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[LOGO]
NEUBERGER BERMAN
EQUITY TRUST-Registered Trademark-
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NYCDC Socially Responsive Trust SEMI-ANNUAL REPORT
FEBRUARY 28, 1999
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
THE FUND
CHAIRMAN'S LETTER A-4
PORTFOLIO COMMENTARY A-5
FINANCIAL STATEMENTS B-1
FINANCIAL HIGHLIGHTS B-7
PER SHARE DATA
THE PORTFOLIO
SCHEDULE OF INVESTMENTS C-1
TOP TEN EQUITY HOLDINGS
FINANCIAL STATEMENTS C-4
FINANCIAL HIGHLIGHTS C-10
OTHER INFORMATION
Directory/Officers and Trustees D-1
</TABLE>
A-3
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CHAIRMAN'S LETTER April 16, 1999
Dear Fellow Shareholder,
The first half of fiscal 1999 was the best of times and worst of times for
equities investors. In September 1998, the first month of this reporting period,
global economic and financial market turmoil sent stocks plummeting. Then, with
three waves of interest rate cuts, Federal Reserve Chairman Alan Greenspan
seemed to make the market's problems disappear and stocks surged back to record
highs. However, not all stocks participated equally in the market recovery.
Growth stocks performed significantly better than value stocks across the market
capitalization spectrum, and large-cap stocks, in general, outperformed mid- and
small-cap stocks. These short-term performance trends are reflected in the
varying returns achieved by our different funds this time period.
No one knows what the market has in store for us in the future or which
investment style or capitalization sector will be most productive. That's why we
believe prudent investors should diversify, rather than put all or most of their
eggs in whatever style/capitalization portfolio has produced the most generous
recent returns. That means making and maintaining positions in current laggards
as well as current leaders.
In closing, at Neuberger Berman, we are dedicated to offering quality funds
managed by talented and experienced investors, not rushing to market with the
latest "hot" product. We are proud of the long-term, solid performance of our
family of investment products and are confident that our disciplined approach
will keep us focused on the long-term potential of our portfolios. To that end,
we try to overlook day-to-day market volatility and not overreact to short-term
events, which could negatively impact our funds. We believe this strategy has
benefited our shareholders in the past and will continue to do so in the years
to come.
Sincerely,
/s/ Stanley Egener
Stanley Egener
Chairman of the Board
Neuberger Berman Equity Trust
A-4
<PAGE>
PORTFOLIO COMMENTARY
Neuberger Berman
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NYCDC Socially Responsive Trust
PORTFOLIO MANAGER JANET PRINDLE BELIEVES DOING GOOD IS GOOD BUSINESS AND
HAS THE POTENTIAL TO PRODUCE POSITIVE INVESTMENT RESULTS. SHE FOCUSES ON
COMPANIES THAT ARE AGENTS OF FAVORABLE CHANGE IN WORKPLACE POLICIES,
PARTICULARLY FOR WOMEN AND MINORITIES, ARE GOOD CORPORATE CITIZENS, AND
ARE RESPONSIVE TO ENVIRONMENTAL ISSUES. SHE DOES NOT INVEST IN TOBACCO,
ALCOHOL, GAMBLING, NUCLEAR POWER, OR WEAPONS COMPANIES. BUT, SOCIAL
RESPONSIBILITY ALONE DOES NOT QUALIFY A COMPANY AS A GOOD INVESTMENT. TRUE
TO NEUBERGER BERMAN'S PRINCIPLES, PORTFOLIO CANDIDATES MUST FIRST APPEAR
FUNDAMENTALLY ATTRACTIVE. THEN, AND ONLY THEN, ARE SOCIAL SCREENS APPLIED.
THE OBJECTIVE IS SIMPLE AND STRAIGHTFORWARD -- TO SERVE BOTH SOCIETY AND
SHAREHOLDERS.
For the six-month period ended February 28, 1999, NYCDC Socially Responsive
Trust gained 25.10% versus the Standard & Poor's 500 Index's 30.32% return.*
In a period in which growth investing once again materially outperformed value
investing, we credit our stock selection for the portfolio's competitive returns
versus the growth stock dominated S&P 500. Our technology, healthcare, and
consumer staples holdings excelled -- in aggregate, returning approximately 56%,
40% and 39%, respectively. Big winners in the technology sector included Analog
Devices, Perkin Elmer, and Unisys -- high-quality companies we were able to
accumulate at discounted valuations. Good performers in the consumer staples
category included Kimberly Clark and Valassis Communications -- once again,
top-tier companies bought at bargain prices. In the healthcare arena, previously
out-of-favor stocks Biogen, C.R. Bard and Wellpoint Health Networks posted
strong gains.
However, our capital goods and utilities investments disappointed on both an
absolute and relative performance basis. Plagued by slack global demand and the
absence of pricing power, multinationals like Minnesota Mining and Manufacturing
and Raychem Corp. struggled. We may have to wait for the global economy to
stabilize before these and other high-quality capital goods holdings can
advance. In addition, our utilities holdings have been restrained by uncertainty
regarding how the ongoing deregulation of the utilities industry would impact
earnings and most recently, by rising interest rates. We didn't buy utilities
for
A-5
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NYCDC Socially Responsive Trust (Cont'd)
earnings or yield, but rather because we expect ongoing industry-wide
consolidations to reduce operating expenses for many of these companies, which,
in turn, should reveal their intrinsic value.
In this report we would like to highlight three companies that we believe
represent socially responsive companies which are also excellent investment
opportunities. We have chosen to highlight drug maker Biogen, computer hardware
and services company Unisys, and retailer Dayton Hudson. Be reminded we reserve
the right to alter our opinion on these and all the stocks in the portfolio if
changing circumstances dictate.
First, Biogen is a company whose stock has more than doubled in the last six
months. Its success in part is driven by the overwhelming reception for Avonex,
its new drug for the treatment of multiple sclerosis. As the only drug that has
proven effective in treating MS during all its stages, we believe Avonex has
true blockbuster potential. Research reveals that since Avonex's introduction,
early stage diagnosis of MS has increased, indicating the market for this
product may be even larger than generally recognized. While Biogen's stock is no
longer cheap, we believe if Avonex reaches its full potential and the company
can bring other promising drugs in its pipeline to market, it may still be a
long-term bargain at current prices. We applaud Biogen's success with Avonex and
its ongoing commitment to finding treatments for other diseases.
Second, Unisys, a computer hardware and services company, has exhibited strong
performance over the last six months. Its management is now focusing on the
higher margin computer network and systems integration business. This strategy,
along with a much-improved balance sheet, is attracting investor attention.
Unisys also deserves credit for re-engineering its facilities to dramatically
reduce manufacturing emissions. This move has not only helped the company by
producing future cost savings estimated at $6 million dollars annually, but it
also benefited the communities located near its manufacturing facilities. A
clearer business strategy, a healthier balance sheet, and cleaner air for its
neighbors has earned our investment and socially responsive stamps of approval.
A-6
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NYCDC Socially Responsive Trust (Cont'd)
And third, retailer Dayton Hudson, another of the portfolio's excellent
performers during the past six months, owes much of its progress to its Target
Store discount chain. Target's profits are accelerating and now account for
approximately 70% of parent Dayton Hudson's earnings. The Target formula -- low
prices combined with more attractive merchandising and a higher level of service
than that provided by many other discount retailers -- has turned out to be a
winning strategy and one we believe can continue to propel Dayton Hudson's
stock. Dayton Hudson also deserves high corporate citizenship marks for donating
5% of its pre-tax profits to charities and for its diverse board of directors
that includes three women and two ethnic minority members.
In closing, most value-oriented investors have struggled to keep pace with the
S&P 500 over the last six months. Consequently, we are particularly pleased with
the portfolio's performance during first-half fiscal 1999. As always, we are
pleased to have been able to reward shareholders whose quest for financial
security is coupled with a well-developed social conscience.
Sincerely,
/s/ Janet Prindle
Janet Prindle
PORTFOLIO MANAGER
*The S&P 500 Index is an unmanaged index generally considered to be
representative of stock market activity. Please note that indices do not take
into account any fees and expenses of investing in the individual securities
that they track, and that individuals cannot invest directly in any index. Data
about the performance of this index are prepared or obtained by Neuberger
Berman Management Incorporated ("NBMI") and include reinvestment of all
dividends and capital gain distributions. The Portfolio invests in many
securities not included in the above-described index.
The composition, industries and holdings of the Portfolio are subject to
change. Socially Responsive Portfolio is invested in a wide array of stocks and
no single holding makes up more than a small fraction of the Portfolio's total
assets.
Please remember that past performance is not indicative of future results.
A-7
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(This page has been left blank intentionally.)
A-8
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STATEMENT OF ASSETS AND LIABILITIES
Neuberger Berman
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NYCDC Socially Responsive Trust
<TABLE>
<CAPTION>
February 28,
1999
(000'S OMITTED EXCEPT PER SHARE AMOUNT) (UNAUDITED)
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<S> <C>
ASSETS
Investment in Portfolio, at value (Note A) $ 230,492
Receivable for Trust shares sold 156
Receivable from administrator -- net (Note
B) 14
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230,662
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LIABILITIES
Payable for Trust shares redeemed 198
Accrued expenses 39
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237
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NET ASSETS at value $ 230,425
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NET ASSETS consist of:
Par value $ 13
Paid-in capital in excess of par value 165,319
Accumulated undistributed net investment
income 817
Accumulated net realized gains on investment 5,714
Net unrealized appreciation in value of
investment 58,562
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NET ASSETS at value $ 230,425
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SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 12,821
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NET ASSET VALUE, offering and redemption price per
share $17.97
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</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-1
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STATEMENT OF OPERATIONS
Neuberger Berman
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NYCDC Socially Responsive Trust
<TABLE>
<CAPTION>
For the
Six Months
Ended
February 28,
1999
(000'S OMITTED) (UNAUDITED)
------------
<S> <C>
INVESTMENT INCOME
Investment income from Portfolio (Note A) $ 1,550
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Expenses:
Administration fee (Note B) 54
Shareholder reports 19
Shareholder servicing agent fees 8
Legal fees 8
Custodian fees 5
Amortization of deferred organization and
initial offering expenses (Note A) 5
Registration and filing fees 4
Auditing fees 4
Trustees' fees and expenses 3
Miscellaneous 1
Expenses from Portfolio (Notes A & B) 646
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Total expenses 757
Expenses reimbursed by administrator and
reduced by custodian fee expense offset
arrangement (Note B) (109)
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Total net expenses 648
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Net investment income 902
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REALIZED AND UNREALIZED GAIN ON INVESTMENTS FROM
PORTFOLIO (NOTE A)
Net realized gain on investment securities 5,750
Change in net unrealized appreciation of
investment securities 39,948
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Net gain on investments from Portfolio
(Note A) 45,698
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Net increase in net assets resulting from
operations $ 46,600
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</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-2
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STATEMENT OF CHANGES IN NET ASSETS
Neuberger Berman
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NYCDC Socially Responsive Trust
<TABLE>
<CAPTION>
For the
Six Months For the
Ended Year
February 28, Ended
1999 August 31,
(000'S OMITTED) (UNAUDITED) 1998
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 902 $ 1,999
Net realized gain on investments
from Portfolio (Note A) 5,750 21,314
Change in net unrealized
appreciation of investments from
Portfolio (Note A) 39,948 (34,977)
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Net increase (decrease) in net
assets resulting from operations 46,600 (11,664)
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DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,994) (1,260)
Net realized gain on investments (18,879) (9,382)
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Total distributions to shareholders (20,873) (10,642)
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FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 19,847 48,075
Proceeds from reinvestment of
dividends and distributions 20,873 10,642
Payments for shares redeemed (22,692) (38,604)
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Net increase from Trust share
transactions 18,028 20,113
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NET INCREASE (DECREASE) IN NET ASSETS 43,755 (2,193)
NET ASSETS:
Beginning of period 186,670 188,863
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End of period $ 230,425 $ 186,670
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Accumulated undistributed net
investment income at end of period $ 817 $ 1,909
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NUMBER OF TRUST SHARES:
Sold 1,109 2,554
Issued on reinvestment of dividends
and distributions 1,147 619
Redeemed (1,273) (2,052)
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Net increase in shares outstanding 983 1,121
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</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-3
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NOTES TO FINANCIAL STATEMENTS
Neuberger Berman February 28, 1999 (Unaudited)
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Equity Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger Berman NYCDC Socially Responsive Trust-SM- (the "Fund") is
a separate operating series of Neuberger Berman Equity Trust (the "Trust"), a
Delaware business trust organized pursuant to a Trust Instrument dated May 6,
1993. The Trust is registered as a diversified, open-end management
investment company under the Investment Company Act of 1940, as amended, and
its shares are registered under the Securities Act of 1933, as amended. The
trustees of the Trust 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.
The Fund seeks to achieve its investment objective by investing all of its
net investable assets in the Neuberger Berman Socially Responsive Portfolio
of Equity Managers Trust (the "Portfolio") having the same investment
objective and policies as the Fund. The value of the Fund's investment in the
Portfolio reflects the Fund's proportionate interest in the net assets of the
Portfolio (64.87% at February 28, 1999). The Fund was created as an
investment vehicle for participants in the Deferred Compensation Plan of the
City of New York and Related Agencies and Instrumentalities. The performance
of the Fund is directly affected by the performance of the Portfolio. The
financial statements of the Portfolio, including the Schedule of Investments,
are included elsewhere in this report and should be read in conjunction with
the Fund's financial statements.
2) PORTFOLIO VALUATION: The Fund records its investment in the Portfolio at
value. Investment securities held by the Portfolio are valued as indicated in
the notes following the Portfolio's Schedule of Investments.
3) TAXES: The Fund is treated as a separate entity for U.S. Federal income tax
purposes. It is the policy of the Fund to continue to qualify as a regulated
investment company by complying with the provisions available to certain
investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of investment company taxable income
and net capital gains (after reduction for any amounts available for U.S.
Federal income tax purposes as capital loss carryforwards) sufficient to
relieve it from all, or substantially all, U.S. Federal income taxes.
Accordingly, the Fund paid no U.S. Federal income taxes and no provision for
U.S. Federal income taxes was required.
4) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund earns income, net of
Portfolio expenses, daily on its investment in the Portfolio. Income
dividends
B-4
<PAGE>
and distributions from net realized capital gains, if any, are normally
distributed in December. Income dividends and capital gain distributions to
shareholders are recorded on the ex-dividend date. To the extent the Fund's
net realized capital gains, if any, can be offset by capital loss
carryforwards, it is the policy of the Fund not to distribute such gains.
The Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a return of capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes are classified as
distributions in excess of net investment income or accumulated net realized
gains.
5) ORGANIZATION EXPENSES: Expenses incurred by the Fund in connection with its
organization are being amortized on a straight-line basis over a five-year
period. At February 28, 1999, the unamortized balance of such expenses
amounted to $342.
6) EXPENSE ALLOCATION: The Fund bears all costs of its operations. Expenses
incurred by the Trust with respect to any two or more funds are allocated in
proportion to the net assets of such funds, except where a more appropriate
allocation of expenses to each fund can otherwise be made fairly. Expenses
directly attributable to a fund are charged to that fund.
7) OTHER: All net investment income and realized and unrealized capital gains
and losses of the Portfolio are allocated pro rata among its respective funds
and any other investors in the Portfolio.
NOTE B -- ADMINISTRATION FEES, DISTRIBUTION ARRANGEMENTS, AND OTHER TRANSACTIONS
WITH AFFILIATES:
The Fund retains Neuberger Berman Management Inc.-Registered Trademark-
("Management") as its administrator under an Administration Agreement
("Agreement"). Pursuant to this Agreement the Fund pays Management an
administration fee at the annual rate of 0.05% of the Fund's average daily net
assets. The Fund indirectly pays for investment management services through its
investment in the Portfolio (see Note B of Notes to Financial Statements of the
Portfolio).
Management has voluntarily undertaken to reimburse the Fund for its operating
expenses plus its pro rata share of the Portfolio's operating expenses
(including the fees payable to Management but excluding interest, taxes,
brokerage commissions, and extraordinary expenses) which exceed, in the
aggregate, 0.60% per annum of the Fund's average daily net assets. This
undertaking is subject to termination by Management upon at least 60 days' prior
written notice to the Fund. For the six months ended February 28, 1999, such
excess expenses amounted to $108,771.
All of the capital stock of Management is owned by individuals who are also
principals of Neuberger Berman, LLC ("Neuberger"), a member firm of The New
B-5
<PAGE>
York Stock Exchange and sub-adviser to the Portfolio. Several individuals who
are officers and/or trustees of the Trust are also principals of Neuberger
and/or officers and/or directors of Management.
The Fund also has a distribution agreement with Management. Management
receives no compensation therefor and no commissions for sales or redemptions of
shares of beneficial interest of the Fund.
The Portfolio has an expense offset arrangement in connection with its
custodian contract. In addition, in connection with the Securities Lending
Agreement between the Portfolio and Morgan Stanley & Co. Incorporated
("Morgan"), Morgan has agreed to reimburse the Portfolio for transaction costs
incurred on security lending transactions charged by the custodian. The impact
of these arrangements, reflected in the Statement of Operations under the
caption Expenses from Portfolio, was a reduction of $66 and $293, respectively.
NOTE C -- INVESTMENT TRANSACTIONS:
During the six months ended February 28, 1999, additions and reductions in
the Fund's investment in the Portfolio amounted to $10,902,128 and $13,666,771,
respectively.
NOTE D -- UNAUDITED FINANCIAL INFORMATION:
The financial information included in this interim report is taken from the
records of the fund without audit by independent accountants. Annual reports
contain audited financial statements.
B-6
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
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NYCDC Socially Responsive Trust(1)
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
For the
Period
from
March
For the 14,
Six Months 1994(2)
Ended to
February 28, August
1999 For the Year Ended August 31, 31,
(UNAUDITED) 1998 1997 1996 1995 1994
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 15.77 $ 17.62 $ 14.42 $ 12.27 $ 10.43 $10.20
------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .07 .17 .17 .14 .13 .06
Net Gains or Losses on Securities
(both realized and unrealized) 3.91 (1.06) 4.38 2.44 1.82 .17
------------------------------------------------------------------------
Total From Investment Operations 3.98 (.89) 4.55 2.58 1.95 .23
------------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) (.17) (.16) (.16) (.12) (.11) --
Distributions (from net capital
gains) (1.61) (.80) (1.19) (.31) -- --
------------------------------------------------------------------------
Total Distributions (1.78) (.96) (1.35) (.43) (.11) --
------------------------------------------------------------------------
Net Asset Value, End of Period $ 17.97 $ 15.77 $ 17.62 $ 14.42 $ 12.27 $10.43
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Total Return(3) +25.10%(4) -5.49% +33.20% +21.27% +18.95% +2.26%(4)
------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $ 230.4 $ 186.7 $ 188.9 $ 125.6 $ 88.5 $ 68.6
------------------------------------------------------------------------
Ratio of Gross Expenses to Average
Net Assets(5) .60%(7) .60% .60% .60% -- --
------------------------------------------------------------------------
Ratio of Net Expenses to Average Net
Assets(6) .60%(7) .60% .60% .60% .60% .60%(7)
------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets .84%(7) .92% 1.11% 1.06% 1.26% 1.42%(7)
------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-7
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger Berman February 28, 1999 (Unaudited)
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NYCDC Socially Responsive Trust
1) The per share amounts and ratios which are shown reflect income and expenses,
including the Fund's proportionate share of the Portfolio's income and
expenses.
2) The date investment operations commenced.
3) Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Fund during each fiscal
period and assumes dividends and other distributions, if any, were
reinvested. Results represent past performance and do not guarantee future
results. Investment returns and principal may fluctuate and shares when
redeemed may be worth more or less than original cost. Total return would
have been lower if Management had not reimbursed certain expenses.
4) Not annualized.
5) For fiscal periods ending after September 1, 1995, the Fund is required to
calculate an expense ratio without taking into consideration any expense
reductions related to expense offset arrangements.
6) After reimbursement of expenses by Management as described in Note B of Notes
to Financial Statements. Had Management not undertaken such action the
annualized ratios of net expenses to average daily net assets would have
been:
<TABLE>
<CAPTION>
For the For the
Six Months Period from
Ended March 14, 1994 to
February 28, For the Year Ended August 31, August 31,
1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Expenses .70% .70% .73% .80% .85% .84%
</TABLE>
7) Annualized.
B-8
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Socially Responsive Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
---------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. Citigroup Inc. 3.6%
2. MCI WorldCom 3.5%
3. C. R. Bard 3.2%
4. Intel Corp. 2.7%
5. Wal-Mart Stores 2.7%
6. ALZA Corp. 2.7%
7. Wellpoint Health Networks 2.6%
8. Unisys Corp. 2.5%
9. Tyco International 2.5%
10. Fannie Mae 2.5%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
COMMON STOCKS (95.8%)
ADVERTISING (2.2%)
330,000 True North Communications $ 7,693
-------------
AUTOMOTIVE (1.7%)
137,200 Borg-Warner Automotive 5,977
-------------
BANKING & FINANCIAL (2.4%)
160,000 Bank One 8,600
-------------
CHEMICALS (1.2%)
100,000 Minerals Technologies 4,294
-------------
CONSUMER GOODS & SERVICES (2.0%)
150,000 Kimberly-Clark 7,088
-------------
DIVERSIFIED (2.5%)
120,000 Tyco International 8,933
-------------
ENERGY (1.7%)
80,000 Chevron Corp. 6,150
-------------
ENTERTAINMENT (2.2%)
300,000 Fox Entertainment Group 7,800
-------------
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
FINANCIAL SERVICES (10.5%)
150,000 Ambac Financial Group $ 8,400
217,500 Citigroup Inc. 12,778
200,000 Dun & Bradstreet 6,850
125,000 Fannie Mae 8,750
53,500 Indigo Aviation ADR 401
-------------
37,179
-------------
FOOD & BEVERAGE (1.9%)
80,000 McDonald's Corp. 6,800
-------------
FURNISHINGS (2.1%)
350,000 Leggett & Platt 7,328
-------------
HEALTH CARE (13.7%)
180,000 ALZA Corp. 9,439
85,000 Biogen, Inc. 8,171
250,000 Invacare Corp. 5,937
90,000 Johnson & Johnson 7,684
120,000 Warner-Lambert 8,287
118,000 Wellpoint Health Networks 9,307
-------------
48,825
-------------
HOSPITAL SUPPLIES (5.2%)
150,000 Beckman Coulter 7,247
200,000 C. R. Bard 11,275
-------------
18,522
-------------
INDUSTRIAL & COMMERCIAL PRODUCTS (2.2%)
350,000 Raychem Corp. 7,984
-------------
INSURANCE (3.9%)
380,000 ESG Re 6,436
160,000 ReliaStar Financial 7,260
-------------
13,696
-------------
OIL & GAS (1.3%)
200,000 Cooper Cameron 4,625
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PAPER & FOREST PRODUCTS (1.6%)
190,000 Mead Corp. 5,783
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</TABLE>
C-1
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Socially Responsive Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
PUBLISHING & BROADCASTING (4.1%)
240,000 CMP Media $ 7,200
150,000 Valassis Communications 7,200
-------------
14,400
-------------
RECYCLING (0.7%)
187,500 IMCO Recycling 2,355
-------------
RETAIL GROCERY (1.9%)
120,000 Albertson's Inc. 6,840
-------------
RETAIL STORES (4.6%)
160,000 Circuit City Stores 8,680
120,000 Dayton Hudson 7,508
-------------
16,188
-------------
RETAILING (2.7%)
110,000 Wal-Mart Stores 9,501
-------------
TECHNOLOGY (12.8%)
230,000 Analog Devices 5,764
160,000 Compaq Computer 5,640
120,000 Hewlett-Packard 7,973
80,000 Intel Corp. 9,595
300,000 Unisys Corp. 8,944
140,000 Xerox Corp. 7,726
-------------
45,642
-------------
TELECOMMUNICATIONS (4.0%)
150,000 MCI WorldCom 12,375
303,200 Metromedia International Group 1,762
-------------
14,137
-------------
TRANSPORTATION (1.9%)
120,000 AMR Corp. 6,653
-------------
UTILITIES, ELECTRIC & GAS (4.8%)
180,000 Cinergy Corp. 5,254
300,000 DPL Inc. 5,343
250,000 KeySpan Energy 6,625
-------------
17,222
-------------
TOTAL COMMON STOCKS (COST
$260,523) 340,215
-------------
<CAPTION>
Market
Value(1)
Principal (000's
Amount omitted)
- ---------- -------------
<C> <S> <C>
U.S. TREASURY SECURITIES (1.2%)
$4,370,000 U.S. Treasury Bills, 4.30% &
4.485%, due 3/25/99 & 4/22/99
(COST $4,347) $ 4,347(2)
-------------
REPURCHASE AGREEMENTS (3.2%)
11,340,000 State Street Bank and Trust
Co. Repurchase Agreement,
4.70%, due 3/1/99, dated
2/26/99, Maturity Value
$11,344,442, Collateralized
by $9,970,000 U.S. Treasury
Bonds, 7.25%, due 5/15/16
(Collateral Value
$11,683,624) (COST $11,340) 11,340 (2)
-------------
SHORT-TERM INVESTMENTS (1.8%)
100,000 Self Help Credit Union, 4.66%,
due 5/24/99 100
6,293,657 N&B Securities Lending Quality
Fund, LLC 6,294
-------------
TOTAL SHORT-TERM INVESTMENTS
(COST $6,394) 6,394 (2)
-------------
TOTAL INVESTMENTS (102.0%)
(COST $282,604) 362,296 (3)
Liabilities, less cash,
receivables and other assets
[(2.0%)] (6,964 )
-------------
TOTAL NET ASSETS (100.0%) $ 355,332
-------------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-2
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
Neuberger Berman February 28, 1999 (Unaudited)
- ----------------------------------------------------------------------
Socially Responsive Portfolio
1) Investment securities of the Portfolio are valued at the latest sales price;
securities for which no sales were reported, unless otherwise noted, are
valued at the mean between the closing bid and asked prices. The Portfolio
values all other securities by a method the trustees of Equity Managers Trust
believe accurately reflects fair value. Foreign security prices are furnished
by independent quotation services expressed in local currency values. Foreign
security prices are translated from the local currency into U.S. dollars
using current exchange rates. Short-term debt securities with less than 60
days until maturity may be valued at cost which, when combined with interest
earned, approximates market value.
2) At cost, which approximates market value.
3) The cost of investments for U.S. Federal income tax purposes was
$282,603,942. At February 28, 1999, gross unrealized appreciation of
investments was $93,521,367 and gross unrealized depreciation of investments
was $13,829,456, resulting in net unrealized appreciation of $79,691,911,
based on cost for U.S. Federal income tax purposes.
SEE NOTES TO FINANCIAL STATEMENTS
C-3
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
Neuberger Berman
- ----------------------------------------------------------------------
Socially Responsive Portfolio
<TABLE>
<CAPTION>
February 28,
1999
(000'S OMITTED) (UNAUDITED)
--------------
<S> <C>
ASSETS
Investments in securities, at market value*
(Note A) -- see Schedule of Investments $ 362,296
Cash 9
Receivable for securities sold 6,009
Dividends and interest receivable 722
Prepaid expenses and other assets 7
--------------
369,043
--------------
LIABILITIES
Payable for securities purchased 6,907
Payable for collateral on securities loaned
(Note A) 6,293
Accrued expenses and other payables 362
Payable to investment manager (Note B) 149
--------------
13,711
--------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 355,332
--------------
NET ASSETS consist of:
Paid-in capital $ 275,640
Net unrealized appreciation in value of
investment securities 79,692
--------------
NET ASSETS $ 355,332
--------------
*Cost of investments $ 282,604
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-4
<PAGE>
STATEMENT OF OPERATIONS
Neuberger Berman
- ----------------------------------------------------------------------
Socially Responsive Portfolio
<TABLE>
<CAPTION>
For the
Six Months
Ended
February 28,
1999
(000'S OMITTED) (UNAUDITED)
------------
<S> <C>
INVESTMENT INCOME
Income:
Dividend income $ 2,013
Interest income 353
------------
Total income 2,366
------------
Expenses:
Investment management fee (Note B) 896
Custodian fees (Note B) 53
Auditing fees 15
Legal fees 8
Accounting fees 5
Trustees' fees and expenses 5
Amortization of deferred organization and
initial offering expenses (Note A) 3
Insurance expense 2
------------
Total expenses 987
Expenses reduced by custodian fee expense
offset arrangement (Note B) (1)
------------
Total net expenses 986
------------
Net investment income 1,380
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investment securities
sold 6,144
Change in net unrealized appreciation of
investment securities 63,179
------------
Net gain on investments 69,323
------------
Net increase in net assets resulting from
operations $ 70,703
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-5
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Neuberger Berman
- ----------------------------------------------------------------------
Socially Responsive Portfolio
<TABLE>
<CAPTION>
For the
Six Months For the
Ended Year
February 28, Ended
1999 August 31,
(000'S OMITTED) (UNAUDITED) 1998
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 1,380 $ 2,863
Net realized gain on investments 6,144 26,331
Change in net unrealized
appreciation of investments 63,179 (50,773)
-----------------------------
Net increase (decrease) in net
assets resulting from operations 70,703 (21,579)
-----------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 25,042 71,633
Reductions (23,263) (23,485)
-----------------------------
Net increase in net assets resulting
from transactions in investors'
beneficial interests 1,779 48,148
-----------------------------
NET INCREASE IN NET ASSETS 72,482 26,569
NET ASSETS:
Beginning of period 282,850 256,281
-----------------------------
End of period $ 355,332 $ 282,850
-----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
February 28, 1999 (Unaudited)
- ----------------------------------------------------------------------
Equity Managers Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger Berman Socially Responsive Portfolio (the "Portfolio") is
a separate operating series of Equity Managers Trust ("Managers Trust"), a
New York common law trust organized as of December 1, 1992. Managers Trust is
registered as a diversified, open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"). Other regulated
investment companies sponsored by Neuberger Berman Management Inc.
("Management"), whose financial statements are not presented herein, also
invest in the Portfolio and other portfolios of Managers Trust.
The assets of each series belong only to that series, and the liabilities
of each series are borne solely by that series and no other.
2) PORTFOLIO VALUATION: Investment securities are valued as indicated in the
notes following the Portfolio's Schedule of Investments.
3) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the
ex-dividend date or, for certain foreign dividends, as soon as the Portfolio
becomes aware of the dividends. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, including accretion of original issue discount,
where applicable, and accretion of discount on short-term investments, is
recorded on the accrual basis. Realized gains and losses from securities
transactions are recorded on the basis of identified cost.
4) TAXES: Managers Trust intends to comply with the requirements of the Internal
Revenue Code. Each portfolio of Managers Trust also intends to conduct its
operations so that each of its investors will be able to qualify as a
regulated investment company. Each portfolio will be treated as a partnership
for U.S. Federal income tax purposes and is therefore not subject to U.S.
Federal income tax.
5) ORGANIZATION EXPENSES: Expenses incurred by the Portfolio in connection with
its organization are being amortized by the Portfolio on a straight-line
basis over a five-year period. At February 28, 1999, the unamortized balance
of such expenses amounted to $233.
6) EXPENSE ALLOCATION: The Portfolio bears all costs of its operations. Expenses
incurred by Managers Trust with respect to any two or more portfolios are
C-7
<PAGE>
allocated in proportion to the net assets of such portfolios, except where a
more appropriate allocation of expenses to each portfolio can otherwise be
made fairly. Expenses directly attributable to a portfolio are charged to
that portfolio.
7) SECURITY LENDING: Securities loans involve certain risks in the event a
borrower should fail financially, including delays or inability to recover
the lent securities or foreclose against the collateral. The investment
manager, under the general supervision of Managers Trust's Board of Trustees,
monitors the creditworthiness of the parties to whom the Portfolio makes
security loans. The Portfolio will not lend securities on which covered call
options have been written, or lend securities on terms which would prevent
each of its investors from qualifying as a regulated investment company.
Effective June 1, 1998, the Portfolio entered into a Securities Lending
Agreement with Morgan Stanley & Co. Incorporated ("Morgan"). The Portfolio
receives cash collateral equal to at least 100% of the current market value
of the loaned securities. The Portfolio invests the cash collateral in the
N&B Securities Lending Quality Fund, LLC ("investment vehicle"), which is
managed by State Street Bank and Trust Company pursuant to guidelines
approved by Managers Trust's investment manager. Income earned on the
investment vehicle is paid to Morgan monthly. The Portfolio receives a fee,
payable monthly, negotiated by the Portfolio and Morgan, based on the number
and duration of the lending transactions. At February 28, 1999, the value of
the securities loaned and the value of the collateral were $6,170,250 and
$6,293,657, respectively.
8) REPURCHASE AGREEMENTS: The Portfolio may enter into repurchase agreements
with institutions that the Portfolio's investment manager has determined are
creditworthy. Each repurchase agreement is recorded at cost. The Portfolio
requires that the securities purchased in a repurchase transaction be
transferred to the custodian in a manner sufficient to enable the Portfolio
to obtain those securities in the event of a default under the repurchase
agreement. The Portfolio monitors, on a daily basis, the value of the
securities transferred to ensure that their value, including accrued
interest, is greater than amounts owed to the Portfolio under each such
repurchase agreement.
NOTE B -- MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
The Portfolio retains Management as its investment manager under a Management
Agreement. For such investment management services, the Portfolio pays
Management a fee at the annual rate of 0.55% of the first $250 million of the
Portfolio's average daily net assets, 0.525% of the next $250 million, 0.50% of
the next $250 million, 0.475% of the next $250 million, 0.45% of the next $500
million, and 0.425% of average daily net assets in excess of $1.5 billion.
All of the capital stock of Management is owned by individuals who are also
principals of Neuberger Berman, LLC ("Neuberger"), a member firm of The New York
Stock Exchange and sub-adviser to the Portfolio. Neuberger is retained by
C-8
<PAGE>
Management to furnish it with investment recommendations and research
information without added cost to the Portfolio. Several individuals who are
officers and/or trustees of Managers Trust are also principals of Neuberger
and/or officers and/or directors of Management.
The Portfolio has an expense offset arrangement in connection with its
custodian contract. In addition, in connection with the Securities Lending
Agreement between the Portfolio and Morgan, Morgan has agreed to reimburse the
Portfolio for transaction costs incurred on security lending transactions
charged by the custodian. The impact of these arrangements, reflected in the
Statement of Operations under the caption Custodian fees, was a reduction of
$100 and $448, respectively.
NOTE C -- SECURITIES TRANSACTIONS:
During the six months ended February 28, 1999, there were purchase and sale
transactions (excluding short-term securities) of $95,860,433 and $90,481,097,
respectively.
During the six months ended February 28, 1999, brokerage commissions on
securities transactions amounted to $242,023, of which Neuberger received
$165,385, and other brokers received $76,638.
NOTE D -- UNAUDITED FINANCIAL INFORMATION:
The financial information included in this interim report is taken from the
records of the Portfolio without audit by independent accountants. Annual
reports contain audited financial statements.
C-9
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
- --------------------------------------------------------------------------------
Socially Responsive Portfolio
<TABLE>
<CAPTION>
For
the
Period
For the from
Six March
Months 14,
Ended 1994(1)
February to
28, August
1999 For the Year Ended August 31, 31,
(UNAUDITED) 1998 1997 1996 1995 1994
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(2) .60%(3) .60% .63% .65% -- --
-----------------------------------------------------------------
Net Expenses .60%(3) .60% .63% .65% .68% .69%(3)
-----------------------------------------------------------------
Net Investment Income .84%(3) .92% 1.08% 1.02% 1.18% 1.33%(3)
-----------------------------------------------------------------
Portfolio Turnover Rate 29% 47% 51% 53% 58% 14%
-----------------------------------------------------------------
Net Assets, End of Period (in millions) $355.3 $282.9 $256.3 $158.5 $96.7 $70.7
-----------------------------------------------------------------
</TABLE>
1) The date investment operations commenced.
2) For fiscal periods ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without taking into consideration any expense
reductions related to expense offset arrangements.
3) Annualized.
C-10
<PAGE>
OTHER INFORMATION
DIRECTORY
INVESTMENT MANAGER, ADMINISTRATOR
AND DISTRIBUTOR
Neuberger Berman Management Inc.
605 Third Avenue 2nd Floor
New York, NY 10158-0180
800.877.9700 or 212.476.8800
Institutional Services 800.366.6264
SUB-ADVISER
Neuberger Berman, LLC
605 Third Avenue
New York, NY 10158-3698
CUSTODIAN AND SHAREHOLDER
SERVICING AGENT
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
ADDRESS CORRESPONDENCE TO:
Deferred Compensation Plan of the
City of New York and Related Agencies
and Instrumentalities
40 Rector Street 3rd Floor
New York, NY 10006
212.306.7760
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, NW
2nd Floor
Washington, DC 20036-1800
OFFICERS AND TRUSTEES
Stanley Egener
CHAIRMAN OF THE BOARD AND TRUSTEE
Lawrence Zicklin
PRESIDENT AND TRUSTEE
Faith Colish
TRUSTEE
Howard A. Mileaf
TRUSTEE
Edward I. O'Brien
TRUSTEE
John T. Patterson, Jr.
TRUSTEE
John P. Rosenthal
TRUSTEE
Cornelius T. Ryan
TRUSTEE
Gustave H. Shubert
TRUSTEE
Daniel J. Sullivan
VICE PRESIDENT
Michael J. Weiner
VICE PRESIDENT
Richard Russell
TREASURER
Claudia A. Brandon
SECRETARY
Barbara DiGiorgio
ASSISTANT TREASURER
Celeste Wischerth
ASSISTANT TREASURER
Stacy Cooper-Shugrue
ASSISTANT SECRETARY
C. Carl Randolph
ASSISTANT SECRETARY
- -C- 1999 Neuberger Berman Management Inc.
D-1
<PAGE>
Statistics and projections in this
report are derived from sources
deemed to be reliable but cannot be
regarded as a representation of
future results of the Fund. This
report is prepared for the general
information of shareholders and is
not an offer of shares of the Fund.
Shares are sold only through the
currently effective prospectus, which
must precede or accompany this report.
[LOGO]
NEUBERGER BERMAN MANAGEMENT INC.
605 Third Avenue 2nd Floor
New York, NY 10158-0180
SHAREHOLDER SERVICES
800.877.9700
INSTITUTIONAL SERVICES
800.366.6264
www.nbfunds.com
[LOGO] NMATR5600499
