand tools, earth-moving equipment,
and waste disposal services. The profitability of most of these companies may
fluctuate significantly in response to capital spending and general economic
conditions. As is the case for the heavy industry sector, there are risks
associated with the production, handling, and disposal of materials and
processes that involve hazardous components and the risk of product
obsolescence.

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

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

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

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

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

NEUBERGER BERMAN SOCIALLY RESPONSIVE PORTFOLIO - DESCRIPTION OF SOCIAL POLICY

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BACKGROUND INFORMATION ON SOCIALLY RESPONSIVE INVESTING

In an era when many people are concerned about the relationship between
business and society, socially responsive investing ("SRI") is a mechanism for
assuring that investors' social values are reflected in their investment
decisions. As such, SRI is a direct descendent of the successful effort begun in
the early 1970's to encourage companies to divest their South African operations
and subscribe to the Sullivan Principles. Today, a growing number of individuals
and institutions are applying similar strategies to a broad range of problems.

Although there are many strategies available to the socially responsive
investor, including proxy activism, below-market loans to community projects,
and venture capital, the SRI strategies used by the Portfolio generally fall
into two categories:

AVOIDANCE INVESTING. Most socially responsive investors seek to avoid
holding securities of companies whose products or policies are seen as being at
odds with the social good. The most common exclusions historically have involved
tobacco companies and weapons manufacturers.

LEADERSHIP INVESTING. A growing number of investors actively look for
companies with progressive programs that are exemplary or companies which make
it their business to try to solve some of the problems of today's society.

The marriage of social and financial objectives would not have surprised
Adam Smith, who was, first and foremost, a moral philosopher. The Wealth of
Nations is firmly rooted in the Enlightenment conviction that the purpose of
capital is the social good and the related belief that idle capital is both
wasteful and unethical. But, what very likely would have surprised Smith is the
sheer complexity of the social issues we face today and the diversity of our
attitudes toward the social good. War and peace, race and gender, the
distribution of wealth, and the conservation of natural resources -- the social
agenda is long and compelling. It is also something about which reasonable
people differ. What should society's priorities be? What can and should be done
about them? And what is the role of business in addressing them? Since
corporations are on the front lines of so many key issues in today's world, a
growing number of investors feel that a corporation's role cannot be ignored.
This is true of some of the most important issues of the day such as equal
opportunity and the environment.

THE SOCIALLY RESPONSIVE DATABASE

Neuberger Berman, LLC ("Neuberger Berman"), the Portfolio's sub-adviser,
maintains a database of information about the social impact of the companies it
follows. NB Management uses the database to evaluate social issues after it
deems a stock acceptable from a financial standpoint for acquisition by the
Portfolio. The aim of the database is to be as comprehensive as possible, given
that much of the information concerning corporate responsibility comes from
subjective sources. Information for the database is gathered by Neuberger Berman
in many categories and then analyzed by NB Management in the following six
categories of corporate responsibility:

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WORKPLACE DIVERSITY AND EMPLOYMENT. NB Management looks for companies that
show leadership in areas such as employee training and promotion policies and
benefits, such as flextime, generous profit sharing, and parental leave. NB
Management looks for active programs to promote women and minorities and takes
into account their representation among the officers of an issuer and members of
its board of directors. As a basis for exclusion, NB Management looks for Equal
Employment Opportunity Act infractions and Occupational Safety and Health Act
violations; examines each case in terms of severity, frequency, and time elapsed
since the incident; and considers actions taken by the company since the
violation. NB Management also monitors companies' progress and attitudes toward
these issues.

ENVIRONMENT. A company's impact on the environment depends largely on the
industry. Therefore, NB Management examines a company's environmental record
vis-a-vis those of its peers in the industry. All companies operating in an
industry with inherently high environmental risks are likely to have had
problems in such areas as toxic chemical emissions, federal and state fines, and
Superfund sites. For these companies, NB Management examines their problems in
terms of severity, frequency, and elapsed time. NB Management then balances the
record against whatever leadership the company may have demonstrated in terms of
environmental policies, procedures, and practices. NB Management defines an
environmental leadership company as one that puts into place strong affirmative
programs to minimize emissions, promote safety, reduce waste at the source,
insure energy conservation, protect natural resources, and incorporate recycling
into its processes and products. NB Management looks for the commitment and
active involvement of senior management in all these areas. Several major
manufacturers which still produce substantial amounts of pollution are among the
leaders in developing outstanding waste source reduction and remediation
programs.

PRODUCT. NB Management considers company announcements, press reports, and
public interest publications relating to the health, safety, quality, labeling,
advertising, and promotion of both consumer and industrial products. NB
Management takes note of companies with a strong commitment to quality and with
marketing practices which are ethical and consumer-friendly. NB Management pays
particular attention to companies whose products and services promote
progressive solutions to social problems.

PUBLIC HEALTH. NB Management measures the participation of companies in
such industries and markets as alcohol, tobacco, gambling and nuclear power. NB
Management also considers the impact of products and marketing activities
related to those products on nutritional and other health concerns, both
domestically and in foreign markets.

WEAPONS. NB Management keeps track of domestic military sales and,
whenever possible, foreign military sales and categorizes them as nuclear
weapons related, other weapons related, and non-weapon military supplies, such
as micro-chip manufacturers and companies that make uniforms for military
personnel.

CORPORATE CITIZENSHIP. NB Management gathers information about a company's
participation in community affairs, its policies with respect to charitable

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<PAGE>

contributions, and its support of education and the arts. NB Management looks
for companies with a focus, dealing with issues not just by making financial
contributions, but also by asking the questions: What can we do to help? What do
we have to offer? Volunteerism, high-school mentoring programs, scholarships and
grants, and in-kind donations to specific groups are just a few ways that
companies have responded to these questions.

IMPLEMENTATION OF SOCIAL POLICY

Companies deemed acceptable by NB Management from a financial standpoint
are analyzed using Neuberger Berman's database. The companies are then evaluated
by the portfolio manager to determine if the companies' policies, practices,
products, and services withstand scrutiny in the following major areas of
concern: the environment and workplace diversity and employment. Companies are
then further evaluated to determine their track record in issues and areas of
concern such as public health, weapons, product, and corporate citizenship.

The issues and areas of concern that are tracked lend themselves to
objective analysis in varying degrees. Few, however, can be resolved entirely on
the basis of scientifically demonstrable facts. Moreover, a substantial amount
of important information comes from sources that do not purport to be
disinterested. Thus, the quality and usefulness of the information in the
database depend on Neuberger Berman's ability to tap a wide variety of sources
and on the experience and judgment of the people at NB Management who interpret
the information.

In applying the information in the database to stock selection for the
Portfolio, NB Management considers several factors. NB Management examines the
severity and frequency of various infractions, as well as the time elapsed since
their occurrence. NB Management also takes into account any remedial action
which has been taken by the company relating to these infractions. NB Management
notes any quality innovations made by the company in its effort to create
positive change and looks at the company's overall approach to social issues.

PERFORMANCE INFORMATION

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

TOTAL RETURN COMPUTATIONS

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

P(1+T)n = ERV

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Average annual total return smoothes out year-to-year variations in
performance and, in that respect, differs from actual year-to-year results. As
of the date of this SAI, Neuberger Berman Regency Trust had been in existence
only a very short time and had no meaningful performance history. The Funds
commenced operations in August 1993 except for Neuberger Berman International
Trust, which commenced operations in June 1998, and Neuberger Berman Millennium
Trust, which commenced operations in November 1998. However, each Fund's
investment objective, policies, and limitations are the same as those of another
mutual fund that is a series of Neuberger Berman Equity Funds and that has a
name similar to the Fund's and invests in the same Portfolio ("Sister Fund").
Each Sister Fund had a predecessor. The following total return data is for each
Fund since its inception and, for periods prior to each Fund's inception, its
Sister Fund (which, as used herein, includes data for that Sister Fund's
predecessor). The total returns for periods prior to the Funds' inception would
have been lower had they reflected the higher fees of the Funds, as compared to
those of the Sister Funds.

Average Annual Total Returns
Fund Periods Ended 8/31/1999

Period from
One Year Five Years Ten Years Inception

Manhattan +36.24% +15.45% +12.13% +16.75%

Genesis +19.15% +15.15% +11.45% +13.14%

Focus +38.07% +16.72% +14.69% +12.23%

Guardian +26.07% +12.68% +12.36% +12.84%

Partners +25.91% +18.13% +14.03% +17.61%

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International +21.99% +10.50% N/A +10.99%

Socially +36.76% +19.14% N/A +17.53%
Responsive

Millennium N/A N/A N/A +95.00%*

* Gross Return

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

NB Management may from time to time waive a portion of its fees due from
any Fund or Portfolio or reimburse a Fund or Portfolio for a portion of its
expenses. Such action has the effect of increasing total return. Actual
reimbursements and waivers are described in the Prospectus and in "Investment
Management and Administration Services" below.

COMPARATIVE INFORMATION

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

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

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<PAGE>

Times, Kiplinger's Personal Finance, and Barron's Newspaper, or

(2) recognized stock and other indices, such as the S&P 500 Composite
Stock Price Index ("S&P 500 Index"), S&P Small Cap 600 Index ("S&P 600
Index"), S&P Mid Cap 400 Index ("S&P 400 Index"), Russell 2000 Stock
Index, Russell Midcap(TM) Index, Dow Jones Industrial Average ("DJIA"),
Wilshire 1750 Index, Nasdaq Composite Index, Montgomery Securities Growth
Stock Index, Value Line Index, U.S. Department of Labor Consumer Price
Index ("Consumer Price Index"), College Board Annual Survey of Colleges,
Kanon Bloch's Family Performance Index, the Barra Growth Index, the Barra
Value Index, the EAFE(R) Index, the Financial Times World XUS Index, and
various other domestic, international, and global indices. The S&P 500
Index is a broad index of common stock prices, while the DJIA represents a
narrower segment of industrial companies. The S&P 600 Index includes
stocks that range in market value from $35 million to $6.1 billion, with
an average of $572 million. The S&P 400 Index measures mid-sized companies
that have an average market capitalization of $2.1 billion. The EAFE(R)
Index is an unmanaged index of common stock prices of more than 1,000
companies from Europe, Australia, and the Far East translated into U.S.
dollars. The Financial Times World XUS Index is an index of 24
international markets, excluding the U.S. market. Each assumes
reinvestment of distributions and is calculated without regard to tax
consequences or the costs of investing. Each Portfolio may invest in
different types of securities from those included in some of the above
indices.

Neuberger Berman Socially Responsive Trust's performance may also be
compared to various socially responsive indices. These include The Domini Social
Index and the indices developed by the quantitative department of Prudential
Securities, such as that department's Large and Mid-Cap portfolio indices for
various breakdowns ("Sin" Stock Free, Cigarette-Stock Free, S&P Composite,
etc.).

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

OTHER PERFORMANCE INFORMATION

From time to time, information about a Portfolio's portfolio allocation
and holdings as of a particular date may be included in Advertisements for the
corresponding Fund. This information may include the Portfolio's portfolio
diversification by asset type, or, in the case of Neuberger Berman Socially
Responsive Portfolio, by the social characteristics of companies owned.
Information used in Advertisements may include statements or illustrations
relating to the appropriateness of types of securities and/or mutual funds that
may be employed to meet specific financial goals, such as (1) funding
retirement, (2) paying for children's education, and (3) financially supporting
aging parents.

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

Investors who may find Neuberger Berman Partners Trust, Neuberger Berman
Guardian Trust, Neuberger Berman Focus Trust, Neuberger Berman Regency Trust or
Neuberger Berman Century Trust to be an attractive investment vehicle also
include parents saving to meet college costs for their children. For instance,
the cost of a college education is rapidly approaching the cost of the average
family home. Estimates of total four-year costs (tuition, room and board, books
and other expenses) for students starting college in various years may be
included in Advertisements, based on the College Board Annual Survey of
Colleges.

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

Information regarding the effects of investing at market highs and/or
lows, and investing early versus late for retirement plans also may be included
in Advertisements, if appropriate.

CERTAIN RISK CONSIDERATIONS

Although each Portfolio seeks to reduce risk by investing in a diversified
portfolio of securities, diversification does not eliminate all risk. There can,
of course, be no assurance that any Portfolio will achieve its investment
objective.

TRUSTEES AND OFFICERS

The following table sets forth information concerning the trustees and
officers of the Trust and Managers Trust, including their addresses and
principal business experience during the past five years. Some persons named as
trustees and officers also serve in similar capacities for other funds and their
corresponding portfolios administered or managed by NB Management and Neuberger
Berman.

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THE TRUST AND EQUITY MANAGERS TRUST:

Positions Held
With the Trust and
Name, Age, and Equity Managers
Address(1) Trust Principal Occupation(s)(2)
<S> <C> <C>

Claudia A. Brandon (42) Secretary of the Director, Corporate Secretarial, of
Trust and Equity NB Management since 1999; formerly
Managers Trust Vice President of NB Management;
Secretary of nine other mutual
funds or which NB Management
acts as investment manager
or administrator.

Faith Colish (64) Trustee of the Attorney at Law, Faith Colish,
63 Wall Street Trust and Equity A Professional Corporation.
24th Floor Managers Trust
New York, NY 10005

Stacy Cooper-Shugrue (36) Assistant Assistant Director, Corporate
Secretary of the Secretarial, of NB Management;
Trust and Equity formerly Assistant Vice President
Managers Trust of NB Management; Assistant
Secretary of nine other mutual
funds for which NB Management
acts as investment manager or
administrator.

Barbara DiGiorgio (40) Assistant Treasurer Assistant Treasurer since 1996 of nine
of the Trust and other mutual funds forwhich NB
Equity Managers Management acts as investment manager
Trust or administrator.

Michael M. Kassen* (46) President and Executive Vice President, Chief
Trustee of the Investment Officer and Director of
Trust and Equity Neuberger Berman; Director of NB
Managers Trust Management; President and/or of
six other mutual funds for which
NB Management acts as investment
manager or administrator.

Howard A. Mileaf (62) Trustee of the Vice President and Special Counsel
WHX Corporation Trust and Equity to WHX Corporation (holding company
110 East 59th Street Managers Trust since 1992; Director of Kevlin
30th Floor Corporation (manufacturer of microwave
New York, NY 10022 and other products).

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<PAGE>

Positions Held
With the Trust and
Name, Age, and Equity Managers
Address(1) Trust Principal Occupation(s)(2)

Edward I. O'Brien* (71) Trustee of the Until 1993, President of the Securities
12 Woods Lane Trust and Equity Industry Association ("SIA")(securities
Scarsdale, NY 10583 Managers Trust industry's representative in government
relations and regulatory matters at the
the federal and state levels); until
November 1993, employee of the SIA;
Director of Legg Mason, Inc.

John T. Patterson, Jr. (71) Trustee of the Retired. Formerly, President of SOBRO
7082 Siena Court Trust and Equity (South Bronx Overall Economic
Boca Raton, FL 33433 Managers Trust Development Corporation).

C. Carl Randolph (61) Assistant Senior Vice President, General Counsel
Secretary of the and Secretary of Neuberger Berman since
Trust and Equity 1992; Assistant Secretary of nine
Managers Trust other mutual funds for which NB
Management acts as investment manager
or administrator.

John P. Rosenthal (66) Trustee of the Senior Vice President of Burnham
Burnham Securities Inc. Trust and Equity Securities Inc. (a registered
Burnham Asset Management Corp. Managers Trust broker-dealer) since 1991; Director,
1325 Avenue of the Americas Cancer Treatment Holdings, Inc.
17th Floor
New York, NY 10019

Richard Russell (52) Treasurer and Employee of NB Management; Treasurer
Principal and Principal Accounting Officer of
Accounting Officer nine other mutual funds for which
of the Trust and NB Management acts as investment
Equity Managers manager or administrator.
Trust

Cornelius T. Ryan (68) Trustee of the General Partner of Oxford Partners
Oxford Bioscience Trust and Equity and Oxford Bioscience Partners
Partners Managers Trust (venture capital partnerships) and
315 Post Road West President of Oxford Venture
Westport, CT 06880 Corporation; Director of Capital
Cash Management Trust (money
market fund) and Prime Cash Fund.

57
<PAGE>

Positions Held
With the Trust and
Name, Age, and Equity Managers
Address(1) Trust Principal Occupation(s)(2)

Gustave H. Shubert (70) Trustee of the Senior Fellow/Corporate Advisor and
13838 Sunset Boulevard Trust and Equity Advisory Trustee of Rand (a non-
Pacific Palisades, CA 90272 Managers Trust profit public research institution)
since 1989; Honorary Member of the
Board of Overseers of the Institute
for Civil Justice, the Policy Advisory
Committee of the Clinical Scholars
Program at the University of
California the American Association
for the Advancement of Science, the
Counsel on Foreign Relations, and the
Institute Studies (London); advisor
to the Program Evaluation and
Methodology Division of the U.S. General
Accounting Office; formerly Senior Vice
President and Trustee of Rand.

Daniel J. Sullivan (59) Vice President of Senior Vice President of NB Management
the Trust and since 1992; Vice President of nine
Equity Managers other mutual funds for which NB
Trust Management acts as investment manager
or administrator.

Peter E. Sundman* (40) Chairman of the Executive Vice President and Director
Board, Chief of Neuberger Berman; President and
Executive Officer, Director of NB Management; Chairman
and Trustee of the of the Board, Chief Executive Officer
Trust and Equity and Trustee of nine other mutual funds
Managers Trust for which NB Management acts as
investment manager or administrator.

58
<PAGE>

Positions Held
With the Trust and
Name, Age, and Equity Managers
Address(1) Trust Principal Occupation(s)(2)

Michael J. Weiner (51) Vice President and Senior Vice President of NB Management
Principal from 1992-1999; Treasurer of NB
Financial Officer Management from 1992 to 1996; Vice
of the Trust and President and Principal Financial
Equity Managers Officer of nine other mutual funds
Trust for which NB Management acts as
investment manager or
administrator.

Celeste Wischerth (38) Assistant Assistant Vice President of NB
Treasurer of the Management since 1994; prior thereto,
Trust and Equity employee of NB Management; Assistant
Managers Trust Treasurer since 1996 of nine other
mutual NB Management acts as
investment manager or
administrator.

GLOBAL MANAGERS TRUST:

Positions Held
Name, Age, and with Global
Address(1) Managers Trust Principal Occupation(s)(2)

Claudia A. Brandon (42) Secretary (See above)

Stacy Cooper-Shugrue (35) Assistant Secretary (See above)

Barbara DiGiorgio (40) Assistant Treasurer (See above)

Jacqueline Henning (56) Assistant Treasurer Managing Director, State Street Cayman
Trust Co., Ltd. since 1994; Assistant
Director, Morgan Grenfell, 1993-94;
Bank of Nova Scotia Trust Co. (Cayman)
Ltd., Managing Director, 1988-93.

Michael M. Kassen* (46) President (See above)

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<PAGE>

Positions Held
Name, Age, and with Global
Address(1) Managers Trust Principal Occupation(s)(2)

Lenore Joan McCabe (37) Assistant Secretary Operations Supervisor, State Street
Cayman Trust Co., Ltd.; Project
Manager, State Street Canada, Inc.,
1992-94.

Howard A. Mileaf (61) Trustee (See above)
WHX Corporation
110 East 59th Street
30th Floor
New York, NY 10022

John T. Patterson, Jr. (70) Trustee (See above)
7082 Siena Court
Boca Raton, FL 33433

C. Carl Randolph (61) Assistant Secretary (See above)

John P. Rosenthal (66) Trustee (See above)
Burnham Securities Inc.
Burnham Asset Management
Corp.
1325 Avenue of the Americas
17th Floor
New York, NY 10019

Richard Russell (52) Treasurer and (See above)
Principal
Accounting Officer

Daniel J. Sullivan (59) Vice President (See above)

Peter E. Sundman* (40) Chairman of the (See above)
Board, Chief
Executive Officer
and Trustee

Michael J. Weiner (51) Vice President and (See above)
Principal
Financial Officer

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<PAGE>

Positions Held
Name, Age, and with Global
Address(1) Managers Trust Principal Occupation(s)(2)

Celeste Wischerth (37) Assistant Treasurer (See above)
- --------------------

</TABLE>

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

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

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

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

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<PAGE>

The following table sets forth information concerning the compensation of
the trustees of the Trust. None of the Neuberger Berman Funds has any retirement
plan for its trustees.

TABLE OF COMPENSATION
FOR FISCAL YEAR ENDED 8/31/99

Aggregate
Compensation Total Compensation from
from Neuberger Investment Companies in the
Name and Position Berman Neuberger Berman Fund
with each Trust Equity Trust Complex Paid to Trustees

Faith Colish $7,284 $93,900
Trustee (9 other investment companies)

Stanley Egener $0 $0
Chairman of the (5 other investment companies)
Board, Chief
Executive Officer,
and Trustee

Howard A. Mileaf $7,570 $64,250
Trustee (4 other investment companies)

Edward I. O'Brien $7,797 $61,750
Trustee (3 other investment companies)

John T. Patterson, Jr. $7,895 $66,500
Trustee (4 other investment companies)

John P. Rosenthal $7,572 $64,250
Trustee (4 other investment companies)

Cornelius T. Ryan $6,636 $52,750
Trustee (3 other investment companies)

Gustave H. Shubert $7,505 $59,500
Trustee (3 other investment companies)

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<PAGE>

Aggregate
Compensation Total Compensation from
from Neuberger Investment Companies in the
Name and Position Berman Neuberger Berman Fund
with each Trust Equity Trust Complex Paid to Trustees

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

At November 22, 1999, the trustees and officers of the Trust and the
corresponding Managers Trusts, as a group, owned beneficially or of record less
than 1% of the outstanding shares of each Fund.

INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES

INVESTMENT MANAGER AND ADMINISTRATOR

Because all of the Funds' net investable assets are invested in their
corresponding Portfolios, the Funds do not need an investment manager. NB
Management serves as the investment manager to all the Portfolios (except
Neuberger Berman International Portfolio) pursuant to a management agreement
with Equity Managers Trust, dated as of August 2, 1993 ("EMT Management
Agreement").

The EMT Management Agreement was approved by the holders of the interests
in all the Portfolios (except Neuberger Berman Socially Responsive Portfolio,
Millennium Portfolio, Neuberger Berman Regency Portfolio and Neuberger Berman
Century Portfolio) on August 2, 1993, and by the holders of the interests in
Neuberger Berman Socially Responsive, Millennium, Regency and Century Portfolios
on March 9, 1994, October 19, 1998, June 1, 1999 and July 29, 1999,
respectively. Neuberger Berman Socially Responsive, Neuberger Berman Millennium,
Neuberger Berman Regency Neuberger Berman and Century Portfolios were authorized
to become subject to the EMT Management Agreement by vote of the Portfolio

63
<PAGE>

Trustees on October 20, 1993, July 29, 1998, April 28, 1999, and July 29, 1999
respectively.

NB Management serves as the investment manager to Neuberger Berman
International Portfolio pursuant to a management agreement with Global Managers
Trust, dated as of November 1, 1995 ("GMT Management Agreement"). The GMT
Management Agreement was approved by the holders of the interests in Neuberger
Berman International Portfolio on October 26, 1995. That Portfolio was
authorized to become subject to the GMT Management Agreement by vote of the
Portfolio Trustees on August 8, 1995.

The EMT Management Agreement and GMT Management Agreement ("Management
Agreements") provide, in substance, that NB Management will make and implement
investment decisions for the Portfolios in its discretion and will continuously
develop an investment program for the Portfolios' assets. The Management
Agreements permit NB Management to effect securities transactions on behalf of
each Portfolio through associated persons of NB Management. The Management
Agreements also specifically permit NB Management to compensate, through higher
commissions, brokers and dealers who provide investment research and analysis to
the Portfolios, although NB Management has no current plans to pay a material
amount of such compensation.

NB Management provides to each Portfolio, without separate cost, office
space, equipment, and facilities and the personnel necessary to perform
executive, administrative, and clerical functions. NB Management pays all
salaries, expenses, and fees of the officers, trustees, and employees of the
Trusts who are officers, directors, or employees of NB Management. One director
of NB Management (who also is an officer and director of Neuberger Berman), who
also serves as an officer of NB Management, presently serves as a trustee and
officer of the Trusts. See "Trustees and Officers." Each Portfolio pays NB
Management a management fee based on the Portfolio's average daily net assets,
as described below.

NB Management provides facilities, services and personnel, as well as
accounting, recordkeeping, and other services, to each Fund pursuant to an
administration agreement with the Trust, dated August 3, 1993, as amended on
August 2, 1996 ("Administration Agreement"). Neuberger Berman International,
Millennium, Regency and Century Trusts were authorized to become subject to the
Administration Agreement by vote of the Fund Trustees on January 22, 1997, July
29, 1998, April 28, 1999 and July 29, 1999, respectively. NB Management enters
into administrative services agreements with Institutions, pursuant to which it
compensates Institutions for accounting, recordkeeping and other services that
they provide in connection with investments in the Funds.

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<PAGE>

Because Neuberger Berman International Portfolio has its principal offices
in the Cayman Islands, Global Managers Trust has entered into an Administrative
Services Agreement with State Street Cayman Trust Company Ltd. ("State Street
Cayman"), Elizabethan Square, P.O. Box 1984, George Town, Grand Cayman, Cayman
Islands, British West Indies, effective August 31, 1994. Under the
Administrative Services Agreement, State Street Cayman provides sufficient
personnel and suitable facilities for the principal offices of Neuberger Berman
International Portfolio and provides certain administrative, fund accounting,
and transfer agency services with respect to that Portfolio. The Administrative
Services Agreement terminates if assigned by State Street Cayman; however, State
Street Cayman is permitted to, and does, employ an affiliate, State Street
Canada, Inc., to perform certain accounting functions.

MANAGEMENT AND ADMINISTRATION FEES

For investment management services, each Portfolio (except Neuberger
Berman Genesis, Millennium and International Portfolios) pays NB Management a
fee at the annual rate of 0.55% of the first $250 million of that Portfolio's
average daily net assets, 0.525% of the next $250 million, 0.50% of the next
$250 million, 0.475% of the next $250 million, 0.45% of the next $500 million,
and 0.425% of average daily net assets in excess of $1.5 billion. Neuberger
Berman Genesis Portfolio and Neuberger Berman Millennium Portfolio each pay NB
Management a fee for investment management services at the annual rate of 0.85%
of the first $250 million of the 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. Neuberger
Berman International Portfolio pays NB Management a fee for investment
management services at the annual rate of 0.85% of the first $250 million of the
Portfolio's average daily net assets, 0.825% of the next $250 million, 0.80% of
the next $250 million, 0.775% of the next $250 million, 0.75% of the next $500
million and 0.725% of average daily net assets in excess of $1.5 billion.

For administrative services, each Fund pays NB Management a fee at the
annual rate of 0.40% of that Fund's average daily net assets, plus certain
out-of-pocket expenses for technology used for shareholder servicing and
shareholder communications subject to the prior approval of an annual budget by
the Trust's Board of Trustees, including a majority of those Trustees who are
not interested persons of the Trust or of Neuberger Berman Management Inc., and
periodic reports to the Board of Trustees on actual expenses. With a Fund's

65
<PAGE>

consent NB Management may subcontract some of its responsibilities to that Fund
under the Administration Agreement and may compensate each Institution that
provides such services. (A portion of this payment may be derived from the Rule
12b-1 fee paid to NB Management by certain of the Funds; see "Distribution and
Shareholder Services Plan," below.)

During the fiscal years ended August 31, 1999, 1998 and 1997, each Fund
accrued management and administration fees as follows:

Management and Administration Fees
Accrued for Fiscal Years
Fund Ended August 31

1999 1998 1997

Manhattan $480,941 $525,466 $415,355

Genesis $8,235,517 $8,034,410 $1,870,816

Focus $2,063,717 $1,953,132 $936,458

Guardian $12,732,406 $19,092,633 $14,839,636

International $26,186 $4,582* N/A

Partners $7,492,692 $6,210,071 $2,313,486

Socially Responsive $183,688 $111,257 $16,656****

Millennium $12,525** N/A N/A

Regency $532*** N/A N/A

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<PAGE>

- --------------------
*From June 29, 1998 (commencement of operations) to August 31, 1998.

** From November 4, 1998 (commencement of operations) to August 31, 1999.

***From June 10, 1999 (commencement of operations) to August 31, 1999.

**** From March 3, 1997 (commencement of operations) to August 31, 1997.

WAIVERS AND REIMBURSEMENTS

From May 1, 1995 to December 14, 1997, NB Management voluntarily waived a
portion of the management fee borne by Neuberger Berman Genesis Portfolio to
reduce the fee by 0.10% per annum of the average daily net assets of that
Portfolio.

PORTION OF MANAGEMENT FEE WAIVED

For Period Ended For Fiscal Year Ended
Fund December 14, 1997 August 31, 1997

Genesis $157,077 $153,513

NB Management has voluntarily undertaken to reimburse each of Neuberger
Berman Focus Trust and Neuberger Berman Socially Responsive Trust for its total
operating expenses so that each Fund's expense ratio per annum will not exceed
the expense ratio of its Sister Fund by more than 0.20% of the Fund's average
daily net assets. Similarly, NB Management has voluntarily undertaken to
reimburse each of Neuberger Berman Genesis Trust, Neuberger Berman Guardian
Trust, Neuberger Berman Manhattan Trust, Neuberger Berman Partners Trust, and
Neuberger Berman International Trust for its total operating expenses so that
each Fund's expense ratio per annum will not exceed the expense ratio of its
Sister Fund by more than 0.10% of the Fund's average daily net assets, but in
the case of Neuberger Berman International Trust not to exceed 1.70%. Each
undertaking can be terminated by NB Management by giving a Fund at least 60
days' prior written notice.

NB Management has also voluntarily undertaken to reimburse Neuberger
Berman Millennium Trust through December 31, 2009 so that the Fund's expense
ratio per annum will not exceed 1.75% of the Fund's average daily net assets.
Neuberger Berman Millennium Trust has in turn agreed to repay NB Management
through December 31, 2000, for the excess total annual operating expenses that
NB Management reimbursed to the Fund through December 31, 1999, so long as the
Fund's Total Operating Expenses do not exceed the above expense limitation.

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<PAGE>

NB Management has agreed to reimburse certain expenses of each of
Neuberger Berman Regency Trust and Neuberger Berman Century Trust through
December 31, 2002, so that the total annual operating expenses of each Fund are
limited to 1.50% of average net assets, or, in the case of Neuberger Berman
Regency Trust, to not more than 0.20% above the total annual operating expenses
of another Neuberger Berman fund that invests in the same Portfolio as that
Fund, whichever is less. Each Fund has in turn agreed to repay NB Management for
expenses reimbursed to the Fund, provided that repayment does not cause the
Fund's total annual operating expenses to exceed 1.50% of its average net assets
and the repayment is made within three years of the year in which NB Management
incurred the expense.

Amount of Total Operating Expenses
Reimbursed by NB Management
Fund for Fiscal Years Ended August 31

1999 1998 1997

Manhattan $37,105 $59,281 $64,448

Genesis $0 $0 $0

Focus $58,587 $67,257 $102,407

Guardian $0 $0 $0

International $89,443 $15,821* N/A

Partners $0 $45,387 $89,923

Millennium $115,640** N/A N/A

Regency $72,144*** N/A N/A

Socially Responsive $101,048 $100,537 $30,470****

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<PAGE>

- --------------------------------------------------------------------------------
*From June 29, 1998 (commencement of operations) to August 31, 1998.

**From November 4, 1998 (commencement of operations) to August 31, 1999.

***From June 10, 1999 (commencement of operations) to August 31, 1999.

****From March 3, 1997 (commencement of operations) to August 31, 1997.

The Management Agreements continue until August 2, 2000. The Management
Agreements are renewable thereafter from year to year with respect to each
Portfolio, so long as their continuance is approved at least annually (1) by the
vote of a majority of the Portfolio Trustees who are not "interested persons" of
NB Management or the corresponding Managers Trust ("Independent Portfolio
Trustees"), cast in person at a meeting called for the purpose of voting on such
approval, and (2) by the vote of a majority of the Portfolio Trustees or by a
1940 Act majority vote of the outstanding interests in that Portfolio. The
Administration Agreement continues until August 2, 2000. The Administration
Agreement is renewable from year to year with respect to a Fund, so long as its
continuance is approved at least annually (1) by the vote of a majority of the
Fund Trustees who are not "interested persons" of NB Management or the Trust
("Independent Fund Trustees"), cast in person at a meeting called for the
purpose of voting on such approval, and (2) by the vote of a majority of the
Fund Trustees or by a 1940 Act majority vote of the outstanding shares in that
Fund.

The Management Agreements are terminable, without penalty, with respect to
a Portfolio on 60 days' written notice either by the corresponding Managers
Trust or by NB Management. The Administration Agreement is terminable, without
penalty, with respect to a Fund on 60 days' written notice either by NB
Management or by the Trust. Each Agreement terminates automatically if it is
assigned.

SUB-ADVISER

NB Management retains Neuberger Berman, 605 Third Avenue, New York, NY
10158-3698, as sub-adviser with respect to each Portfolio (except Neuberger
Berman International Portfolio) pursuant to a sub-advisory agreement dated

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<PAGE>

August 2, 1993 ("EMT Sub-Advisory Agreement").

The EMT Sub-Advisory Agreement was approved by the holders of the
interests in the Portfolios (except Neuberger Berman Millennium, and Regency
Portfolios) on August 2, 1993, and by the holders of the interests in Neuberger
Berman Millennium Portfolio on October 19, 1998, and Neuberger Berman Regency
Portfolio on June 1, 1999. Neuberger Berman Millennium Portfolio and Regency
Portfolio were authorized to become subject to the Sub-Advisory Agreement by
vote of the Portfolio Trustees on July 29, 1998 and April 28, 1999,
respectively.

NB Management retains Neuberger Berman as sub-adviser with respect to
Neuberger Berman International Portfolio pursuant to a sub-advisory agreement
dated November 1, 1995 ("GMT Sub-Advisory Agreement"). The GMT Sub-Advisory
Agreement was approved by the holders of the interests in Neuberger Berman
International Portfolio on October 26, 1995. That Portfolio was authorized to
become subject to the GMT Sub-Advisory Agreement by vote of the Portfolio
Trustees on August 8, 1995.

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

The Sub-Advisory Agreements continue until August 2, 2000 and are
renewable from year to year, subject to approval of their continuance in the
same manner as the Management Agreements. The Sub-Advisory Agreements are
subject to termination, without penalty, with respect to each Portfolio by the
Portfolio Trustees or a 1940 Act majority vote of the outstanding interests in
that Portfolio, by NB Management, or by Neuberger Berman on not less than 30 nor
more than 60 days' prior written notice. The Sub-Advisory Agreements also
terminate automatically with respect to each Portfolio if they are assigned or
if the Management Agreement terminates with respect to that Portfolio.

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

INVESTMENT COMPANIES MANAGED

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<PAGE>

As of September 30, 1999, the investment companies managed by NB
Management had aggregate net assets of approximately $17.8 billion. NB
Management currently serves as investment manager of the following investment
companies:

Approximate
Net Assets at
Name September 30, 1999

Neuberger Berman Cash Reserves Portfolio..........................$1,129,792,312
(investment portfolio for Neuberger Berman Cash Reserves)

Neuberger Berman Government Money Portfolio.........................$701,999,455
(investment portfolio for Neuberger Berman Government Money Fund)

Neuberger Berman High Yield Bond Portfolio...........................$25,041,449
(investment portfolio for Neuberger Berman High Yield Bond Fund)

Neuberger Berman Limited Maturity Bond Portfolio....................$274,532,907
(investment portfolio for Neuberger Berman Limited Maturity Bond Fund
and Neuberger Berman Limited Maturity Bond Trust)

Neuberger Berman Municipal Money Portfolio..........................$275,065,503
(investment portfolio for Neuberger Berman Municipal Money Fund)

Neuberger Berman Century Portfolio...............(in registration as of 9/30/99)
(investment portfolio for Neuberger Berman Century Fund and Neuberger
Berman Century Trust)

Neuberger Berman Focus Portfolio..................................$1,463,580,020
(investment portfolio for Neuberger Berman Focus Fund, Neuberger Berman
Focus Trust and Neuberger Berman Focus Assets)

71
<PAGE>

Neuberger Berman Genesis Portfolio................................$1,647,532,448
(investment portfolio for Neuberger Berman Genesis Fund, Neuberger Berman
Genesis Trust, Neuberger Berman Genesis Assets and Neuberger Berman
Genesis Institutional)

Neuberger Berman Guardian Portfolio............................. $4,423,729,801
(investment portfolio for Neuberger Berman Guardian Fund, Neuberger
Berman Guardian Trust and Neuberger Berman Guardian Assets)

Neuberger Berman International Portfolio............................$117,925,499
(investment portfolio for Neuberger Berman International Fund and
Neuberger Berman International Trust)

Neuberger Berman Manhattan Portfolio................................$606,962,000
(investment portfolio for Neuberger Berman Manhattan Fund, Neuberger
Berman Manhattan Trust and Neuberger Berman Manhattan Assets)

Neuberger Berman Millennium Portfolio................................$78,666,423
(investment portfolio for Neuberger Berman Millennium Fund, Neuberger
Berman Millennium Trust and Neuberger Berman Millennium Assets)

Neuberger Berman Partners Portfolio...............................$3,553,329,259
(investment portfolio for Neuberger Berman Partners Fund, Neuberger
Berman Partners Trust and Neuberger Berman Partners Assets)

Neuberger Berman Regency Portfolio...................................$30,848,996
(investment portfolio for Neuberger Berman Regency Fund and Neuberger
Berman Regency Trust)

Neuberger Berman Socially Responsive Portfolio......................$376,629,789
(investment portfolio for Neuberger Berman Socially Responsive Fund,
Neuberger Berman Socially Responsive Trust, and Neuberger Berman Socially
Responsive Assets)

Advisers Managers Trust...........................................$2,026,088,252
(eight series)

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

72
<PAGE>

Management have varied from one another in the past and are likely to vary in
the future.

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

The Portfolios are subject to certain limitations imposed on all advisory
clients of Neuberger Berman (including the Portfolios, the Other NB Funds, and
other managed accounts) and personnel of Neuberger Berman and its affiliates.
These include, for example, limits that may be imposed in certain industries or
by certain companies, and policies of Neuberger Berman that limit the aggregate
purchases, by all accounts under management, of the outstanding shares of public
companies.

MANAGEMENT AND CONTROL OF NB MANAGEMENT

The directors and officers of NB Management, all of whom have offices at
the same address as NB Management, are Richard A. Cantor, Chairman; Theodore P.
Giuliano, Vice President; Michael M. Kassen, Executive Vice President and Chief
Investment Officer; Barbara Katersky, Senior Vice President; Daniel J. Sullivan,
Senior Vice President; Philip Ambrosio, Senior Vice President and Chief
Financial Officer; Peter E. Sundman, President; Michael J. Weiner, Senior Vice
President; Brooke A. Cobb, Vice President; Valerie Chang, Vice President; Robert
W. D'Alelio, Vice President; Clara Del Villar, Vice President; Robert S.
Franklin, Vice President; Robert I. Gendelman, Vice President; Thomas Gengler,
Vice President; Josephine P. Mahaney, Vice President; Michael F. Malouf, Vice
President; S. Basu Mullick, Vice President; Janet W. Prindle, Vice President;
Kevin L. Risen, Vice President; Jennifer K. Silver, Vice President; Kent C.
Simons, Vice President; Judith M. Vale, Vice President; Catherine Waterworth,
Vice President; Allan R. White III, Vice President; Robert Conti, Treasurer;
Ramesh Babu, Vice President; Robert L. Ladd, Vice President; Ingrid Saukaitis,
Vice President; Benjamin E. Segal, Vice President; Josephine Velez, Vice
President; and Ellen Metzger, Secretary. Messrs. Cantor, D'Alelio, Gendelman,
Giuliano, Kassen, Risen, Simons, Sundman, Weiner and White and Mmes. Prindle,

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Silver and Vale are employees of Neuberger Berman.

Mr. Sundman is a trustee and officer of the Trust and the Managers
Trusts. Mr. Kassen is a trustee of the Trust and Equity Managers Trust and
an officer of the Trust and the Managers Trusts. Messrs. Sullivan and Weiner
are officers of the Trust and Managers Trusts.

Neuberger Berman and NB Management are wholly owned subsidiaries of
Neuberger Berman Inc., a publicly owned holding company owned primarily by the
employees of Neuberger Berman.

DISTRIBUTION ARRANGEMENTS

DISTRIBUTOR

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

From time to time, NB Management may enter into arrangements pursuant to
which it compensates a registered broker-dealer or other third party for
services in connection with the distribution of Fund shares.

The Trust, on behalf of each Fund, and the Distributor are parties to a
Distribution Agreement that continues until August 2, 2000. The Distribution
Agreement may be renewed annually if specifically approved by (1) the vote of a
majority of the Fund Trustees or a 1940 Act majority vote of the Fund's
outstanding shares and (2) the vote of a majority of the Independent Fund
Trustees, cast in person at a meeting called for the purpose of voting on such
approval. The Distribution Agreement may be terminated by either party and will
terminate automatically on its assignment, in the same manner as the Management
Agreements.

DISTRIBUTION AND SHAREHOLDER SERVICES PLAN

The Fund Trustees adopted the Plan on July 29, 1999. The Plan provides
that Neuberger Berman Century Trust, Focus Trust, Millennium Trust, Regency
Trust and Socially Responsive Trust will compensate NB Management for

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administrative and other services provided to the Funds, its activities and
expenses related to the sale and distribution of Fund shares, and ongoing
services to investors in the Funds. Under the Plan, NB Management receives from
each Fund a fee at the annual rate of 0.10% of that Fund's average daily net
assets. NB Management may pay up to the full amount of this fee to Institutions
that make available Fund shares and/or provide services to the Funds and their
shareholders. The fee paid to an Institution is based on the level of such
services provided. Institutions may use the payments for, among other purposes,
compensating employees engaged in sales and/or shareholder servicing. The amount
of fees paid by a Fund during any year may be more or less than the cost of
distribution and other services provided to the Fund and its investors. NASD
rules limit the amount of annual distribution and service fees that may be paid
by a mutual fund and impose a ceiling on the cumulative distribution fees paid.
The Trust's plan complies with these rules.

The Plan requires that NBMI provide the Fund Trustees for their review a
quarterly written report identifying the amounts expended by each Fund and the
purposes for which such expenditures were made.

Prior to approving the Plan, the Fund Trustees considered various factors
relating to the implementation of the Plan and determined that there is a
reasonable likelihood that the Plan will benefit the Funds and their
shareholders. The Fund Trustees noted that the purpose of the master/feeder fund
structure is to permit access to a variety of markets. To the extent the Plan
allows the Funds to penetrate markets to which they would not otherwise have
access, the Plan may result in additional sales of Fund shares; this, in turn,
may enable the Funds to achieve economies of scale that could reduce expenses.
In addition, certain on-going shareholder services may be provided more
effectively by Institutions with which shareholders have an existing
relationship.

The Plan continues until August 2, 2000. The Plan is renewable thereafter
from year to year with respect to each Fund, so long as its continuance is
approved at least annually (1) by the vote of a majority of the Fund Trustees
and (2) by a vote of the majority of the Rule 12b-1 Trustees, cast in person at
a meeting called for the purpose of voting on such approval. The Plan may not be
amended to increase materially the amount of fees paid by any Fund thereunder
unless such amendment is approved by a 1940 Act majority vote of the outstanding
shares of the Fund and by the Fund Trustees in the manner described above. The
Plan is terminable with respect to a Fund at any time by a vote of a majority of
the Rule 12b-1 Trustees or by a 1940 Act majority vote of the outstanding shares
in the Fund.

ADDITIONAL PURCHASE INFORMATION

SHARE PRICES AND NET ASSET VALUE

Each Fund's shares are bought or sold at a price that is the Fund's NAV
per share. The NAVs for each Fund and its corresponding Portfolio are calculated
by subtracting total liabilities from total assets (in the case of a Portfolio,

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the market value of the securities the Portfolio holds plus cash and other
assets; in the case of a Fund, its percentage interest in its corresponding
Portfolio, multiplied by the Portfolio's NAV, plus any other assets). Each
Fund's per share NAV is calculated by dividing its NAV by the number of Fund
shares outstanding and rounding the result to the nearest full cent. Each Fund
and its corresponding Portfolio calculate their NAVs as of the close of regular
trading on the NYSE, usually 4 p.m. Eastern time, on each day the NYSE is open.

Each Portfolio (except Neuberger Berman International Portfolio) values
securities (including options) listed on the NYSE, the American Stock Exchange
or other national securities exchanges or quoted on The Nasdaq Stock Market, and
other securities for which market quotations are readily available, at the last
reported sale price on the day the securities are being valued. If there is no
reported sale of such a security on that day, the security is valued at the mean
between its closing bid and asked prices on that day. These Portfolios value all
other securities and assets, including restricted securities, by a method that
the trustees of Equity Managers Trust believe accurately reflects fair value.

Neuberger Berman International Portfolio values equity securities at the
last reported sale price on the principal exchange or in the principal
over-the-counter market in which such securities are traded, as of the close of
regular trading on the NYSE on the day the securities are being valued or, if
there are no sales, at the last available bid price on that day. Debt
obligations are valued at the last available bid price for such securities or,
if such prices are not available, at prices for securities of comparable
maturity, quality, and type. Foreign securities are translated from the local
currency into U.S. dollars using current exchange rates. The Portfolio values
all other types of securities and assets, including restricted securities and
securities for which market quotations are not readily available, by a method
that the trustees of Global Managers Trust believe accurately reflects fair
value.

Neuberger Berman International Portfolio's portfolio securities are traded
primarily in foreign markets which may be open on days when the NYSE is closed.
As a result, the NAV of Neuberger Berman International Trust may be
significantly affected on days when shareholders have no access to that Fund.

If NB Management believes that the price of a security obtained under a
Portfolio's valuation procedures (as described above) does not represent the
amount that the Portfolio reasonably expects to receive on a current sale of the
security, the Portfolio will value the security based on a method that the
trustees of the corresponding Managers Trust believe accurately reflects fair
value.

ADDITIONAL EXCHANGE INFORMATION

As more fully set forth in the section of the Prospectus entitled
"Maintaining Your Account," an Institution may exchange shares of any Fund for
shares of one or more of the other Funds or the income fund that is briefly
described below ("Income Fund"), if made available through that Institution.

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INCOME FUND

Neuberger Berman Seeks the highest current income consistent with
Limited Maturity Bond Trust low risk to principal and liquidity and,
secondarily, total return. The corresponding
portfolio invests in debt securities, primarily
investment grade; maximum 10% below investment
grade, but no lower than B.(*) Maximum average
duration of four years.

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

Before effecting an exchange, Fund shareholders must obtain and should
review a currently effective prospectus of the fund into which the exchange is
to be made. An exchange is treated as a sale for federal income tax purposes
and, depending on the circumstances, a capital gain or loss may be realized.

ADDITIONAL REDEMPTION INFORMATION

SUSPENSION OF REDEMPTIONS

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

REDEMPTIONS IN KIND

Each Fund reserves the right, under certain conditions, to honor any
request for redemption (or a combination of requests from the same shareholder
in any 90-day period) exceeding $250,000 or 1% of the net assets of the Fund,
whichever is less, by making payment in whole or in part in securities valued as
described under "Share Prices and Net Asset Value" above. If payment is made in
securities, an Institution generally will incur brokerage expenses or other
transaction costs in converting those securities into cash and will be subject
to fluctuation in the market prices of those securities until they are sold. The

- ---------------
(*) As rated by Moody's or S&P or, if unrated by either of those entities,
determined by NB Management to be of comparable quality.

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Funds do not redeem in kind under normal circumstances, but would do so when the
Fund Trustees determined that it was in the best interests of a Fund's
shareholders as a whole.

DIVIDENDS AND OTHER DISTRIBUTIONS

Each Fund distributes to its shareholders substantially all of its share
of any net investment income (after deducting expenses incurred directly by the
Fund), any net realized capital gains, and any net realized gains from foreign
currency transactions earned or realized by its corresponding Portfolio. A
Portfolio's net investment income consists of all income accrued on portfolio
assets less accrued expenses, but does not include capital and foreign currency
gains and losses. Net investment income and realized gains and losses are
reflected in a Portfolio's NAV (and, hence, its corresponding Fund's NAV) until
they are distributed. Each Fund calculates its net investment income and NAV per
share as of the close of regular trading on the NYSE on each Business Day
(usually 4:00 p.m. Eastern time).

Dividends from net investment income and distributions of net realized
capital and foreign currency gains, if any, normally are paid once annually, in
December, except that Neuberger Berman Guardian Trust distributes substantially
all of its share of Neuberger Berman Guardian Portfolio's net investment income
(after deducting expenses incurred directly by Neuberger Berman Guardian Trust),
if any, near the end of each other calendar quarter.

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

ADDITIONAL TAX INFORMATION

TAXATION OF THE FUNDS

To continue to qualify for treatment as a RIC under the Code, each Fund
must distribute to its shareholders for each taxable year at least 90% of its
investment company taxable income (consisting generally of net investment
income, net short-term capital gain, and net gains from certain foreign currency
transactions) ("Distribution Requirement") and must meet several additional
requirements. With respect to each Fund, these requirements include the
following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities
loans, and gains from the sale or other disposition of securities or foreign
currencies, or other income (including gains from Financial Instruments) derived
with respect to its business of investing in securities or those currencies
("Income Requirement"); and (2) at the close of each quarter of the Fund's
taxable year, (i) at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. Government securities, securities of
other RICs, and other securities limited, in respect of any one issuer, to an
amount that does not exceed 5% of the value of the Fund's total assets and that
does not represent more than 10% of the issuer's outstanding voting securities,
and (ii) not more than 25% of the value of its total assets may be invested in

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securities (other than U.S. Government securities or securities of other RICs)
of any one issuer. If the fund failed to qualify as a RIC for any taxable year,
it would be taxed on the full amount of its taxable income for that year without
being able to deduct the distributions it makes to its shareholders and the
shareholders would treat all those distributions, including distributions of net
capital gain (the excess of net long-term capital gain over net short-term
capital loss), as dividends (that is, ordinary income) to the extent of the
Fund's earnings and profits.

Certain funds that invest in portfolios managed by NB Management,
including most of the Sister Funds have received rulings from the Internal
Revenue Service ("Service") that each such fund, as an investor in its
corresponding portfolio, will be deemed to own a proportionate share of the
portfolio's assets and income for purposes of determining whether the fund
satisfies all the requirements described above to qualify as a RIC. Although
these rulings may not be relied on as precedent by the Funds, NB Management
believes that the reasoning thereof and, hence, their conclusion apply to the
Funds as well.

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

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

TAXATION OF THE PORTFOLIOS

The Portfolios (except Neuberger Berman Socially Responsive, Neuberger
Berman Millennium, Neuberger Berman Regency, Neuberger Berman Century and
Neuberger Berman International Portfolios) have received rulings from the
Service to the effect that, among other things, each such Portfolio will be
treated as a separate partnership for federal income tax purposes and will not
be a "publicly traded partnership." Although these rulings may not be relied on
as precedent by the excepted Portfolios, NB Management believes the reasoning
thereof and, hence, their conclusion apply to those Portfolios as well. As a
result, no Portfolio is subject to federal income tax; instead, each investor in
a Portfolio, such as a Fund, is required to take into account in determining its
federal income tax liability its share of the Portfolio's income, gains, losses,
deductions, and credits, without regard to whether it has received any cash
distributions from the Portfolio. Each Portfolio also is not subject to Delaware
or New York income or franchise tax.

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

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

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

If more than 50% of the value of Neuberger Berman International Trust's
total assets (taking into account its share of Neuberger Berman International
Portfolio's total assets) at the close of its taxable year consists of
securities of foreign corporations, that Fund will be eligible to, and may, file
an election with the Service that will enable its shareholders, in effect, to
receive the benefit of the foreign tax credit with respect to the Fund's share
of any foreign taxes paid by the Portfolio ("Fund's foreign taxes"). Pursuant to
the election, Neuberger Berman International Trust would treat those taxes as
dividends paid to its shareholders and each shareholder would be required to (1)
include in gross income, and treat as paid by the shareholder, his or her share
of those taxes, (2) treat his or her share of those taxes and of any dividend
paid by the Fund that represents its share of the Portfolio's income from
foreign or U.S. possessions sources as his or her own income from those sources,
and (3) either deduct the taxes deemed paid by him or her in computing his or
her taxable income or, alternatively, use the foregoing information in
calculating the foreign tax credit against his or her federal income tax.
Neuberger Berman International Trust will report to its shareholders shortly
after each taxable year their respective shares of the Fund's foreign taxes and
income (taking into account its share of the Portfolio's income) from sources
within foreign countries and U.S. possessions if it makes this election.
Individual shareholders of the Fund who have no more than $300 ($600 for married
persons filing jointly) of creditable foreign taxes included on Forms 1099 and
all of whose foreign source income is "qualified passive income" may elect each
year to be exempt from the extremely complicated foreign tax credit limitation
and will be able to claim a foreign tax credit without having to file the
detailed Form 1116 that otherwise is required.

A Portfolio may invest in the stock of "passive foreign investment
companies" ("PFICs"). A PFIC is any foreign corporation (with certain
exceptions) that, in general, meets either of the following tests: (1) at least

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

If a Portfolio invests in a PFIC and elects to treat the PFIC as a
"qualified electing fund" ("QEF"), then in lieu of its corresponding Fund's
incurring the foregoing tax and interest obligation, the Fund would be required
to include in income each year its share of the Portfolio's pro rata share of
the QEF's annual ordinary earnings and net capital gain -- which the Fund most
likely would have to distribute to satisfy the Distribution Requirement and
avoid imposition of the Excise Tax -- even if the Portfolio did not receive
those earnings and gain from the QEF. In most instances it will be very
difficult, if not impossible, to make this election because of certain
requirements thereof.

A holder of stock in any PFIC may elect to include in ordinary income for
each taxable year the excess, if any, of the fair market value of the stock over
the adjusted basis therein as of the end of that year. Pursuant to the election,
a deduction (as an ordinary, not capital, loss) also would be allowed for the
excess, if any, of the holder's adjusted basis in PFIC stock over the fair
market value thereof as of the taxable year-end, but only to the extent of any
net mark-to-market gains with respect to that stock included in income for prior
taxable years under the election (and under regulations proposed in 1992 that
provided a similar election with respect to the stock of certain PFICs). The
adjusted basis in each PFIC's stock subject to the election would be adjusted to
reflect the amounts of income included and deductions taken thereunder.

The Portfolios' use of hedging strategies, such as writing (selling) and
purchasing options and futures contracts and entering into forward contracts,
involves complex rules that will determine for income tax purposes the amount,
character, and timing of recognition of the gains and losses the Portfolios
realize in connection therewith. Gains from the disposition of foreign
currencies (except certain gains that may be excluded by future regulations),
and gains from Financial Instruments derived by a Portfolio with respect to its
business of investing in securities or foreign currencies, will qualify as
permissible income for its corresponding Fund under the Income Requirement.

Exchange-traded futures contracts and certain forward contracts subject to
section 1256 of the Code ("Section 1256 contracts") are required to be marked to
market (that is, treated as having been sold at market value) for federal income
tax purposes at the end of a Portfolio's taxable year. Sixty percent of any net

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gain or loss recognized as a result of these "deemed sales," and 60% of any net
realized gain or loss from any actual sales, of Section 1256 contracts are
treated as long-term capital gain or loss; the remainder is treated as
short-term capital gain or loss. Section 1256 contracts also may be
marked-to-market for purposes of the Excise Tax. These rules may operate to
increase the amount that a Fund must distribute to satisfy the Distribution
Requirement, which will be taxable to the shareholders as ordinary income, and
to increase the net capital gain recognized by the Fund, without in either case
increasing the cash available to the Fund. A Portfolio may elect to exclude
certain transactions from the operation of section 1256, although doing so may
have the effect of increasing the relative proportion of net short-term capital
gain (taxable to its corresponding Fund's shareholders as ordinary income when
distributed to them) and/or increasing the amount of dividends that Fund must
distribute to meet the Distribution Requirement and avoid imposition of the
Excise Tax.

If a Portfolio has an "appreciated financial position" -- generally, an
interest (including an interest through an option, futures or forward contract,
or short sale) with respect to any stock, debt instrument (other than "straight
debt"), or partnership interest the fair market value of which exceeds its
adjusted basis -- and enters into a "constructive sale" of the position, the
Portfolio will be treated as having made an actual sale thereof, with the result
that gain will be recognized at that time. A constructive sale generally
consists of a short sale, an offsetting notional principal contract, or a
futures or forward contract entered into by a Fund or a related person with
respect to the same or substantially identical property. In addition, if the
appreciated financial position is itself a short sale or such a contract,
acquisition of the underlying property or substantially identical property will
be deemed a constructive sale. The foregoing will not apply, however, to any
transaction during any taxable year that otherwise would be treated as a
constructive sale if the transaction is closed within 30 days after the end of
that year and the Portfolio holds the appreciated financial position unhedged
for 60 days after that closing (i.e., at no time during that 60-day period is
the Portfolio's risk of loss regarding that position reduced by reason of
certain specified transactions with respect to substantially identical or
related property, such as having an option to sell, being contractually
obligated to sell, making a short sale, or granting an option to buy
substantially identical stock or securities).

Each of Neuberger Berman Partners, Neuberger Berman Millennium, Neuberger
Berman Regency, Neuberger Berman Century and Neuberger Berman Socially
Responsive Portfolios may acquire zero coupon securities or other securities
issued with original issue discount ("OID"). As a holder of those securities,
each such Portfolio (and, through it, its corresponding Fund) must take into
income the OID that accrues on the securities during the taxable year, even if
it receives no corresponding payment on them during the year. Because each such
Fund annually must distribute substantially all of its investment company
taxable income (including its share of its corresponding Portfolio's accrued
OID) to satisfy the Distribution Requirement and avoid imposition of the Excise
Tax, such a Fund may be required in a particular year to distribute as a
dividend an amount that is greater than its share of the total amount of cash
its corresponding Portfolio actually receives. Those distributions will be made
from a Fund's (or its share of its corresponding Portfolio's) cash assets or, if
necessary, from the proceeds of sales of that Portfolio's securities. A

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Portfolio may realize capital gains or losses from those sales, which would
increase or decrease its corresponding Fund's investment company taxable income
and/or net capital gain.

TAXATION OF THE FUNDS' SHAREHOLDERS

If Fund shares are sold at a loss after being held for six months or less,
the loss will be treated as long-term, instead of short-term, capital loss to
the extent of any capital gain distributions received on those shares.

PORTFOLIO TRANSACTIONS

Neuberger Berman acts as principal broker for each Portfolio (except
Neuberger Berman International Portfolio) in the purchase and sale of its
portfolio securities (other than certain securities traded on the OTC market).
Neuberger Berman may act as broker for Neuberger Berman International Portfolio.
A substantial portion of the portfolio transactions of Neuberger Berman Genesis
and Neuberger Berman Millennium Portfolios involves securities traded on the OTC
market; those Portfolios purchase and sell OTC securities in principal
transactions with dealers who are the principal market makers for such
securities. In effecting securities transactions, each Portfolio seeks to obtain
the best price and execution of orders.

During the fiscal year ended August 31, 1997, Neuberger Berman Manhattan
Portfolio paid brokerage commissions of $971,026, of which $458,679 was paid to
Neuberger Berman. During the fiscal year ended August 31, 1998, Neuberger Berman
Manhattan Portfolio paid brokerage commissions of $1,132,309, of which $546,227
was paid to Neuberger Berman.

During the fiscal year ended August 31, 1999, Neuberger Berman Manhattan
Portfolio paid brokerage commissions of $1,155,067, of which $495,351 was paid
to Neuberger Berman. Transactions in which that Portfolio used Neuberger Berman
as broker comprised 45.46% of the aggregate dollar amount of transactions
involving the payment of commissions, and 42.89% of the aggregate brokerage
commissions paid by the Portfolio, during the fiscal year ended August 31, 1999.
99.63% of the $657,243 paid to other brokers by that Portfolio during that
fiscal year (representing commissions on transactions involving approximately
$398,886,704) was directed to those brokers because of research services they
provided. During the fiscal year ended August 31, 1999, that Portfolio acquired
securities of the following of its "regular brokers or dealers" (as defined in
the 1940 Act) ("Regular B/Ds"): American Express Credit Corp., Donaldson,
Lufkin, & Jenrette Securities Corp., Ford Motor Credit Co., General Electric
Capital Corp., Goldman, Sachs & Co., Lehman Brothers Inc. and State Street Bank
and Trust Company, at that date, that Portfolio held the securities of its
Regular B/Ds with an aggregate value as follows: Ford Motor Credit Corp.,
$10,996,258; Lehman Brothers Inc., $5,138,500; and State Street Bank & Trust
Company, $12,240,000.

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During the fiscal year ended August 31, 1997, Neuberger Berman Genesis
Portfolio paid brokerage commissions of $860,097, of which $516,040 was paid to
Neuberger Berman. During the fiscal year ended August 31, 1998, Neuberger Berman
Genesis Portfolio paid brokerage commissions of $2,419,159, of which $1,159,143
was paid to Neuberger Berman.

During the fiscal year ended August 31, 1999, Neuberger Berman Genesis
Portfolio paid brokerage commissions of $2,150,168, of which $1,034,712 was paid
to Neuberger Berman. Transactions in which that Portfolio used Neuberger Berman
as broker comprised 49.53% of the aggregate dollar amount of transactions
involving the payment of commissions, and 48.12% of the aggregate brokerage
commissions paid by the Portfolio, during the fiscal year ended August 31, 1999.
94.48% of the $1,053,905 paid to other brokers by that Portfolio during that
fiscal year (representing commissions on transactions involving approximately
$425,499,870) was directed to those brokers because of research services they
provided. During the fiscal year ended August 31, 1999, that Portfolio acquired
securities of the following of its Regular B/Ds: American Express Credit Corp.,
Ford Motor Credit Co., General Electric Capital Corp., Merrill Lynch, Pierce,
Fenner & Smith Inc., Morgan Stanley Dean Witter & Co., and State Street Bank and
Trust Company, at that date, that Portfolio held the securities of its Regular
B/Ds with an aggregate value as follows: American Express Credit Corp.,
$9,997,150; General Electric Capital Corp., $9,989,831; and State Street Bank &
Trust Company, $26,740,000.

During the fiscal year ended August 31, 1997, Neuberger Berman Focus
Portfolio paid brokerage commissions of $1,825,493, of which $920,202 was paid
to Neuberger Berman. During the fiscal year ended August 31, 1998, Neuberger
Berman Focus Portfolio paid brokerage commissions of $2,051,007, of which
$998,930 was paid to Neuberger Berman.

During the fiscal year ended August 31, 1999, Neuberger Berman Focus
Portfolio paid brokerage commissions of $1,972,390, of which $983,860 was paid
to Neuberger Berman. Transactions in which that Portfolio used Neuberger Berman
as broker comprised 55.54% of the aggregate dollar amount of transactions
involving the payment of commissions, and 49.88% of the aggregate brokerage
commissions paid by the Portfolio, during the fiscal year ended August 31, 1999.
91.88% of the $908,219 paid to other brokers by that Portfolio during that
fiscal year (representing commissions on transactions involving approximately
$534,330,876) was directed to those brokers because of research services they
provided. During the fiscal year ended August 31, 1999, that Portfolio acquired
securities of the following of its Regular B/Ds: Ford Motor Credit Co., General
Electric Capital Corp., Merrill Lynch, Pierce, Fenner & Smith Inc., Morgan
Stanley Dean Witter & Co., and State Street Bank and Trust Company, at that
date, that Portfolio held the securities of its Regular B/Ds with an aggregate
value as follows: Morgan Stanley Dean Witter & Co., $87,957,813 and State Street
Bank & Trust Company, $22,890,000.

During the fiscal year ended August 31, 1997, Neuberger Berman Guardian
Portfolio paid brokerage commissions of $8,540,335, of which $4,806,913 was paid
to Neuberger Berman. During the fiscal year ended August 31, 1998, Neuberger

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Berman Guardian Portfolio paid brokerage commissions of $11,558,523, of which
$5,733,976 was paid to Neuberger Berman.

During the fiscal year ended August 31, 1999, Neuberger Berman Guardian
Portfolio paid brokerage commissions of $10,793,418, of which $3,975,341 was
paid to Neuberger Berman. Transactions in which that Portfolio used Neuberger
Berman as broker comprised 42.88% of the aggregate dollar amount of transactions
involving the payment of commissions, and 36.83% of the aggregate brokerage
commissions paid by the Portfolio, during the fiscal year ended August 31, 1999.
89.21% of the $6,082,366 paid to other brokers by that Portfolio during that
fiscal year (representing commissions on transactions involving approximately
$4,098,122,468) was directed to those brokers because of research services they
provided. During the fiscal year ended August 31, 1999, that Portfolio acquired
securities of the following of its Regular B/Ds: American Express Credit Corp.,
Donaldson, Lufkin, & Jenrette Securities Corp., Ford Motor Credit Co., General
Electric Capital Corp., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner &
Smith Inc., Morgan Stanley Dean Witter & Co., and State Street Bank and Trust
Company, at that date, that Portfolio held the securities of its Regular B/Ds
with an aggregate value as follows: American Express Credit Corp., $49,992,736;
Ford Motor Credit Co., $49,948,667; General Electric Capital Corp., $49,985,833;
Morgan Stanley Dean Witter & Co., $49,728,344; and State Street Bank & Trust
Company, $111,170,000.

During the fiscal year ended August 31, 1997, Neuberger Berman Partners
Portfolio paid brokerage commissions of $5,413,453, of which $3,508,790 was paid
to Neuberger Berman. During the fiscal year ended August 31, 1998, Neuberger
Berman Partners Portfolio paid brokerage commissions of $10,028,713, of which
$6,281,978 was paid to Neuberger Berman.

During the fiscal year ended August 31, 1999, Neuberger Berman Partners
Portfolio paid brokerage commissions of $14,228,430 of which $7,694,359 was paid
to Neuberger Berman. Transactions in which that Portfolio used Neuberger Berman
as broker comprised 55.60% of the aggregate dollar amount of transactions
involving the payment of commissions, and 54.08% of the aggregate brokerage
commissions paid by the Portfolio, during the fiscal year ended August 31, 1999.
90.92% of the $5,940,877 paid to other brokers by that Portfolio during that
fiscal year (representing commissions on transactions involving approximately
$4,178,855,517) was directed to those brokers because of research services they
provided. During the fiscal year ended August 31, 1999, that Portfolio acquired
securities of the following of its Regular B/Ds: American Express Credit Corp.,
Ford Motor Credit Co., General Electric Capital Corp., Goldman, Sachs & Co.,
Morgan Stanley Dean Witter & Co., and State Street Bank and Trust Company, at
that date, that Portfolio held the securities of its Regular B/Ds with an
aggregate value as follows: American Express Credit Corp., $49,948,375; Ford
Motor Credit Co., $49,992,764; Morgan Stanley Dean Witter & Co., $28,318,125;
and State Street Bank & Trust Company, $63,300,000.

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During the fiscal year ended August 31, 1997, Neuberger Berman Socially
Responsive Portfolio paid brokerage commissions of $305,640, of which $232,238
was paid to Neuberger Berman. During the fiscal year ended August 31, 1998,
Neuberger Berman Socially Responsive Portfolio paid brokerage commissions of
$401,601, of which $296,353 was paid to Neuberger Berman.

During the fiscal year ended August 31, 1999, Neuberger Berman Socially
Responsive Portfolio paid brokerage commissions of $485,040, of which $329,666
was paid to Neuberger Berman. Transactions in which that Portfolio used
Neuberger Berman as broker comprised 69.99% of the aggregate dollar amount of
transactions involving the payment of commissions, and 67.97% of the aggregate
brokerage commissions paid by the Portfolio, during the fiscal year ended August
31, 1999. 99.97% of the $155,324 paid to other brokers by that Portfolio during
that fiscal year (representing commissions on transactions involving
approximately $97,201,802) was directed to those brokers because of research
services they provided. During the fiscal year ended August 31, 1999, that
Portfolio acquired securities of the following of its Regular B/Ds: Goldman,
Sachs & Co. and State Street Bank and Trust Company; at that date, that
Portfolio held the securities of its Regular B/Ds with an aggregate value as
follows: Goldman, Sachs & Co., $556,256; and State Street Bank & Trust Company,
$8,370,000.

During the fiscal year ended August 31, 1997, Neuberger Berman
International Portfolio paid brokerage commissions of $297,431, of which $5,910
was paid to Neuberger Berman. During the fiscal year ended August 31, 1998,
Neuberger Berman International Portfolio paid brokerage commissions of $345,192,
of which $3,435 was paid to Neuberger Berman.

During the fiscal year ended August 31, 1999, Neuberger Berman
International Portfolio paid brokerage commissions of $717,488, of which $5,632
was paid to Neuberger Berman. Transactions in which the Portfolio used Neuberger
Berman as broker comprised 1.67% of the aggregate dollar amount of transactions
involving the payment of commissions, and 0.79% of the aggregate brokerage
commissions paid by the Portfolio, during the fiscal year ended August 31, 1999.
Of the $664,624 paid to other brokers by that Portfolio during that fiscal year,
93.37% (representing commissions on transactions involving approximately
$201,189,337 was directed to those brokers because of research services they
provided. During the fiscal year ended August 31, 1999, that Portfolio acquired
securities of the following of its Regular B/Ds: Exxon Credit Corp., General
Electric Capital Corp., HSBC Securities, Inc., Samsung Securities (America),
Inc., State Street Bank and Trust Company, and Vickers Ballas (USA) Inc.; at
that date, that Portfolio held the securities of its Regular B/Ds with an
aggregate value as follows:
State Street Bank & Trust Company, $3,920,000.

During the fiscal year ended August 31, 1999, Neuberger Berman Millennium
Portfolio paid brokerage commissions of $50,656, of which $28,188 was paid to
Neuberger Berman. Transactions in which that Portfolio used Neuberger Berman as
broker comprised 52.82% of the aggregate dollar amount of transactions involving
the payment of commissions, and 55.65% of the aggregate brokerage commissions

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paid by the Portfolio, during the fiscal year ended August 31, 1999. 99.14% of
the $22,275 paid to other brokers by that Portfolio during that fiscal year
(representing commissions on transactions involving approximately $9,372,700)
was directed to those brokers because of research services they provided. During
the fiscal year ended August 31, 1999, that Portfolio acquired securities of the
following of its Regular B/Ds: Donaldson, Lufkin, & Jenrette Securities Corp.,
Ford Motor Credit Co., General Electric Capital Corp., Merrill Lynch, Pierce,
Fenner & Smith Inc., and State Street Bank and Trust Company, at that date, that
Portfolio held the securities of its Regular B/Ds with an aggregate value as
follows: Ford Motor Credit Co., $1,499,783; and State Street Bank & Trust
Company, $2,090,000.

During the fiscal year ended August 31, 1999, Neuberger Berman Regency
Portfolio paid brokerage commissions of $17,045, of which $15,488 was paid to
Neuberger Berman. Transactions in which that Portfolio used Neuberger Berman as
broker comprised 90.37% of the aggregate dollar amount of transactions involving
the payment of commissions, and 90.87% of the aggregate brokerage commissions
paid by the Portfolio, during the fiscal year ended August 31, 1999. 96.47% of
the $1,502 paid to other brokers by that Portfolio during that fiscal year
(representing commissions on transactions involving approximately $840,736) was
directed to those brokers because of research services they provided. During the
fiscal year ended August 31, 1999, that Portfolio acquired securities of the
following of its Regular B/Ds: American Express Credit Corp., Ford Motor Credit
Co., General Electric Capital Corp., and State Street Bank and Trust Company, at
that date, that Portfolio held the securities of its Regular B/Ds with an
aggregate value as follows: State Street Bank & Trust Company, $370,000.

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

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

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security on more favorable terms (as specified in the order) than that
Portfolio. If, in any month, a Portfolio's expenses exceed its income in any
securities loan transaction with Neuberger Berman, Neuberger Berman must
reimburse that Portfolio for such loss.

A committee of Independent Portfolio Trustees from time to time reviews,
among other things, information relating to securities loans by the Portfolios.
The following information reflects interest income earned by the Portfolios from
the cash collateralization of securities loans through Neuberger Berman during
the fiscal years ended 1998 and 1997. As reflected below, Neuberger Berman
received a portion of the interest income from the cash collateral.

Interest Income
from
Collateralization
of Securities Amount Paid to
Name of Portfolio Fiscal Year End Loans Neuberger Berman

Neuberger Berman 8/31/98 $ 469,745 $ 212,611
Manhattan Portfolio 8/31/97 $ 988,931 $ 326,403

- --------------------------------------------------------------------------------
Neuberger Berman 8/31/98 $ 285,737 $ 152,375
Genesis Portfolio 8/31/97 $ 168,552 $ 69,948

- --------------------------------------------------------------------------------
Neuberger Berman 8/31/98 $ 1,355,093 $ 1,035,708
Guardian Portfolio 8/31/97 $ 4,005,765 $ 3,523,486

- --------------------------------------------------------------------------------
Neuberger Berman 8/31/98 $ 139,877 $ 101,879
Focus Portfolio 8/31/97 $ 1,053,272 $ 898,127

- --------------------------------------------------------------------------------
Neuberger Berman 8/31/98 $ 280,193 $ 141,707
Partners Portfolio 8/31/97 $ 797,133 $ 688,624

- --------------------------------------------------------------------------------
Neuberger Berman 8/31/98 $ 31,250 0
International 8/31/97 $ 0 0
Portfolio
- --------------------------------------------------------------------------------

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Neuberger Berman 8/31/98 $ 20,023 $ 10,803
Socially Responsive 8/31/97 $ 80,484 $ 51,639
Portfolio

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

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

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

Under the 1940 Act, commissions paid by a Portfolio to Neuberger Berman in
connection with a purchase or sale of securities on a securities exchange may
not exceed the usual and customary broker's commission. Accordingly, it is each

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Portfolio's policy that the commissions paid to Neuberger Berman must, in NB
Management's judgment, be (1) at least as favorable as those charged by other
brokers having comparable execution capability and (2) at least as favorable as
commissions contemporaneously charged by Neuberger Berman on comparable
transactions for its most favored unaffiliated customers, except for accounts
for which Neuberger Berman acts as a clearing broker for another brokerage firm
and customers of Neuberger Berman considered by a majority of the Independent
Portfolio Trustees not to be comparable to the Portfolio. The Portfolios do not
deem it practicable and in their best interests to solicit competitive bids for
commissions on each transaction effected by Neuberger Berman. However,
consideration regularly is given to information concerning the prevailing level
of commissions charged by other brokers on comparable transactions during
comparable periods of time. The 1940 Act generally prohibits Neuberger Berman
from acting as principal in the purchase of portfolio securities from, or the
sale of portfolio securities to, a Portfolio unless an appropriate exemption is
available.

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

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

Under policies adopted by the Board of Trustees, Neuberger Berman may
enter into agency cross-trades on behalf of a Portfolio. An agency cross-trade
is a securities transaction in which the same broker acts as agent on both sides
of the trade and the broker or an affiliate has discretion over one of the
participating accounts. In this situation, Neuberger Berman would receive
brokerage commissions from both participants in the trade. The other account
participating in an agency cross-trade with a Portfolio cannot be an account
over which Neuberger Berman exercises investment discretion. A member of the
Board of Trustees who is not affiliated with Neuberger Berman reviews
confirmations of each agency cross-trade that the Portfolios participate in.

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

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A committee comprised of officers of NB Management and principals of
Neuberger Berman who are portfolio managers of some of the Portfolios and Other
NB Funds (collectively, "NB Funds") and some of Neuberger Berman's managed
accounts ("Managed Accounts") evaluates semi-annually the nature and quality of
the brokerage and research services provided by other brokers. Based on this
evaluation, the committee establishes a list and projected rankings of preferred
brokers for use in determining the relative amounts of commissions to be
allocated to those brokers. Ordinarily, the brokers on the list effect a large
portion of the brokerage transactions for the NB Funds and the Managed Accounts
that are not effected by Neuberger Berman. However, in any semi-annual period,
brokers not on the list may be used, and the relative amounts of brokerage
commissions paid to the brokers on the list may vary substantially from the
projected rankings. These variations reflect the following factors, among
others: (1) brokers not on the list or ranking below other brokers on the list
may be selected for particular transactions because they provide better price
and/or execution, which is the primary consideration in allocating brokerage;
(2) adjustments may be required because of periodic changes in the execution
capabilities of or research provided by particular brokers or in the execution
or research needs of the NB Funds and/or the Managed Accounts; and (3) the
aggregate amount of brokerage commissions generated by transactions for the NB
Funds and the Managed Accounts may change substantially from one semi-annual
period to the next.

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

Kent C. Simons; Kevin L. Risen and Allan R. White III; Judith M. Vale and
Robert W. D'Alelio; Valerie Chang; Jennifer K. Silver and Brooke A. Cobb;
Michael F. Malouf and Jennifer K. Silver; Michael M. Kassen, Robert I. Gendelman
and S. Basu Mullick; and Janet W. Prindle, each of whom is a Vice President of
NB Management and a Managing Director of Neuberger Berman are the persons
primarily responsible for making decisions as to specific action to be taken
with respect to the investment portfolios of Neuberger Berman Focus, Neuberger
Berman Guardian, Neuberger Berman Genesis, Neuberger Berman International,
Neuberger Berman Manhattan, Neuberger Berman Millennium, Neuberger Berman
Partners Neuberger Berman Regency and Neuberger Berman Socially Responsive
Portfolios, respectively. Each of them has full authority to take action with
respect to portfolio transactions and may or may not consult with other
personnel of NB Management prior to taking such action. If Ms. Prindle is
unavailable to perform her responsibilities, Robert Ladd and/or Ingrid
Saukaitis, each of whom is a Vice President of NB Management, will assume

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responsibility for the portfolio of Neuberger Berman Socially Responsive
Portfolio.

PORTFOLIO TURNOVER

A Portfolio's portfolio turnover rate is calculated by dividing (1) the
lesser of the cost of the securities purchased or the proceeds from the
securities sold by the Portfolio during the fiscal year (other than securities,
including options, whose maturity or expiration date at the time of acquisition
was one year or less) by (2) the month-end average of the value of such
securities owned by the Portfolio during the fiscal year.

REPORTS TO SHAREHOLDERS

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

ORGANIZATION, CAPITALIZATION AND OTHER MATTERS

THE FUNDS

Each Fund is a separate ongoing series of the Trust, a Delaware business
trust organized pursuant to a Trust Instrument dated as of May 6, 1993. The
Trust is registered under the Investment Company Act of 1940 as a diversified,
open-end management investment company, commonly known as a mutual fund. The
Trust has nine separate series. Each Fund invests all of net investable assets
in its corresponding Portfolio, in each case receiving a beneficial interest in
that Portfolio. The trustees of the Trust may establish additional series or
classes of shares without the approval of shareholders. The assets of each
series belong only to that series, and the liabilities of each series are borne
solely by that series and no other.

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

Prior to November 17, 1995, the name of Neuberger Berman International
Portfolio was International Portfolio.

Prior to November 9, 1998, the name of the Trust was "Neuberger & Berman
Equity Trust" and the term "Neuberger Berman" in each Fund's name was "Neuberger
& Berman".

DESCRIPTION OF SHARES. Each Fund is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share). Shares of
each Fund represent equal proportionate interests in the assets of that Fund
only and have identical voting, dividend, redemption, liquidation, and other

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rights. All shares issued are fully paid and non-assessable, and shareholders
have no preemptive or other rights to subscribe to any additional shares.

SHAREHOLDER MEETINGS. The trustees of the Trust do not intend to hold
annual meetings of shareholders of the Funds. The trustees will call special
meetings of shareholders of a Fund only if required under the 1940 Act or in
their discretion or upon the written request of holders of 10% or more of the
outstanding shares of that Fund entitled to vote.

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

OTHER. Because Fund shares can be bought, owned and sold only through an
account with an Institution, a client of an Institution may be unable to
purchase additional shares and/or may be required to redeem shares (and possibly
incur a tax liability) if the client no longer has a relationship with the
Institution or if the Institution no longer has a contract with NB Management to
perform services. Depending on the policies of the Institution involved, an
investor may be able to transfer an account from one Institution to another.

THE PORTFOLIOS

Each Portfolio (except Neuberger Berman International Portfolio) is a
separate operating series of Equity Managers Trust, a New York common law trust
organized as of December 1, 1992. Neuberger Berman International Portfolio is a
separate operating series of Global Managers Trust, a New York common law trust
organized as of March 18, 1994. The Managers Trusts are registered under the
1940 Act as diversified, open-end management investment companies. Equity
Managers Trust has nine separate Portfolios. Global Managers Trust currently has
one operating Portfolio. The assets of each Portfolio belong only to that
Portfolio, and the liabilities of each Portfolio are borne solely by that
Portfolio and no other.

FUNDS' INVESTMENTS IN PORTFOLIOS. Each Fund is a "feeder fund" that seeks
to achieve its investment objective by investing all of its net investable
assets in its corresponding Portfolio, which is a "master fund." The Portfolio,
which has the same investment objective, policies, and limitations as the Fund,
in turn invests in securities; the Fund thus acquires an indirect interest in
those securities.

Each Fund's investment in its corresponding Portfolio is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in a Portfolio. The Sister Funds that are series of
Neuberger Berman Equity Funds(R) ("Equity Funds") and the other mutual funds
that are series of other trusts invest all of their respective net assets in
corresponding Portfolios of Equity Managers Trust. The shares of each series of

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Equity Funds are available for purchase by members of the general public. The
Trust does not sell its shares directly to members of the general public.

Each Portfolio may also permit other investment companies and/or other
institutional investors to invest in the Portfolio. All investors will invest in
a Portfolio on the same terms and conditions as a Fund and will pay a
proportionate share of the Portfolio's expenses. Other investors in a Portfolio
(including the series of Equity Funds, Equity Assets and Equity Series) are not
required to sell their shares at the same public offering price as a Fund, could
have a different administration fee and expenses than a Fund, and (except Equity
Funds and Equity Assets) might charge a sales commission. Therefore, Fund
shareholders may have different returns than shareholders in another investment
company that invests exclusively in the Portfolio. Information regarding any
fund that invests in a Portfolio is available from NB Management by calling
800-877-9700.

The trustees of the Trust believe that investment in a Portfolio by a
series of Equity Funds, Equity Assets or Equity Series by other potential
investors in addition to a Fund may enable the Portfolio to realize economies of
scale that could reduce its operating expenses, thereby producing higher returns
and benefiting all shareholders. However, a Fund's investment in its
corresponding Portfolio may be affected by the actions of other large investors
in the Portfolio, if any. For example, if a large investor in a Portfolio (other
than a Fund) redeemed its interest in the Portfolio, the Portfolio's remaining
investors (including the Fund) might, as a result, experience higher pro rata
operating expenses, thereby producing lower returns.

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

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

94
<PAGE>

receive a majority of votes cast by all Portfolio investors; indeed, if other
investors hold a majority interest in a Portfolio, they could have voting
control of the Portfolio.

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

CUSTODIAN AND TRANSFER AGENT

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

INDEPENDENT AUDITORS/ACCOUNTANTS

Each Fund and Portfolio (other than Neuberger Berman International
Portfolio, Neuberger Berman Manhattan Trust and Portfolio, Neuberger Berman
Millennium Trust and Portfolio, Neuberger Berman Socially Responsive Trust and
Portfolio, and Neuberger Berman Regency Trust and Portfolio) has selected Ernst
& Young LLP, 200 Clarendon Street, Boston, MA 02116, as the independent auditors
who will audit its financial statements. Neuberger Berman International
Portfolio has selected Ernst & Young, Shedden Road, George Town, Grand Cayman,
Cayman Islands, British West Indies as the independent auditors who will audit
its financial statements. Neuberger Berman Manhattan Trust and Portfolio,
Neuberger Berman Socially Responsive Trust and Portfolio, Neuberger Berman
Millennium Trust and Portfolio, and Neuberger Berman Regency Trust and Portfolio
have selected PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110,
as the independent accountants who will audit their financial statements.

LEGAL COUNSEL

Each Fund and Portfolio has selected Kirkpatrick & Lockhart LLP, 1800
Massachusetts Avenue, N.W., 2nd Floor, Washington, D.C. 20036-1800, as its legal
counsel.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

The following table sets forth the name, address, and percentage of
ownership of each person who was known by each Fund to own beneficially or of
record 5% or more of that Fund's outstanding shares at October 30, 1999:

95
<PAGE>

Percentage of
Ownership at
Name and Address October 30, 1999
- --------------------------------------------------------------------------------
Neuberger Berman MAC & Co. 17.94%
Manhattan Trust A/C 195-643
AEOF 1956432
Mutual Fund Operations
P.O. Box 3198
Pittsburgh, PA 15230-3198

The Northern Trust Co., Trustee 44.77%
FBO Case Corporation
22-75833
P.O. Box 92956
Chicago, IL 60675-2956

Fleet National Bank
AETNA/FLEET DIRECTED TRUSTEE 12.87%
151 Farmington Avenue, Suite T531
Hartford, CT -6156-001

Neuberger Berman Nationwide Life Insurance 19.32%
Partners Trust QPVA
c/o IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029

National Financial Services Corp.* 9.90%
P.O. Box 3908
Church Street Station
New York, NY 10008-3908

PRC Inc. 9.27%
c/o T. Rowe Price Financial
Attn: Asset Recon.
P.O. Box 17215
Baltimore, MD 21297-0354

96
<PAGE>

Percentage of
Ownership at
Name and Address October 30, 1999
- --------------------------------------------------------------------------------
Connecticut General Life 12.32%
Insurance Company
350 Church St.
P.O. Box 2975 M-110
Hartford, CT 06103-1106

Fidelity Investments Institutional 7.39%
Oper. Co.
Agent for certain benefit pln
100 Magellan Way
Mailzone KWIC
Covington, KY 41015-1987

The Northern Trust Co., Trustee 6.18%
Phycor Savings Plan
P.O. Box 92956
Chicago, IL 60675-2956

Neuberger Berman National Financial Services Corp.* 5.54%
Guardian Trust P.O. Box 3908
Church Street Station
New York, NY 100008-3908

Fidelity Investments Institutional 13.39%
Ops Co.
Agent for certain EE benefit plans
Mailzone KWIC
Covington, KY 41015

The Manufacturers Life Insurance 19.41%
Co.
200 Bloor St. E NT3
Toronto ON M4W 1E5
Canada

97
<PAGE>

Percentage of
Ownership at
Name and Address October 30, 1999
- --------------------------------------------------------------------------------
Nationwide Life Insurance Co. 8.25%
QPVA
c/o IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029

Wachovia Bank of North Carolina, 7.75%
Master Trustee
Incentive Savings Plan
301 N. Main Street MC-NC 32213
Winston-Salem, NC 27101-3819

Connecticut General Life 5.50%
Insurance Company
350 Church Street
P.O. Box 2975 M-110
Hartford, CT 06104-2975

Neuberger Berman Focus National Financial Services Corp.* 7.55%
Trust P.O. Box 3908
Church Street Station
New York, NY 10008-3908

American Express Trust Co. 12.65%
Benefit of American Express
Trust Retirement Service Plans
1200 Northstar West
P.O. Box 534
Minneapolis, MN 55440-0534

98
<PAGE>

Percentage of
Ownership at
Name and Address October 30, 1999
- --------------------------------------------------------------------------------
Smith Barney Inc. 14.28%
00109801250
388 Greenwich Street
New York, NY 10013-2375

Emjayco 12.31%
Omnibus Account
P.O. Box 17909
Milwaukee, WI 53217-0909

Aetna Life Insurance & Annuity Co. 9.61%
ACES - Separate Account F
15 Farmington Ave.
Hartford, CT 06156-0001

Boston Safe Deposit & Trust Co., 12.12%
Trustee
TWA Inc. Pilots Directed Account
Plan & 401K Plan for Pilots of TWA
Inc.

Mallzone 028-003I
One Cabot Road
Medford, MA 02155-5141

MAC & Co. A/C 195-643 5.62%
AEOF 1956432
P.O. Box 3198
Mutual Fund Operations
Pittsburgh, PA 15230-3198

Neuberger Berman National Financial Services Corp.* 14.22%
Genesis Trust P.O. Box 3908
Church Street Station
New York, NY 10008-3908

Nationwide Life Insurance Co. 6.93%
IPO Portfolio Accounting
P.O. Box 182029

99
<PAGE>

Percentage of
Ownership at
Name and Address October 30, 1999
- --------------------------------------------------------------------------------
AETNA Life Insurance Co. 5.11%
Valuation Unit
151 Farmington Avenue
Hartford, CT 06156-0001

Smith Barney, Inc. 15.28%
00109801250
388 Greenwich Street
New York, NY 10013-2375

Fidelity Investments Institutional 18.98%
Ops Co.
Agent for certain EE benefit plans
Mailzone KWIC
Covington, KY 41015

Neuberger Berman Chase Manhattan Bank, Trustee 51.94%
International Trust Professional Pensions Inc.
Retirement Programs
444 Foxon Road
East Haven, CT 06513-2019

Fleet Trust Corporation 34.42%
Third Party M F Alliances
P.O. Box 2197
Boston, MA 02106-2197

Neuberger Berman Trust 9.22%
Lillian Vernon Corp.
401K Prifit Sharing Plan
1 Theall Road
Rye, NY 10580-1404

100
<PAGE>

Percentage of
Ownership at
Name and Address October 30, 1999
- --------------------------------------------------------------------------------
Neuberger Berman National Financial Service Corp.* 76.23%
Millennium Trust P.O. Box 3908
Church Street Station
New York, NY 10008-3908

Donaldson, Lufkin & Jenrette 19.15%
Securities Corporation
Pershing Division
Mutual Fund Balancing
P.O. Box 2052
Jersey City, NJ 07303-2052

Neuberger Berman Boston Safe Deposit & Trust Co. 98.54%
Regency Trust TWA Inc. Pilots Directed Account
Plan & 401K Plan for Pilots of TWA
Inc.
135 Santilli Hwy. #26-0320
Everett, MA 02149-1906

Neuberger Berman ICMA Retirement Trust 65.31%
Socially Responsive Trust 777 N. Capitol Street, NE
Washington, D.C. 20002-4239

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

REGISTRATION STATEMENT

This SAI and the Prospectus do not contain all the information included in
the Trust's registration statement filed with the SEC under the 1933 Act with
respect to the securities offered by the Prospectus. The registration statement,
including the exhibits filed therewith, may be examined at the SEC's offices in
Washington, D.C. The SEC maintains a Website (http://www.sec.gov) that contains
this SAI, material incorporated by reference, and other information regarding
the Funds and Portfolios.

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

101
<PAGE>

FINANCIAL STATEMENTS

The following financial statements and related documents are incorporated
herein by reference from the Funds' Annual Report to shareholders for the fiscal
year ended August 31, 1999:

The audited financial statements of the Funds and Portfolios and notes
thereto for the fiscal year ended August 31, 1999, and the reports of Ernst &
Young LLP, independent auditors, with respect to such audited financial
statements of Neuberger Berman Genesis Trust and Portfolio, Neuberger Berman
Focus Trust and Portfolio, Neuberger Berman Guardian Trust and Portfolio,
Neuberger Berman Partners Trust and Portfolio, and Neuberger Berman
International Trust; the report of Ernst & Young, independent auditors, with
respect to such audited financial statements of Neuberger Berman International
Portfolio; and the reports of PricewaterhouseCoopers LLP, independent
accountants, with respect to such audited financial statements of Neuberger
Berman Manhattan Trust and Portfolio, Neuberger Berman Regency Trust and
Portfolio, Neuberger Berman Millennium Trust and Portfolio and Neuberger Berman
Socially Responsive Trust and Portfolio.

102
<PAGE>

Appendix A

RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER

S&P CORPORATE BOND RATINGS:

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

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

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

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

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

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

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

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

MOODY'S CORPORATE BOND RATINGS:

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

A-1
<PAGE>

may not be as large as in Aaa-rated securities, fluctuation of protective
elements may be of greater amplitude, or there may be other elements present
that make the long-term risks appear somewhat larger than in Aaa-rated
securities.

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

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

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

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

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

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

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

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

S&P commercial paper ratings:

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

Moody's commercial paper ratings

A-2
<PAGE>

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

- - Leading market positions in well-established industries.

- - High rates of return on funds employed.

- - Conservative capitalization structures with moderate reliance on debt
and ample asset protection.

- - Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.

- - Well-established access to a range of financial markets and assured
sources of alternate liquidity.

A-3

<PAGE>

NEUBERGER BERMAN GUARDIAN TRUST AND PORTFOLIO

STATEMENT OF ADDITIONAL INFORMATION

DATED DECEMBER 1, 1999

NO-LOAD MUTUAL FUND
605 THIRD AVENUE, 2ND FLOOR, NEW YORK, NY 10158-0180
TOLL-FREE 800-877-9700

Neuberger Berman GUARDIAN Trust ("Fund"), a series of Neuberger
Berman Equity Trust ("Trust"), is a no-load mutual fund that offers shares
pursuant to a Prospectus dated December 1, 1999. The Fund invests all of its net
investable assets in Neuberger Berman GUARDIAN Portfolio ("Portfolio").

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

The Fund's Prospectus provides basic information that an investor
should know before investing. You can get a free copy of the Prospectus from
Neuberger Berman Management Inc., ("NB Management"), Institutional Services, 605
Third Avenue, 2nd Floor, New York, NY 10158-0180, or by calling 800-877-9700.

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

<PAGE>

by the Fund or its distributor. The Prospectus and this SAI do not constitute an
offering by the Fund or its distributor in any jurisdiction in which such
offering may not lawfully be made.

<PAGE>

TABLE OF CONTENTS

PAGE

INVESTMENT INFORMATION.......................................................1
Investment Policies and Limitations....................................1
Investment Insight.....................................................4
Additional Investment Information......................................6

PERFORMANCE INFORMATION.....................................................19
Total Return Computations.............................................19
Comparative Information...............................................20
Other Performance Information.........................................20

CERTAIN RISK CONSIDERATIONS.................................................21

TRUSTEES AND OFFICERS.......................................................21

INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES...........................27
Investment Manager and Administrator..................................27
Management and Administration Fees....................................28
Sub-Adviser...........................................................29
Investment Companies Managed..........................................30
Management and Control of NB Management...............................32

DISTRIBUTION ARRANGEMENTS...................................................32

ADDITIONAL PURCHASE INFORMATION.............................................33
Share Prices and Net Asset Value......................................33

ADDITIONAL REDEMPTION INFORMATION...........................................34
Suspension of Redemptions.............................................34
Redemptions in Kind...................................................34

DIVIDENDS AND OTHER DISTRIBUTIONS...........................................34

ADDITIONAL TAX INFORMATION..................................................35
Taxation of the Fund..................................................35

<PAGE>

Taxation of the Portfolio.............................................36
Taxation of the Fund's Shareholders...................................38

PORTFOLIO TRANSACTIONS......................................................38
Portfolio Turnover....................................................41

REPORTS TO SHAREHOLDERS.....................................................42

ORGANIZATION, CAPITALIZATION AND OTHER MATTERS..............................42

CUSTODIAN AND TRANSFER AGENT................................................44

INDEPENDENT AUDITORS........................................................45

LEGAL COUNSEL...............................................................45

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.........................45

FINANCIAL STATEMENTS........................................................47

APPENDIX A.................................................................A-1
RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER............................A-1

ii
<PAGE>

INVESTMENT INFORMATION

The Fund is a separate operating series of the Trust, a Delaware
business trust that is registered with the Securities and Exchange Commission
("SEC") as a diversified open-end management investment company. The Fund seeks
its investment objective by investing all of its net investable assets in the
Portfolio, a series of Equity Managers Trust ("Managers Trust") that has an
investment objective identical to that of the Fund. The Portfolio, in turn,
invests in securities in accordance with an investment objective, policies, and
limitations identical to those of the Fund. (The Trust and Managers Trust, which
is an open-end management investment company managed by NB Management, are
together referred to below as the "Trusts.")

The following information supplements the discussion in the
Prospectus of the investment objective, policies, and limitations of the Fund
and Portfolio. The investment objective and, unless otherwise specified, the
investment policies and limitations of the Fund and Portfolio are not
fundamental. Any investment objective, policy or limitation that is not
fundamental may be changed by the trustees of the Trust ("Fund Trustees") or of
Managers Trust ("Portfolio Trustees") without shareholder approval. The
fundamental investment policies and limitations of the Fund or the Portfolio may
not be changed without the approval of the lesser of:

(1) 67% of the total units of beneficial interest ("shares") of the
Fund or Portfolio represented at a meeting at which more than 50% of the
outstanding Fund or Portfolio shares are represented or

(2) a majority of the outstanding shares of the Fund or Portfolio.

These percentages are required by the Investment Company Act of 1940
("1940 Act") and are referred to in this SAI as a "1940 Act majority vote."
Whenever the Fund is called upon to vote on a change in a fundamental investment
policy or limitation of the Portfolio, the Fund casts its votes in proportion to
the votes of its shareholders at a meeting thereof called for that purpose.

INVESTMENT POLICIES AND LIMITATIONS

The Fund has the following fundamental investment policy, to enable
it to invest in the Portfolio:

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

All other fundamental investment policies and limitations and the
non-fundamental investment policies and limitations of the Fund are identical to
those of the Portfolio. Therefore, although the following discusses the
investment policies and limitations of the Portfolio, it applies equally to the
Fund.

1
<PAGE>

The Portfolio's fundamental investment policies and limitations
are as follows:

1. BORROWING. The Portfolio may not borrow money, except that the
Portfolio may (i) borrow money from banks for temporary or emergency purposes
and not for leveraging or investment and (ii) enter into reverse repurchase
agreements for any purpose; provided that (i) and (ii) in combination do not
exceed 33-1/3% of the value of its total assets (including the amount borrowed)
less liabilities (other than borrowings). If at any time borrowings exceed
33-1/3% of the value of the Portfolio's total assets, the Portfolio will reduce
its borrowings within three days (excluding Sundays and holidays) to the extent
necessary to comply with the 33-1/3% limitation.

2. COMMODITIES. The Portfolio may not purchase physical commodities
or contracts thereon, unless acquired as a result of the ownership of securities
or instruments, but this restriction shall not prohibit the Portfolio from
purchasing futures contracts or options (including options on futures contracts,
but excluding options or futures contracts on physical commodities) or from
investing in securities of any kind.

3. DIVERSIFICATION. The Portfolio may not, with respect to 75% of
the value of its total assets, purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, (i) more than 5% of the value of the
Portfolio's total assets would be invested in the securities of that issuer or
(ii) the Portfolio would hold more than 10% of the outstanding voting securities
of that issuer.

4. INDUSTRY CONCENTRATION. The Portfolio may not purchase any
security if, as a result, 25% or more of its total assets (taken at current
value) would be invested in the securities of issuers having their principal
business activities in the same industry. This limitation does not apply to
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities.

5. LENDING. The Portfolio may not lend any security or make any
other loan if, as a result, more than 33-1/3% of its total assets (taken at
current value) would be lent to other parties, except, in accordance with its
investment objective, policies, and limitations, (i) through the purchase of a
portion of an issue of debt securities or (ii) by engaging in repurchase
agreements.

6. REAL ESTATE. The Portfolio may not purchase real estate unless
acquired as a result of the ownership of securities or instruments, but this
restriction shall not prohibit the Portfolio from purchasing securities issued
by entities or investment vehicles that own or deal in real estate or interests
therein or instruments secured by real estate or interests therein.

7. SENIOR SECURITIES. The Portfolio may not issue senior
securities, except as permitted under the 1940 Act.

2
<PAGE>

8. UNDERWRITING. The Portfolio may not underwrite securities
of other issuers, except to the extent that the Portfolio, in disposing of
portfolio securities, may be deemed to be an underwriter within the meaning of
the Securities Act of 1933 ("1933 Act").

For purposes of the limitation on commodities, the Portfolio does
not consider foreign currencies or forward contracts to be physical commodities.

The Portfolio's non-fundamental investment policies and limitations
are as follows:

1. BORROWING. The Portfolio may not purchase securities if
outstanding borrowings, including any reverse repurchase agreements, exceed 5%
of its total assets.

2. LENDING. Except for the purchase of debt securities and
engaging in repurchase agreements, the Portfolio may not make any loans other
than securities loans.

3. MARGIN TRANSACTIONS. The Portfolio may not purchase securities
on margin from brokers or other lenders, except that the Portfolio may obtain
such short-term credits as are necessary for the clearance of securities
transactions. Margin payments in connection with transactions in futures
contracts and options on futures contracts shall not constitute the purchase of
securities on margin and shall not be deemed to violate the foregoing
limitation.

4. FOREIGN SECURITIES. The Portfolio may not invest more than
10% of the value of its total assets in securities of foreign issuers, provided
that this limitation shall not apply to foreign securities denominated in U.S.
dollars, including American Depositary Receipts ("ADRs").

5. ILLIQUID SECURITIES. The Portfolio may not purchase any
security if, as a result, more than 15% of its net assets would be invested in
illiquid securities. Illiquid securities include securities that cannot be sold
within seven days in the ordinary course of business for approximately the
amount at which the Portfolio has valued the securities, such as repurchase
agreements maturing in more than seven days.

6. PLEDGING. The Portfolio may not pledge or hypothecate any of
its assets, except that the Portfolio may pledge or hypothecate up to 5% of its
total assets in connection with its entry into any agreement or arrangement
pursuant to which a bank furnishes a letter of credit to collateralize a capital
commitment made by the Portfolio to a mutual insurance company of which the
Portfolio is a member.

Although the Portfolio does not have a policy limiting its
investment in warrants, the Portfolio does not currently intend to invest in
warrants unless acquired in units or attached to securities.

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

3
<PAGE>

INVESTMENT INSIGHT

Neuberger Berman's commitment to its asset management approach is
reflected in the more than $125 million the organization's employees and their
families invested in the Neuberger Berman mutual funds.

INVESTMENT PROGRAM

DISCIPLINED, LARGE-CAP VALUE ORIENTATION

CONSISTENT VALUE STYLE

Guardian is a large cap value fund that searches for:

o Established high-quality companies

o Low price/earnings ratios

o Strong balance sheets

4
<PAGE>

o Solid management

DISCIPLINED, LARGE-CAP VALUE ORIENTATION

BOTTOM-UP APPROACH TO STOCK SELECTION

The managers believe cheap stocks are plentiful, but true investment
bargains are a rare find. To uncover them, they scour a universe of stocks
consisting of the bottom 20% of the market in terms of valuation. Those deemed
by the managers as inexpensive and poised for a turnaround are placed under
consideration. Potential investment candidates are financially sound,
well-managed companies that are undervalued relative to their earnings potential
and the market as a whole.

A BROAD VIEW OF RISK MANAGEMENT

Managing risk involves carefully monitoring the way the stocks in
the portfolio react to one another as well as to outside factors. Companies that
are in completely different sectors may in fact react similarly to certain
economic, market or international events. In their efforts to consider these
relationships, the managers use quantitative analysis to evaluate these factors
and their impact on the overall portfolio. It is a process they believe is a
crucial component in controlling risk and one that evolves over time as new
holdings are introduced to the portfolio.

A STRONG SELL DISCIPLINE

The portfolio co-managers will generally make an initial investment
in a stock of between 1-4% of total net assets. A higher weighting indicates
that they believe their research gives them an "edge" over Wall Street
analysts, or they believe the stock has an uncovered value that others may have
overlooked. Once a stock grows beyond the high side of that range, gains are
harvested and the holding is reduced to about 3% of total net assets.

INVESTMENT PROCESS

(Portfolio Risk Management)

o Monitor Portfolio's Exposure

(Selection Criteria)

o Improving Financials

5
<PAGE>

o Superior Management

Discount Valuations to the Market

(Stock Universe)

o Large-Cap Value

GUARDIAN INVESTORS CAN EXPECT:

o Disciplined, large-cap value orientation

o Bottom-up approach to stock selection

o Broad view of risk management

o Strong sell discipline

INVESTMENT INSIGHT

The portfolio co-managers look for established companies whose
intrinsic value, by their measure, is undiscovered among the majority of
investors. In managing overall risk, a conscious effort is made to determine the
risk/reward scenario of each individual holding as well as its impact at the
portfolio level.

ADDITIONAL INVESTMENT INFORMATION

The Portfolio may make the following investments, among others; some
of which are part of the Portfolio's principal investment strategies and some of
which are not. The principal risks of the Portfolio's principal strategies are
disclosed in the Prospectus. It may not buy all of the types of securities or
use all of the investment techniques that are described.

ILLIQUID SECURITIES. Illiquid securities are securities that cannot
be expected to be sold within seven days at approximately the price at which
they are valued. These may include unregistered or other restricted securities
and repurchase agreements maturing in greater than seven days. Illiquid
securities may also include commercial paper under section 4(2) of the 1933 Act,
as amended, and Rule 144A securities (restricted securities that may be traded
freely among qualified institutional buyers pursuant to an exemption from the
registration requirements of the securities laws); these securities are
considered illiquid unless NB Management, acting pursuant to guidelines
established by the trustees of Managers Trust, determines they are liquid.
Generally, foreign securities freely tradable in their principal market are not
considered restricted or illiquid. Illiquid securities may be difficult for the
Portfolio to value or dispose of due to the absence of an active trading market.
The sale of some illiquid securities by the Portfolio may be subject to legal
restrictions which could be costly to the Portfolio.

POLICIES AND LIMITATIONS. The Portfolio may invest up to 15% of
its net assets in illiquid securities.

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REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio
purchases securities from a bank that is a member of the Federal Reserve System
or from a securities dealer that agrees to repurchase the securities from the
Portfolio at a higher price on a designated future date. Repurchase agreements
generally are for a short period of time, usually less than a week. Costs,
delays, or losses could result if the selling party to a repurchase agreement
becomes bankrupt or otherwise defaults. NB Management monitors the
creditworthiness of sellers.

POLICIES AND LIMITATIONS. Repurchase agreements with a maturity of
more than seven days are considered to be illiquid securities. The Portfolio may
not enter into a repurchase agreement with a maturity of more than seven days
if, as a result, more than 15% of the value of its net assets would then be
invested in such repurchase agreements and other illiquid securities. The
Portfolio may enter into a repurchase agreement only if (1) the underlying
securities are of a type that the Portfolio's investment policies and
limitations would allow it to purchase directly, (2) the market value of the
underlying securities, including accrued interest, at all times equals or
exceeds the repurchase price, and (3) payment for the underlying securities is
made only upon satisfactory evidence that the securities are being held for the
Portfolio's account by its custodian or a bank acting as the Portfolio's agent.

SECURITIES LOANS. The Portfolio may lend securities to banks,
brokerage firms, and other institutional investors judged creditworthy by NB
Management, provided that cash or equivalent collateral, equal to at least 100%
of the market value of the loaned securities, is continuously maintained by the
borrower with the Portfolio. The Portfolio may invest the cash collateral and
earn income, or it may receive an agreed upon amount of interest income from a
borrower who has delivered equivalent collateral. During the time securities are
on loan, the borrower will pay the Portfolio an amount equivalent to any
dividends or interest paid on such securities. These loans are subject to
termination at the option of the Portfolio or the borrower. The Portfolio may
pay reasonable administrative and custodial fees in connection with a loan and
may pay a negotiated portion of the interest earned on the cash or equivalent
collateral to the borrower or placing broker. The Portfolio does not have the
right to vote securities on loan, but would terminate the loan and regain the
right to vote if that were considered important with respect to the investment.
NB Management believes the risk of loss on these transactions is slight because,
if a borrower were to default for any reason, the collateral should satisfy the
obligation. However, as with other extensions of secured credit, loans of
portfolio securities involve some risk of loss of rights in the collateral
should the borrower fail financially.

POLICIES AND LIMITATIONS. The Portfolio may lend portfolio
securities with a value not exceeding 33-1/3% of its total assets to banks,
brokerage firms, or other institutional investors judged creditworthy by NB
Management. Borrowers are required continuously to secure their obligations to
return securities on loan from the Portfolio by depositing collateral in a form
determined to be satisfactory by the Portfolio Trustees. The collateral, which
must be marked to market daily, must be equal to at least 100% of the market
value of the loaned securities, which will also be marked to market daily.

RESTRICTED SECURITIES AND RULE 144A SECURITIES. The Portfolio may
invest in restricted securities, which are securities that may not be sold to
the public without an effective registration statement under the 1933 Act.
Before they are registered, such securities may be sold only in a privately
negotiated transaction or pursuant to an exemption from registration. In

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recognition of the increased size and liquidity of the institutional market for
unregistered securities and the importance of institutional investors in the
formation of capital, the SEC has adopted Rule 144A under the 1933 Act. Rule
144A is designed to facilitate efficient trading among institutional investors
by permitting the sale of certain unregistered securities to qualified
institutional buyers. To the extent privately placed securities held by the
Portfolio qualify under Rule 144A and an institutional market develops for those
securities, the Portfolio likely will be able to dispose of the securities
without registering them under the 1933 Act. To the extent that institutional
buyers become, for a time, uninterested in purchasing these securities,
investing in Rule 144A securities could increase the level of the Portfolio's
illiquidity. NB Management, acting under guidelines established by the Portfolio
Trustees, may determine that certain securities qualified for trading under Rule
144A are liquid. Regulation S under the 1933 Act permits the sale abroad of
securities that are not registered for sale in the United States.

Where registration is required, the Portfolio may be obligated to
pay all or part of the registration expenses, and a considerable period may
elapse between the decision to sell and the time the Portfolio may be permitted
to sell a security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, the Portfolio might obtain a
less favorable price than prevailed when it decided to sell. Restricted
securities for which no market exists are priced by a method that the Portfolio
Trustees believe accurately reflects fair value.

POLICIES AND LIMITATIONS. To the extent restricted securities,
including Rule 144A securities, are illiquid, purchases thereof will be subject
to the Portfolio's 15% limit on investments in illiquid securities.

REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement,
the Portfolio sells portfolio securities subject to its agreement to repurchase
the securities at a later date for a fixed price reflecting a market rate of
interest. There is a risk that the counter-party to a reverse repurchase
agreement will be unable or unwilling to complete the transaction as scheduled,
which may result in losses to the Portfolio.

POLICIES AND LIMITATIONS. Reverse repurchase agreements are
considered borrowings for purposes of the Portfolio's investment policies and
limitations concerning borrowings. While a reverse repurchase agreement is
outstanding, the Portfolio will deposit in a segregated account with its
custodian cash or appropriate liquid securities, marked to market daily, in an
amount at least equal to the Portfolio's obligations under the agreement.

FOREIGN SECURITIES. The Portfolio may invest in U.S.
dollar-denominated securities of foreign issuers and foreign branches of U.S.
banks, including negotiable certificates of deposit ("CDs"), bankers'
acceptances and commercial paper. Foreign issuers are issuers organized and
doing business principally outside the U.S. and include banks, non-U.S.
governments, and quasi-governmental organizations. While investments in foreign
securities are intended to reduce risk by providing further diversification,
such investments involve sovereign and other risks, in addition to the credit
and market risks normally associated with domestic securities. These additional
risks include the possibility of adverse political and economic developments
(including political instability, nationalization, expropriation, or
confiscatory taxation) and the potentially adverse effects of unavailability of
public information regarding issuers, less governmental supervision and
regulation of financial markets, reduced liquidity of certain financial markets,

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and the lack of uniform accounting, auditing, and financial reporting standards
or the application of standards that are different or less stringent than those
applied in the United States.

The Portfolio also may invest in equity, debt, or other
income-producing securities that are denominated in or indexed to foreign
currencies, including (1) common and preferred stocks, (2) CDs, commercial
paper, fixed time deposits, and bankers' acceptances issued by foreign banks,
(3) obligations of other corporations, and (4) obligations of foreign
governments and their subdivisions, agencies, and instrumentalities,
international agencies, and supranational entities. Investing in foreign
currency denominated securities involves the special risks associated with
investing in non-U.S. issuers, as described in the preceding paragraph, and the
additional risks of (1) adverse changes in foreign exchange rates, and (2)
adverse changes in investment or exchange control regulations (which could
prevent cash from being brought back to the United States). Additionally,
dividends and interest payable on foreign securities (and gains realized on
disposition thereof) may be subject to foreign taxes, including taxes withheld
from those payments. Commissions on foreign securities exchanges are often at
fixed rates and are generally higher than negotiated commissions on U.S.
exchanges, although the Portfolio endeavors to achieve the most favorable net
results on portfolio transactions.

Foreign securities often trade with less frequency and in less
volume than domestic securities and therefore may exhibit greater price
volatility. Additional costs associated with an investment in foreign securities
may include higher custodial fees than apply to domestic custody arrangements
and transaction costs of foreign currency conversions.

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

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

The Portfolio may invest in ADRs, EDRs, GDRs, and IDRs. ADRs
(sponsored or unsponsored) are receipts typically issued by a U.S. bank or trust
company evidencing its ownership of the underlying foreign securities. Most ADRs
are denominated in U.S. dollars and are traded on a U.S. stock exchange. Issuers
of the securities underlying sponsored ADRs, but not unsponsored ADRs, are
contractually obligated to disclose material information in the United States.
Therefore, the market value of unsponsored ADRs may not reflect the effect of
such information. EDRs and IDRs are receipts typically issued by a European bank

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or trust company evidencing its ownership of the underlying foreign securities.
GDRs are receipts issued by either a U.S. or non-U.S. banking institution
evidencing its ownership of the underlying foreign securities and are often
denominated in U.S. dollars.

POLICIES AND LIMITATIONS. In order to limit the risks inherent in
investing in foreign currency denominated securities, the Portfolio may not
purchase any such security if, as a result, more than 10% of its total assets
(taken at market value) would be invested in foreign currency denominated
securities. Within that limitation, however, the Portfolio is not restricted in
the amount it may invest in securities denominated in any one foreign currency.

Investments in securities of foreign issuers are subject to the
Portfolio's quality standards. The Portfolio may invest only in securities of
issuers in countries whose governments are considered stable by NB Management.

FUTURES, OPTIONS ON FUTURES, OPTIONS ON SECURITIES AND INDICES,
FORWARD CONTRACTS, AND OPTIONS ON FOREIGN
CURRENCIES (COLLECTIVELY, "FINANCIAL INSTRUMENTS")

FUTURES CONTRACTS AND OPTIONS THEREON. For purposes of managing cash
flow, the Portfolio may purchase and sell stock index futures contracts, and may
purchase and sell options thereon, to increase its exposure to the performance
of a recognized securities index, such as the S&P 500 Index.

A "sale" of a futures contract (or a "short" futures position)
entails the assumption of a contractual obligation to deliver the securities or
currency underlying the contract at a specified price at a specified future
time. A "purchase" of a futures contract (or a "long" futures position) entails
the assumption of a contractual obligation to acquire the securities or currency
underlying the contract at a specified price at a specified future time. Certain
futures, including stock and bond index futures, are settled on a net cash
payment basis rather than by the sale and delivery of the securities underlying
the futures.

U.S. futures contracts (except certain currency futures) are traded
on exchanges that have been designated as "contract markets" by the CFTC;
futures transactions must be executed through a futures commission merchant that
is a member of the relevant contract market. In both U.S. and foreign markets,
an exchange's affiliated clearing organization guarantees performance of the
contracts between the clearing members of the exchange.

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"Margin" with respect to a futures contract is the amount of assets
that must be deposited by the Portfolio with, or for the benefit of, a futures
commission merchant in order to initiate and maintain the Portfolio's futures
positions. The margin deposit made by the Portfolio when it enters into a
futures contract ("initial margin") is intended to assure its performance of the
contract. If the price of the futures contract changes -- increases in the case
of a short (sale) position or decreases in the case of a long (purchase)
position -- so that the unrealized loss on the contract causes the margin
deposit not to satisfy margin requirements, the Portfolio will be required to
make an additional margin deposit ("variation margin"). However, if favorable
price changes in the futures contract cause the margin deposit to exceed the
required margin, the excess will be paid to the Portfolio. In computing its NAV,
the Portfolio marks to market the value of its open futures positions. The
Portfolio also must make margin deposits with respect to options on futures that
it has written (but not with respect to options on futures that it has
purchased). If the futures commission merchant holding the margin deposit goes
bankrupt, the Portfolio could suffer a delay in recovering its funds and could
ultimately suffer a loss.

An option on a futures contract gives the purchaser the right, in
return for the premium paid, to assume a position in the contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the option exercise period. The
writer of the option is required upon exercise to assume a short futures
position (if the option is a call) or a long futures position (if the option is
a put). Upon exercise of the option, the accumulated cash balance in the
writer's futures margin account is delivered to the holder of the option. That
balance represents the amount by which the market price of the futures contract
at exercise exceeds, in the case of a call, or is less than, in the case of a
put, the exercise price of the option. Options on futures have characteristics
and risks similar to those of securities options, as discussed herein.

Although the Portfolio believes that the use of futures contracts
will benefit it, if NB Management's judgment about the general direction of the
markets or about interest rate or currency exchange rate trends is incorrect,
the Portfolio's overall return would be lower than if it had not entered into
any such contracts. The prices of futures contracts are volatile and are
influenced by, among other things, actual and anticipated changes in interest or
currency exchange rates, which in turn are affected by fiscal and monetary
policies and by national and international political and economic events. At
best, the correlation between changes in prices of futures contracts and of
securities being hedged can be only approximate due to differences between the
futures and securities markets or differences between the securities or
currencies underlying the Portfolio's futures position and the securities held
by or to be purchased for the Portfolio. The currency futures market may be
dominated by short-term traders seeking to profit from changes in exchange
rates. This would reduce the value of such contracts used for hedging purposes
over a short-term period. Such distortions are generally minor and would
diminish as the contract approaches maturity.

Because of the low margin deposits required, futures trading
involves an extremely high degree of leverage; as a result, a relatively small
price movement in a futures contract may result in immediate and substantial
loss, or gain, to the investor. Losses that may arise from certain futures
transactions are potentially unlimited.

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beyond that limit. The daily limit governs only price movements during a
particular trading day, however; it thus does not limit potential losses. In
fact, it may increase the risk of loss, because prices can move to the daily
limit for several consecutive trading days with little or no trading, thereby
preventing liquidation of unfavorable futures and options positions and
subjecting traders to substantial losses. If this were to happen with respect to
a position held by the Portfolio, it could (depending on the size of the
position) have an adverse impact on the NAV of the Portfolio.

POLICIES AND LIMITATIONS. The 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.

CALL OPTIONS ON SECURITIES. The Portfolio may write covered call
options and may purchase call options in related closing transactions. The
purpose of writing call options is to hedge (i.e., to reduce, at least in part,
the effect of price fluctuations of securities held by the Portfolio on the
Portfolio's and the Fund's net asset values ("NAVs")) or to earn premium income.
Portfolio securities on which call options may be written and purchased by the
Portfolio are purchased solely on the basis of investment considerations
consistent with the Portfolio's investment objective.

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

The writing of covered call options is a conservative investment
technique that is believed to involve relatively little risk but is capable of
enhancing the Portfolio's total return. When writing a covered call option, the
Portfolio, in return for the premium, gives up the opportunity for profit from a
price increase in the underlying security above the exercise price, but
conversely retains the risk of loss should the price of the security decline.

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

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

POLICIES AND LIMITATIONS. The Portfolio may write covered call
options and may purchase call options in related closing transactions. The
Portfolio writes only "covered" call options on securities it owns (in contrast
to the writing of "naked" or uncovered call options, which the Portfolio will
not do). The Portfolio would purchase a call option to offset a previously
written call option.

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GENERAL INFORMATION ABOUT SECURITIES OPTIONS. The exercise price of
an option may be below, equal to, or above the market value of the underlying
security at the time the option is written. Options normally have expiration
dates between three and nine months from the date written. American-style
options are exercisable at any time prior to their expiration date. The
obligation under any option written by the Portfolio terminates upon expiration
of the option or, at an earlier time, when the Portfolio offsets the option by
entering into a "closing purchase transaction" to purchase an option of the same
series. If an option is purchased by the Portfolio and is never exercised or
closed out, the Portfolio will lose the entire amount of the premium paid.

Options are traded both on U.S. national securities exchanges and in
the over-the-counter ("OTC") market. Exchange-traded options in the United
States are issued by a clearing organization affiliated with the exchange on
which the option is listed; the clearing organization in effect guarantees
completion of every exchange-traded option. In contrast, OTC options are
contracts between the Portfolio and a counter-party, with no clearing
organization guarantee. Thus, when the Portfolio writes an OTC option, it
generally will be able to "close out" the option prior to its expiration only by
entering into a closing purchase transaction with the dealer to whom the
Portfolio originally sold the option. There can be no assurance that the
Portfolio would be able to liquidate an OTC option at any time prior to
expiration. Unless the Portfolio is able to effect a closing purchase
transaction in a covered OTC call option it has written, it will not be able to
liquidate securities used as cover until the option expires or is exercised or
until different cover is substituted. In the event of the counter-party's
insolvency, the Portfolio may be unable to liquidate its options position and
the associated cover. NB Management monitors the creditworthiness of dealers
with which the Portfolio may engage in OTC options transactions.

The premium received (or paid) by the Portfolio when it writes (or
purchases) an option is the amount at which the option is currently traded on
the applicable market. The premium may reflect, among other things, the current
market price of the underlying security, the relationship of the exercise price
to the market price, the historical price volatility of the underlying security,
the length of the option period, the general supply of and demand for credit,
and the interest rate environment. The premium received by the Portfolio for
writing an option is recorded as a liability on the Portfolio's statement of
assets and liabilities. This liability is adjusted daily to the option's current
market value.

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

The Portfolio will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more than the premium
received from writing the call option. Because increases in the market price of
a call option generally reflect increases in the market price of the underlying
security, any loss resulting from the repurchase of a call option is likely to
be offset, in whole or in part, by appreciation of the underlying security owned
by the Portfolio; however, the Portfolio could be in a less advantageous
position than if it had not written the call option.

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The Portfolio pays brokerage commissions or spreads in connection
with purchasing or writing options, including those used to close out existing
positions.

The hours of trading for options may not conform to the hours during
which the underlying securities are traded. To the extent that the options
markets close before the markets for the underlying securities, significant
price and rate movements can take place in the underlying markets that cannot be
reflected in the options markets.

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

PUT AND CALL OPTIONS ON SECURITIES INDICES. For purposes of managing
cash flow, the Portfolio may purchase put and call options on securities indices
to increase its exposure to the performance of a recognized securities index,
such as the S&P 500 Index. 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" 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.

POLICIES AND LIMITATIONS. For purposes of managing cash flow, the
Portfolio may purchase put and call options on securities indices to increase
its exposure to the performance of a recognized securities index, such as the
S&P 500 Index. All securities index options purchased by the Portfolio will be
listed and traded on an exchange.

FOREIGN CURRENCY TRANSACTIONS. The Portfolio may enter into
contracts for the purchase or sale of a specific currency at a future date
(usually less than one year from the date of the contract) at a fixed price
("forward contracts"). The Portfolio also may engage in foreign currency
exchange transactions on a spot (I.E., cash) basis at the spot rate prevailing
in the foreign currency exchange market.

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The Portfolio enters into forward contracts in an attempt to hedge
against changes in prevailing currency exchange rates. The Portfolio does not
engage in transactions in forward contracts for speculation; it views
investments in forward contracts as a means of establishing more definitely the
effective return on, or the purchase price of, securities denominated in foreign
currencies. Forward contract transactions include forward sales or purchases of
foreign currencies for the purpose of protecting the U.S. dollar value of
securities held or to be acquired by the Portfolio or protecting the U.S. dollar
equivalent of dividends, interest, or other payments on those securities.

Forward contracts are traded in the interbank market directly
between dealers (usually large commercial banks) and their customers. A forward
contract generally has no deposit requirement, and no commissions are charged at
any stage for trades; foreign exchange dealers realize a profit based on the
difference (the spread) between the prices at which they are buying and selling
various currencies.

At the consummation of a forward contract to sell currency, the
Portfolio may either make delivery of the foreign currency or terminate its
contractual obligation to deliver by purchasing an offsetting contract. If the
Portfolio chooses to make delivery of the foreign currency, it may be required
to obtain such currency through the sale of portfolio securities denominated in
such currency or through conversion of other assets of the Portfolio into such
currency. If the Portfolio engages in an offsetting transaction, it will incur a
gain or a loss to the extent that there has been a change in forward contract
prices. Closing purchase transactions with respect to forward contracts are
usually made with the currency dealer who is a party to the original forward
contract.

However, a hedge or proxy-hedge cannot protect against exchange rate
risks perfectly, and if NB Management is incorrect in its judgment of future
exchange rate relationships, the Portfolio could be in a less advantageous
position than if such a hedge had not been established. If the Portfolio uses
proxy-hedging, it may experience losses on both the currency in which it has
invested and the currency used for hedging if the two currencies do not vary
with the expected degree of correlation. Using forward contracts to protect the
value of the Portfolio's securities against a decline in the value of a currency
does not eliminate fluctuations in the prices of underlying securities. Because
forward contracts are not traded on an exchange, the assets used to cover such
contracts may be illiquid. The Portfolio may experience delays in the settlement
of its foreign currency transactions.

POLICIES AND LIMITATIONS. The Portfolio may enter into forward
contracts for the purpose of hedging and not for speculation.

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OPTIONS ON FOREIGN CURRENCIES. The Portfolio may write and purchase
covered call and put options on foreign currencies. Currency options have
characteristics and risks similar to those of securities options, as discussed
herein. Certain options on foreign currencies are traded on the OTC market and
involve liquidity and credit risks that may not be present in the case of
exchange-traded currency options.

POLICIES AND LIMITATIONS. The Portfolio would use options on
foreign currencies to protect against declines in the U.S. dollar value of
portfolio securities or increases in the U.S. dollar cost of securities to be
acquired or to protect the U.S. dollar equivalent of dividends, interest, or
other payments on those securities.

REGULATORY LIMITATIONS ON USING FINANCIAL INSTRUMENTS. To the extent
the Portfolio sells or purchases futures contracts or writes options thereon or
options on foreign currencies that are traded on an exchange regulated by the
CFTC other than for BONA FIDE hedging purposes (as defined by the CFTC), the
aggregate initial margin and premiums on those positions (excluding the amount
by which options are "in-the-money") may not exceed 5% of the Portfolio's net
assets.

COVER FOR FINANCIAL INSTRUMENTS. Securities held in a segregated
account cannot be sold while the futures, options or forward strategy covered by
those securities is outstanding, unless they are replaced with other suitable
assets. As a result, segregation of a large percentage of the Portfolio's assets
could impede portfolio management or the Portfolio's ability to meet current
obligations. The Portfolio may be unable promptly to dispose of assets which
cover, or are segregated with respect to, an illiquid futures, options or
forward position; this inability may result in a loss to the Portfolio.

POLICIES AND LIMITATIONS. The Portfolio will comply with SEC
guidelines regarding "cover" for Financial Instruments and, if the guidelines so
require, set aside in a segregated account with its custodian the prescribed
amount of cash or appropriate liquid securities.

GENERAL RISKS OF FINANCIAL INSTRUMENTS. The primary risks in using
Financial Instruments are (1) imperfect correlation or no correlation between
changes in market value of the securities or currencies held or to be acquired
by the Portfolio and the prices of Financial Instruments; (2) possible lack of a
liquid secondary market for Financial Instruments and the resulting inability to
close out Financial Instruments when desired; (3) the fact that the skills
needed to use Financial Instruments are different from those needed to select
the Portfolio's securities; (4) the fact that, although use of Financial
Instruments for hedging purposes can reduce the risk of loss, they also can
reduce the opportunity for gain, or even result in losses, by offsetting
favorable price movements in hedged investments; and (5) the possible inability
of the Portfolio to purchase or sell a portfolio security at a time that would
otherwise be favorable for it to do so, or the possible need for the Portfolio
to sell a portfolio security at a disadvantageous time, due to its need to
maintain cover or to segregate securities in connection with its use of
Financial Instruments. There can be no assurance that the Portfolio's use of
Financial Instruments will be successful.

16
<PAGE>

The Portfolio's use of Financial Instruments may be limited by the
provisions of the Internal Revenue Code of 1986, as amended ("Code"), with which
it must comply if the Fund is to continue to qualify as a regulated investment
company ("RIC"). See "Additional Tax Information." Financial Instruments may not
be available with respect to some currencies, especially those of so-called
emerging market countries.

POLICIES AND LIMITATIONS. NB Management intends to reduce the risk
of imperfect correlation by investing only in Financial Instruments whose
behavior is expected to resemble or offset that of the Portfolio's underlying
securities or currency. NB Management intends to reduce the risk that the
Portfolio will be unable to close out Financial Instruments by entering into
such transactions only if NB Management believes there will be an active and
liquid secondary market.

FIXED INCOME SECURITIES. While the emphasis of the Portfolio's
investment program is on common stocks and other equity securities, it may also
invest in money market instruments, U.S. Government and Agency Securities, and
other fixed income securities. The Portfolio may invest in investment grade
corporate bonds and debentures.

U.S. Government Securities are obligations of the U.S. Treasury
backed by the full faith and credit of the United States. U.S. Government Agency
Securities are issued or guaranteed by U.S. Government agencies or by
instrumentalities of the U.S. Government, such as the Government National
Mortgage Association, Fannie Mae (also known as Federal National Mortgage
Association), Freddie Mac (also known as Federal Home Loan Mortgage
Corporation), Student Loan Marketing Association (commonly known as "Sallie
Mae"), and the Tennessee Valley Authority. Some U.S. Government Agency
Securities are supported by the full faith and credit of the United States,
while others may by supported by the issuer's ability to borrow from the U.S.
Treasury, subject to the Treasury's discretion in certain cases, or only by the
credit of the issuer. U.S. Government Agency Securities include U.S. Government
Agency mortgage-backed securities. The market prices of U.S. Government and
Agency Securities are not guaranteed by the Government.

Investment grade debt securities are those receiving one of the four
highest ratings from Standard & Poor's ("S&P"), Moody's Investors Service, Inc.
("Moody's"), or another nationally recognized statistical rating organization
("NRSRO") or, if unrated by any NRSRO, deemed by NB Management to be comparable
to such rated securities ("Comparable Unrated Securities"). Securities rated by
Moody's in its fourth highest rating category (Baa) or Comparable Unrated
Securities may be deemed to have speculative characteristics.

The ratings of an NRSRO represent its opinion as to the quality of
securities it undertakes to rate. Ratings are not absolute standards of quality;
consequently, securities with the same maturity, coupon, and rating may have
different yields. Although the Portfolio may rely on the ratings of any NRSRO,
the Portfolio primarily refers to ratings assigned by S&P and Moody's, which are
described in Appendix A to this SAI.

17
<PAGE>

liquidity ("market risk"). The value of the fixed income securities in which the
Portfolio may invest is likely to decline in times of rising market interest
rates. Conversely, when rates fall, the value of the Portfolio's fixed income
investments is likely to rise. Foreign debt securities are subject to risks
similar to those of other foreign securities.

POLICIES AND LIMITATIONS. The Portfolio normally may invest up to
35% of its total assets in debt securities. Subsequent to its purchase by the
Portfolio, an issue of debt securities may cease to be rated or its rating may
be reduced, so that the securities would no longer be eligible for purchase by
the Portfolio. In such a case, the Portfolio will engage in an orderly
disposition of the downgraded securities to the extent necessary to ensure that
the Portfolio's holdings of securities rated below investment grade and
Comparable Unrated Securities will not exceed 5% of its net assets.

COMMERCIAL PAPER. Commercial paper is a short-term debt security
issued by a corporation or bank, usually for purposes such as financing current
operations. The Portfolio may invest in commercial paper that cannot be resold
to the public without an effective registration statement under the 1933 Act.
While restricted commercial paper normally is deemed illiquid, NB Management may
in certain cases determine that such paper is liquid, pursuant to guidelines
established by the Portfolio Trustees.

POLICIES AND LIMITATIONS. The Portfolio may invest in commercial
paper only if it has received the highest rating from S&P (A-1) or Moody's (P-1)
or deemed by NB Management to be of comparable quality.

CONVERTIBLE SECURITIES. The Portfolio may invest in convertible
securities. A convertible security is a bond, debenture, note, preferred stock,
or other security that may be converted into or exchanged for a prescribed
amount of common stock of the same or a different issuer within a particular
period of time at a specified price or formula. Convertible securities generally
have features of both common stocks and debt securities. A convertible security
entitles the holder to receive the interest paid or accrued on debt or the
dividend paid on preferred stock until the convertible security matures or is
redeemed, converted or exchanged. Before conversion, such securities ordinarily
provide a stream of income with generally higher yields than common stocks of
the same or similar issuers, but lower than the yield on non-convertible debt.
Convertible securities are usually subordinated to comparable-tier
non-convertible securities but rank senior to common stock in a corporation's
capital structure. The value of a convertible security is a function of (1) its
yield in comparison to the yields of other securities of comparable maturity and
quality that do not have a conversion privilege and (2) its worth if converted
into the underlying common stock.

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

18
<PAGE>

common stock, sell it to a third party or permit the issuer to redeem the
security. Any of these actions could have an adverse effect on the Portfolio's
and the Fund's ability to achieve their investment objectives.

POLICIES AND LIMITATIONS. Convertible debt securities are
subject to the Portfolio's investment policies and limitations concerning
fixed income securities.

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

OTHER INVESTMENT COMPANIES. The 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. The Portfolio does not intend to invest in such funds
unless, in the judgment of NB Management, the potential benefits of such
investment justify the payment of any applicable premium or sales charge.

POLICIES AND LIMITATIONS. 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.

PERFORMANCE INFORMATION

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

TOTAL RETURN COMPUTATIONS

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

P(1+T)n = ERV

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

19
<PAGE>

The Fund commenced operations in August 1993. However, the Fund's
investment objective, policies, and limitations are the same as those of
Neuberger Berman GUARDIAN Fund, which is a series of Neuberger Berman Equity
Funds(R) and invests in the Portfolio ("Sister Fund"). The Sister Fund had a
predecessor. The following total return data is for the Fund since its inception
and, for periods prior to the Fund's inception, its Sister Fund (which, as used
herein, includes data for that Sister Fund's predecessor). The total returns for
periods prior to the Fund's inception would have been lower had they reflected
the higher fees of the Fund, as compared to those of the Sister Fund.

Average Annual Total Returns
Periods Ended 8/31/1999
ONE YEAR FIVE YEARS TEN YEARS PERIOD FROM INCEPTION
GUARDIAN TRUST +26.07% +12.68% +12.36% +12.84%

NB Management may from time to time waive a portion of its fees due
from the Fund or Portfolio or reimburse the Fund or Portfolio for a portion of
its expenses. Such action has the effect of increasing total return. Actual
reimbursements are described in the Prospectus and in "Investment Management and
Administration Services" below.

COMPARATIVE INFORMATION

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

20
<PAGE>

The S&P 500 Index is a broad index of common stock prices, while the DJIA
represents a narrower segment of industrial companies. The S&P 600 Index
includes stocks that range in market value from $35 million to $6.1
billion, with an average of $572 million. The S&P 400 Index measures
mid-sized companies that have an average market capitalization of $2.1
billion. Each assumes reinvestment of distributions and is calculated
without regard to tax consequences or the costs of investing. The
Portfolio may invest in different types of securities from those included
in some of the above indices.

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

OTHER PERFORMANCE INFORMATION

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

Investors who may find the Fund to be an attractive investment
vehicle also include parents saving to meet college costs for their children.
For instance, the cost of a college education is rapidly approaching the cost of
the average family home. Estimates of total four-year costs (tuition, room and
board, books and other expenses) for students starting college in various years
may be included in Advertisements, based on the College Board Annual Survey of
Colleges.

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

21
<PAGE>

Information regarding the effects of automatic investing at market
highs and/or lows, and investing early versus late for retirement plans also may
be included in Advertisements, if appropriate.

CERTAIN RISK CONSIDERATIONS

Although the Portfolio seeks to reduce risk by investing in a
diversified portfolio of securities, diversification does not eliminate all
risk. There can, of course, be no assurance the Portfolio will achieve its
investment objective.

TRUSTEES AND OFFICERS

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

Name, Age, and Positions Held
ADDRESS(1) WITH THE TRUSTS PRINCIPAL OCCUPATION(S)(2)
<S> <C> <C>

Faith Colish (64) Trustee of each Trust Attorney at Law, Faith Colish,
63 Wall Street A Professional Corporation.
24th Floor
New York, NY 10005

Michael M. Kassen (46)* President and Executive Vice President, Chief
Trustee of each Trust Investment Officer and Director
of Neuberger Berman; President
and Trustee of six other mutual
funds for which NB Management
acts as investment manager or
administrator.

Howard A. Mileaf (62) Trustee of each Trust Vice President and Special
WHX Corporation Counsel to WHX Corporation
110 East 59th Street (holding company) since 1992;
30th Floor Directo of Kevlin Corporation
New York, NY 10022 (manufacturer of microwave and
other products).

22
<PAGE>

Name, Age, and Positions Held
ADDRESS(1) WITH THE TRUSTS PRINCIPAL OCCUPATION(S)(2)
<S> <C> <C>

Edward I. O'Brien* (71) Trustee of each Trust Until 1993, President of the
12 Woods Lane Securities Industry Association
Scarsdale, NY 10583 ("SIA") (securities industry's
representative in government
relations and regulatory matters
at the federal and state levels);
until November 1993, employee of
the SIA; Director of Legg Mason, Inc.

John T. Patterson, Jr. (71) Trustee of each Trust Retired. Formerly, President of
7082 Siena Court SOBRO (South Bronx Overall Economic
Boca Raton, FL 33433 Development Corporation).

John P. Rosenthal (66) Trustee of each Trust Senior Vice President of Burnham
Burnham Securities Inc. Securities Inc. (a registered
Burnham Asset Management broker-dealer) since 1991;
Corp. Director, Cancer Treatment
1325 Avenue of the Americas Holdings, Inc.
17th Floor
New York, NY 10019

Cornelius T. Ryan (68) Trustee of each Trust General Partner of Oxford Partners
Oxford Bioscience Partners and Oxford Bioscience Partners
315 Post Road West (venture capital partnerships)
Westport, CT 06880 and President of Oxford Venture
Corporation; Director of Capital
Cash Management Trust (money market
fund) and Prime Cash Fund.

23
<PAGE>

Name, Age, and Positions Held
ADDRESS(1) WITH THE TRUSTS PRINCIPAL OCCUPATION(S)(2)
<S> <C> <C>

Gustave H. Shubert (70) Trustee of each Trust Senior Fellow/Corporate Advisor and
13838 Sunset Boulevard Advisory Trustee of Rand (a non
Pacific Palisades, CA 90272 -profit public interest research
institution) since 1989; Honorary
Member of the Board of Overseers
of the Institute for Civil Justice,
the Policy Advisory Committee of
the Clinical Scholars Program at
the University of California, the
American Association for the
Advancement of Science, the Counsel
on Foreign Relations, and the
Institute for Strategic Studies
(London); advisor to the Program
Evaluation and Methodology Division
of the U.S. General Accounting
Office; formerly Senior Vice
President and Trustee of Rand.

Peter Sundman* (40)* Chairman of the Managing Director of Neuberger
Board, Chief Berman; President and Director of
Executive Officer, NB Management; Chairman of the
and Trustee of each Board, Chief Executive Officer and
Trust Trustee of nine othermutual funds
for which NB Management acts as
investment manager or
administrator.

Daniel J. Sullivan (59) Vice President of Senior Vice President of NB
each Trust Management since 1992; Vice
President of nine other mutual
funds for which NB Management
acts as investment manager or
administrator.

Michael J. Weiner (51) Vice President and Senior Vice President of NB
Officer of each Trust Principal Financial Management
since 1992; Principal of Neuberger
Berman since 1998; Treasurer of NB
Management from 1992 to 1996; Vice
President and Principal Financial
Officer of nine other mutual funds
for which NB Management acts as
investment manager or
administrator.

24
<PAGE>

Name, Age, and Positions Held
ADDRESS(1) WITH THE TRUSTS PRINCIPAL OCCUPATION(S)(2)
<S> <C> <C>

Claudia A. Brandon (42) Secretary of each Director, Corporate Secretarial,
Trust of Neuberger Berman; formerly Vice
President of NB Management;
Secretary of nine other mutual
funds for which NB Management
acts as investment manager or
administrator.

Richard Russell (52) Treasurer and Employee of NB Management;
Principal Accounting Treasurer and Principal Accounting
Officer of each Trust Officer of nine other mutual funds
for which NB Management acts as
investment manager or
administrator.

Stacy Cooper-Shugrue Assistant Secretary Assistant Director, Corporate
(36) of each Trust Secretarial, of Neuberger
Berman; formerly Assistant Vice
President of NB Management
since 1993; Assistant
Secretary of nine other mutual
funds for which NB Management
acts as investment manager or
administrator.

C. Carl Randolph (61) Assistant Secretary Senior Vice President, General
of each Trust Counsel and Secretary of
Neuberger Berman; Assistant
Secretary of nine other mutual
funds for which NB Management
acts as investment manager or
administrator.

Barbara DiGiorgio (40) Assistant Assistant Treasurer since 1996
Treasurer of each of nine other mutual funds for
Trust which NB Management acts as
investment manager or
administrator.

Celeste Wischerth (38) Assistant Treasurer Assistant Treasurer since 1996
of each Trust of nine other mutual funds for
which NB Management acts as
investment manager or
administrator.

</TABLE>

25
<PAGE>

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

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

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

* Indicates a trustee who is an "interested person" of the Trust within the
meaning of the 1940 Act. Messrs. Sundman and Kassen are interested persons by
virtue of the fact that they are officers and/or directors of NB Management and
Managing Directors of Neuberger Berman. Mr. O'Brien is an interested person by
virtue of the fact that he is a director of Legg Mason, Inc., a wholly owned
subsidiary of which, from time to time, serves as a broker or dealer to the
Portfolio and other funds for which NB Management serves as investment manager.

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

The following table sets forth information concerning the
compensation of the trustees of the Trust. None of the Neuberger Berman
Funds has any retirement plan for its trustees.

TABLE OF COMPENSATION
FOR FISCAL YEAR ENDED 8/31/99

Total Compensation
from Investment
Name and Position Aggregate Compensation Companies in the
WITH EACH TRUST FROM THE TRUST Neuberger Berman Fund
COMPLEX PAID TO
TRUSTEES

Faith Colish $7,284 $96,500
Trustee (5 other investment
companies)

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

26
<PAGE>

TABLE OF COMPENSATION
FOR FISCAL YEAR ENDED 8/31/99

Total Compensation
from Investment
Name and Position Aggregate Compensation Companies in the
WITH EACH TRUST FROM THE TRUST Neuberger Berman Fund
COMPLEX PAID TO
TRUSTEES

Howard A. Mileaf $7,570 $64,250
Trustee (4 other investment
companies)
Edward I. O'Brien $7,797 $61,750
Trustee (3 other investment
companies)
John T. Patterson, Jr. $7,895 $66,500
Trustee (4 other investment
companies)
John P. Rosenthal $7,572 $64,250
Trustee (4 other investment
companies)
Cornelius T. Ryan $6,636 $52,750
Trustee (3 other investment
companies)
Gustave H. Shubert $7,505 $59,500
Trustee (3 other investment
companies)

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

At November 22, 1999, the trustees and officers of the Trusts, as a
group, owned beneficially or of record less than 1% of the outstanding shares of
the Fund.

INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES

INVESTMENT MANAGER AND ADMINISTRATOR

Because all of the Fund's net investable assets are invested in the
Portfolio, the Fund does not need an investment manager. NB Management serves as
the Portfolio's investment manager pursuant to a management agreement with
Managers Trust, dated as of August 2, 1993 ("Management Agreement").

The Management Agreement was approved by the holders of the
interests in the Portfolio on August 2, 1993. The Management Agreement provides,
in substance, that NB Management will make and implement investment decisions
for the Portfolio in its discretion and will continuously develop an investment
program for the Portfolio's assets. The Management Agreement permits NB

27
<PAGE>

Management to effect securities transactions on behalf of the Portfolio through
associated persons of NB Management. The Management Agreement also specifically
permits NB Management to compensate, through higher commissions, brokers and
dealers who provide investment research and analysis to the Portfolio, although
NB Management has no current plans to pay a material amount of such
compensation.

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

NB Management provides facilities, services and personnel, as well
as accounting, recordkeeping, and other services, to the Fund pursuant to an
administration agreement with the Trust, dated August 3, 1993, as amended on
August 2, 1996. ("Administration Agreement"). For such administrative services,
the Fund pays NB Management a fee based on the Fund's average daily net assets,
as described in the Prospectus. NB Management enters into administrative
services agreements with Institutions, pursuant to which it compensates
Institutions for accounting, recordkeeping and other services that they provide
in connection with investments in the Fund.

Institutions may be subject to federal or state laws that limit
their ability to provide certain administrative or distribution-related
services. For example, the Glass-Steagall Act is generally interpreted to
prohibit most banks from underwriting mutual fund shares. NB Management intends
to contract with Institutions for only those services they may legally provide.
If, due to a change in the laws governing Institutions or in the interpretation
of any such law, an Institution is prohibited from performing some or all of the
above-described services, NB Management may be required to find alternative
means of providing those services. Any such change is not expected to impact the
Fund or its shareholders adversely.

MANAGEMENT AND ADMINISTRATION FEES

For investment management services, the Portfolio pays NB 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.

NB Management provides administrative services to the Fund that
includes furnishing facilities and personnel for the Fund and performing
accounting, recordkeeping, and other services. For such administrative services,
the Fund pays NB Management a fee at the annual rate of 0.40% of the Fund's
average daily net assets, plus certain out-of-pocket expenses for technology
used for shareholder servicing and shareholder communications subject to the
prior approval of an annual budget by the Trust's Board of Trustees, including a

28
<PAGE>

majority of those who are not interested persons of the Trust or of Neuberger
Berman Management Inc., and periodic reports to the Board of Trustees on actual
expenses. With the Fund's consent NB Management may subcontract some of its
responsibilities to the Fund under the Administration Agreement and may
compensate each Institution that provides such services.

During the fiscal years ended August 31, 1999, 1998, and 1997, the
Fund accrued management and administration fees as follows:

MANAGEMENT AND ADMINISTRATION FEES
ACCRUED FOR FISCAL YEARS
ENDED AUGUST 31

1999 1998 1997
---- ---- ----
GUARDIAN TRUST $12,732,406 $19,092,633 $14,839,636

NB Management has voluntarily undertaken to reimburse the Fund for
its Total Operating Expenses (as defined in the Prospectus) so that the Fund's
expense ratio per annum will not exceed the expense ratio of its Sister Fund by
more than 0.10% of the Fund's average daily net assets. This undertaking can be
terminated by NB Management by giving the Fund at least 60 days' prior written
notice. During the period from August 3, 1993 (commencement of operations of the
Fund) to December 31, 1994, NB Management voluntarily undertook to reimburse the
Fund for its Total Operating Expenses so that the Fund's expense ratio per annum
would not exceed the expense ratio of the Sister Fund. The table below shows the
amounts reimbursed by NB Management pursuant to this arrangement:

AMOUNT OF TOTAL OPERATING EXPENSES
REIMBURSED BY NB MANAGEMENT
FOR FISCAL YEARS ENDED AUGUST 31

FUND 1999 1998 1997
---- ---- ----
GUARDIAN TRUST $0 $0 $0

The Management Agreement continues until August 2, 2000. The
Management Agreement is renewable thereafter from year to year with respect to
the Portfolio, so long as its continuance is approved at least annually (1) by
the vote of a majority of the Portfolio Trustees who are not "interested

29
<PAGE>

persons" of NB Management or Managers Trust ("Independent Portfolio Trustees"),
cast in person at a meeting called for the purpose of voting on such approval,
and (2) by the vote of a majority of the Portfolio Trustees or by a 1940 Act
majority vote of the outstanding interests in the Portfolio. The Administration
Agreement continues until August 2, 1999. The Administration Agreement is
renewable from year to year with respect to the Fund, so long as its continuance
is approved at least annually (1) by the vote of a majority of the Fund Trustees
who are not "interested persons" of NB Management or the Trust ("Independent
Fund Trustees"), cast in person at a meeting called for the purpose of voting on
such approval, and (2) by the vote of a majority of the Fund Trustees or by a
1940 Act majority vote of the outstanding shares in the Fund.

The Management Agreement is terminable, without penalty, with
respect to the Portfolio on 60 days' written notice either by Managers Trust or
by NB Management. The Administration Agreement is terminable, without penalty,
with respect to the Fund on 60 days' written notice either by NB Management or
by the Trust. Each Agreement terminates automatically if it is assigned.

SUB-ADVISER

NB Management retains Neuberger Berman, 605 Third Avenue, New York,
NY 10158-3698, as sub-adviser with respect to the Portfolio pursuant to a
sub-advisory agreement dated August 2, 1993 ("Sub-Advisory Agreement"). The
Sub-Advisory Agreement was approved by the holders of the interests in the
Portfolio on August 2, 1993.

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

The Sub-Advisory Agreement continues until August 2, 2000 and is
renewable from year to year, subject to approval of its continuance in the same
manner as the Management Agreement. The Sub-Advisory Agreement is subject to
termination, without penalty, with respect to the Portfolio by the Portfolio
Trustees or a 1940 Act majority vote of the outstanding interests in the
Portfolio, by NB Management, or by Neuberger Berman on not less than 30 nor more
than 60 days' written notice. The Sub-Advisory Agreement also terminates
automatically with respect to the Portfolio if it is assigned or if the
Management Agreement terminates with respect to the Portfolio.

30
<PAGE>

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

INVESTMENT COMPANIES MANAGED

Approximate
Net Assets at
NAME SEPTEMBER 30, 1999

Neuberger Berman Cash Reserves Portfolio..........................$1,129,792,312
(investment portfolio for Neuberger Berman Cash Reserves)

Neuberger Berman Government Money Portfolio.........................$701,999,455
(investment portfolio for Neuberger Berman Government Money Fund)

Neuberger Berman High Yield Bond Portfolio...........................$25,041,449
(investment portfolio for Neuberger Berman High Yield Bond Fund)

Neuberger Berman Municipal Money Portfolio..........................$275,065,503
(investment portfolio for Neuberger Berman Municipal Money Fund)

Neuberger Berman Municipal Securities Portfolio......................$35,080,349
(investment portfolio for Neuberger Berman Municipal Securities Trust)

Neuberger Berman Focus Portfolio..................................$1,463,580,020
(investment portfolio for Neuberger Berman Focus Fund, Neuberger Berman
Focus Trust and Neuberger Berman Focus Assets)

Neuberger Berman Guardian Portfolio...............................$4,423,729,801
(investment portfolio for Neuberger Berman Guardian Fund, Neuberger
Berman Guardian Trust and Neuberger Berman Guardian Assets)

Neuberger Berman International Portfolio............................$117,925,499
(investment portfolio for Neuberger Berman International Fund and
Neuberger Berman International Trust)

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<PAGE>

Neuberger Berman Regency Portfolio...................................$30,848,996
(investment portfolio for Neuberger Berman Regency Fund and Neuberger
Berman Regency Trust)

Neuberger Berman Socially Responsive................................$376,629,789
(investment portfolio for Neuberger Berman Socially Responsive Fund,
Neuberger Berman Socially Responsive Trust, and Neuberger Berman Socially
Responsive Assets)

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<PAGE>

Advisers Managers Trust...........................................$2,026,088,252
(eight series)

The investment decisions concerning the Portfolio and the other
mutual funds managed by NB Management (collectively, "Other NB Funds") have been
and will continue to be made independently of one another. In terms of their
investment objectives, most of the Other NB Funds differ from the Portfolio.
Even where the investment objectives are similar, however, the methods used by
the Other NB Funds and the Portfolio to achieve their objectives may differ. The
investment results achieved by all of the mutual funds managed by NB Management
have varied from one another in the past and are likely to vary in the future.

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

The Portfolio is subject to certain limitations imposed on all
advisory clients of Neuberger Berman (including the Portfolio, the Other NB
Funds, and other managed accounts) and personnel of Neuberger Berman and its
affiliates. These include, for example, limits that may be imposed in certain
industries or by certain companies, and policies of Neuberger Berman that limit
the aggregate purchases, by all accounts under management, of the outstanding
shares of public companies.

MANAGEMENT AND CONTROL OF NB MANAGEMENT

The directors and officers of NB Management, all of whom have
offices at the same address as NB Management, are Richard A. Cantor, Chairman;
Theodore P. Guiliano, Vice President; Michael M. Kassen, Executive Vice
President and Chief Investment Officer; Daniel J. Sullivan, Senior Vice
President; Peter E. Sundman, President; Michael J. Weiner, Senior Vice
President; Philip Ambrosio, Senior Vice President and Chief Financial Officer;
Barbara Katersky, Senior Vice President; Brooke A. Cobb, Vice President; Robert

33
<PAGE>

W. D'Alelio, Vice President; Clara Del Villar, Vice President; Robert I.
Gendelman, Vice President; Thomas Gengler, Vice President; Benjamin E. Segal,
Vice President; Robert S. Franklin, Vice President, Josephine P. Mahaney, Vice
President; Michael F. Malouf, Vice President; Ellen Metzger, Secretary; S. Basu
Mullick, Vice President; Janet W. Prindle, Vice President; Kevin L. Risen, Vice
President; Jennifer K. Silver, Vice President; Kent C. Simons, Vice President;
Judith M. Vale, Vice President; Catherine Waterworth Vice President; Allan R.
White III, Vice President; Robert Conti, Treasurer; Ramesh Babu, Vice President;
Valerie Chang, Vice President; Robert L. Ladd, Vice President; Ingrid
Saukauitis, Vice President; Josephine Velez, Vice President; Messrs. Cantor,
D'Alelio, Egener, Gendelman, Guiliano, Kassen, Risen, Simons, Sundman, Weiner
and White and Mmes. Prindle, Silver and Vale are employees of Neuberger Berman.

Messrs. Sundman and Kassen are trustees and officers and Messrs.
Sullivan and Weiner are officers of each Trust.

Neuberger Berman and NB Management are wholly owned subsidiaries of
Neuberger Berman Inc., a publicly owned holding company owned primarily by the
employees of Neuberger Berman.

DISTRIBUTION ARRANGEMENTS

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

34
<PAGE>

sales commission or other compensation and bears all advertising and promotion
expenses incurred in the sale of the Fund's shares.

From time to time, NB Management may enter into arrangements
pursuant to which it compensates a registered broker-dealer or other third party
for services in connection with the distribution of Fund shares.

The Trust, on behalf of the Fund, and the Distributor are parties to
a Distribution Agreement that continues until August 2, 1999. The Distribution
Agreement may be renewed annually if specifically approved by (1) the vote of a
majority of the Fund Trustees or a 1940 Act majority vote of the Fund's
outstanding shares and (2) the vote of a majority of the Independent Fund
Trustees, cast in person at a meeting called for the purpose of voting on such
approval. The Distribution Agreement may be terminated by either party and will
terminate automatically on its assignment, in the same manner as the Management
Agreement.

ADDITIONAL PURCHASE INFORMATION

SHARE PRICES AND NET ASSET VALUE

The Fund's shares are bought or sold at a price that is the Fund's
NAV per share. The NAVs for the Fund and the Portfolio are calculated by
subtracting total liabilities from total assets (in the case of the Portfolio,
the market value of the securities the Portfolio holds plus cash and other
assets; in the case of the Fund, its percentage interest in the Portfolio,
multiplied by the Portfolio's NAV, plus any other assets). The Fund's per share
NAV is calculated by dividing its NAV by the number of Fund shares outstanding
and rounding the result to the nearest full cent. The Fund and the Portfolio
calculate their NAVs as of the close of regular trading on the NYSE, usually 4
p.m. Eastern time, on each day the NYSE is open.

The Portfolio values securities (including options) listed on the
NYSE, the American Stock Exchange or other national securities exchanges or
quoted on The Nasdaq Stock Market, and other securities for which market
quotations are readily available, at the last reported sale price on the day the
securities are being valued. If there is no reported sale of such a security on
that day, the security is valued at the mean between its closing bid and asked
prices on that day. The Portfolio values all other securities and assets,
including restricted securities, by a method that the trustees of the Trust
believe accurately reflects fair value.

If NB Management believes that the price of a security obtained
under the Portfolio's valuation procedures (as described above) does not
represent the amount that the Portfolio reasonably expects to receive on a
current sale of the security, the Portfolio will value the security based on a
method that the trustees of the Managers Trust believe accurately reflects fair
value.

35
<PAGE>

ADDITIONAL REDEMPTION INFORMATION

SUSPENSION OF REDEMPTIONS

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

REDEMPTIONS IN KIND

The Fund reserves the right, under certain conditions, to honor any
request for redemption (or a combination of requests from the same shareholder
in any 90-day period) exceeding $250,000 or 1% of the net assets of the Fund,
whichever is less, by making payment in whole or in part in securities valued as
described in "Share Prices and Net Asset Value" above. If payment is made in
securities, an Institution generally will incur brokerage expenses or other
transaction costs in converting those securities into cash and will be subject
to fluctuation in the market prices of those securities until they are sold. The
Fund does not redeem in kind under normal circumstances, but would do so when
the Fund Trustees determined that it was in the best interests of the Fund's
shareholders as a whole.

DIVIDENDS AND OTHER DISTRIBUTIONS

The Fund distributes to its shareholders substantially all of its
share of any net investment income, (after deducting expenses incurred directly
by the Fund), any net realized capital gains, and any net realized gains from
foreign currency transactions earned or realized by the Portfolio. The
Portfolio's net investment income consists of all income accrued on portfolio
assets less accrued expenses, but does not include capital and foreign currency
gains and losses. Net investment income and realized gains and losses are
reflected in the Portfolio's NAV (and, hence, the Fund's NAV) until they are
distributed. The Fund calculates its net investment income and NAV per share as
of the close of regular trading on the NYSE on each Business Day (usually 4:00
p.m. Eastern time).

The Fund generally distributes substantially all of its share of the
Portfolio's net investment income, (after deducting expenses incurred directly
by the Fund), if any, near the end of each other calendar quarter. Distributions
of net realized capital and foreign currency gains, if any, normally are paid
once annually, in December.

Dividends and other distributions are automatically reinvested in
additional shares of the Fund, unless the Institution elects to receive them in
cash ("cash election"). To the extent dividends and other distributions are
subject to federal, state, or local income taxation, they are taxable to the

36
<PAGE>

shareholders whether received in cash or reinvested in Fund shares. A cash
election with respect to the Fund remains in effect until the Institution
notifies the Fund in writing to discontinue the election.

ADDITIONAL TAX INFORMATION

TAXATION OF THE FUND

To continue to qualify for treatment as a RIC under the Code, the
Fund must distribute to its shareholders for each taxable year at least 90% of
its investment company taxable income (consisting generally of net investment
income, net short-term capital gain, and net gains from certain foreign currency
transactions) ("Distribution Requirement") and must meet several additional
requirements. These requirements include the following: (1) the Fund must derive
at least 90% of its gross income each taxable year from dividends, interest,
payments with respect to securities loans, and gains from the sale or other
disposition of securities or foreign currencies, or other income (including
gains from Financial Instruments) derived with respect to its business of
investing in securities or those currencies ("Income Requirement"); and (2) at
the close of each quarter of the Fund's taxable year, (i) at least 50% of the
value of its total assets must be represented by cash and cash items, U.S.
Government securities, securities of other RICs, and other securities limited,
in respect of any one issuer, to an amount that does not exceed 5% of the value
of the Fund's total assets and that does not represent more than 10% of the
issuer's outstanding voting securities, and (ii) not more than 25% of the value
of its total assets may be invested in securities (other than U.S. Government
securities or securities of other RICs) of any one issuer. If the Fund failed to
qualify for treatment as a RIC for any taxable year, it would be taxed on the
full amount of its taxable income for that year without being able to deduct the
distributions it makes to its shareholders and the shareholders would treat all
those distributions, including distributions of net capital gain (the excess of
net long-term capital gain over net short-term capital loss), as dividends (that
is, ordinary income) to the extent of the Fund's earnings and profits.

Certain funds that invest in portfolios managed by NB Management,
including the Sister Fund, have received rulings from the Internal Revenue
Service ("Service") that each such fund, as an investor in its corresponding
portfolio, will be deemed to own a proportionate share of the portfolio's assets
and income for purposes of determining whether the fund satisfies all the
requirements described above to qualify as a RIC. Although these rulings may not
be relied on as precedent by the Fund, NB Management believes that the reasoning
thereof and, hence, their conclusion apply to the Fund as well.

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

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

37
<PAGE>

TAXATION OF THE PORTFOLIO

The Portfolio has received a ruling from the Service to the effect
that, among other things, the Portfolio will be treated as a separate
partnership for federal income tax purposes and will not be a "publicly traded
partnership." As a result, the Portfolio is not subject to federal income tax;
instead, each investor in the Portfolio, such as the Fund, is required to take
into account in determining its federal income tax liability its share of the
Portfolio's income, gains, losses, and deductions, without regard to whether it
has received any cash distributions from the Portfolio. The Portfolio also is
not subject to Delaware or New York income or franchise tax.

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

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

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

The Portfolio may invest in the stock of "passive foreign investment
companies" ("PFICs"). A PFIC is any foreign corporation (with certain
exceptions) that, in general, meets either of the following tests: (1) at least
75% of its gross income is passive or (2) an average of at least 50% of its
assets produce, or are held for the production of, passive income. Under certain
circumstances, if the Portfolio holds stock of a PFIC, the Fund (indirectly
through its interest in the Portfolio) will be subject to federal income tax on
its share of a portion of any "excess distribution" received by the Portfolio on
the stock or of any gain on the Portfolio's disposition of the stock

38
<PAGE>

(collectively, "PFIC income"), plus interest thereon, even if the Fund
distributes its share of the PFIC income as a taxable dividend to its
shareholders. The balance of the Fund's share of the PFIC income will be
included in its investment company taxable income and, accordingly, will not be
taxable to it to the extent it distributes that income to its shareholders.

If the Portfolio invests in a PFIC and elects to treat the PFIC as a
"qualified electing fund" ("QEF"), then in lieu of the Fund's incurring the
foregoing tax and interest obligation, the Fund would be required to include in
income each year its share of the Portfolio's pro rata share of the QEF's annual
ordinary earnings and net capital gain -- which the Fund most likely would have
to distribute to satisfy the Distribution Requirement and avoid imposition of
the Excise Tax -- even if the Portfolio did not receive those earnings and gain
from the QEF. In most instances it will be very difficult, if not impossible, to
make this election because of certain requirements thereof.

A holder of stock in any PFIC may elect to include in ordinary
income for each taxable year the excess, if any, of the fair market value of the
stock over the adjusted basis therein as of the end of that year. Pursuant to
the election, a deduction (as an ordinary, not capital, loss) also would be
allowed for the excess, if any, of the holder's adjusted basis in PFIC stock
over the fair market value thereof as of the taxable year-end, but only to the
extent of any net mark-to-market gains with respect to that stock included in
income for prior taxable years under the election (and under regulations
proposed in 1992 that provided a similar election with respect to the stock of
certain PFICs). The adjusted basis in each PFIC's stock subject to the election
would be adjusted to reflect the amounts of income included and deductions taken
thereunder.

The Portfolio's use of hedging strategies, such as writing (selling)
and purchasing options and entering into forward contracts, involves complex
rules that will determine for income tax purposes the amount, character, and
timing of recognition of the gains and losses the Portfolio realizes in
connection therewith. Gains from the disposition of foreign currencies (except
certain gains that may be excluded by future regulations), and gains from
Financial Instruments derived by the Portfolio with respect to its business of
investing in securities or foreign currencies, will qualify as permissible
income for the Fund under the Income Requirement.

Exchange-traded futures contracts and certain forward contracts
subject to Section 1256 of the Code ("Section 1256 contracts") are required to
be marked to market (that is, treated as having been sold at market value) for
federal income tax purposes at the end of the Portfolio's taxable year. Sixty
percent of any net gain or loss recognized as a result of these "deemed sales,"
and 60% of any net realized gain or loss from any actual sales, of Section 1256
contracts are treated as long-term capital gain or loss; the remainder is
treated as short-term capital gain or loss. Section 1256 contracts also may be
marked-to-market for purposes of the Excise Tax. These rules may operate to
increase the amount that a Fund must distribute to satisfy the Distribution
Requirement, which will be taxable to the shareholders as ordinary income, and
to increase the net capital gain recognized by the Fund, without in either case
increasing the cash available to the Fund. A Portfolio may elect to exclude
certain transactions from the operation of section 1256, although doing so may

39
<PAGE>

have the effect of increasing the relative proportion of net short-term capital
gain (taxable to its shareholders as ordinary income when distributed to them)
and/or increasing the amount of dividends that Fund must distribute to meet the
Distribution Requirement and avoid imposition of the Excise Tax.

If the Portfolio has an "appreciated financial position" --
generally, an interest (including an interest through an option, futures or
forward contract, or short sale) with respect to any stock, debt instrument
(other than "straight debt"), or partnership interest the fair market value of
which exceeds its adjusted basis -- and enters into a "constructive sale" of the
position, the Portfolio will be treated as having made an actual sale thereof,
with the result that gain will be recognized at that time. A constructive sale
generally consists of a short sale, an offsetting notional principal contract,
or a futures or forward contract entered into by the Portfolio or a related
person with respect to the same or substantially identical property. In
addition, if the appreciated financial position is itself a short sale or such a
contract, acquisition of the underlying property or substantially identical
property will be deemed a constructive sale. The foregoing will not apply,
however, to any transaction during any taxable year that otherwise would be
treated as a constructive sale if the transaction is closed within 30 days after
the end of that year and the Portfolio holds the appreciated financial position
unhedged for 60 days after that closing (I.E., at no time during that 60-day
period is the Portfolio's risk of loss regarding that position reduced by reason
of certain specified transactions with respect to substantially identical or
related property, such as having an option to sell, being contractually
obligated to sell, making a short sale, or granting an option to buy
substantially identical stock or securities).

TAXATION OF THE FUND'S SHAREHOLDERS

If Fund shares are sold at a loss after being held for six months or
less, the loss will be treated as long-term, instead of short-term, capital loss
to the extent of any capital gain distributions received on those shares.

PORTFOLIO TRANSACTIONS

Neuberger Berman acts as principal broker for the Portfolio in the
purchase and sale of its portfolio securities (other than certain securities
traded on the OTC market).

During the fiscal year ended August 31, 1997, the Portfolio paid brokerage
commissions of $8,540,335, of which $4,806,913 was paid to Neuberger Berman.
During the fiscal year ended August 31, 1998, the Portfolio paid brokerage
commissions of $11,558,523, of which $5,733,976 was paid to Neuberger Berman.

40
<PAGE>

During the fiscal year ended August 31, 1999, the Portfolio paid
brokerage commissions of $10,793,418, of which $3,975,341 was paid to Neuberger
Berman. Transactions in which the Portfolio used Neuberger Berman as broker
comprised 42.88% of the aggregate dollar amount of transactions involving the
payment of commissions, and 36.83% of the aggregate brokerage commissions paid
by the Portfolio, during the fiscal year ended August 31, 1999. 89.21% of the
$6,082,366 paid to other brokers by the Portfolio during that fiscal year
(representing commissions on transactions involving approximately
$4,098,122,468) was directed to those brokers because of research services they
provided. During the fiscal year ended August 31, 1999, the Portfolio acquired
securities of the following of its Regular B/Ds: American Express Credit Corp.,
Donaldson, Lufkin, & Jenrette Securities Corp., Ford Motor Credit Co., General
Electric Capital Corp., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner &
Smith Inc., Morgan Stanley Dean Witter & Co., and State Street Bank and Trust
Company, N.A.; at that date, that Portfolio held the securities of its Regular
B/Ds with an aggregate value as follows: American Express Credit Corp.,
$49,992,736; Ford Motor Credit Co., $49,948,667; General Electric Capital Corp.,
$49,985,833; Morgan Stanley Dean Witter & Co., $49,728,344; and State Street
Bank & Trust Company, $111,170,000.

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

A committee of Independent Portfolio Trustees from time to time
reviews, among other things, information relating to securities loans by the
Portfolio. The following information reflects interest income earned by the
Portfolio from the cash collateralization of securities loans during the fiscal
years ended 1999, 1998, and 1997. As reflected below, Neuberger Berman received
a portion of the interest income from the cash collateral.

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<PAGE>

Interest Income
from
Collateralization Amount Paid to
NAME OF PORTFOLIO FISCAL YEAR END of SECURITIES LOANS NEUBERGER BERMAN
- --------------------------------------------------------------------------------
Neuberger Berman 8/31/98 $1,355,093 $1,035,708
GUARDIAN Portfolio 8/31/97 $4,005,765 $3,523,486
- --------------------------------------------------------------------------------

In effecting securities transactions, the Portfolio generally seeks
to obtain the best price and execution of orders. Commission rates, being a
component of price, are considered along with other relevant factors. The
Portfolio plans to continue to use Neuberger Berman as its principal broker
where, in the judgment of NB Management, that firm is able to obtain a price and
execution at least as favorable as other qualified brokers. To the Portfolio's
knowledge, no affiliate of the Portfolio receives give-ups or reciprocal
business in connection with its securities transactions.

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

Under the 1940 Act, commissions paid by the Portfolio to Neuberger
Berman in connection with a purchase or sale of securities on a securities
exchange may not exceed the usual and customary broker's commission.
Accordingly, it is the Portfolio's policy that the commissions paid to Neuberger
Berman must, in NB Management's judgment, be (1) at least as favorable as those
charged by other brokers having comparable execution capability and (2) at least
as favorable as commissions contemporaneously charged by Neuberger Berman on
comparable transactions for its most favored unaffiliated customers, except for
accounts for which Neuberger Berman acts as a clearing broker for another
brokerage firm and customers of Neuberger Berman considered by a majority of the
Independent Portfolio Trustees not to be comparable to the Portfolio. The
Portfolio does not deem it practicable and in its best interests to solicit
competitive bids for commissions on each transaction effected by Neuberger
Berman. However, consideration regularly is given to information concerning the
prevailing level of commissions charged by other brokers on comparable
transactions during comparable periods of time. The 1940 Act generally prohibits
Neuberger Berman from acting as principal in the purchase of portfolio
securities from, or the sale of portfolio securities to, the Portfolio unless an
appropriate exemption is available.

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<PAGE>

comparable execution capability. In addition, the procedures pursuant to which
Neuberger Berman effects brokerage transactions for the Portfolio must be
reviewed and approved no less often than annually by a majority of the
Independent Portfolio Trustees.

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

Under policies adopted by the Board of Trustees, Neuberger Berman
may enter into agency cross-trades on behalf of a Portfolio. An agency
cross-trade is a securities transaction in which the same broker acts as agent
on both sides of the trade and the broker or an affiliate has discretion over
one of the participating accounts. In this situation, Neuberger Berman would
receive brokerage commissions from other participants in the trade. The other
account participating in an agency cross-trade with a Portfolio cannot be an
account over which Neuberger Berman exercises investment discretion. A member of
the Board of Trustees who is not affiliated with Neuberger Berman reviews
confirmation of each agency cross- trade that the Portfolios participate in.

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

A committee comprised of officers of NB Management and employees of
Neuberger Berman who are portfolio managers of the Portfolio and Other NB Funds
(collectively, "NB Funds") and some of Neuberger Berman's managed accounts
("Managed Accounts") evaluates semi-annually the nature and quality of the
brokerage and research services provided by other brokers. Based on this
evaluation, the committee establishes a list and projected rankings of preferred
brokers for use in determining the relative amounts of commissions to be
allocated to those brokers. Ordinarily, the brokers on the list effect a large
portion of the brokerage transactions for the NB Funds and the Managed Accounts
that are not effected by Neuberger Berman. However, in any semi-annual period,
brokers not on the list may be used, and the relative amounts of brokerage
commissions paid to the brokers on the list may vary substantially from the
projected rankings. These variations reflect the following factors, among
others: (1) brokers not on the list or ranking below other brokers on the list
may be selected for particular transactions because they provide better price
and/or execution, which is the primary consideration in allocating brokerage;
(2) adjustments may be required because of periodic changes in the execution
capabilities of or research provided by particular brokers or in the execution
or research needs of the NB Funds and/or the Managed Accounts; and (3) the
aggregate amount of brokerage commissions generated by transactions for the NB

43
<PAGE>

Funds and the Managed Accounts may change substantially from one semi-annual
period to the next.

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

Kevin L. Risen and Allan R. White III, each of whom is a Vice
President of NB Management and a Managing Director of Neuberger Berman, are the
persons primarily responsible for making decisions as to specific action to be
taken with respect to the investment portfolio of the Portfolio. Each of them
has full authority to take action with respect to portfolio transactions and may
or may not consult with other personnel of NB Management prior to taking such
action.

PORTFOLIO TURNOVER

The Portfolio's portfolio turnover rate is calculated by dividing
(1) the lesser of the cost of the securities purchased or the proceeds from the
securities sold by the Portfolio during the fiscal year (other than securities,
including options, whose maturity or expiration date at the time of acquisition
was one year or less) by (2) the month-end average of the value of such
securities owned by the Portfolio during the fiscal year.

REPORTS TO SHAREHOLDERS

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

ORGANIZATION, CAPITALIZATION AND OTHER MATTERS

THE FUND

The Fund is a separate ongoing series of the Trust, a Delaware
business trust organized pursuant to a Trust Instrument dated as of December 23,
1992. The Trust is registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has ten separate operating series. The Fund invests all of its
net investable assets in the Portfolio, receiving a beneficial interest in the

44
<PAGE>

Portfolio. The trustees of the Trust may establish additional series or classes
of shares without the approval of shareholders. The assets of each series belong
only to that series, and the liabilities of each series are borne solely by that
series and no other.

Prior to November 9, 1998, the name of the Trust was "Neuberger &
Berman Equity Trust" and the term "Neuberger Berman" in the Fund's name was
"Neuberger & Berman".

DESCRIPTION OF SHARES. The Fund is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share). Shares of
the Fund represent equal proportionate interests in the assets of the Fund only
and have identical voting, dividend, redemption, liquidation, and other rights.
All shares issued are fully paid and non-assessable, and shareholders have no
preemptive or other rights to subscribe to any additional shares.

SHAREHOLDER MEETINGS. The trustees of the Trust do not intend to
hold annual meetings of shareholders of the Fund. The trustees will call special
meetings of shareholders of the Fund only if required under the 1940 Act or in
their discretion or upon the written request of holders of 10% or more of the
outstanding shares of the Fund entitled to vote.

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

OTHER. Because Fund shares can be bought, owned and sold only
through an account with an Institution, a client of an Institution may be unable
to purchase additional shares and/or may be required to redeem shares (and
possibly incur a tax liability) if the client no longer has a relationship with
the Institution or if the Institution no longer has a contract with NB
Management to perform services. Depending on the policies of the Institution
involved, an investor may be able to transfer an account from one Institution to
another.

THE PORTFOLIO

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

FUND'S INVESTMENTS IN THE PORTFOLIO. The Fund is a "feeder fund"
that seeks to achieve its investment objective by investing all of its net
investable assets in the Portfolio, which is a "master fund." The Portfolio,
which has the same investment objective, policies, and limitations as the Fund,
in turn invests in securities; the Fund thus acquires an indirect interest in
those securities.

45
<PAGE>

The Fund's investment in the Portfolio is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in the Portfolio. Series of two other investment
companies, Neuberger Berman Equity Funds ("Equity Funds"), Neuberger Berman
Equity Assets ("Equity Assets"), and Neuberger Berman Equity Series ("Equity
Series") invest all of their respective net assets in corresponding Portfolios
of Managers Trust. The shares of the series of Equity Funds are available for
purchase by members of the general public. Equity Assets and Equity Series do
not sell their shares directly to members of the general public.

The Portfolio may also permit other investment companies and/or
other institutional investors to invest in the Portfolio. All investors will
invest in the Portfolio on the same terms and conditions as the Fund and will
pay a proportionate share of the Portfolio's expenses. Other investors in the
Portfolio (including the series of Equity Funds, Equity Assets, and Equity
Series) are not required to sell their shares at the same public offering price
as the Fund, could have a different administration fee and expenses than the
Fund, and (except Equity Funds, Equity Assets and Equity Series) might charge a
sales commission. Therefore, Fund shareholders may have different returns than
shareholders in another investment company that invests exclusively in the
Portfolio. Information regarding any fund that invests in the Portfolio is
available from NB Management by calling 800-877-9700.

The trustees of the Trust believe that investment in the Portfolio
by a series of Equity Funds, Equity Assets or Equity Series or by other
potential investors in addition to the Fund may enable the Portfolio to realize
economies of scale that could reduce its operating expenses, thereby producing
higher returns and benefiting all shareholders. However, the Fund's investment
in the Portfolio may be affected by the actions of other large investors in the
Portfolio, if any. For example, if a large investor in the Portfolio (other than
the Fund) redeemed its interest in the Portfolio, the Portfolio's remaining
investors (including the Fund) might, as a result, experience higher pro rata
operating expenses, thereby producing lower returns.

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

46
<PAGE>

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

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

CUSTODIAN AND TRANSFER AGENT

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

INDEPENDENT AUDITORS

The Fund and Portfolio have selected Ernst & Young LLP, 200
Clarendon Street, Boston, MA 02116, as the independent auditors who will audit
their financial statements.

LEGAL COUNSEL

The Fund and Portfolio have selected Kirkpatrick & Lockhart LLP,
1800 Massachusetts Avenue, N.W., 2nd Floor, Washington, D.C. 20036-1800, as
their legal counsel.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

The following table sets forth the name, address, and percentage of
ownership of each person who was known by the Fund to own beneficially or of
record 5% or more of the Fund's outstanding shares at October 30, 1999:

47
<PAGE>

Percentage of Ownership at
NAME AND ADDRESS OCTOBER 17, 1999

Neuberger Berman
GUARDIAN Trust National Financial Services 5.54%
Corp.*
P.O. Box 3908
Church Street Station
New York, NY 100008-3908

Fidelity Investments 13.39%
Institutional Ops Co.
Agent for certain EE benefit plans
Mailzone KWIC
Covington, KY 41015

The Manufacturers Life Insurance 19.41%
Co.
200 Bloor St. E NT3
Toronto ON M4W 1E5
Canada

Nationwide Life Insurance Co. 8.25%
QPVA
c/o IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029

Wachovia Bank of North Carolina, 7.75%
Master Trustee
Incentive Savings Plan
301 N. Main Street MC-NC 32213
Winston-Salem, NC 27101-3819

Connecticut General Life 5.50%
Insurance Company
350 Church Street
P.O. Box 2975 M-110
Hartford, CT 06104-2975

48
<PAGE>

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

49
<PAGE>

REGISTRATION STATEMENT

This SAI and the Prospectus do not contain all the information
included in the Trust's registration statement filed with the SEC under the 1933
Act with respect to the securities offered by the Prospectus. The registration
statement, including the exhibits filed therewith, may be examined at the SEC's
offices in Washington, D.C. The SEC maintains a Website (http://www.sec.gov)
that contains this SAI, material incorporated by reference, and other
information regarding the Fund and Portfolio.

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

FINANCIAL STATEMENTS

The following financial statements and related documents are
incorporated herein by reference from the Fund's Annual Report to shareholders
for the fiscal year ended August 31, 1999:

The audited financial statements of the Fund and Portfolio and notes
thereto for the fiscal year ended August 31, 1999, and the reports of
Ernst & Young LLP, independent auditors, with respect to such audited
financial statements.

50
<PAGE>

Appendix A

RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER

S&P CORPORATE BOND RATINGS:

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

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

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

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

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

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

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

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

MOODY'S CORPORATE BOND RATINGS:

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

A-1
<PAGE>

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

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

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

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

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

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

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

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

S&P commercial paper ratings:

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

A-2
<PAGE>

Moody's commercial paper ratings

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

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

A-3

<PAGE>

NEUBERGER BERMAN EQUITY TRUST
POST-EFFECTIVE AMENDMENT NO. 26 ON FORM N-1A

PART C

OTHER INFORMATION

ITEM 23. FINANCIAL STATEMENTS AND EXHIBITS
- ------- ---------------------------------

Exhibit
NUMBER DESCRIPTION
------ -----------
(a) (1) Certificate of Trust. Incorporated by Reference
to Post-Effective Amendment No. 8 to Registrant's
Registration Statement, File Nos. 33-64368 and
811-7784.

(2) Restated Certificate of Trust. Incorporated by
Reference to Post-Effective Amendment No. 18 to
Registrant's Registration Statement, File Nos.
33-64368 and 811-7784.

(3) Trust Instrument of Neuberger Berman Equity
Trust. Incorporated by Reference to
Post-Effective Amendment No. 8 to Registrant's
Registration Statement, File Nos. 33-64368 and
811-7784.

(4) Schedule A - Current Series of Neuberger Berman
Equity Trust. Incorporated by Reference to
Post-Effective Amendment No. 24 to Registrant's
Registration Statement, File Nos. 33-64368 and
811-7784.

(b) By-laws of Neuberger Berman Equity Trust.
Incorporated by Reference to Post-Effective
Amendment No. 8 to Registrant's Registration
Statement, File Nos. 33-64368 and 811-7784.

(c) (1) Trust Instrument of Neuberger Berman Equity
Trust, Articles IV, V, and VI. Incorporated by
Reference to Post-Effective Amendment No. 8 to
Registrant's Registration Statement, File Nos.
33-64368 and 811-7784.

(2) By-laws of Neuberger Berman Equity Trust, Articles
V, VI, and VIII. Incorporated by Reference to
Post-Effective Amendment No. 8 to Registrant's
Registration Statement, File Nos. 33-64368 and
811-7784.

(d) (1) (i) Management Agreement Between Equity Managers
Trust and Neuberger Berman Management Inc.
Incorporated by Reference to Post-Effective
Amendment No. 87 to Registration Statement
of Neuberger Berman Equity Funds, File
Nos. 2-11357 and 811-582.

(ii) Schedule A - Series of Equity Managers Trust
Currently Subject to the Management
Agreement. Incorporated by Reference to
Post-Effective Amendment No. 87 to
Registration Statement of Neuberger Berman
Equity Funds, File Nos. 2-11357 and 811-582.

<PAGE>

Exhibit
NUMBER DESCRIPTION
------ -----------

(iii) Schedule B - Schedule of Compensation Under
the Management Agreement. Incorporated by
Reference to Post-Effective Amendment No. 87
to Registration Statement of Neuberger
Berman Equity Funds, File Nos. 2-11357 and
811-582.

(2) (i) Sub-Advisory Agreement Between Neuberger
Berman Management Inc. and Neuberger Berman,
LLC with Respect to Equity Managers Trust.
Incorporated by Reference to Post-Effective
Amendment No. 70 to Registration Statement
of Neuberger Berman Equity Funds, File Nos.
2-11357 and 811-582.

(ii) Schedule A - Series of Equity Managers Trust
Currently Subject to the Sub-Advisory
Agreement. Incorporated by Reference to
Post-Effective Amendment No. 87 to
Registration Statement of Neuberger Berman
Equity Funds, File Nos. 2-11357 and 811-582.

(iii) Substitution Agreement Among Neuberger
Berman Management Inc., Equity Managers
Trust, Neuberger Berman, L.P., and Neuberger
Berman, LLC. Incorporated by Reference to
Post-Effective Amendment No. 7 to
Registration Statement of Equity Managers
Trust, File No. 811-7910.

(3) (i) Management Agreement Between Global
Managers Trust and Neuberger Berman
Management Inc.. Incorporated by Reference
to Post-Effective Amendment No. 74 to
Registration Statement of Neuberger Berman
Equity Funds, File Nos. 2-11357 and 811-582.

(ii) Schedule A - Series of Global Managers Trust
Currently Subject to the Management
Agreement. Incorporated by Reference to
Post-Effective Amendment No. 74 to
Registration Statement of Neuberger Berman
Equity Funds, File Nos. 2-11357 and 811-582.

(iii) Schedule B - Schedule of Compensation Under
the Management Agreement. Incorporated by
Reference to Post-Effective Amendment No. 74
to Registration Statement of Neuberger
Berman Equity Funds, File Nos. 2-11357 and
811-582.

(4) (i) Sub-Advisory Agreement Between Neuberger
Berman Management Inc. and Neuberger Berman,
LLC with Respect to Global Managers Trust.
Incorporated by Reference to Post-Effective
Amendment No. 74 to Registration Statement
of Neuberger Berman Equity Funds, File Nos.
2-11357 and 811-582.

2
<PAGE>

Exhibit
NUMBER DESCRIPTION
------ -----------
(ii) Schedule A - Series of Global Managers Trust
Currently Subject to the Sub-Advisory
Agreement. Incorporated by Reference to
Post-Effective Amendment No. 74 to
Registration Statement of Neuberger Berman
Equity Funds, File Nos. 2-11357 and 811-582.

(iii) Substitution Agreement among Neuberger
Berman Management Inc., Global Managers
Trust, Neuberger Berman, L.P. and Neuberger
Berman, LLC. Incorporated by Reference to
the substantially similar agreement filed in
Post-Effective Amendment No. 7 to the
Registration Statement of Equity Managers
Trust, File No. 811-7910 (the documents
differ only with respect to the date of and
the master fund party to the subadvisory
agreement under which substitution is sought
and the name of the executing master fund).

(e) (1) Distribution Agreement Between Neuberger Berman Equity
Trust and Neuberger Berman Management Inc. Incorporated
by Reference to Post-Effective Amendment No. 24 to
Registrant's Registration Statement, File Nos. 33-64368
and 811-7784.

(2) Schedule A - Series of Neuberger Berman Equity Trust
Currently Subject to the Distribution Agreement.
Incorporated by Reference to Post-Effective Amendment
No. 24 to Registrant's Registration Statement, File
Nos. 33-64368 and 811-7784.

(3) Distribution and Services Agreement between Neuberger
Berman Equity Trust and Neuberger Berman Management Inc.
Incorporated by Reference to Post-Effective Amendment
No. 24 to Registrant's Registration Statement, File
Nos. 33-64368 and 811-7784.

(4) Schedule A - Series of Neuberger Berman Equity Trust
Currently Subject to the Distribution and Services
Agreement. Incorporated by Reference to Post-Effective
Amendment No. 24 to Registrant's Registration Statement,
File Nos. 33-64368 and 811-7784.

(f) Bonus, Profit Sharing or Pension Plans. None.

(g) (1) Custodian Contract Between Neuberger Berman Equity Trust
and State Street Bank and Trust Company. Incorporated
by Reference to Post-Effective Amendment No. 8 to
Registrant's Registration Statement, File Nos. 33-64368
and 811-7784.

(2) Schedule of Compensation under the Custodian Contract.
Incorporated by Reference to Post-Effective Amendment
No. 10 to Registrant's Registration Statement, File Nos.
33-64368 and 811-7784.

3
<PAGE>

Exhibit
NUMBER DESCRIPTION
------ -----------
(h) (1) (i) Transfer Agency and Service Agreement Between
Neuberger Berman Equity Trust and State Street
Bank and Trust Company. Incorporated by Reference
to Post-Effective Amendment No. 8 to Registrant's
Registration Statement, File Nos. 33-64368 and
811-7784.

(ii) First Amendment to Transfer Agency and Service
Agreement between Neuberger Berman Equity Trust
and State Street Bank and Trust Company.
Incorporated by Reference to Post-Effective
Amendment No. 8 to Registrant's Registration
Statement, File Nos. 33-64368 and 811-7784.

(iii) Schedule of Compensation under the Transfer Agency
and Service Agreement. Incorporated by Reference
to Post-Effective Amendment No. 10 to Registrant's
Registration Statement, File Nos. 33-64368 and
811-7784.

(iv) Second Amendment to Transfer Agency and Service
Agreement between Neuberger Berman Equity Trust
and State Street Bank and Trust Company.
Incorporated by reference to Post-Effective
Amendment No. 12 to Registrant's Registration
Statement, File Nos. 33-64368 and 811-7784.

(2) (i) Administration Agreement Between Neuberger Berman
Equity Trust and Neuberger Berman Management Inc.
Incorporated by Reference to Post-Effective
Amendment No. 24 to Registrant's Registration
Statement, File Nos. 33-64368 and 811-7784.

(ii) Schedule A - Series of Neuberger Berman Equity
Trust Currently Subject to the Administration
Agreement. Incorporated by Reference to
Post-Effective Amendment No. 24 to Registrant's
Registration Statement, File Nos. 33-64368 and
811-7784.

(iii) Schedule B - Schedule of Compensation Under the
Administration Agreement. Incorporated by
Reference to Post-Effective Amendment No. 24 to
Registrant's Registration Statement, File Nos.
33-64368 and 811-7784.

4
<PAGE>

Exhibit
NUMBER DESCRIPTION
------ -----------
(i) (a) Opinion and Consent of Kirkpatrick & Lockhart LLP on
Securities Matters with Respect to Neuberger Berman
Equity Trust and its series Neuberger Berman Focus
Trust, Neuberger Berman Guardian Trust, Neuberger Berman
Genesis Trust, Neuberger Berman International Trust,
Neuberger Berman Manhattan Trust, and Neuberger Berman
Partners Trust. Incorporated by Reference to
Post-Effective Amendment No. 13 to Registrant's
Registration Statement, File Nos. 33-64368 and 811-7784.

(b) Opinion and Consent of Kirkpatrick & Lockhart LLP on
Securities Matters with Respect to Neuberger Berman
Socially Responsive Trust. Incorporated by Reference to
Post-Effective Amendment No. 3 to the Registration
Statement of Neuberger Berman Equity Assets, File Nos.
33-82568 and 811-8106.

(c) Opinion and Consent of Kirkpatrick & Lockhart LLP on
Securities Matters with Respect to Neuberger Berman
Millennium Trust. Incorporated by Referene to
Post-Effective Amendment No. 16 to Registrant's
Registration Statement, File Nos. 33-64368
and 811-7784.

(d) Opinion and Consent of Kirkpatrick & Lockhart LLP on
Securities Matters with Respect to Neuberger Berman
Regency Trust. Incorporated by Reference to Post-
Effective Amendment No. 22 to Registrant's Registration
Statement, File Nos. 33-64368 and 811-7784.

(e) Opinion and Consent of Kirkpatrick & Lockhart LLP on
Securities Matters with Respect to Neuberger Berman
Century Trust. Incorporated by Reference to Post-
Effective Amendment No. 24 to Registrant's Registration
Statement, File Nos. 33-64368 and 811-7784.

(f) Consent of Kirkpatrick & Lockhart LLP to use Previously
Filed Opinions on Securities Matters. Filed herewith.

(j) Consent of Independent Auditors. Filed herewith.

(k) Financial Statements Omitted from Prospectus. None.

(l) Letter of Investment Intent. None.

(m) Plan Pursuant to Rule 12b-1. Incorporated by Reference
to Post-Effective Amendment No. 24 to Registrant's
Registration Statement, File Nos. 33-64368 and 811-7784.

(n) Financial Data Schedule. Not Applicable.

(o) Plan Pursuant to Rule 18f-3. None.

5
<PAGE>

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
- ------- -------------------------------------------------------------

No person is controlled by or under common control with the
Registrant.

ITEM 25. INDEMNIFICATION.
- ------- ---------------

A Delaware business trust may provide in its governing instrument for
indemnification of its officers and trustees from and against any and all claims
and demands whatsoever. Article IX, Section 2 of the Trust Instrument provides
that the Registrant shall indemnify any present or former trustee, officer,
employee or agent of the Registrant ("Covered Person") to the fullest extent
permitted by law against liability and all expenses reasonably incurred or paid
by him or her in connection with any claim, action, suit or proceeding
("Action") in which he or she becomes involved as a party or otherwise by virtue
of his or her being or having been a Covered Person and against amounts paid or
incurred by him or her in settlement thereof. Indemnification will not be
provided to a person adjudged by a court or other body to be liable to the
Registrant or its shareholders by reason of "willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office" ("Disabling Conduct"), or not to have acted in good faith in the
reasonable belief that his or her action was in the best interest of the
Registrant. In the event of a settlement, no indemnification may be provided
unless there has been a determination that the officer or trustee did not engage
in Disabling Conduct (i) by the court or other body approving the settlement;
(ii) by at least a majority of those trustees who are neither interested
persons, as that term is defined in the Investment Company Act of 1940 ("1940
Act"), of the Registrant ("Independent Trustees"), nor are parties to the matter
based upon a review of readily available facts; or (iii) by written opinion of
independent legal counsel based upon a review of readily available facts.

Pursuant to Article IX, Section 3 of the Trust Instrument, if any present
or former shareholder of any series ("Series") of the Registrant shall be held
personally liable solely by reason of his or her being or having been a
shareholder and not because of his or her acts or omissions or for some other
reason, the present or former shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of any entity, its
general successor) shall be entitled out of the assets belonging to the
applicable Series to be held harmless from and indemnified against all loss and
expense arising from such liability. The Registrant, on behalf of the affected
Series, shall, upon request by such shareholder, assume the defense of any claim
made against such shareholder for any act or obligation of the Series and
satisfy any judgment thereon from the assets of the Series.

Section 9 of the Management Agreements between Neuberger and Berman
Management Incorporated ("NB Management") and Equity Managers Trust and Global
Managers Trust (Equity Managers Trust and Global Managers Trust are collectively
referred to as the "Managers Trusts") provide that neither NB Management nor any
director, officer or employee of NB Management performing services for the
series of the Managers Trusts at the direction or request of NB Management in
connection with NB Management's discharge of its obligations under the
Agreements shall be liable for any error of judgment or mistake of law or for
any loss suffered by a series in connection with any matter to which the
Agreements relate; provided, that nothing in the Agreements shall be construed
(i) to protect NB Management against any liability to the Managers Trusts or any
series thereof or their interest holders to which NB Management would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence in
the performance of its duties, or by reason of NB Management's reckless
disregard of its obligations and duties under the Agreements, or (ii) to protect
any director, officer or employee of NB Management who is or was a trustee or
officer of the Managers Trusts against any liability to the Managers Trusts or
any series thereof or their interest holders to which such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
person's office with the Managers Trusts.

6
<PAGE>

Section 1 of the Sub-Advisory Agreements between NB Management and
Neuberger Berman, LLC ("Neuberger Berman") with respect to the Managers Trusts
provides that, in the absence of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or of reckless disregard of its
duties and obligations under the Agreements, Neuberger Berman will not be
subject to any liability for any act or omission or any loss suffered by any
series of the Managers Trusts or their interest holders in connection with the
matters to which the Agreements relate.

Section 11 of the Distribution Agreement between the Registrant and NB
Management provides that NB Management shall look only to the assets of a Series
for the Registrant's performance of the Agreement by the Registrant on behalf of
such Series, and neither the Trustees nor any of the Registrant's officers,
employees or agents, whether past, present or future, shall be personally liable
therefor.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("1933 Act") may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF ADVISER AND SUB-ADVISER.
- ------- ---------------------------------------------------------

There is set forth below information as to any other business, profession,
vocation or employment of a substantial nature in which each director or officer
of NB Management and each principal of Neuberger Berman is, or at any time
during the past two years has been, engaged for his or her own account or in the
capacity of director, officer, employee, partner or trustee.

7
<PAGE>

NAME BUSINESS AND OTHER CONNECTIONS
- ---- ------------------------------

Philip Ambrosio Senior Vice President and Chief
Senior Vice President Financial Officer, Neuberger
and Chief Financial Berman Inc.
Officer, Neuberger
Berman

Brooke A. Cobb Chief Investment Officer, Bainco
Vice President, International Investors. Senior
NB Management Vice President and Senior
Portfolio Manager, Putnam
Investments.(1)

Barbara DiGiorgio, Assistant Treasurer, Neuberger
Assistant Vice Berman Advisers Management Trust;
President, Assistant Treasurer, Advisers
NB Management Managers Trust; Assistant
Treasurer, Neuberger Berman Income Funds; Assistant
Treasurer, Neuberger Berman Income Trust; Assistant
Treasurer, Neuberger Berman Equity Funds; Assistant
Treasurer, Neuberger Berman Equity Trust; Assistant
Treasurer, Income Managers Trust; Assistant Treasurer,
Equity Managers Trust; Assistant Treasurer, Global
Managers Trust; Assistant Treasurer, Neuberger Berman
Equity Assets; Assistant Treasurer, Neuberger Berman
Equity Series.

Theodore P. Giuliano President and Trustee, Neuberger
Vice President, NB Berman Income Funds; President
Management; Managing and Trustee, Neuberger Berman
Director, Neuberger Income Trust; President and
Berman Trustee, Income Managers Trust.

Michael M. Kassen Executive Vice President, Chief
Executive Vice Investment Officer and Director,
President, Neuberger Berman Inc.
Neuberger Berman

Jeffrey B. Lane President, Chief Executive
President and Chief Officer and
Executive Officer, Director of Neuberger Berman, Inc.
Neuberger Berman

Michael F. Malouf Portfolio Manager, Dresdner RCM
Vice President Global Investors.(2)
NB Management

Robert Matza Executive Vice President, Chief
Executive Vice Administrative Officer and
President and Chief Director, Neuberger Berman, Inc.
Administrative Officer,
Neuberger Berman

- -----------------------
(1) Until 1997.

(2) Until 1998.
8
<PAGE>

NAME BUSINESS AND OTHER CONNECTIONS
- ---- ------------------------------

S. Basu Mullick Portfolio Manager, Ark Asset
Vice President, Management(3)
NB Management

C. Carl Randolph Secretary and General Counsel,
Senior Vice President, Neuberger Berman, Inc. Assistant
General Counsel and Secretary, Neuberger Berman
Secretary, Advisers Management Trust;
Neuberger Berman Assistant Secretary, Advisers
Managers Trust; Assistant Secretary, Neuberger Berman
Income Funds; Assistant Secretary, Neuberger Berman
Income Trust; Assistant Secretary, Neuberger Berman
Equity Funds; Assistant Secretary, Neuberger Berman
Equity Trust; Assistant Secretary, Income Managers
Trust; Assistant Secretary, Equity Managers Trust;
Assistant Secretary, Global Managers Trust; Assistant
Secretary, Neuberger Berman Equity Assets; Assistant
Secretary, Neuberger Berman Equity Series.

Richard Russell Treasurer, Neuberger Berman
Vice President, Advisers Management Trust;
NB Management Treasurer, Advisers Managers
Trust; Treasurer, Neuberger Berman Income Funds;
Treasurer, Neuberger Berman Income Trust; Treasurer,
Neuberger Berman Equity Funds; Treasurer, Neuberger
Berman Equity Trust; Treasurer, Income Managers Trust;
Treasurer, Equity Managers Trust; Treasurer, Global
Managers Trust; Treasurer, Neuberger Berman Equity
Assets; Treasurer, Neuberger Berman Equity Series.

Ingrid Saukaitis Project Director, Council on
Vice President, NB Economic Priorities.(4)
Management

Heidi L. Schneider Executive Vice President and
Executive Vice Director, Neuberger Berman, Inc.
President, Neuberger
Berman

Benjamin E. Segal Assistant Portfolio Manager, GT
Vice President, NB Global Investment Management*/;
Management, Managing Consultant, Bain & Company,
Director, Neuberger Inc.**/
Berman

- ----------------------
(3) Until 1998.

(4) Until 1997.

*/ Until 1997.

**/ Until 1997.

9
<PAGE>

NAME BUSINESS AND OTHER CONNECTIONS
- ---- ------------------------------

Jennifer K. Silver Portfolio Manager and Director,
Vice President, NB Putnum Investments.(5)
Management, Managing
Director, Neuberger
Berman

Daniel J. Sullivan Vice President, Neuberger Berman
Senior Vice President, Advisers Management Trust; Vice
NB Management President, Advisers Managers
Trust; Vice President, Neuberger Berman Income Funds;
Vice President, Neuberger Berman Income Trust; Vice
President, Neuberger Berman Equity Funds; Vice
President, Neuberger Berman Equity Trust; Vice
President, Income Managers Trust; Vice President,
Equity Managers Trust; Vice President, Global Managers
Trust; Vice President, Neuberger Berman Equity Assets;
Vice President, Neuberger Berman Equity Series.

Peter E. Sundman Executive Vice President and
President, NB Director, Neuberger Berman Inc.
Management; Executive
Vice President,
Neuberger Berman

Michael J. Weiner Vice President, Neuberger Berman
Senior Vice President, Advisers Management Trust; Vice
NB Management; Senior President, Advisers Managers
Vice President, Trust; Vice President, Neuberger
Neuberger Berman Berman Income Funds; Vice
President, Neuberger Berman Income Trust; Vice
President, Neuberger Berman Equity Funds; Vice
President, Neuberger Berman Equity Trust; Vice
President, Income Managers Trust; Vice President,
Equity Managers Trust; Vice President, Global Managers
Trust; Vice President, Neuberger Berman Equity Assets;
Vice President, Neuberger Berman Equity Series.

- -----------------------
(5) Until 1997.

10
<PAGE>

NAME BUSINESS AND OTHER CONNECTIONS
- ---- ------------------------------

Allan R. White, III Portfolio Manager, Salomon Asset
Vice President, NB Management.(6)
Management; Managing
Director, Neuberger
Berman

Celeste Wischerth, Assistant Treasurer, Neuberger
NB Management Berman Advisers Management Trust;
Assistant Treasurer, Advisers
Managers Trust; Assistant
Treasurer, Neuberger Berman
Income Funds; Assistant
Treasurer, Neuberger Berman
Income Trust; Assistant
Treasurer, Neuberger Berman
Equity Funds; Assistant
Treasurer, Neuberger Berman
Equity Trust; Assistant
Treasurer, Income Managers Trust;
Assistant Treasurer, Equity
Managers Trust; Assistant
Treasurer, Global Managers Trust;
Assistant Treasurer, Neuberger
Berman Equity Assets; Assistant
Treasurer, Neuberger Berman
Equity Series.

The principal address of NB Management, Neuberger Berman, and of
each of the investment companies named above, is 605 Third Avenue, New York, New
York 10158.

The principal address of NB Management, Neuberger Berman, and of each of
the investment companies named above, is 605 Third Avenue, New York, New York
10158.

ITEM 27. PRINCIPAL UNDERWRITERS.
- ------- ----------------------

(a) NB Management, the principal underwriter distributing securities of
the Registrant, is also the principal underwriter and distributor for each of
the following investment companies:

Neuberger Berman Advisers Management Trust

Neuberger Berman Equity Funds

Neuberger Berman Equity Assets

Neuberger Berman Equity Series

Neuberger Berman Income Funds

Neuberger Berman Income Trust

NB Management is also the investment manager to the master funds in
which the above-named investment companies invest.

- ------------------------
(6) Until 1998.

11
<PAGE>

(b) Set forth below is information concerning the directors and officers
of the Registrant's principal underwriter. The principal business address of
each of the persons listed is 605 Third Avenue, New York, New York 10158-0180,
which is also the address of the Registrant's principal underwriter.

12
<PAGE>

POSITION AND
POSITIONS AND OFFICES OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
---- ---------------- ---------------

Ramesh Babu Vice President None

Richard A. Cantor Chairman of the Board None

Valerie Chang Vice President None

Brooke A. Cobb Vice President None

Robert Conti Treasurer None

Robert W. D'Alelio Vice President None

Clara Del Villar Vice President None

Barbara DiGiorgio Assistant Vice Assistant Treasurer
President

Robert S. Franklin Vice President None

Robert I. Gendelman Vice President None

Theodore P. Giuliano Vice President and None
Director

Michael M. Kassen Vice President and None
Director

Robert L. Ladd Vice President None

Josephine Mahaney Vice President None

Michael F. Malouf Vice President None

Ellen Metzger Secretary None

S. Basu Mullick Vice President None

Janet W. Prindle Vice President None

Kevin L. Risen Vice President None

Ingrid Saukaitis Vice President None

Benjamin Segal Vice President None

Jennifer K. Silver Vice President None

Kent C. Simons Vice President None

Daniel J. Sullivan Senior Vice President Vice President

Peter E. Sundman President None

Judith M. Vale Vice President None

Josephine Velez Vice President None

Catherine Waterworth Vice President None

Michael J. Weiner Senior Vice Vice President and
President Principal Financial
Officer

Allan R. White, III Vice President None

13
<PAGE>

(c) No commissions or other compensation were received directly or
indirectly from the Registrant by any principal underwriter who was not an
affiliated person of the Registrant.

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
- ------- --------------------------------

All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act, as amended, and the rules promulgated thereunder
with respect to the Registrant are maintained at the offices of State Street
Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110, except
for the Registrant's Trust Instrument and By-laws, minutes of meetings of the
Registrant's Trustees and shareholders and the Registrant's policies and
contracts, which are maintained at the offices of the Registrant, 605 Third
Avenue, New York, New York 10158.

All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act, as amended, and the rules promulgated thereunder
with respect to Equity Managers Trust are maintained at the offices of State
Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110,
except for the Equity Managers Trust's Declaration of Trust and By-laws, minutes
of meetings of Equity Managers Trust's Trustees and interest holders and Equity
Managers Trust's policies and contracts, which are maintained at the offices of
the Equity Managers Trust, 605 Third Avenue, New York, New York 10158.

All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act, as amended, and the rules promulgated thereunder
with respect to Global Managers Trust are maintained at the offices of State
Street Cayman Trust Company, Ltd., Elizabethan Square, P.O. Box 1984, George
Town, Grand Cayman, Cayman Islands, BWI.

ITEM 29. MANAGEMENT SERVICES.
- ------- -------------------

Other than as set forth in Parts A and B of this Registration
Statement, the Registrant is not a party to any management-related service
contract.

ITEM 30. UNDERTAKINGS.
- ------- ------------

None.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, NEUBERGER BERMAN EQUITY TRUST
certifies that it meets all of the requirements for effectiveness of
Post-Effective Amendment No. 26 to its Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City and State of New York on the
30th day of November, 1999.

NEUBERGER BERMAN EQUITY TRUST

By: /s/ Michael M. Kassen
---------------------
Michael M. Kassen
President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 26 has been signed below by the following persons
in the capacities and on the date indicated.

SIGNATURE TITLE DATE

/s/ Peter E. Sundman Chairman of the Board 11/30/99
- --------------------------- and Trustee (Chief
Peter E. Sundman Executive Officer)

/s/ Michael M. Kassen President and Trustee 11/30/99
- ---------------------------
Michael M. Kassen

/s/ Michael J. Weiner Vice President 11/30/99
- --------------------------- (Principal Financial
Michael J. Weiner Officer)

/s/ Richard Russell Treasurer (Principal 11/30/99
- --------------------------- Accounting Officer)
Richard Russell

(signatures continued on next page)

<PAGE>

SIGNATURE TITLE DATE

/s/ Faith Colish Trustee 11/30/99
- ---------------------------
Faith Colish

/s/ Howard A. Mileaf Trustee 11/30/99
- ---------------------------
Howard A. Mileaf

/s/ Edward I. O'Brien Trustee 11/30/99
- ---------------------------
Edward I. O'Brien

/s/ John T. Patterson, Jr. Trustee 11/30/99
- ---------------------------
John T. Patterson, Jr.

/s/ John P. Rosenthal Trustee 11/30/99
- ---------------------------
John P. Rosenthal

/s/ Cornelius T. Ryan Trustee 11/30/99
- ---------------------------
Cornelius T. Ryan

/s/ Gustave H. Shubert Trustee 11/30/99
- ---------------------------
Gustave H. Shubert

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, EQUITY MANAGERS TRUST certifies that it meets
all of the requirements for effectiveness of Post-Effective Amendment No. 26
to the Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this Post-Effective Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the City and State of New York on the 30th day of
November, 1999.

EQUITY MANAGERS TRUST

By: /s/ Michael M. Kassen
---------------------
Michael M. Kassen
President

Pursuant to the requirements of the Securities Act of 1933, the
Post-Effective Amendment No. 26 has been signed below by the following
persons in the capacities and on the date indicated.

SIGNATURE TITLE DATE

/s/ Peter E. Sundman Chairman of the Board 11/30/99
- --------------------------- and Trustee (Chief
Peter E. Sundman Executive Officer)

/s/ Michael M. Kassen President and Trustee 11/30/99
- ---------------------------
Michael M. Kassen

/s/ Michael J. Weiner Vice President 11/30/99
- --------------------------- (Principal Financial
Michael J. Weiner Officer)

/s/ Richard Russell Treasurer (Principal 11/30/99
- --------------------------- Accounting Officer)
Richard Russell

(signatures continued on next page)

<PAGE>

SIGNATURE TITLE DATE

/s/ Faith Colish Trustee 11/30/99
- ---------------------------
Faith Colish

/s/ Howard A. Mileaf Trustee 11/30/99
- ---------------------------
Howard A. Mileaf

/s/ Edward I. O'Brien Trustee 11/30/99
- ---------------------------
Edward I. O'Brien

/s/ John T. Patterson, Jr. Trustee 11/30/99
- ---------------------------
John T. Patterson, Jr.

/s/ John P. Rosenthal Trustee 11/30/99
- ---------------------------
John P. Rosenthal

/s/ Cornelius T. Ryan Trustee 11/30/99
- ---------------------------
Cornelius T. Ryan

/s/ Gustave H. Shubert Trustee 11/30/99
- ---------------------------
Gustave H. Shubert

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, GLOBAL MANAGERS TRUST certifies that it meets
all of the requirements for effectiveness of Post-Effective Amendment No. 26 to
the Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Post-Effective Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City and State of New York on the 30th day of November, 1999.

GLOBAL MANAGERS TRUST

By: /s/ Peter E. Sundman
---------------------
Peter E. Sumdman, Chairman of the Board
(Chief Executive Officer)

Pursuant to the requirements of the Securities Act of 1933, Post-Effective
Amendment No. 26 has been signed below by the following persons in the
capacities and on the date indicated.

SIGNATURE TITLE DATE

/s/ Peter E. Sundman Chairman of the Board 11/30/99
- --------------------------- and Trustee (Chief
Peter E. Sundman Executive Officer)

/s/ Michael J. Weiner Vice President 11/30/99
- --------------------------- (Principal Financial
Michael J. Weiner Officer)

/s/ Richard Russell Treasurer (Principal 11/30/99
- --------------------------- Accounting Officer)
Richard Russell

(signatures continued on next page)

<PAGE>

SIGNATURE TITLE DATE

/s/ Howard A. Mileaf Trustee 11/30/99
- ---------------------------
Howard A. Mileaf

/s/ John T. Patterson, Jr. Trustee 11/30/99
- ---------------------------
John T. Patterson, Jr.

/s/ John P. Rosenthal Trustee 11/30/99
- ---------------------------
John P. Rosenthal

<PAGE>

NEUBERGER BERMAN EQUITY TRUST
POST-EFFECTIVE AMENDMENT NO. 26 ON FORM N-1A

INDEX TO EXHIBIT

Exhibit
NUMBER DESCRIPTION
------ -----------

(a) (1) Certificate of Trust. Incorporated by
Reference to Post-Effective Amendment No. 8 to
Registrant's Registration Statement, File
Nos. 33-64368 and 811-7784.

(2) Restated Certificate of Trust. Incorporated by
Reference to Post- Effective Amendment No. 18
to Registrant's Registration Statement, File
Nos. 33-64368 and 811-7784.

(3) Trust Instrument of Neuberger Berman Equity
Trust. Incorporated by Reference to
Post-Effective Amendment No. 8 to Registrant's
Registration Statement, File Nos. 33-64368 and
811-7784.

(4) Schedule A - Current Series of Neuberger Berman
Equity Trust. Incorporated by Reference to
Post-Effective Amendment No. 24 to Registrant's
Registration Statement, File Nos. 33-64368 and
811-7784.

(b) By-laws of Neuberger Berman Equity Trust.
Incorporated by Reference to Post-Effective
Amendment No. 8 to Registrant's Registration
Statement, File Nos. 33-64368 and 811-7784.

(2) By-laws of Neuberger Berman Equity Trust,
Articles V, VI, and VIII. Incorporated by
Reference to Post-Effective Amendment No. 8 to
Registrant's Registration Statement, File Nos.
33-64368 and 811-7784.

(d) (1) (i) Management Agreement Between Equity
Managers Trust and Neuberger Berman
Management Inc. Incorporated by
Reference to Post-Effective Amendment
No. 87 to Registration Statement of
Neuberger Berman Equity Funds, File
Nos. 2-11357 and 811-582.

15
<PAGE>

Exhibit
NUMBER DESCRIPTION
------ -----------
(iii) Schedule B - Schedule of Compensation Under
the Management Agreement. Incorporated by
Reference to Post-Effective Amendment No. 87
to Registration Statement of Neuberger
Berman Equity Funds, File Nos. 2-11357 and
811-582.

(2) (i) Sub-Advisory Agreement Between Neuberger
Berman Management Inc. and Neuberger
Berman, LLC with Respect to Equity
Managers Trust. Incorporated by
Reference to Post-Effective Amendment No.
70 to Registration Statement of Neuberger
Berman Equity Funds, File Nos. 2-11357
and 811-582.

(3) (i) Management Agreement Between Global
Managers Trust and Neuberger Berman
Management Inc.. Incorporated by
Reference to Post-Effective Amendment No.
74 to Registration Statement of Neuberger
Berman Equity Funds, File Nos. 2-11357
and 811-582.

(ii) Schedule A - Series of Global Managers
Trust Currently Subject to the Management
Agreement. Incorporated by Reference to
Post-Effective Amendment No. 74 to
Registration Statement of Neuberger
Berman Equity Funds, File Nos. 2-11357
and 811-582.

(iii) Schedule B - Schedule of Compensation
Under the Management Agreement.
Incorporated by Reference to
Post-Effective Amendment No. 74 to
Registration Statement of Neuberger
Berman Equity Funds, File Nos. 2-11357
and 811-582.

(4) (i) Sub-Advisory Agreement Between Neuberger
Berman Management Inc. and Neuberger
Berman, LLC with Respect to Global
Managers Trust. Incorporated by
Reference to Post-Effective Amendment No.
74 to Registration Statement of Neuberger
Berman Equity Funds, File Nos. 2-11357
and 811-582.

16
<PAGE>

Exhibit
NUMBER DESCRIPTION
------ -----------

(ii) Schedule A - Series of Global Managers
Trust Currently Subject to the
Sub-Advisory Agreement. Incorporated by
Reference to Post-Effective Amendment No.
74 to Registration Statement of Neuberger
Berman Equity Funds, File Nos. 2-11357
and 811-582.

(iii) Substitution Agreement among Neuberger
Berman Management Inc., Global Managers
Trust, Neuberger Berman, L.P. and
Neuberger Berman, LLC. Incorporated by
Reference to the substantially similar
agreement filed in Post-Effective
Amendment No. 7 to the Registration
Statement of Equity Managers Trust, File
No. 811-7910 (the documents differ only
with respect to the date of and the
master fund party to the subadvisory
agreement under which substitution is
sought and the name of the executing
master fund).

(e) (1) Distribution Agreement Between Neuberger Berman
Equity Trust and Neuberger Berman Management Inc.
Incorporated by Reference to Post-Effective Amendment
No. 24 to Registrant's Registration Statement, File
Nos. 33-64368 and 811-7784.

(f) Bonus, Profit Sharing or Pension Plans. None.

(g) (1) Custodian Contract Between Neuberger Berman Equity
Trust and State Street Bank and Trust Company.
Incorporated by Reference to Post-Effective Amendment
No. 8 to Registrant's Registration Statement, File
Nos. 33-64368 and 811-7784.

(2) Schedule of Compensation under the Custodian
Contract. Incorporated by Reference to
Post-Effective Amendment No. 10 to Registrant's
Registration Statement, File Nos. 33-64368 and
811-7784.

17
<PAGE>

Exhibit
NUMBER DESCRIPTION
------ -----------

(h) (1) (i) Transfer Agency and Service Agreement Between
Neuberger Berman Equity Trust and State Street
Bank and Trust Company. Incorporated by
Reference to Post-Effective Amendment No. 8 to
Registrant's Registration Statement, File
Nos. 33-64368 and 811-7784.

(2) (i) Administration Agreement Between Neuberger
Berman Equity Trust and Neuberger Berman
Management Inc. Incorporated by Reference to
Post-Effective Amendment No. 24 to Registrant's
Registration Statement, File Nos. 33-64368 and
811-7784.

18
<PAGE>

Exhibit
NUMBER DESCRIPTION
------ -----------

(i) (a) Opinion and Consent of Kirkpatrick & Lockhart LLP on
Securities Matters with Respect to Neuberber Berman
Equity Trust and its series Neuberger Berman Focus
Trust, Neuberger Berman Guardian Trust, Neuberger Berman
Genesis Trust, Neuberger Berman International Trust,
Neuberger Berman Manhattan Trust, and Neuberger Berman
Partners Trust. Incorporated by Reference to
Post-Effective Amendment No. 13 to Registrant's
Registration Statement, File Nos. 33-64368 and 811-7784.

(b) Opinion and Consent of Kirkpatrick & Lockhart LLP on
Securities Matters with Respect to Neuberger Berman
Socially Responsive Trust. Incorporated by Reference
to Post-Effective Amendment No. 3 to the Registration
Statement of Neuberger Berman Equity Assets, File
Nos. 33-82568 and 811-8106.

(c) Opinion and Consent of Kirkpatrick &
Lockhart LLP on Securities Matters with Respect to
Neuberger Berman Millennium Trust. Incorporated by
Reference to Post-Effective Amendment No. 16 to
Registrant's Registration Statement, File Nos.
33-64368 and 811-7784.

(d) Opinion and Consent of Kirkpatrick &
Lockhart LLP on Securities Matters
with Respect to Neuberger Berman Regency Trust.
Incorporated by Reference to Post-Effective Amendment
No. 22 to Registrant's Registration Statement,
File Nos. 33-64368 and 811-7784.

(e) Opinion and Consent of Kirkpatrick & Lockhart LLP on
Securities Matters with Respect to Neuberger Berman
Century Trust. Incorporated by Reference
to Post-Effective Amendment No. 24 to Registrant's
Registration Statement, File Nos. 33-64368 and 811-7784.

(f) Consent of Kirkpatrick & Lockhart LLP to use
Previously Filed Opinions on Securities Matters. Filed
herewith.

(j) Consent of Independent Auditors. Filed herewith.

(k) Financial Statements Omitted from Prospectus. None.

(l) Letter of Investment Intent. None.

(m) Plan Pursuant to Rule 12b-1. Incorporated by
Reference to Post-Effective Amendment No. 24 to
Registrant's Registration Statement, File Nos. 33-64368
and 811-7784.

(n) Financial Data Schedule. Not Applicable.

(o) Plan Pursuant to Rule 18f-3. None.

- --------

CONSENT AUTHORIZING USE OF PREVIOUSLY-FILED LEGAL OPINION
FOR NEUBERGER BERMAN EQUITY TRUST ("REGISTRANT")

In connection with Post-Effective Amendment Nos. 25 and 26 to Registrant's
Registration Statement on Form N-1A (File Nos. 33-64368 and 811-7784) to be
filed with the Securities and Exchange Commission on or about November 30, 1999,
we hereby consent to the continued use of the Opinion and Consent of Kirkpatrick
& Lockhart LLP on Securities Matters with respect to Neuberger Berman Equity
Trust and its series Neuberger Berman Focus Trust, Neuberger Berman Genesis
Trust, Neuberger Berman Guardian Trust, Neuberger Berman International Trust,
Neuberger Berman Manhattan Trust, and Neuberger Berman Partners Trust previously
filed in Post-Effective Amendment No. 13 to Registrant's Registration Statement
on Form N-1A (File Nos. 33-64368 and 811-7784); the Opinion and Consent of
Kirkpatrick & Lockhart LLP on Securities Matters with respect to Neuberger
Berman Socially Responsive Trust previously filed in Post-Effective Amendment
No. 3 to the Registration Statement of Neuberger Berman Equity Assets (File Nos.
33-82568 and 811-8106); the Opinion and Consent of Kirkpatrick & Lockhart LLP on
Securities Matters with respect to Neuberger Berman Regency Trust previously
filed in Post-Effective Amendment No. 22 to Registrant's Registration Statement
on Form N-1A (File Nos. 33-64368 and 811-7784); and the Opinion and Consent of
Kirkpatrick & Lockhart LLP on Securities Matters with respect to Neuberger
Berman Century Trust previously filed in Post-Effective Amendment No. 24 to
Registrant's Registration Statement on Form N-1A (File Nos. 33-64368 and
811-7784). We further consent to the filing of this consent in connection with
Post-Effective Amendment Nos. 25 and 26 to Registrant's Registration Statement.
We also consent to the reference to our firm in the Statement of Additional
Information filed as part of the Registration Statement.

Sincerely,

KIRKPATRICK & LOCKHART LLP

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference into the Prospectus and
Statement of Additional Information constituting the Post-Effective Amendment
No. 25 and 26 to the Registration Statement on Form N-1A (the "Registration
Statement") of Neuberger Berman Equity Trust (the "Trusts") on the financial
statements and financial highlights appearing in the August 31, 1999 Annual
Report to the Shareholders. We further consent to the references to our Firm
under the heading "Financial Highlights" in the Prospectus and "Experts" in the
Statement of Additional Information.

/s/ PricewaterhouseCoopers LLP
- -------------------------------
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 24, 1999

<PAGE>

CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Financial
Highlights" in the Prospectus and "Reports to Shareholders", "Independent
Auditors/Accountants" and "Financial Statements in the Statement of Additional
Information in Post-Effective Amendment Number 26 to the Registration Statement
(Form N-1A No. 33-64368) of Neuberger Berman Equity Trust, and to the
incorporation by reference of our report dated October 1, 1999 on Neuberger
Berman International Portfolio, the only series of Global Managers Trust,
included in the 1999 Annual Report to Shareholders of Neuberger Berman Equity
Funds.

Grand Cayman,
Cayman Islands
November 24, 1999

<PAGE>

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectus and "Reports to Shareholders", "Independent
Auditors/Accountants" and "Financial Statements" in the Statement of Additional
Information in Post-Effective Amendment Number 26 to the Registration Statement
(Form N-1A, No. 33-64368) of Neuberger Berman Equity Trust and to the
incorporation by reference of our reports dated October 1, 1999 on Neuberger
Berman Focus Trust, Neuberger Berman Genesis Trust, Neuberger Berman Guardian
Trust, Neuberger Berman International Trust, and Neuberger Berman Partners
Trust, five of the series comprising Neuberger Berman Equity Trust, and on
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, and the Neuberger Berman International
Portfolio, the only series comprising Global Managers Trust included in the 1999
Annual Report to Shareholders of Neuberger Berman Equity Trust.

ERNST & YOUNG LLP

Boston, Massachusetts
November 26, 1999