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NEUBERGER BERMAN
Neuberger Berman
Equity Trust -Registered Trademark-
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CENTURY TRUST ANNUAL REPORT
FOCUS TRUST AUGUST 31, 2000
GENESIS TRUST
GUARDIAN TRUST
INTERNATIONAL TRUST
MANHATTAN TRUST
MILLENNIUM TRUST
PARTNERS TRUST
REGENCY TRUST
SOCIALLY RESPONSIVE TRUST
TECHNOLOGY TRUST
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TABLE OF CONTENTS
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THE FUNDS
CHAIRMAN'S LETTER A-4
PORTFOLIO COMMENTARY
Century Trust A-5
Focus Trust A-8
Genesis Trust A-11
Guardian Trust A-14
International Trust A-17
Manhattan Trust A-20
Millennium Trust A-23
Partners Trust A-26
Regency Trust A-29
Socially Responsive Trust A-32
Technology Trust A-35
GROWTH OF A DOLLAR CHARTS
COMPARISON OF A
$10,000 INVESTMENT
Century Trust A-39
Focus Trust A-41
Genesis Trust A-43
Guardian Trust A-45
International Trust A-47
Manhattan Trust A-48
Millennium Trust A-50
Partners Trust A-52
Regency Trust A-54
Socially Responsive Trust A-56
Technology Trust A-58
FINANCIAL STATEMENTS B-1
FINANCIAL HIGHLIGHTS
PER SHARE DATA
Century Trust B-18
Focus Trust B-19
Genesis Trust B-20
Guardian Trust B-21
International Trust B-22
Manhattan Trust B-23
Millennium Trust B-24
Partners Trust B-25
Regency Trust B-26
Socially Responsive Trust B-27
Technology Trust B-28
REPORT OF INDEPENDENT
ACCOUNTANTS/AUDITORS B-31
THE PORTFOLIOS
SCHEDULE OF INVESTMENTS
TOP TEN EQUITY
HOLDINGS
Century Portfolio C-1
Focus Portfolio C-4
Genesis Portfolio C-6
Guardian Portfolio C-10
International Portfolio C-13
Manhattan Portfolio C-17
Millennium Portfolio C-20
Partners Portfolio C-23
Regency Portfolio C-26
Socially Responsive
Portfolio C-29
Technology Portfolio C-31
FINANCIAL STATEMENTS C-35
FINANCIAL HIGHLIGHTS
Century Portfolio C-55
Focus Portfolio C-56
Genesis Portfolio C-57
Guardian Portfolio C-58
International Portfolio C-59
Manhattan Portfolio C-60
Millennium Portfolio C-61
Partners Portfolio C-62
Regency Portfolio C-63
Socially Responsive
Portfolio C-64
Technology Portfolio C-65
REPORT OF INDEPENDENT
ACCOUNTANTS/AUDITORS C-66
DIRECTORY D-1
OFFICERS AND TRUSTEES D-2
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The "Neuberger Berman" name and logo are service marks of Neuberger Berman, LLC.
"Neuberger Berman Management Inc." and the individual fund names in this report
are either service marks or registered trademarks of Neuberger Berman Management
Inc. -C-2000 Neuberger Berman Management Inc.
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CHAIRMAN'S LETTER October 20, 2000
Dear Fellow Shareholder,
In recent years many growth stocks have excelled while value stocks have
languished. Some market observers declared value investing dead. We disagreed,
praising the long-term benefits of style diversification.
As measured by the growth and value stock benchmarks, growth stock investing
continued to be the most productive style in our fiscal year 2000. But, value
stocks came back to life, and Neuberger Berman value-oriented funds, most
notably Focus, Genesis, Guardian, Partners and Regency, delivered attractive
returns. Going forward, we can't predict which investment style will provide the
most generous short- to intermediate-term returns. Over the longer term,
however, we believe style diversification will work to shareholders' advantage.
We have witnessed a similar pattern in the relative performance of stocks in
different capitalization sectors. In recent years, large-cap stocks materially
outperformed small and mid-cap stocks.(1) In fiscal 2000, small- and mid-cap
stocks generally excelled. Our small- and mid-cap funds, most notably Genesis,
Millennium and Manhattan, were excellent performers. We don't know which market
capitalization sectors will be the best relative performers in the year ahead,
but again, we believe diversification is advantageous over the long haul.
Diversification and patience -- the twin foundations of a prudent long-term
investment strategy -- paid off handsomely in fiscal 2000. We believe they will
continue to benefit shareholders in the years ahead.
In closing, it is with great sadness that we report the recent passing of John
T. Patterson, Jr. John served as a Trustee of our equity funds since 1992. He
was widely respected for his intelligence and caring nature, a gracious man
whose pleasant vitality was a continuous inspiration. We will miss him deeply.
Sincerely,
/s/ Peter Sundman
Peter Sundman
Chairman of the Board
Neuberger Berman Equity Trust
(1)Mid-cap stocks, as represented by the Russell Midcap Index, returned 28.83%
for the fiscal year ending August 31, 2000. Small-cap stocks, as represented
by the Russell 2000 Index, returned 27.15%. Large-cap stocks, as represented
by the Russell 1000 Index, returned 20.14%. In the previous three fiscal
years ending August 31, the Russell 1000 had outperformed both the Russell
Midcap Index and the Russell 2000 Index.
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PORTFOLIO COMMENTARY
Neuberger Berman
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Century Trust
From its inception on January 26, 2000, through August 31, 2000, the Century
Trust returned 34.40%, versus the Russell 1000 Growth Index's 15.35% gain and
the Standard & Poor's 500 Index's 6.82% gain over the same time periods (see
page A-39 for comparison of $10,000 investment and cumulative total returns as
of August 31, 2000).*
Century Trust's strong performance in its first year of operations affirms our
belief that our investment philosophy, which has worked so successfully for the
Manhattan Fund in the mid-cap arena, could prove effective in the large-cap
sector as well. We believe that larger companies which are growing earnings
faster than their competitors and have consistently beaten consensus earnings
estimates will be superior performers.
Our current strategy is to be only half-weighted, relative to our benchmark,
in the stocks that comprise the top capitalization quintile of our universe, and
collectively over-weighted in the rest. This produces a bias to smaller
companies in the large-cap category. We tend to be particularly fond of "top of
the class" companies graduating from the mid-cap sector. These companies often
have faster earnings growth rates, and because they are not as widely followed
as the behemoths in the large cap category, may have a better chance of
exceeding consensus earnings growth estimates. In other words, we hope to feast
on the "giant shrimps" on the large-cap menu. We note the average capitalization
of large-cap mutual funds has been coming down, indicating that other investment
professionals are also seeking better earnings growth and more reasonable
valuations in the lower end of the large-cap spectrum.
Our portfolio holdings have been living up to our earnings expectations and
exceeding consensus earnings forecasts. In calendar first quarter 2000,
portfolio earnings grew 45%, well above consensus earnings growth estimates of
32%. Seventy-five percent of our holdings beat consensus expectations. In
calendar second quarter 2000, the numbers were even better. Portfolio earnings
were up 60% versus a consensus estimate of 40% growth, and 80% of our holdings
beat consensus
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Century Trust (Cont'd)
forecasts. As we write, calendar third quarter earnings are not yet in. However,
if we can sustain the portfolio's high earnings growth rate and favorable
earnings surprise batting average, the Fund has the potential to perform well.
The Trust's technology sector investments had the greatest impact on returns,
with stocks such as Oracle Corp., Analog Devices, EMC Corp. and Rational
Software more than doubling. Nortel Networks and Sun Microsystems also made our
Top Ten Performance List with impressive gains. Our concentration in companies
providing components, equipment, software, and services that have been essential
to the construction of Internet infrastructure paid off handsomely, as earnings
continued to blow away consensus estimates. Equally importantly, the portfolio
sustained little damage from the dot.com stock massacre in March and April,
which was triggered by investors questioning (as we did) whether skyrocketing
revenues would ever translate into profits.
The portfolio's healthcare positions delivered respectable gains. We favored
biotechnology companies over the large pharmaceuticals, primarily because we
believed new drug introductions would create more earnings leverage. Portfolio
companies such as Genentech and Amgen came through with new drugs that gained
widespread acceptance in the market and raised earnings expectations.
Our financial services investments, most notably Merrill Lynch and Citigroup,
also performed well, as better than expected earnings coupled with ongoing
consolidation in the sector propelled stock prices. Energy investments also
energized the portfolio. Rising oil prices powered earnings for companies such
as Anadarko Petroleum and energy services giant Schlumberger, which posted
excellent gains. Tight global inventories and constrained capacity should keep
exploration/production and energy services companies busy even if energy prices
retreat modestly from current levels. We expect this to translate into sustained
earnings momentum.
This year's portfolio disappointments were relatively modest. Our consumer
cyclicals investments, primarily retailers, performed poorly even though most
hit consensus earnings targets. Six Federal Reserve
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Century Trust (Cont'd)
rate hikes seemed to convince investors that retailers' earnings would suffer
from consumers tightening their purse strings. It hasn't happened yet, and now
that the Fed has taken its foot off the monetary brake, investor sentiment
toward the retailers may improve. We expect consumer cyclicals holdings that
continue to meet or beat consensus earnings estimates to rebound in the year
ahead.
In closing, it has been a gratifying first year for us and we are delighted to
have rewarded Century Trust shareholders. Guided by an investment discipline
that has worked well for us in the past, we will be striving to build on this
success in the years ahead.
Sincerely,
/s/ Brooke Cobb
Brooke Cobb
PORTFOLIO MANAGER
*This is a cumulative return and is not annualized. Because this is a new fund,
short-term results may not be duplicated. Average net assets of the Portfolio
from inception through August 31, 2000 were approximately $31.7 million. It may
be easier to achieve higher returns in a small fund than in a larger fund.
While investment in IPOs has had a positive impact on the performance of the
fund, as the fund grows in assets, this impact will likely be diminished.
Neuberger Berman Management Inc.-Registered Trademark- ("NBMI") currently
absorbs certain expenses of the fund. Without this arrangement, the fund's
returns would have been less. Past performance does not guarantee future
results and shares when redeemed may be worth more or less than original cost.
The prospectus contains a full discussion of the risks of investing in the
fund.
For index definitions, refer to page A-38, titled "Glossary of Indices." The
Portfolio invests in many securities not included in the indices listed.
The composition, industries and holdings of the Portfolio are subject to
change. Century 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.
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PORTFOLIO COMMENTARY
Neuberger Berman
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Focus Trust
For the six and twelve month periods concluding August 31, 2000, the Focus
Trust gained 31.29% and 59.02% respectively, versus an 11.72% and a 16.31%
increase in the S&P 500 and a 14.31% and a 4.15% rise in the Russell 1000 Value
index. These results placed the Fund in the top 1% of all Lipper Multi-Cap Value
funds for the year, and in the top 5% of its classification for the 3, 5 and 10
year periods.* It was a good year.
Whether or not such relative performance can be sustained is anyone's guess,
but we can state unequivocally that the investment approach used to manage the
portfolio will not be altered.
The Focus Portfolio is a value fund. We are valuation driven, and the first
question we ask regarding any potential investments is "what is the
price-earnings ratio?" We are not content, however, to buy only those stocks
which are just statistically cheap. We are trying to build a portfolio of stocks
that sell at a discount to the market but whose earnings per share growth will
prove to be superior to that of the overall market. The aim is to have a fund
that is valued like a value fund but has earnings dynamics of a growth fund.
One of the common sense assumptions we make is that value is unlikely to be
evenly distributed throughout the market at any given time. In our opinion, when
value managers attempt to construct a portfolio that does not differ materially
from the S&P 500, they necessarily face some unappealing investment choices. If
an industry sector is currently favored by the market, the best stocks in that
sector will likely be highly priced, and buying them will cause the manager to
violate his or her value discipline. Yet, if the manager maintains his or her
discipline by looking for "cheap" stocks in that sector, it may mean buying a
third or fourth rate company. We find each of these choices unacceptable.
That's why we do not seek to have investments in all areas of the market at
all times. We never invest in a company just to diversify the portfolio. There
is but one reason, and one reason only, that the Portfolio buys a stock: we
think it will prove to be a good investment.
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Focus Trust (Cont'd)
Looking for stocks with attractive valuations usually takes us to areas which
are out of popular favor. It has been our experience that when an industry or
sector goes out of favor, the disfavor affects all companies in that area to
more or less the same degree. Thus, it is possible to buy even the best
companies in such industries while maintaining a value discipline. While it is a
subjective judgement, we believe that using this approach results in the Focus
Portfolio having a higher percentage of its assets in industry leaders than most
other value funds do.
For example, when the Federal Reserve started to raise interest rates last
year, many investors' knee-jerk reaction was to sell financial stocks due to the
perception that rising rates would hurt earnings. While this perception has
little in the way of empirical evidence to support it, it is widely held, and
the downward movement in financial stocks was both widespread and
indiscriminate. We emerged from this period with substantial positions in
Citigroup, which we consider the leading financial services company; Morgan
Stanley Dean Witter, the leading brokerage firm; Chase Manhattan, the leading
money center bank; as well as Capital One and Providian, which have been the two
fastest growing credit card companies. All of these stocks were purchased at
substantial P/E discounts to the S&P 500.
While our belief that the Portfolio's investments are of higher quality than
those of the average value fund is a subjective one, the numbers show that the
Portfolio's earnings are expected to grow much faster than the typical value
fund. On August 31, 2000 the P/E ratio of the Focus Portfolio was 16.0 times
next year's earnings as opposed to 15.6 times for the Russell 1000 Value Index,
yet the long term expected growth rate in earnings of the Fund was 20.0% as
opposed to 13.2% for the Russell 1000 Value. In other words, with a forward P/E
ratio only 3% higher than the Russell 1000 Value, the Portfolio has an expected
growth rate in earnings that is over 50% higher.
Similarly, the forward P/E ratio of the S&P 500 on August 31st was 23.1, 44%
higher than that of the Focus Fund. At the same time, the S&P 500's expected
earnings growth rate (18.9%) was some 6% lower
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Focus Trust (Cont'd)
than that of Focus. We find these metrics compelling, and a portfolio like this
doesn't result from mindless diversification. In our opinion, there is only one
way to do it: Focus.
Sincerely,
/s/ Kent Simons
Kent Simons
PORTFOLIO MANAGER
*For index definitions, refer to page A-38, titled "Glossary of Indices." The
Portfolio invests in many securities not included in the indices listed.
Percentage rankings for Multi-Cap Value fund provided by Lipper. These funds
are defined by Lipper as those value funds that, by portfolio practice, invest
in a variety of market capitalization ranges, without concentrating 75% of
their equity assets in any one market capitalization range over an extended
period of time. Lipper Multi-Cap Value funds percentage ratings are calculated
from the funds' one-, three-, and five- year average annual returns, net of
expenses, for the year ending August 31, 2000 and were compared to 476, 334,
and 205 funds respectively. Neuberger Berman Focus Trust began operations on
August 30, 1993. Certain expenses were reimbursed to the fund during the period
shown, and had a material effect on returns. Absent such arrangement, the
average annual returns of the fund would have been less.
The composition, industries and holdings of the Portfolio are subject to
change. No single holding of Focus Portfolio make up more than a small fraction
of the Portfolio's total assets.
While the value-oriented approach is intended to limit risks, the
Portfolio -- with its concentration in sectors -- may be more greatly affected
by any single economic, political or regulatory development than a more
diversified mutual fund.
Past performance is no guarantee of future results. Share prices will vary and
your shares, when redeemed, may be worth more or less than the price you paid
for them.
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PORTFOLIO COMMENTARY
Neuberger Berman
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Genesis Trust
For the six and twelve month periods concluding August 31, 2000, Genesis Trust
gained 17.75% and 25.76% respectively, compared to the Russell 2000's drop of
6.38% and gain of 27.15% over the same time periods (see page A-43 for
comparison of a $10,000 investment and average annual total returns as of
August 31, 2000).*
Small-cap value stocks delivered solid returns in fiscal 2000. The Spring 2000
collapse of red-hot small-cap growth stocks with "more sizzle than substance"
(particularly in the Internet sector) appeared to give investors a renewed
appreciation of the fundamental merits of small-cap stocks. Even after this
year's good performance, we believe small-cap value stocks remain attractively
valued. We think earnings prospects look good and valuations are still modest
compared to other equity asset classes. Value has continued to be brought to
fruition by corporate acquirers targeting bargains in the small-cap value
sector. Importantly, the outflow of capital from small-cap value mutual funds
appears to be abating, or perhaps even turning positive. This may provide
additional momentum for small-cap value stocks going forward.
Our technology stock investments made the greatest performance contribution in
fiscal 2000. As a result of our value discipline, we were materially
under-weighted, relative to our benchmark, in technology stocks throughout the
year. However, our holdings produced returns exceeding 70%, which is why the
technology sector was such a positive contributor. Some of our biggest winners
were somewhat mundane technology companies with small divisions in more
glamorous tech niches. For example, Methode Electronics, which is primarily an
auto electronics systems company, soared when it began talking about spinning
off its much smaller, but more exciting bandwidth enhancing optical electronic
components division. We exited our Methode position with a big gain. Over the
course of fiscal 2000, we booked profits in tech holdings that moved out of our
value range. We redirected some of our profits to technology stock opportunities
that seemed to us more
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Genesis Trust (Cont'd)
reasonably priced and took some money off the tech table to deploy in other
sectors. We will continue to invest in technology stocks on our own value terms.
Our energy investments also produced excellent gains. We were materially
over-weighted in this sector, with a bias toward oil services companies and
drillers, the leading performers in the energy group. We have taken some
profits, but are still committed to the energy sector. Inventories remain tight
and capacity is constrained. We believe the fundamental prospects for our energy
investments remain attractive, even if oil prices decline modestly from their
current highs.
The portfolio also benefited from the takeover of two portfolio holdings,
Cordant Technology and Central Newspapers. The former soared after the deal
announcement and the latter doubled after putting itself up for sale. We expect
more of the bargains in the portfolio to attract corporate suitors in the years
ahead.
Although our capital goods holdings posted a modest gain for the year -- every
sector represented in the portfolio finished in positive performance
territory -- we had some major disappointments in this sector. Five of the
stocks on our Worst 10 Performance List, AAR Corp, Wallace Computer Services,
Kaydon Corp., Aviall Inc., and Dionex Corp., are in the capital goods category.
Each declined as a result of company specific earnings problems. Our inclination
is to be patient with these investments that we believe can get back on the
earnings track.
Returns from our financial services investments were not as lofty as the gains
in our technology and energy holdings, but we believe we have identified some
excellent bargains. Let us give you an example. Mutual Risk provides
administrative and claims handling services to companies that insure themselves.
Mutual Risk's revenue and earnings growth has been tempered by declining prices
for property and casualty and workman's compensation insurance. Cutthroat
competition in the insurance industry has abated, however, and insurance rates
are now on the rise. This should materially increase the number of companies
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Genesis Trust (Cont'd)
choosing the self-insurance option, and therefore, the demand for Mutual Risk's
services. We see Mutual Risk's earnings beginning to accelerate in the next two
or three quarters and believe the company can grow earnings at 20% or better
annually over the next several years. At the close of this reporting period,
Mutual Risk stock was trading at 14 times our 2001 earnings estimate. Of course,
Mutual Risk may not live up to our earnings and stock appreciation expectations
and should not be considered a recommendation. However, we think the stock is an
excellent addition to the Genesis Portfolio.
In closing, we are delighted by the rebound in the small-cap value sector and
pleased that the Fund performed as it did. Looking ahead, we believe we will
continue to enjoy a fertile environment for our value-oriented discipline.
Sincerely,
/s/ Judith Vale /s/ Robert D'Alelio
Judith Vale and Robert D'Alelio
PORTFOLIO CO-MANAGERS
*For index definitions, refer to page A-38, titled "Glossary of Indices." The
Portfolio invests in many securities not included in the indices listed.
The composition, industries and holdings of the Portfolio are subject to
change. Genesis 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.
THE RISKS INVOLVED IN SEEKING CAPITAL APPRECIATION FROM INVESTMENTS PRIMARILY
IN COMPANIES WITH SMALL MARKET CAPITALIZATION ARE SET FORTH IN THE PROSPECTUS.
Past performance is no guarantee of future results. Shares when redeemed may be
worth more or less than original cost.
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PORTFOLIO COMMENTARY
Neuberger Berman
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Guardian Trust
For the six and twelve month periods concluding August 31, 2000, the Guardian
Trust returned 19.94% and 16.72% respectively, versus the Russell 1000 Value
Index's 14.31% and 4.15% gains over the same time periods. The S&P 500 advanced
11.72% and 16.31% over the corresponding six and twelve month periods (see
page A-45 for comparison of $10,000 investment and average annual total returns
as of August 31, 2000).*
We are pleased with the Fund's excellent returns in fiscal 2000, and gratified
by its continued solid progress toward achieving our objective of superior
long-term performance.
In the first half of fiscal 2000, technology stocks were the only game in
town. Over the last six months, we enjoyed a much broader market, with the
stocks of companies in many other industry groups performing well. Our
technology stock investments (on average about 16% of portfolio assets during
the year) performed exceptionally well, with collective returns exceeding 65%.
We will continue to invest in technology stocks with a very sharp eye on
valuations and a focus on companies that we believe are improving their
competitive position.
Seven of the other ten sectors represented in the portfolio also posted
positive results. Strong returns from our capital goods, consumer staples,
energy, financial services, and health care holdings demonstrated investors'
renewed appreciation of high quality, reasonably valued companies in less
glamorous industries -- the kind of stocks that are staples of the Guardian
Portfolio. Aided by declining market interest rates, good earnings and continued
consolidation in the industry, our financial services holdings finished the year
with solid gains. Our health care holdings also got much healthier during the
year as investors re-appraised quality companies in this previously out-of-favor
sector. Rising oil prices propelled our energy holdings. Finally, five portfolio
companies (Champion, Union Pacific, Nabisco, Warner Lambert, and Associated
First Capital) were hit by takeover lightning -- receiving bids well above our
average purchase prices. We believe ongoing merger and acquisition activity may
continue to bring values to fruition in out-of-favor industries, providing a
tailwind for the portfolio.
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Guardian Trust (Cont'd)
Our communications services investments were a drag on performance. We were
well aware the tidal wave of capital being used to build advanced communications
networks would create temporary over-capacity and cutthroat competition.
However, we wanted to maintain some exposure in a sector that benefits from the
continued proliferation of digital communications services. We adopted a
defensive posture -- owning established companies like Verizon Communications
(formerly Bell Atlantic), Worldcom, and AT&T, which we viewed as the most
reasonably-valued participants. This strategy struggled as prices for telecom
services fell faster and farther than we anticipated.
Our consumer cyclicals investments also restrained portfolio performance. As
the Federal Reserve increased short-term interest rates to slow the economy,
investors began anticipating earnings problems for consumer cyclicals, such as
retailers and auto manufacturers. To date, earnings have held up relatively
well, and if interest rates stabilize at current levels, future earnings may
come in better than expected. Our current inclination is to be patient with our
consumer cyclicals holdings, one of which we will highlight in this report. Be
advised this should not be viewed as a recommendation, but rather an example of
our investment discipline.
Costco is a leading discount retailer, which until the last several quarters
had an unblemished growth record. The company's rapid expansion finally resulted
in growing pains and an earnings shortfall, which took the stock from a high of
$60 per share to the mid-$20s. We began buying in the low- to mid-$30s. We
believe Costco has a valid business model, plenty of room for growth, and the
ability to manage this growth more successfully in the years ahead. We expect
long-term annual earnings growth approximating 15%. Costco stock has rebounded
from its low, but we think it still represents good value.
It's been a rewarding year for Guardian Trust shareholders. Although we can
never be sure of what the market has in store for us, we believe our value
strategy (buying "best in class" companies at below market average valuations)
has better long-term potential than momentum
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Guardian Trust (Cont'd)
investing -- buying stocks simply because they are going up in price. We like to
buy "momentum casualties" -- great companies such as Costco, Bristol Myers, GM
Hughes, The Gap, and Lexmark -- that we believe are now back to being great
values as well. We believe quality merchandise bought at bargain prices will
continue to be an effective method for generating superior long-term investment
returns.
Sincerely,
/s/ Kevin Risen /s/ Rick White
Kevin Risen and Rick White
PORTFOLIO CO-MANAGERS
*For index definitions, refer to page A-38, titled "Glossary of Indices." The
Portfolio invests in many securities not included in the indices listed.
The composition, industries and holdings of the Portfolio are subject to
change. Guardian 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.
Past performance is no guarantee of future results. Shares when redeemed may be
worth more or less than original cost.
The investments for the Portfolio are managed by the same portfolio manager(s)
who manage one or more other mutual funds that have similar names, investment
objectives and investment styles as the Portfolio. You should be aware that the
Portfolio is likely to differ from the other mutual funds in size, cash flow
pattern and tax matters. Accordingly, the holdings and performance of the
Portfolio can be expected to vary from those of the other mutual funds.
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PORTFOLIO COMMENTARY
Neuberger Berman
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International Trust
For the six month and twelve month periods concluding August 31, 2000, the
International Trust declined 21.10% and gained 26.72% respectively, versus
MSCI-EAFE's which declined 3.48% and gained 9.81% over the same time periods
(see page A-47 average annual total returns as of August 31, 2000).*
Technology stocks made the largest contribution to Fund performance this year.
We earned generous returns from smaller, less established tech companies in the
first half of fiscal 2000. However, by the start of the second half, we had
become increasingly wary of high valuations and concerned about the negative
impact that constricting capital markets could have on these companies' future
prospects. We exited and/or reduced our positions in young technology companies
that lack self-sustaining cash flow, while maintaining or adding to positions in
more established, profitable technology companies. In the process, we avoided
some of the damage sustained in the March/April global technology stock
sell-off.
Although our allocation to the technology stock sector was reduced
significantly in the second half, we are still over-weighted relative to EAFE.
Our weighting in technology is closer to the S&P 500's, where we believe the
EAFE technology weighting is headed.
Our energy investments contributed positively to performance. International
energy stocks with costs in local currencies and revenues and profits in dollars
benefited from rising oil prices and the strong US currency. We still like the
energy sector, because world inventories remain low and capacity is still
constrained. We believe our energy stock investments can grow earnings
significantly even if the price of oil retreats from current levels.
Our healthcare holdings also performed well. Our over-weighting in medical
equipment and services companies compared to our market-weighting in
pharmaceuticals enhanced returns. There is political pressure in Europe as well
as in the United States to try to curb healthcare
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International Trust (Cont'd)
costs by putting a cap on the prices of drug prescriptions. Medical equipment
and services companies are much less likely to face government imposed pricing
restrictions. This was reflected in stock prices.
Let us highlight one of our current favorites in this sector. Be advised this
is not a recommendation and we may alter our opinion as conditions change.
Sweden's Nobel Biocare is one of the world's three leading manufacturers of
dental implants -- false teeth implanted directly into a patient's jaw. Dental
implants are a cost-competitive alternative to bridges and caps. Nobel Biocare
is doing a good job promoting implants to the public and dental schools around
the world. We expect the market for dental implants to grow significantly over
the next decade. Sixty percent of Nobel Biocare's revenues are in dollars, while
the majority of its costs are in Krona. This is currently enhancing earnings,
which we think can grow at 20% annually over the next several years.
The Fund remains under-weighted in financial stocks. We don't like the banks
for several reasons. We believe European interest rates are likely to trend
higher, squeezing margins in traditional banking businesses. Also, property
values in Europe and Asia have increased rapidly over the past few years,
potentially undermining asset values going forward. Finally, we do not believe
the banks can sustain historically high rates of return from their investment
banking, trading, and brokerage operations.
Our Japanese holdings closed fiscal 2000 with a modest gain. The Bank of
Japan's interest rate hike eliminated consumer support for the still fragile
economy and the nascent recovery has stalled. Real interest rates in Japan are
now about 5% (2% bond yields and 3% price deflation). This is not a good recipe
for economic growth or a healthy stock market. Consequently, we significantly
reduced our allocation to Japan in the second half.
On a regional allocation basis, we are under-weighted in Japan; in the UK
where the economy remains sluggish; and in the larger markets of Continental
Europe, where the persistently weak Euro is restraining
A-18
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International Trust (Cont'd)
growth. We have some modest exposure to emerging markets not represented in
EAFE. We are over-weighted in smaller European markets such as Finland, Sweden,
Denmark, and Ireland where recent economic growth has been robust. These
countries have been making the transition from resource and low margin
manufacturing-based economies to more profitable technology and services-driven
economies.
At fiscal year-end, cash equivalents represented approximately 13% of the
portfolio's total net assets. A more stable US stock market would inspire us to
put these cash reserves to work. Over the long-term, international markets will
chart their own course, but over the short-term, we believe they will likely
follow the US market's lead. We have already targeted a number of new stocks we
would like to buy and existing portfolio holdings in which we would like to make
additional investments. If the US market stumbles again, bringing global
equities valuations lower, we are ready to put some of this "dry powder" to
work.
Sincerely,
/s/ Valerie Chang /s/ Benjamin Segal
Valerie Chang and Benjamin Segal
PORTFOLIO CO-MANAGERS
*For index definitions, refer to page A-38, titled "Glossary of Indices." The
Portfolio invests in many securities not included in the indices listed.
The composition, industries and holdings of the Portfolio are subject to
change. International 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.
INVESTING IN FOREIGN SECURITIES INVOLVES GREATER RISKS THAN INVESTING IN
SECURITIES OF U.S. ISSUERS, INCLUDING CURRENCY FLUCTUATIONS, INTEREST RATES AND
POLITICAL CONDITIONS. IN AN ATTEMPT TO REDUCE OVERALL VOLATILITY, NEUBERGER
BERMAN MANAGEMENT INC. DIVERSIFIES THE PORTFOLIO HOLDINGS OVER A WIDE ARRAY OF
COUNTRIES AND INDIVIDUAL STOCKS.
Past performance is no guarantee of future results. Shares when redeemed may be
worth more or less than original cost.
A-19
<PAGE>
PORTFOLIO COMMENTARY
Neuberger Berman
----------------------------------------------------------------------
Manhattan Trust
For the six and twelve month periods concluding August 31, 2000, the Manhattan
Trust declined 0.91% and gained 87.95% respectively, versus the Russell Midcap
Growth Index's 0.09% decline and 67.18% gain over the same time period, (see
page A-48 for comparison of $10,000 investment and average annual total returns
as of August 31, 2000).*
After five long years of under-performing large-cap stocks, mid-cap stocks
excelled in fiscal 2000.(1) Even after this exceptional year, we believe mid-cap
stocks remain fundamentally attractive relative to large-caps. Earnings growth
rates are materially higher and valuations are still significantly lower. Merger
and acquisition activity affirms there is still great value to be found in the
mid-cap arena.
Of course, fundamental merit is no guarantee that mid-cap stocks will continue
to outperform. However, mid-caps are attracting more investor attention. Over
the last year, we have seen the average capitalizations of large-cap mutual
funds declining and the average capitalization of small-cap funds rising.
Large-cap fund managers appear to be dipping into the mid-cap well for companies
with better earnings growth and more reasonable valuations. Small-cap fund
managers may be straying into mid-cap territory for greater liquidity.
Regardless of the reasons for increased institutional interest in mid-cap
stocks, the positive flow of funds into mid-caps may provide a demand-driven
performance tailwind.
We are delighted to have out-performed our Russell Midcap Growth Index
benchmark by a sizable margin for the fiscal one-year period. We believe this
further validates our investment thesis that stocks which are growing earnings
faster than their competitors and are consistently beating consensus earnings
estimates will be superior performers. In calendar second quarter 2000,
portfolio earnings grew by 65% compared to consensus earnings growth rate
estimates of 48%. Seventy-five percent of our holdings exceeded consensus
earnings estimates. We believe if the portfolio sustains its earnings momentum
and its high percentage of pleasant earnings surprises, the Fund will continue
to deliver superior performance.
A-20
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----------------------------------------------------------------------
Manhattan Trust (Cont'd)
Our technology investments continued to lead the performance parade, with
holdings such as Veritas Software, JDS Uniphase, and Network Appliance Inc. more
than tripling in fiscal 2000. Our strategy of investing in profitable Internet
infrastructure companies, rather than profitless "dot.coms," helped generate
impressive absolute returns and resulted in our tech holdings materially
exceeding the tech sector's contribution to our Russell Midcap Growth benchmark.
We employed a similarly fruitful strategy in the healthcare arena, favoring
companies supplying productivity enhancing products to end-users. Our best
performer was PE Biosystems (PEB), which manufactures gene sequencing equipment
for genomic research. PEB sells its equipment to nearly all of the participants
in the genomic drug field. In the course of the year, we added genomic drug
companies Millennium Pharmaceuticals and Human Genome to the portfolio. We
believe these two companies have some potentially profitable genomic drugs
(drugs customized to treat individuals with varying genetic makeups) in their
pipelines. If other factors line up right, this could translate into positive
earnings growth.
Not all our big winners were in glamorous growth industries such as technology
and biotechnology. Calpine, which finished near the top of our performance list,
is a utility using state-of-the-art gas turbine technology to generate
electricity. It is the low cost producer in the generating business and earnings
are accelerating. In second quarter 2000, Calpine's earnings came in 50% above
consensus estimates, which over the previous six months had been raised by more
than 30%.
As usual, our primary portfolio disappointments came in the form of companies
in a variety of sectors that failed to meet earnings expectations. As is our
discipline, these stocks were sold. Communications services holdings such as
McCloud and Winstar performed poorly despite meeting fundamental forecasts. The
same is true for media investments including Westwood One and Univision. We put
these stocks in our "performance in the warehouse" category -- stocks we believe
will ultimately be rewarded for superior earnings growth records.
A-21
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----------------------------------------------------------------------
Manhattan Trust (Cont'd)
Manhattan Trust booked relatively large realized capital gains in fiscal 2000.
This is primarily the result of selling holdings that performed so well that
they moved up into the large-cap category. This includes some of our biggest
winners in the technology sector. Our prospectus doesn't mandate the sale of
stocks that grow out of their mid-cap clothing. However, an integral part of our
investment thesis is that over the long term, mid-cap stocks will outperform
large-cap equities. This dictates we preserve the mid-cap character of the Fund.
We believe that recycling cash from the sales of our larger cap holdings into
smaller companies just graduating into the mid-cap category will enhance
long-term returns.
In closing, we are gratified by the strong showing of mid-cap growth stocks
and the Fund's exceptional fiscal 2000 returns. We will be striving to build on
Manhattan Trust's successful performance record in the year ahead.
Sincerely,
/s/ Jennifer Silver /s/ Brooke Cobb
Jennifer Silver and Brooke Cobb
PORTFOLIO CO-MANAGERS
*For index definitions, refer to page A-38, titled "Glossary of Indices." The
Portfolio invests in many securities not included in the indices listed.
(1)Mid-cap stocks, as represented by the Russell Midcap Index, returned 28.83%
for the fiscal year ending August 31, 2000. Large-cap stocks, as represented by
the Russell 1000 Index, returned 20.14%. In the previous five fiscal years
ending August 31, the Russell 1000 had outperformed the Russell Midcap Index.
The composition, industries and holdings of the Portfolio are subject to
change. Manhattan 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.
Past performance is no guarantee of future results. Shares when redeemed may be
worth more or less than original cost.
The investments for the Portfolio are managed by the same portfolio
manager(s) who manage one or more other mutual funds that have similar names,
investment objectives and investment styles as the Portfolio. You should be
aware that the Portfolio is likely to differ from the other mutual funds in
size, cash flow pattern and tax matters. Accordingly, the holdings and
performance of the Portfolio can be expected to vary from those of the other
mutual funds.
A-22
<PAGE>
PORTFOLIO COMMENTARY
Neuberger Berman
----------------------------------------------------------------------
Millennium Trust
For the six and twelve month periods concluding August 31, 2000, the
Millennium Trust declined 13.14% and gained 96.66% respectively, compared to the
Russell 2000 Growth Index's 16.24% decline and 39.08% gain over the same time
periods (see page A-50 for comparison of a $10,000 investment and average annual
total returns as of August 31, 2000).*
We are pleased to have achieved excellent results in fiscal 2000. Technology
stocks comprised approximately 50% of portfolio equity market value, and
collectively generated returns in excess of 130%. These gains were accompanied
by the volatility which is characteristic of the technology sector. More than
any other sector group in today's market, technology stocks are subject to
dramatic shifts in investor sentiment. This year, we saw panic buying in January
and February, which gave way to panic selling in March and April, before a more
orderly summer advance that helped our tech investments close the year with
strong gains. Over the short-term, technology stock performance will almost
surely continue to be erratic, characterized by breathtaking rallies and
dizzying declines. However, over the longer term, we believe investing in small
technology companies that are capable of translating promise into profits will
be rewarding.
Our communications technology investments performed extremely well this year,
with Integrated Device Technologies, Efficient Networks Inc. and Natural
Microsystems finishing near the top of our performance list. We believe
companies providing semiconductors and optical components for next generation
communications systems continue to have exceptional growth and investment
potential.
The Internet category in our technology universe produced some of our major
portfolio disappointments. Many "dot.com" stocks went from market darlings to
market dogs almost overnight. At issue is whether rapidly growing revenues will
ever translate into profits. We believe dot.com companies with good business
plans can succeed, and that discerning investors will acknowledge this going
forward. In fact, some had a positive impact on the Portfolio's performance.
Lifeminders and My Points, for example, are direct marketers specializing in
targeted
A-23
<PAGE>
----------------------------------------------------------------------
Millennium Trust (Cont'd)
e-mail programs. Both companies are experiencing rapid revenue growth, and in
our opinion, are on the road to future profitability. We believe the same is
true for About.com, a portal that seems well positioned in the Internet
information niche. Despite the poor performance of these stocks this year, we
continue to have faith in their ability to reward shareholders.
Our energy investments contributed positively to returns this year, with oil
services stocks such as Caldive International posting excellent gains. There is
some concern that natural gas and oil prices will decline from their highs,
restraining energy companies earnings. We believe strong global demand, tight
inventories and constrained capacity will sustain energy prices around current
levels and that oil services company earnings will advance in the year ahead.
Our communications services investments, primarily the publicly traded Sprint
PCS affiliates, also performed well. In return for building their wireless
systems, these companies have the right to market their services under the
Sprint PCS name and receive back office support from Sprint PCS as well. We
think this is a good deal for all involved.
Collectively, our health care investments had a negative impact on our
Portfolio, well below the contribution of this sector to our Russell 2000 Growth
benchmark. Experimental drugs from several of the biotechnology companies in the
portfolio stumbled badly in clinical trials, dimming their prospects. Having
failed our growth tests as well, they were eliminated from the portfolio.
What does the small-cap stock market hold in store for the year ahead? The
performance of technology stocks will probably continue to have the greatest
influence on small-cap stock returns. We believe there are still pockets of
extreme overvaluation in the tech sector. For example, several fuel cell
companies with little revenues and no earnings have multi-billion dollar market
caps. We also see pockets of extreme under-valuation. As mentioned above,
virtually every stock with a dot.com label has been severely punished. We
believe there are some outstanding growth bargains in this category, however. We
are not top-down investors, so we won't venture the blanket statement that
A-24
<PAGE>
----------------------------------------------------------------------
Millennium Trust (Cont'd)
technology stocks are now reasonably valued. However, we are still finding
plenty of small-cap growth stocks that in our analysis, look like great
long-term investment opportunities.
In closing, we are pleased to have delivered strong gains and materially
outperformed our Russell 2000 Growth Index benchmark. We believe this is a
testament to our investment strategy of looking for fast growing companies
capable of consistently exceeding consensus growth expectations. Volatility,
particularly in the technology sector, will continue to present a challenge to
small-cap growth stock investors. It will not undermine our resolve or cause us
to lose confidence in the long-term potential of small-cap growth stock
investing.
Sincerely,
/s/ Michael Malouf /s/ Jennifer Silver
Michael Malouf and Jennifer Silver
PORTFOLIO CO-MANAGERS
*The start up of Millennium Trust roughly coincided with a period of accelerated
growth in the small-cap growth sector of the stock market, and its investment
in IPOs had a significant impact on performance. There can be no assurance that
these factors will continue to have a positive effect on the fund. And since
the fund for much of this period was relatively small in asset size; it may be
easier to achieve higher returns than in a larger fund.
NBMI currently absorbs certain expenses of the fund. This arrangement is
subject to change, and without this arrangement, the fund's returns would have
been less. Results are shown on a "total return" basis and include reinvestment
of all dividends and capital gains distributions. Performance data quoted
represents past performance, which is no guarantee of future results. The
investment return and principal value of an investment will fluctuate so that
the shares, when redeemed, may be worth more or less than their original cost.
For index definitions, refer to page A-38, titled "Glossary of Indices." The
Portfolio invests in many securities not included in the indices listed.
The composition, industries and holdings of the Portfolio are subject to
change. Millennium 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.
THE RISKS INVOLVED IN SEEKING CAPITAL APPRECIATION FROM INVESTMENTS PRIMARILY
IN COMPANIES WITH SMALL MARKET CAPITALIZATION ARE SET FORTH IN THE PROSPECTUS.
A-25
<PAGE>
PORTFOLIO COMMENTARY
Neuberger Berman
----------------------------------------------------------------------
Partners Trust
For the six and twelve month periods concluding August 31, 2000, the Partners
Trust returned 12.08% and 8.41% respectively, versus the Russell 1000 Value
Index's 14.31% and 4.15% gains over the same time period. The S&P 500 advanced
11.72% and 16.31% over the corresponding six and twelve month periods (see
page A-52 for comparison of $10,000 investment and average annual total returns
as of August 31, 2000).*
We are pleased to have more than doubled the performance of our Russell 1000
Value benchmark in fiscal 2000. We were in some of the right places at the right
time: technology, financial services, energy, and healthcare: and stock
selection helped us post good gains in poorer performing sectors such as
consumer cyclicals, and consumer staples.
Although our technology stock holdings provided the greatest contribution to
performance this year, we are particularly proud of the generous returns
achieved by our financial services investments. We significantly under-weighted
financial services stocks, relative to our benchmark, when they began retreating
in the face of Federal Reserve rate hikes in the first half of fiscal 2000. We
gradually increased our exposure to financials as declining market interest
rates spawned a big rebound in the second half. Our stock selection was also
good, with Bank of New York, Morgan Stanley Dean Witter, and XL Capital Ltd.
making our Top Ten Performance List. Although the Portfolio, on average, was
materially under-weighted in financial services throughout fiscal 2000, our
returns in this sector matched that of our benchmark index.
Stock selection was the key to our success in energy, where Portfolio gains
were more than triple this sector's contribution to the Russell 1000 Value
Index. Anadarko Petroleum, which became a much more balanced
exploration/production company through its acquisition of Union Pacific
Resources, was a big winner, as was offshore driller Transocean Sedco. We think
energy prices may have peaked and therefore we currently favor the integrated
oils over more richly valued exploration/production companies and drillers.
A-26
<PAGE>
----------------------------------------------------------------------
Partners Trust (Cont'd)
Our basic materials, capital goods, and communications services investments
disappointed. We expected basic materials and capital goods company earnings to
benefit from global economic expansion. A strong dollar, however, has continued
to keep international demand, pricing and margins down, and we have lost
confidence in earnings prospects for the foreseeable future. In communications
services, we took a defensive approach, favoring established companies such as
Verizon Communications (formerly Bell Atlantic), AT&T and Worldcom. Low
valuations failed to support these stocks when revenues and earnings suffered
from superheated competition and cutthroat pricing in the land line telecom
arena. Even though we think these companies still have stores of
value -- principally in their wireless communications businesses -- we are
re-evaluating our strategy in this area.
Value investors buy technology stocks when valuations are in line with
realistic earnings potential. Such opportunities generally evolve when the tech
sector is out-of-favor or when a good technology company stumbles on the
earnings front. Lexmark, the low cost producer of laser jet and ink jet computer
printers, ran into earnings problems when companies deferred buying new computer
systems during the Y2K hysteria. Lexmark stock retreated from a high of 136 to
the mid-40's. We began buying it shortly afterward. It has continued to retreat,
but become even a better bargain, in our opinion. We believe the revenues and
earnings Lexmark lost in fourth quarter 1999 will begin coming on stream in
fourth quarter 2000. In the interim Lexmark continues to gain market share. In
addition, growth in the Internet should translate into growth in the use of
printers and ink cartridges, particularly the higher margin colored ink
cartridges. This should help improve Lexmark's margins. We think the company can
grow earnings by 30% annually over the next several years, but Lexmark stock is
trading at just about 13 times our 2001 earnings estimates. Although there are
no guarantees Lexmark will live up to our earnings and capital appreciation
expectations, it looks like a great bargain.
A-27
<PAGE>
----------------------------------------------------------------------
Partners Trust (Cont'd)
What can we expect from the stock market in the year ahead? We note that
declining market interest rates (bond yields) infer the economy is beginning to
slow. No one (including us) can predict the precise impact of a slower economy
on earnings. If corporate earnings do disappoint in the year ahead, however, we
believe that richly valued growth stocks will suffer more than the fundamental
value bargains in our portfolio.
Sincerely,
/s/ S. Basu Mullick /s/ Robert Gendelman
S. Basu Mullick and Robert Gendelman
PORTFOLIO CO-MANAGERS
*For index definitions, refer to page A-38, titled "Glossary of Indices." The
Portfolio invests in many securities not included in the indices listed.
The composition, industries and holdings of the Portfolio are subject to
change. Partners 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.
Past performance is no guarantee of future results. Shares when redeemed may be
worth more or less than original cost.
The investments for the Portfolio are managed by the same portfolio
manager(s) who manage one or more other mutual funds that have similar names,
investment objectives and investment styles as the Portfolio. You should be
aware that the Portfolio is likely to differ from the other mutual funds in
size, cash flow pattern and tax matters. Accordingly, the holdings and
performance of the Portfolio can be expected to vary from those of the other
mutual funds.
A-28
<PAGE>
PORTFOLIO COMMENTARY
Neuberger Berman
----------------------------------------------------------------------
Regency Trust
For the six and twelve month periods concluding August 31, 2000, the Regency
Trust returned 20.09% and 34.86% respectively, versus the Russell Midcap Value
Index's 19.73% and 6.26% gains over the same time periods, (see page A-54 for
comparison of $10,000 investment and average annual total returns as of
August 31, 2000).*
In a reversal of recent years' trend, mid-cap stocks outperformed large-cap
stocks in fiscal 2000.(1) Mid-cap growth stocks were by far the biggest winners,
but mid-cap value stocks delivered respectable returns. Sector allocation and
stock selection helped the Regency Trust outperform its Russell Midcap Value
Index benchmark by a wide margin.
The Portfolio's technology holdings had the most favorable impact on returns.
We were significantly over-weighted in technology throughout the year. Although
our value approach to the tech sector prevented us from owning some of the
highest flyers, returns from our technology stock holdings exceeded 50%. We will
continue to be opportunistic in this dynamic sector, striving to identify truly
undervalued tech stocks. We expect ongoing technology stock volatility to
provide many opportunities for value investors.
Our financial services investments also performed well. On average, we were
modestly under-weighted in this sector, but our returns nearly doubled the
group's contribution to our benchmark index. Although only modestly
over-weighted in energy stocks, our selections produced returns exceeding 60%.
We were substantially under-weighted in utilities, but our holdings excelled,
appreciating more than 45% for the year.
The Portfolio's basic materials investments were our primary portfolio
casualty. Global demand and pricing for basic materials remained flat and the
strong U.S. dollar restrained exports. Although basic materials stocks are very
cheap, we fear they may stay that way for the foreseeable future. Separately,
our investments in two communications services companies, competitive local
exchange carrier ALGX and Loral Space & Communications, a satellite cellular
operator, came up lame. We are now determining whether we want to scratch them
from the portfolio.
A-29
<PAGE>
----------------------------------------------------------------------
Regency Trust (Cont'd)
When shucking market oysters, we occasionally find a pearl. At SPX Corp, for
example, a respected former senior executive of General Electric Co. is CEO, and
has instituted an Economic Value Added (EVA) strategy. The basic tenet of EVA is
that each division of a company must generate returns exceeding their cost of
capital. Those that don't are jettisoned, and proceeds are directed to building
or acquiring businesses that do. We believe this is a very effective way to run
slower growth, lower margin industrial companies like SPX. Management did not
disappoint. SPX sold several under-performing businesses and acquired several
others they believe can clear the EVA hurdle. The acquisition of General Signal
produced what we think is the pearl we alluded to -- fiber optic switching
technology for broadband communications networks. SPX has spun off a portion of
this business (InRange) to the public. This accomplishes three things. It
exploits the value of SPX's InRange shares; gives the company the ability to
attract and retain engineering talent though the use of InRange stock options;
and provides a valuable currency for making additional acquisitions in the fiber
optic communications business. We believe the value of SPX's InRange shares has
the potential to exceed the current market value of the entire company. Of
course, there are no guarantees SPX stock will live up to our expectations, but
we view it as an excellent addition to the portfolio.
We are not economists or market forecasters, but we must be conscious of
economic and market trends that could impact the portfolio. The question of the
day has two parts: Will the Federal Reserve successfully engineer another soft
landing for the economy, and if so, what kind of impact will a slower growth
economy have on corporate earnings? We think there is a reasonably good
possibility the economy will slow without dipping into recession. We believe the
stock market's summer rally reflects a growing consensus for this scenario.
However, this scenario appears to ignore the possibility that corporate earnings
may fall well short of expectations as the economy decelerates. Market bulls
seem to believe stock investors can have their cake (lower market
A-30
<PAGE>
----------------------------------------------------------------------
Regency Trust (Cont'd)
interest rates and expanding P/Es) and eat it too (good corporate earnings
growth). We are not so sure. In any case, we believe that value stocks are less
vulnerable to earnings disappointments than high P/E multiple growth stocks.
It was gratifying to see mid-cap stocks make a good showing in fiscal 2000.
Value once again took a back seat to growth, but the Regency Trust delivered
excellent absolute and relative returns. Looking ahead, we believe economic and
market trends may favor value investors. We will be working diligently to build
on Regency Fund's success in its first full year of operation.
Sincerely,
/s/ Robert Gendelman /s/ S. Basu Mullick
Robert Gendelman and S. Basu Mullick
PORTFOLIO CO-MANAGERS
*Because this is a new fund, short-term results may not be duplicated. Average
net assets of the Portfolio through August 31, 2000 were approximately $31.1
million. In particular, IPO's had a significant impact on the performance of
the Fund. It is often easier to achieve higher returns in a smaller fund than a
larger fund. Neuberger Berman Management Inc. ("NBMI") currently absorbs
certain expenses of the Fund. Without this arrangement, the Fund's returns
would have been less. Past performance does not guarantee future results and
shares when redeemed may be worth more or less than original cost. The risks
involved in seeking capital appreciation from investments primarily in
companies with medium market capitalization are set forth in the prospectus.
For index definitions, refer to page A-38, titled "Glossary of Indices." The
Portfolio invests in many securities not included in the indices listed.
(1)Mid-cap stocks, as represented by the Russell Midcap Index, returned 28.83%
for the fiscal year ending August 31, 2000. Large-cap stocks, as represented
by the Russell 1000 Index, returned 20.14%. In the previous five fiscal years
ending August 31, the Russell 1000 had outperformed the Russell Midcap Index.
The composition, industries and holdings of the Portfolio are subject to
change. Regency 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.
A-31
<PAGE>
PORTFOLIO COMMENTARY
Neuberger Berman
----------------------------------------------------------------------
Socially Responsive Trust
For the six and twelve month periods concluding August 31, 2000, the Socially
Responsive Trust returned 13.96% and 2.76%, respectively, compared to the
Russell 1000 Value Index's 14.31% and 4.15% gains over the same time periods.
The S&P 500 Index returned 11.72% and 16.31% over the corresponding six and
twelve month periods (see page A-56 for comparison of a $10,000 investment and
average annual total returns as of August 31, 2000).*
After a slow start, the Socially Responsive Trust regained momentum in the
second half of fiscal 2000. We finished the fiscal year with competitive gains
versus our Russell 1000 Value benchmark, although we trailed the growth
stock-dominated S&P 500 by a significant margin.
Our energy investments made the greatest contribution to returns. The
Portfolio's energy sector weighting matched that of its Russell 1000 Value Index
benchmark, but the Portfolio's returns were exponentially higher. Our bias
towards oil services and exploration/production companies, which significantly
outperformed the integrated oil companies, was responsible for this big relative
return advantage. Anadarko Petroleum, a natural gas exploration and production
company with a great environmental management record, was high on our Top Ten
Performance List. We still like the energy sector. Inventories are low and
capacity is still constrained, which means, in our opinion, that our energy
investments can earn good money even if energy prices retreat from their current
highs.
Our financial services holdings also performed well, highlighted by good gains
in insurance company holdings such as Hartford Financial and AIG. Property and
casualty insurers and re-insurance companies just now seem to be emerging from
an extended down cycle characterized by intense, margin-eroding price
competition. Competition has been abating and some pricing flexibility has
returned to the business. We accumulated these beaten down stocks at very low
prices relative to severely depressed earnings. We expect these stocks to
continue to march higher, assuming policy pricing continues to firm, earnings
recover, and price/earnings multiples expand.
A-32
<PAGE>
----------------------------------------------------------------------
Socially Responsive Trust (Cont'd)
Our utility holdings, most notably Enron and Keyspan Energy, posted
exceptional revenue and earnings gains in part due to supplementing their
regulated utilities businesses with unregulated operations such as
telecommunications and commodities trading. Coupled with pricing improvements in
the basic utilities business, a growth dimension has been added to these stocks,
which have performed quite well over the last year. Our returns from the health
care sector got a big boost when Pfizer acquired Warner Lambert. Looking ahead,
we are a bit wary about the pharmaceuticals. Political pressure for some form of
price restraints on prescription drugs is mounting. Whether it comes from
government or the insurance companies, price restraints would likely crimp
pharmaceutical companies' earnings growth.
Collectively, our technology investments finished the year at a modest gain
compared to substantial gains for the tech sector in our benchmark index. What
went wrong? Smaller cap tech holdings such as Quantum Corp. were severely
punished for reporting disappointing earnings. Larger cap holdings such as Xerox
and Unisys suffered the same fate. Substantial losses in these stocks offset
good gains in portfolio holdings such as Intel, Hewlett Packard, and Compaq
Computer. We have reoriented our technology stock commitments, focusing on what
we think are reasonably valued blue chips less prone to unpleasant earnings
surprises.
Our communications services holdings also penalized returns. We had taken what
we thought was a defensive posture, focusing on large established companies
including AT&T, Worldcom, and Verizon Communications (formerly Bell Atlantic).
We believed these companies' size and dominant positions would help them succeed
in the increasingly competitive telecommunications market. Instead, newcomers
with more modern networks continued to capture share from these "legacy"
companies, sending their stock prices materially lower. We are rethinking our
communications services sector strategy and may change our focus in the year
ahead.
As the name of our Trust indicates, portfolio companies must be socially
responsive in addition to having good investment potential.
A-33
<PAGE>
----------------------------------------------------------------------
Socially Responsive Trust (Cont'd)
KeySpan Corporation (formerly Brooklyn Union Gas) certainly qualifies. In
addition to its New York Metropolitan Area electric and gas utilities business,
KeySpan has some telecommunications properties and investments in fuel cell
technology. Fuel cells produce electric power by converting energy from natural
gas into electricity without combustion. This is the cleanest, most
environmentally friendly method of producing electricity. KeySpan has operated a
large fuel cell at a Staten Island hospital, which it believes has eliminated
almost 30,000 pounds of air pollution and three million pounds of carbon dioxide
from the air. We think KeySpan has reasonably good earnings prospects and a
yield approximating 5%. Our comments on KeySpan should not be viewed as a
recommendation, but rather an example of the type of stock we want to own: in
short, a good corporate citizen with seemingly excellent investment prospects.
Although the Fund's full fiscal year 2000 results are uninspiring, we are
pleased and encouraged by its strong performance in the second half. We are
striving to maintain this momentum in the year ahead, while maintaining the
socially responsive character of the portfolio.
Sincerely,
/s/ Janet Prindle
Janet Prindle
PORTFOLIO MANAGER
*For index definitions, refer to page A-38, titled "Glossary of Indices." The
Portfolio invests in many securities not included in the indices listed.
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.
Past performance is no guarantee of future results. Shares when redeemed may be
worth more or less than original cost.
The investments for the Portfolio are managed by the same portfolio
manager(s) who manage one or more other mutual funds that have similar names,
investment objectives and investment styles as the Portfolio. You should be
aware that the Portfolio is likely to differ from the other mutual funds in
size, cash flow pattern and tax matters. Accordingly, the holdings and
performance of the Portfolio can be expected to vary from those of the other
mutual funds.
A-34
<PAGE>
PORTFOLIO COMMENTARY
Neuberger Berman
----------------------------------------------------------------------
Technology Trust
From inception on May 2, 2000 through August 31, 2000, Neuberger Berman
Technology Trust returned 21.40% versus the Russell 1000 Growth Index's 6.77%
and the Standard & Poor's 500 Index's 4.93% gain over the same time period (see
page A-58 for comparison of $10,000 investment and cumulative total returns as
of August 31, 2000).*
We are pleased the Fund has gotten off to such a good start, helped by the
timing of its introduction. We missed the March/April technology stock sell-off
and believe we were able to buy some great stocks at very attractive valuations.
Considering the fact that the Fund is just four months old, we will not dwell on
performance. Since this is our first opportunity to address many of the Fund's
shareholders, we will focus instead on our investment philosophy and
methodology, which is identical to that of our other growth products (Manhattan,
Millennium, and Century Funds).
Our goal is to identify the very best companies in the fastest growing
technology businesses. We also look for non-tech companies improving their own
prospects by employing new technologies. We start by screening stocks on the
basis of growth rates, their record for exceeding consensus growth estimates and
history of upward revisions in consensus growth forecasts. Our research shows
that stocks with the ability to consistently beat consensus expectations have
been superior performers.
Once we have fenced our field through the screening process, we talk to
management and other industry sources. We key on the growth potential of the
company's markets, market share position, and profit prospects. When an
investment candidate makes it into the portfolio, it is continually monitored on
the basis of meeting our growth expectations, and ideally, exceeding consensus
expectations. Those that fail are usually sold.
This is an all-cap fund. We buy technology stocks big and small. We expect the
portfolio's average capitalization to approximate that of its Russell 1000
Growth benchmark. We divide the portfolio into eight basic technology
industries: communications equipment, communications services, computer-related,
Internet, semiconductors, industry software, systems and components, and
healthcare technology. We are
A-35
<PAGE>
----------------------------------------------------------------------
Technology Trust (Cont'd)
conscious of the weighting of these industries relative to technology stock
indices, but will over-weight those sectors in which we believe we will find the
most promising investments.
Currently, four of our largest industry allocations are software,
semiconductors, communications equipment, and healthcare technology. In the
software arena, portfolio companies such as BEA Software and Rational Software,
both of which are providing software essential to the development of next
generation mission-critical web infrastructure, offer good examples of our
approach.
We subdivide our semiconductor industry into equipment manufacturers, personal
computer chipmakers and communications chip manufacturers. Currently, most of
our semiconductor investments are in the third category. Analog Devices, which
makes chips enabling communications devices to "read" both analog and digital
signals, is one of our largest holdings in this industry.
Nortel, a company we believe is well-positioned in the Internet infrastructure
equipment/components market, is among our holdings in the communications
equipment sector. PE Biosystems is a good example of the type of investments
we've made in the healthcare industry. PEB makes gene-sequencing equipment used
in genomic research. We have done quite a bit of research on genomic drug
companies, which are customizing drugs for treating individuals with different
genetic make-ups. We are intrigued, but will probably not invest in such
companies until their drugs make it further along the lengthy FDA approval
process.
Now, let's tackle the issue of technology stock profitability. Following the
crash of many dot.com stocks (Internet portals and e-tailers) investors are
increasingly suspicious of valuing technology companies exclusively on the basis
of revenue growth. They want to see "profits, not promises." This is justified
in the case of companies with flawed business plans that may never produce
profits. However, technology investors who disdain stocks that do not yet have
net earnings will miss some of the very best opportunities in the market.
Technology companies in general, and small tech firms in particular, are
spending a lot of money on research, development and marketing. Their objective
is to
A-36
<PAGE>
----------------------------------------------------------------------
Technology Trust (Cont'd)
have the very best products and services, and to grab market share. If they
succeed and become dominant "franchise" companies in their business niches, they
will very probably have the kind of pricing flexibility that will translate into
good profit margins and earnings. At any point in time, these companies could
stop spending money on R&D and marketing and show an instant profit. However,
this would generally not be in the best long-term interest of shareholders. We
don't require portfolio companies to have earnings, but we insist they have a
business plan which we are confident can produce good earnings in the future.
If history is prologue to the future, technology stocks will probably continue
to be volatile. We don't believe volatility detracts from tech stocks'
exceptional long-term investment potential. We close by thanking the Fund's
shareholders for their appreciation of our investment strategy and confidence in
our ability to execute it effectively.
Sincerely,
/s/ Jennifer Silver /s/ Brooke Cobb /s/ Michael Malouf /s/ Rudy Torrijos
Jennifer Silver, Brooke Cobb, Michael Malouf, and Rudy Torrijos
PORTFOLIO CO-MANAGERS
*This is a cumulative return and is not annualized. Since the fund is relatively
small in asset size, it may be easier to achieve higher returns than in a
larger fund. NBMI currently absorbs certain expenses of the fund. This
arrangement is subject to change, and without this arrangement, the fund's
returns would have been less. Results are shown on a "total return" basis and
include reinvestment of all dividends and capital gains distributions.
Performance data quoted represents past performance, which is no guarantee of
future results. The investment return and principal value of an investment will
fluctuate so that the shares, when redeemed, may be worth more or less than
their original cost.
For index definitions, refer to page A-38, titled "Glossary of Indices." The
Portfolio invests in many securities not included in the indices listed.
The composition, industries and holdings of the Portfolio are subject to
change. Technology 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.
The risks involved in seeking capital appreciation from investments primarily
in technology related companies and/or with small market capitalization are set
forth in the prospectus.
A-37
<PAGE>
GLOSSARY OF INDICES
<TABLE>
<S> <C>
S&P 500 INDEX: The S&P 500 Index is widely regarded
as the standard for measuring
large-cap U.S. stock markets
performance and includes a
representative sample of leading
companies in leading industries.
RUSSELL 1000-REGISTERED TRADEMARK- INDEX: Measures the performance of the 1,000
largest companies in the Russell
3000-Registered Trademark- Index
(which measures the performance of
the 3,000 largest U.S. companies
based on total market
capitalization). The Russell 1000
Index represents approximately 92% of
the total market capitalization of
the Russell 3000 Index.
RUSSELL 1000-REGISTERED TRADEMARK- VALUE Measures the performance of those
INDEX: Russell 1000 companies with lower
price-to-book ratios and lower
forecasted growth values.
RUSSELL 1000-REGISTERED TRADEMARK- GROWTH Measures the performance of the
INDEX: Russell 1000-Registered Trademark-
companies with higher price-to-book
ratios and higher forecasted growth
values.
RUSSELL 2000-REGISTERED TRADEMARK- INDEX: An unmanaged index consisting of
securities of the 2,000 issuers
having the smallest capitalization in
the Russell 3000-Registered
Trademark- Index, representing
approximately 8% of the Russell 3000
total market capitalization. The
smallest company's market
capitalization is roughly $178
million.
RUSSELL 2000-REGISTERED TRADEMARK- GROWTH Measures the performance of those
INDEX: Russell 2000-Registered Trademark-
Index companies with higher price-
to-book ratios and higher forecasted
growth values.
RUSSELL 2000-REGISTERED TRADEMARK- VALUE Measures the performance of those
INDEX: Russell 2000-Registered Trademark-
Index companies with lower price-to-
book ratios and lower forecasted
growth values.
EAFE-REGISTERED TRADEMARK- INDEX: Also known as the Morgan Stanley
Capital International Europe,
Australasia, Far East Index. An
unmanaged index of over 1,000 foreign
stock prices. The index is translated
into U.S. dollars and includes
reinvestment of all dividends and
capital gain distributions.
RUSSELL MIDCAP-REGISTERED TRADEMARK- An unmanaged index that measures the
GROWTH INDEX: performance of those Russell Midcap-
Trademark- Index (the 800 smallest
companies in the Russell 1000 Index)
companies with higher price-to-book
ratios and higher forecasted growth
values.
RUSSELL MIDCAP-REGISTERED TRADEMARK- VALUE An unmanaged index that measures the
INDEX: performance of those Russell Midcap-
Trademark- Index (the 800 smallest
companies in the Russell 1000 Index)
companies with lower price-to-book
ratios and lower forecasted growth
values.
</TABLE>
Please note that indices do not take into account any fees and expenses of the
individual securities that they track and that individuals cannot invest
directly in any index. Data about the performance of these indices are prepared
or obtained by Neuberger Berman Management Inc. and include reinvestment of all
dividends and capital gain distributions. The Portfolios may invest in many
securities not included in the above-described indices.
A-38
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Century Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C>
Aggregate Total Return(1)
RUSSELL 1000-Registered Trademark-
CENTURY GROWTH(2) S&P 500(2)
LIFE OF FUND +34.40% +15.35% +6.82%
</TABLE>
<TABLE>
<S> <C> <C> <C>
Russell 1000
Century Trust Growth S&P 500
12/6/99 $10,000 $10,000 $10,000
2/29/00 $12,380 $10,586 $9,561
5/31/00 $10,720 $10,260 $9,971
8/31/00 $13,440 $11,535 $10,682
</TABLE>
These are cumulative returns and are not annualized. The cumulative returns
shown above for Neuberger Berman Century Trust, the Russell 1000 Growth Index,
and the S&P 500 Index are from December 6, 1999, which is the commencement of
operations of the Neuberger Berman Century Trust, through August 31, 2000.
Because this is a new fund, short-term results may not be duplicated. An
investment in IPO's had a significant impact on performance. Average net assets
of Neuberger Berman Century Portfolio through August 31, 2000 were
$31.7 million. Neuberger Berman Management Inc. ("Management") has contractually
undertaken 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. The fund has agreed to repay 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 Management incurred the expense.
Absent such arrangement, the cumulative total returns of the Trust would have
been less.
1. "Total Return" includes reinvestment of all income dividends and capital gain
distributions. Results represent past performance and do not indicate future
results. The value of an investment in the Trust and the return on the
investment both will fluctuate, and redemption proceeds may be higher or lower
than an investor's original cost.
2. The Russell 1000-Registered Trademark- Index measures the performance of the
1,000 largest companies in the Russell 3000-Registered Trademark- Index (which
measures the performance of the 3,000 largest U.S. companies based on total
market
A-39
<PAGE>
capitalization). The Russell 1000 Index represents approximately 92% of the
total market capitalization of the Russell 3000 Index. The Russell 1000 Growth
Index measures the performance of those Russell 1000 companies with higher
price-to-book ratios and higher forecasted growth values. The S&P 500 Index is
widely regarded as the standard for measuring large-cap U.S. stock market
performance and includes a representative sample of leading companies in leading
industries. 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
these indices are prepared or obtained by Management and include reinvestment of
all dividends and capital gain distributions. The Portfolio may invest in many
securities not included in the above-described indices.
A-40
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Focus Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C>
Average Annual Total Return(1)
RUSSELL 1000-Registered Trademark-
FOCUS VALUE(2) S&P 500(2)
1 YEAR +59.02% +4.15% +16.31%
5 YEAR +22.00% +18.21% +24.03%
10 YEAR +20.59% +17.18% +19.47%
</TABLE>
<TABLE>
<S> <C> <C> <C>
Russell 1000
Focust Trust Value S&P 500
1990 $10,000 $10,000 $10,000
1991 $11,596 $12,356 $12,685
1992 $12,965 $13,596 $13,689
1993 $16,621 $17,248 $15,766
1994 $18,878 $17,742 $16,627
1995 $24,058 $21,145 $20,189
1996 $24,929 $24,854 $23,968
1997 $35,881 $34,680 $33,705
1998 $29,620 $36,029 $36,435
1999 $40,895 $46,867 $50,939
2000 $65,030 $48,814 $59,248
</TABLE>
The performance information for Neuberger Berman Focus Trust is as of
August 31, 2000. Neuberger Berman Focus Trust started operating on August 30,
1993. It has identical investment objectives and policies, and invests in the
same Portfolio as Neuberger Berman Focus Fund ("Sister Fund"), which is also
managed by Neuberger Berman Management Inc. ("Management"). The performance
information shown in the above chart for the period before August 30, 1993, is
for the Sister Fund. Management voluntarily bears certain operating expenses of
the Trust so that its expense ratio per annum will not exceed the expense ratio
per annum of its Sister Fund by more than 0.20% of the Trust's average daily net
assets per annum. This arrangement can be terminated upon 60 days' prior written
notice. Absent such arrangement, the average annual total returns of the Trust
would have been less. The total returns for periods prior to the Trust's
commencement of operations would have been lower had they reflected the higher
expense ratios of the Trust as compared to those of its Sister Fund.
The Trust's name prior to January 1, 1995 was Neuberger&Berman Selected
Sectors Trust. Prior to November 1, 1991, the investment policies of the Sister
Fund required that a substantial percentage of its assets be invested in the
energy field; accordingly, performance results prior to that time do not
necessarily reflect the level of performance that may be expected under the
Trust's current investment policies.
A-41
<PAGE>
While the Trust's value-oriented approach is intended to limit risks, the
Portfolio, with its concentration in sectors, may be more greatly affected by
any single economic, political or regulatory development than a more diversified
mutual fund.
1. "Total Return" includes reinvestment of all income dividends and capital gain
distributions. Results represent past performance and do not indicate future
results. The value of an investment in the Trust and the return on the
investment both will fluctuate, and redemption proceeds may be higher or lower
than an investor's original cost.
2. The Russell 1000-Registered Trademark- Index measures the performance of the
1,000 largest companies in the Russell 3000-Registered Trademark- Index (which
measures the performance of the 3,000 largest U.S. companies based on total
market capitalization). The Russell 1000 Index represents approximately 92% of
the total market capitalization of the Russell 3000 Index. The Russell 1000
Value Index measures the performance of those Russell 1000 companies with lower
price-to-book ratios and lower forecasted growth values. The S&P 500 Index is
widely regarded as the standard for measuring large-cap U.S. stock market
performance and includes a representative sample of leading companies in leading
industries. 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
these indices are prepared or obtained by Management and include reinvestment of
all dividends and capital gain distributions. The Portfolio may invest in many
securities not included in the above-described indices.
A-42
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Genesis Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C>
Average Annual Total Return(1)
GENESIS RUSSELL 2000-Registered Trademark-(2)
1 YEAR +25.76% +27.15%
5 YEAR +16.33% +13.46%
10 YEAR +16.84% +16.20%
</TABLE>
<TABLE>
<S> <C> <C>
Genesis Trust Russell 2000
1990 $10,000 $10,000
1991 $13,536 $13,125
1992 $14,226 $14,083
1993 $17,655 $18,664
1994 $18,621 $19,759
1995 $22,254 $23,875
1996 $27,026 $26,459
1997 $39,001 $34,120
1998 $31,636 $27,502
1999 $37,694 $35,301
2000 $47,405 $44,887
</TABLE>
The performance information for Neuberger Berman Genesis Trust is as of
August 31, 2000. Neuberger Berman Genesis Trust started operating on August 26,
1993. It has identical investment objectives and policies, and invests in the
same Portfolio as Neuberger Berman Genesis Fund ("Sister Fund"), which is also
managed by Neuberger Berman Management Inc. ("Management"). The performance
information shown in the above chart for the period before August 26, 1993, is
for the Sister Fund which commenced operations on September 27, 1988. Management
voluntarily bears certain operating expenses of the Trust so that its expense
ratio per annum will not exceed the expense ratio per annum of its Sister Fund
by more than 0.10% of the Trust's average daily net assets per annum. This
arrangement can be terminated upon 60 days' prior written notice. In connection
with the 12b-1 fee recently submitted to shareholders, Management has notified
the Trust of its intention to raise the allowable annual differential to 0.20%
as of December 15, 2000. Management previously agreed to waive a portion of the
management fee borne directly by Neuberger Berman Genesis Portfolio and
indirectly by Neuberger Berman Genesis Trust. Absent such arrangements, the
average annual total returns of the Trust would have been less. The total
returns for periods prior to the Trust's commencement of operations would have
been lower had they reflected the higher expense ratios of the Trust as compared
to those of its Sister Fund.
A-43
<PAGE>
1. "Total Return" includes reinvestment of all income dividends and capital gain
distributions. Results represent past performance and do not indicate future
results. The value of an investment in the Trust and the return on the
investment both will fluctuate, and redemption proceeds may be higher or lower
than an investor's original cost.
2. The Russell 2000 Index is an unmanaged index that measures the performance of
the 2,000 issuers having the smallest capitalization in the Russell
3000-Registered Trademark- Index, representing approximately 8% of the Russell
3000 total market capitalization. The smallest company's market capitalization
is roughly $178 million. 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 Management and include reinvestment of
all dividends and capital gain distributions. The Portfolio may invest in many
securities not included in the above-described index.
THE RISKS INVOLVED IN SEEKING CAPITAL APPRECIATION FROM INVESTMENTS PRIMARILY IN
COMPANIES WITH SMALL MARKET CAPITALIZATION ARE SET FORTH IN THE PROSPECTUS.
A-44
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Guardian Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C>
Average Annual Total Return(1)
RUSSELL 1000-Registered Trademark-
GUARDIAN VALUE(2) S&P 500(2)
1 YEAR +16.72% +4.15% +16.31%
5 YEAR +11.32% +18.21% +24.03%
10 YEAR +15.65% +17.18% +19.47%
</TABLE>
<TABLE>
<S> <C> <C> <C>
Russell 1000
Guardian Trust Value S&P 500
1990 $10,000 $10,000 $10,000
1991 $13,048 $12,356 $12,685
1992 $14,860 $13,596 $13,689
1993 $18,254 $17,248 $15,766
1994 $20,184 $17,742 $16,627
1995 $25,031 $21,145 $20,189
1996 $26,331 $24,854 $23,968
1997 $36,748 $34,680 $33,705
1998 $29,077 $36,029 $36,435
1999 $36,659 $46,867 $50,939
2000 $42,787 $48,814 $59,248
</TABLE>
The performance information for Neuberger Berman Guardian Trust is as of
August 31, 2000. Neuberger Berman Guardian Trust started operating on August 3,
1993. It has identical investment objectives and policies, and invests in the
same Portfolio as Neuberger Berman Guardian Fund ("Sister Fund"), which is also
managed by Neuberger Berman Management Inc. ("Management"). The performance
information shown in the above chart for the period before August 3, 1993, is
for the Sister Fund. Management voluntarily bears certain operating expenses of
the Trust so that its expense ratio per annum will not exceed the expense ratio
per annum of its Sister Fund by more than 0.10% of the Trust's average daily net
assets per annum. This arrangement can be terminated upon 60 days' prior written
notice. Absent such arrangement, the average annual total returns of the Trust
would have been less. The total returns for periods prior to the Trust's
commencement of operations would have been lower had they reflected the higher
expense ratios of the Trust as compared to those of its Sister Fund. In
connection with the 12b-1 fee recently submitted to shareholders, Management has
notified the Trust of its intention to raise the allowable annual differential
to 0.20% as of December 15, 2000.
1. "Total Return" includes reinvestment of all income dividends and capital gain
distributions. Results represent past performance and do not indicate future
results. The value of an investment in the Trust and the return on the
investment both will fluctuate, and redemption proceeds may be higher or lower
than an investor's original cost.
A-45
<PAGE>
2. The Russell 1000-Registered Trademark- Index measures the performance of the
1,000 largest companies in the Russell 3000-Registered Trademark- Index (which
measures the performance of the 3,000 largest U.S. companies based on total
market capitalization). The Russell 1000 Index represents approximately 92% of
the total market capitalization of the Russell 3000 Index. The Russell 1000
Value Index measures the performance of those Russell 1000 companies with lower
price-to-book ratios and lower forecasted growth values. The S&P 500 Index is
widely regarded as the standard for measuring large-cap U.S. stock market
performance and includes a representative sample of leading companies in leading
industries. 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
these indices are prepared or obtained by Management and include reinvestment of
all dividends and capital gain distributions. The Portfolio may invest in many
securities not included in the above-described indices.
A-46
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
International Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C>
Average Annual Total Return(1)
INTERNATIONAL EAFE-Registered Trademark- INDEX(2)
1 YEAR +26.72% +9.81%
5 YEAR +15.26% +10.39%
LIFE OF FUND +13.38% +9.04%
</TABLE>
<TABLE>
<S> <C> <C>
International Trust EAFE Index
6/15/94 $10,000 $10,000
8/31/94 $10,460 $10,366
1995 $10,732 $10,449
1996 $11,991 $11,305
1997 $14,954 $12,363
1998 $14,124 $12,379
1999 $17,230 $15,601
2000 $21,835 $17,132
</TABLE>
The performance information for Neuberger Berman International Trust is as of
August 31, 2000. Neuberger Berman International Trust started operating on
June 29, 1998. It has identical investment objectives and policies, and invests
in the same Portfolio as Neuberger Berman International Fund ("Sister Fund"),
which is also managed by Neuberger Berman Management Inc. ("Management"). The
performance information shown in the above chart for the period before June 29,
1998, is for the Sister Fund. Management voluntarily bears certain operating
expenses of the Trust so that its expense ratio per annum will not exceed the
expense ratio per annum of its Sister Fund by more than 0.10% of the Trust's
average daily net assets per annum, but not to exceed 1.70%. This arrangement
can be terminated upon 60 days' prior written notice. Absent such arrangement,
the average annual total returns of the Trust would have been less.
1. "Total Return" includes reinvestment of all income dividends and capital gain
distributions. Results represent past performance and do not indicate future
results. The value of an investment in the Trust and the return on the
investment both will fluctuate, and redemption proceeds may be higher or lower
than an investor's original cost.
2. The EAFE 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. The index is translated into U.S. dollars and includes
reinvestment of all dividends and capital gain distributions. 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 Management and include reinvestment of all dividends and capital
gain distributions. The Portfolio may invest in many securities not included in
the above-described index.
THE RISKS INVOLVED IN SEEKING CAPITAL APPRECIATION FROM INVESTMENTS PRIMARILY IN
COMPANIES BASED OUTSIDE THE UNITED STATES ARE SET FORTH IN THE PROSPECTUS.
A-47
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Manhattan Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C>
Average Annual Total Return(1)
RUSSELL MIDCAP-Registered Trademark-
MANHATTAN GROWTH(2) S&P 500(2)
1 YEAR +87.95% +67.18% +16.31%
5 YEAR +25.08% +26.44% +24.03%
10 YEAR +21.03% +22.57% +19.47%
</TABLE>
<TABLE>
<S> <C> <C> <C>
Russell Midcap
Manhattan Trust Growth S&P 500
1990 $10,000 $10,000 $10,000
1991 $12,617 $13,896 $12,685
1992 $13,215 $14,836 $13,689
1993 $16,873 $18,012 $15,766
1994 $17,497 $18,983 $16,627
1995 $22,030 $23,681 $20,189
1996 $21,373 $26,480 $23,968
1997 $29,674 $34,751 $33,705
1998 $26,343 $30,763 $36,435
1999 $35,889 $45,786 $50,939
2000 $67,453 $76,545 $59,248
</TABLE>
The performance information for Neuberger Berman Manhattan Trust is as of
August 31, 2000. Neuberger Berman Manhattan Trust started operating on
August 30, 1993. It has identical investment objectives and policies, and
invests in the same Portfolio as Neuberger Berman Manhattan Fund ("Sister
Fund"), which is also managed by Neuberger Berman Management Inc.
("Management"). The performance information shown in the above chart for the
period before August 30, 1993, is for the Sister Fund. Management voluntarily
bears certain operating expenses of the Trust so that its expense ratio per
annum will not exceed the expense ratio per annum of its Sister Fund by more
than 0.10% of the Trust's average daily net assets per annum. This arrangement
can be terminated upon 60 days' prior written notice. Absent such arrangement,
the average annual total returns of the Trust would have been less. The total
returns for periods prior to the Trust's commencement of operations would have
been lower had they reflected the higher expense ratios of the Trust as compared
to those of its Sister Fund.
1. "Total Return" includes reinvestment of all income dividends and capital gain
distributions. Results represent past performance and do not indicate future
results. The value of an investment in the Trust and the return on the
investment both will fluctuate, and redemption proceeds may be higher or lower
than an investor's original cost.
2. The Russell Midcap Growth Index measures the performance of those Russell
Midcap-Registered Trademark- Index companies with higher price-to-book ratios
and higher forecasted growth values. The Russell Midcap Index measures the
performance of the 800 smallest companies in the Russell
1000-Registered Trademark- Index, which represents approximately 24% of the
total market capitalization of the Russell 1000 Index (which, in turn, consists
of the 1,000 largest
A-48
<PAGE>
U.S. companies, based on market capitalization). The S&P 500 Index is widely
regarded as the standard for measuring large-cap U.S. stock markets performance
and includes a representative sample of leading companies in leading industries.
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 these indices
are prepared or obtained by Management and include reinvestment of all dividends
and capital gain distributions. The Portfolio may invest in many securities not
included in the above-described indices.
A-49
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Millennium Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN(1)
RUSSELL 2000-Registered Trademark-
MILLENNIUM GROWTH(2) RUSSELL 2000-Registered Trademark-(2)
1 YEAR +96.66% +39.08% +27.15%
LIFE OF FUND +105.31% +39.78% +26.94%
</TABLE>
<TABLE>
<S> <C> <C> <C>
Millennium Trust Russell 2000 Growth Russell 2000
10/20/98 $10,000 $10,000 $10,000
11/30/98 $12,307 $11,714 $11,299
2/28/99 $14,858 $12,127 $11,173
5/31/99 $17,120 $13,690 $12,545
8/31/99 $19,500 $13,443 $12,281
11/30/99 $25,900 $15,540 $13,070
2/29/00 $44,150 $22,321 $16,679
5/31/00 $30,108 $16,386 $13,789
8/31/00 $38,349 $18,696 $15,615
</TABLE>
The performance information for Neuberger Berman Millennium Trust is as of
August 31, 2000. Neuberger Berman Millennium Trust started operations on
November 4, 1998. It has identical investment objectives and policies, and
invests in the same Portfolio as Neuberger Berman Millennium Fund ("Sister
Fund"), which is also managed by Neuberger Berman Management ("Management"). The
performance information shown in the above chart prior to November 4, 1998 is
for the Sister Fund. The start up of Millennium Trust roughly coincided with a
period of accelerated growth in the small-cap growth sector of the stock market,
and its investment in IPOs had a significant impact on performance. There can be
no assurance that these factors will continue to have a positive effect on the
fund. Average net assets of Neuberger Berman Millennium Portfolio for fiscal
year ended August 31, 2000 were approximately $236.1 million. Since the fund has
been relatively small in asset size, it may be easier to achieve higher returns
in a small fund than in a larger fund. Management has contractually agreed until
12/31/10 to absorb certain operating expenses so that total annual operating
expenses of the fund are limited to 1.75% of average net assets. The fund has
agreed to repay Management through 12/31/00 for expenses reimbursed by 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
A-50
<PAGE>
assets. Absent this arrangement, the Trust's returns would have been less. THE
RISKS INVOLVED IN SEEKING CAPITAL APPRECIATION FROM INVESTMENTS PRIMARILY IN
COMPANIES WITH SMALL MARKET CAPITALIZATION ARE SET FORTH IN THE PROSPECTUS.
1. "Total Return" includes reinvestment of all income dividends and capital gain
distributions. Results represent past performance and do not indicate future
results. The value of an investment in the Trust and the return on the
investment both will fluctuate, and redemption proceeds may be higher or lower
than an investor's original cost.
2. The Russell 2000 Growth Index measures the performance of those Russell 2000
Index companies with higher price-to-book ratios and higher forecasted growth
values. The Russell 2000 Index is an unmanaged index that measures the
performance of the 2,000 issuers having the smallest capitalization in the
Russell 3000-Registered Trademark- Index, representing approximately 8% of the
Russell 3000 total market capitalization. The smallest company's market
capitalization is roughly $178 million. 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 these indices are prepared or obtained by Management
and include reinvestment of all dividends and capital gain distributions. The
Portfolio may invest in many securities not included in the above-described
indices.
A-51
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Partners Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN(1)
RUSSELL 1000-Registered Trademark-
PARTNERS VALUE(2) S&P 500(2)
1 YEAR +8.41% +4.15% +16.31%
5 YEAR +15.47% +18.21% +24.03%
10 YEAR +15.76% +17.18% +19.47%
</TABLE>
<TABLE>
<S> <C> <C> <C>
Partners Trust Russell 1000 Value S&P 500
1990 $10,000 $10,000 $10,000
1991 $11,803 $12,356 $12,685
1992 $12,806 $13,596 $13,689
1993 $16,411 $17,248 $15,766
1994 $17,332 $17,742 $16,627
1995 $21,061 $21,145 $20,189
1996 $23,960 $24,854 $23,968
1997 $35,246 $34,680 $33,705
1998 $31,669 $36,029 $36,435
1999 $39,875 $46,867 $50,939
2000 $43,227 $48,814 $59,248
</TABLE>
The performance information for Neuberger Berman Partners Trust is as of
August 31, 2000. Neuberger Berman Partners Trust started operating on
August 30, 1993. It has identical investment objectives and policies, and
invests in the same Portfolio as Neuberger Berman Partners Fund ("Sister Fund"),
which is also managed by Neuberger Berman Management Inc. ("Management"). The
performance information shown in the above chart for the period before
August 30, 1993, is for the Sister Fund. Management voluntarily bears certain
operating expenses of the Trust so that its expense ratio per annum will not
exceed the expense ratio per annum of its Sister Fund by more than 0.10% of the
Trust's average daily net assets per annum. This arrangement can be terminated
upon 60 days' prior written notice. Absent such arrangement, the average annual
total returns of the Trust would have been less. The total returns for periods
prior to the Trust's commencement of operations would have been lower had they
reflected the higher expense ratios of the Trust as compared to those of its
Sister Fund. In connection with the 12b-1 fee recently submitted to
shareholders, Management has notified the Trust of its intention to raise the
allowable annual differential to 0.20% as of December 15, 2000.
1. "Total Return" includes reinvestment of all income dividends and capital gain
distributions. Results represent past performance and do not indicate future
results. The value of an investment in the Trust and the return on the
investment both will fluctuate, and redemption proceeds may be higher or lower
than an investor's original cost.
A-52
<PAGE>
2. The Russell 1000-Registered Trademark- Index measures the performance of the
1,000 largest companies in the Russell 3000-Registered Trademark- Index (which
measures the performance of the 3,000 largest U.S. companies based on total
market capitalization). The Russell 1000 Index represents approximately 92% of
the total market capitalization of the Russell 3000 Index. The Russell 1000
Value Index measures the performance of those Russell 1000 companies with lower
price-to-book ratios and lower forecasted growth values. The S&P 500 Index is
widely regarded as the standard for measuring large-cap U.S. stock markets
performance and includes a representative sample of leading companies in leading
industries. 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
these indices are prepared or obtained by Management and include reinvestment of
all dividends and capital gain distributions. The Portfolio may invest in many
securities not included in the above-described indices.
A-53
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Regency Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN(1)
RUSSELL MIDCAP-Registered Trademark-
REGENCY VALUE(2) RUSSELL MIDCAP-Registered Trademark-(2)
1 YEAR +34.86% +6.26% +28.83%
LIFE OF FUND +25.18% +0.93% +20.49%
</TABLE>
<TABLE>
<S> <C> <C> <C>
Regency Trust Russell Midcap Value Russell Midcap
6/1/99 $10,000 $10,000 $10,000
8/31/99 $9,828 $9,520 $9,808
11/30/99 $9,798 $9,134 $10,196
2/29/00 $11,037 $8,449 $11,551
5/31/00 $11,874 $9,675 $11,326
8/31/00 $13,255 $10,116 $12,635
</TABLE>
The performance information for Neuberger Berman Regency Trust is as of
August 31, 2000. Neuberger Berman Regency Trust started operations on June 10,
2000. It has identical investment objectives and policies, and invests in the
same Portfolio as Neuberger Berman Regency Fund ("Sister Fund"), which is also
managed by Neuberger Berman Management ("Management"). The performance
information shown in the above chart prior to June 10, 1999 is for the Sister
Fund. Because this is a new fund, it may be easier to achieve higher returns in
a small fund than in a larger fund. In particular, IPO's had a significant
impact on the performance of the Trust. Management currently absorbs certain
operating expenses that exceed, in the aggregate, 1.50% of the average daily net
assets per annum of the Trust, or no more than .20% above the total of the
Sister Fund, whichever is less, until December 31, 2002. The fund has agreed to
repay Management for expenses reimbursed to the fund provided that repayment
does not cause the fund's annual operating expenses to exceed 1.50%. Any
repayment must be made within three years after the year in which Management
incurred the expense. Absent this arrangement, the Trust's returns would have
been less. THE RISKS INVOLVED IN SEEKING CAPITAL APPRECIATION FROM INVESTMENTS
PRIMARILY IN COMPANIES WITH MEDIUM MARKET CAPITALIZATION ARE SET FORTH IN THE
PROSPECTUS.
A-54
<PAGE>
1. "Total Return" includes reinvestment of all income dividends and capital gain
distributions. Results represent past performance and do not indicate future
results. The value of an investment in the Trust and the return on the
investment both will fluctuate, and redemption proceeds may be higher or lower
than an investor's original cost.
2. The Russell Midcap Value Index measures the performance of those Russell
Midcap Index companies with lower price-to-book ratios and lower forecasted
growth values. The Russell Midcap Index measures the performance of the 800
smallest companies in the Russell 1000-Registered Trademark- Index, which
represents approximately 24% of the total market capitalization of the Russell
1000 Index (which, in turn, consists of the 1,000 largest U.S. companies, based
on market capitalization). 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 these indices are prepared or obtained by Management and include reinvestment
of all dividends and capital gain distributions. The Portfolio may invest in
many securities not included in the above-described indices.
A-55
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Socially Responsive Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN(1)
RUSSELL 1000-Registered Trademark-
SOCIALLY RESPONSIVE VALUE(2) S&P 500(2)
1 YEAR +2.76% +4.15% +16.31%
5 YEAR +15.92% +18.21% +24.03%
LIFE OF FUND +15.10% +17.18% +22.23%
</TABLE>
<TABLE>
<S> <C> <C> <C>
Russell 1000
Socially Responsive Trust Value S&P 500
3/16/94 $10,000 $10,000 $10,000
8/31/94 $10,070 $10,128 $10,276
1995 $11,865 $12,071 $12,476
1996 $14,261 $14,188 $14,812
1997 $18,813 $19,797 $20,829
1998 $17,675 $20,568 $22,517
1999 $24,171 $26,754 $31,480
2000 $24,838 $27,866 $36,615
</TABLE>
The performance information for Neuberger Berman Socially Responsive Trust is
as of August 31, 2000. Neuberger Berman Socially Responsive Trust started
operating on March 3, 1997. It has identical investment objectives and policies,
and invests in the same Portfolio as Neuberger Berman Socially Responsive Fund
("Sister Fund"), which is also managed by Neuberger Berman Management Inc.
("Management"). The performance information shown in the above chart for the
period before March 3, 1997, is for the Sister Fund. Management voluntarily
bears certain operating expenses of the Trust so that its expense ratio per
annum will not exceed the expense ratio per annum of its Sister Fund by more
than 0.20% of the Trust's average daily net assets per annum. This arrangement
can be terminated upon 60 days' prior written notice. Absent such arrangement,
the average annual total returns of the Trust would have been less. The total
returns for periods prior to the Trust's commencement of operations would have
been lower had they reflected the higher expense ratios of the Trust as compared
to those of its Sister Fund.
1. "Total Return" includes reinvestment of all income dividends and capital gain
distributions. Results represent past performance and do not indicate future
results. The value of an investment in the Trust and the return on the
investment both will fluctuate, and redemption proceeds may be higher or lower
than an investor's original cost.
2. The Russell 1000-Registered Trademark- Index measures the performance of the
1,000 largest companies in the Russell 3000-Registered Trademark- Index (which
measures the performance of the 3,000 largest U.S. companies based on total
market capitalization). The Russell 1000 Index represents approximately 92% of
the total market capitalization of the Russell 3000 Index. The Russell 1000
Value Index measures the performance of those Russell 1000
A-56
<PAGE>
companies with lower price-to-book ratios and lower forecasted growth values.
The S&P 500 Index is widely regarded as the standard for measuring large-cap
U.S. stock market performance and includes a representative sample of leading
companies in leading industries. 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 these indices are prepared or obtained by Management and
include reinvestment of all dividends and capital gain distributions. The
Portfolio may invest in many securities not included in the above-described
indices.
A-57
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Technology Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C>
Aggregate Total Return(1)
RUSSELL 1000-Registered Trademark-
TECHNOLOGY GROWTH(2) S&P 500(2)
LIFE OF FUND +21.40% +6.77% +4.93%
</TABLE>
<TABLE>
<S> <C> <C> <C>
Russell 1000
Technology Trust Growth S&P 500
5/1/00 $10,000 $10,000 $10,000
5/31/00 $8,700 $9,497 $9,795
8/31/00 $12,140 $10,677 $10,493
</TABLE>
These are cumulative returns and are not annualized. The cumulative returns
shown above for Neuberger Berman Technology Trust, the Russell 1000 Growth
Index, and the S&P 500 Index are from May 1, 2000, which is the commencement of
operations of Neuberger Berman Technology Trust through August 31, 2000. Because
this is a new fund, short-term results may not be duplicated. Average net assets
of Neuberger Berman Technology Portfolio through August 31, 2000 were
$17.1 million. It may be easier to achieve higher returns in a small fund than
in a larger fund. Neuberger Berman Management Inc. ("Management") has
contractually agreed to reimburse certain expenses of the fund through 12/31/03
so that the total annual operating expenses of the fund are limited to 2.00% of
average net assets. The fund has agreed to repay Management for expenses
reimbursed to the fund provided that the repayment does not cause the fund's
annual operating expenses to exceed 2.00% of its average net assets. Any such
payment must be made within three years after the year that Management incurred
the expense. Absent this arrangement, the cumulative total returns of the Trust
would have been less.
1. "Total Return" includes reinvestment of all income dividends and capital gain
distributions. Results represent past performance and do not indicate future
results. The value of an investment in the Trust and the return on the
investment both will fluctuate, and redemption proceeds may be higher or lower
than an investor's original cost.
2. The Russell 1000-Registered Trademark- Index measures the performance of the
1,000 largest companies in the Russell 3000-Registered Trademark- Index (which
measures the performance of the 3,000 largest U.S. companies based on total
market
A-58
<PAGE>
capitalization). The Russell 1000 Index represents approximately 92% of the
total market capitalization of the Russell 3000 Index. The Russell 1000 Growth
Index measures the performance of those Russell 1000 companies with higher
price-to-book ratios and higher forecasted growth values. The S&P 500 Index is
widely regarded as the standard for measuring large-cap U.S. stock market
performance and includes a representative sample of leading companies in leading
industries. 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
these indices are prepared or obtained by Management and include reinvestment of
all dividends and capital gain distributions. The Portfolio may invest in many
securities not included in the above-described indices.
A-59
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
Neuberger Berman
----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
CENTURY FOCUS GENESIS GUARDIAN
(000'S OMITTED EXCEPT PER SHARE AMOUNTS) TRUST TRUST TRUST TRUST
<S> <C> <C> <C> <C>
----------------------------------------------------------
ASSETS
Investment in corresponding Portfolio, at
value (Note A) $ 2,195 $ 367,858 $ 769,996 $ 1,095,123
Deferred organization costs (Note A) -- -- -- --
Receivable for Trust shares sold -- 5,122 1,849 215
Receivable from administrator -- net
(Note B) -- -- -- --
----------------------------------------------------------
2,195 372,980 771,845 1,095,338
----------------------------------------------------------
LIABILITIES
Payable for Trust shares redeemed -- 381 590 1,211
Payable to administrator -- net (Note B) -- 80 249 361
Accrued expenses 11 101 139 142
----------------------------------------------------------
11 562 978 1,714
----------------------------------------------------------
NET ASSETS at value $ 2,184 $ 372,418 $ 770,867 $ 1,093,624
----------------------------------------------------------
NET ASSETS consist of:
Par value $ -- $ 11 $ 30 $ 71
Paid-in capital in excess of par value 1,657 210,234 629,015 786,375
Accumulated undistributed net investment
income -- -- -- 1,360
Accumulated net realized gains (losses) on
investment (74) 15,926 23,748 91,018
Net unrealized appreciation in value of
investment 601 146,247 118,074 214,800
----------------------------------------------------------
NET ASSETS at value $ 2,184 $ 372,418 $ 770,867 $ 1,093,624
----------------------------------------------------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 162 10,540 30,420 70,818
----------------------------------------------------------
NET ASSET VALUE, offering and redemption price per
share $13.44 $35.33 $25.34 $15.44
----------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-1
<PAGE>
August 31, 2000
----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
INTERNATIONAL MANHATTAN MILLENNIUM PARTNERS
TRUST TRUST TRUST TRUST
<S> <C> <C> <C> <C>
----------------------------------------------------------
ASSETS
Investment in corresponding Portfolio, at
value (Note A) $ 3,987 $ 138,496 $ 19,486 $ 625,235
Deferred organization costs (Note A) 52 -- -- --
Receivable for Trust shares sold 1 293 28 220
Receivable from administrator -- net
(Note B) 2 -- -- --
----------------------------------------------------------
4,042 138,789 19,514 625,455
----------------------------------------------------------
LIABILITIES
Payable for Trust shares redeemed 8 144 15 2,499
Payable to administrator -- net (Note B) -- 36 11 209
Accrued expenses 18 37 20 103
----------------------------------------------------------
26 217 46 2,811
----------------------------------------------------------
NET ASSETS at value $ 4,016 $ 138,572 $ 19,468 $ 622,644
----------------------------------------------------------
NET ASSETS consist of:
Par value $ -- $ 5 $ 1 $ 33
Paid-in capital in excess of par value 3,410 85,512 15,880 511,116
Accumulated undistributed net investment
income -- -- -- 3,443
Accumulated net realized gains (losses) on
investment 414 21,121 963 29,449
Net unrealized appreciation in value of
investment 192 31,934 2,624 78,603
----------------------------------------------------------
NET ASSETS at value $ 4,016 $ 138,572 $ 19,468 $ 622,644
----------------------------------------------------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 189 5,328 571 33,226
----------------------------------------------------------
NET ASSET VALUE, offering and redemption price per
share $21.24 $26.01 $34.10 $18.74
----------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-2
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES(Cont'd)
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
SOCIALLY
REGENCY RESPONSIVE TECHNOLOGY
(000'S OMITTED EXCEPT PER SHARE AMOUNTS) TRUST TRUST TRUST
<S> <C> <C> <C>
-------------------------------------------
ASSETS
Investment in corresponding Portfolio, at
value (Note A) $ 25,082 $ 29,045 $ 2,452
Deferred organization costs (Note A) -- 34 --
Receivable for Trust shares sold -- 14 10
Receivable from administrator -- net
(Note B) -- -- 35
-------------------------------------------
25,082 29,093 2,497
-------------------------------------------
LIABILITIES
Payable for Trust shares redeemed -- 34 --
Payable to administrator -- net (Note B) 4 27 --
Accrued expenses 17 26 18
-------------------------------------------
21 87 18
-------------------------------------------
NET ASSETS at value $ 25,061 $ 29,006 $ 2,479
-------------------------------------------
NET ASSETS consist of:
Par value $ 2 $ 2 $ --
Paid-in capital in excess of par value 17,542 24,745 2,068
Accumulated undistributed net investment
income -- -- --
Accumulated net realized gains (losses) on
investment 3,860 (915) (26)
Net unrealized appreciation in value of
investment 3,657 5,174 437
-------------------------------------------
NET ASSETS at value $ 25,061 $ 29,006 $ 2,479
-------------------------------------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 1,905 1,997 204
-------------------------------------------
NET ASSET VALUE, offering and redemption price per
share $13.15 $14.53 $12.14
-------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-3
<PAGE>
(This page has been left blank intentionally.)
B-4
<PAGE>
STATEMENTS OF OPERATIONS
Neuberger Berman
----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
CENTURY FOCUS
TRUST TRUST
For the
Period from
December 6, 1999 For the
(Commencement Year
of Operations) to Ended
August 31, August 31,
(000's omitted) 2000 2000
<S> <C> <C>
------------------------------
INVESTMENT INCOME
Investment income from corresponding Portfolio
(Note A) $ 11 $ 2,018
------------------------------
Expenses:
Administration fee (Note B) 6 973
Amortization of deferred organization and
initial offering expenses (Note A) -- --
Auditing fees 5 5
Custodian fees 7 10
Distribution fees (Note B) 1 183
Legal fees 26 13
Registration and filing fees 35 49
Shareholder reports 12 65
Shareholder servicing agent fees -- 20
Trustees' fees and expenses 1 4
Miscellaneous -- 27
Expenses from corresponding Portfolio
(Notes A & B) 14 1,224
------------------------------
Total expenses 107 2,573
Expenses reimbursed by administrator and/or
reduced
by custodian fee expense offset
arrangement (Note B) (86) (30)
------------------------------
Total net expenses 21 2,543
------------------------------
Net investment income (loss) (10) (525)
------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
FROM CORRESPONDING PORTFOLIO (NOTE A)
Net realized gain (loss) on investment
securities (52) 17,153
Net realized gain (loss) on option contracts -- 44
Net realized loss on financial futures
contracts -- --
Change in net unrealized appreciation
(depreciation) of investment securities,
financial futures contracts, option
contracts, and translation of assets and
liabilities in foreign currencies 601 96,943
------------------------------
Net gain on investments from corresponding
Portfolio (Note A) 549 114,140
------------------------------
Net increase in net assets resulting from
operations $ 539 $ 113,615
------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-5
<PAGE>
----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
GENESIS GUARDIAN INTERNATIONAL
TRUST TRUST TRUST
For the For the For the
Year Year Year
Ended Ended Ended
August 31, August 31, August 31,
2000 2000 2000
<S> <C> <C> <C>
-------------------------------------------
INVESTMENT INCOME
Investment income from corresponding Portfolio
(Note A) $ 7,360 $ 16,793 $ 43
-------------------------------------------
Expenses:
Administration fee (Note B) 2,461 4,535 16
Amortization of deferred organization and
initial offering expenses (Note A) -- -- 18
Auditing fees 5 6 5
Custodian fees 10 10 10
Distribution fees (Note B) -- -- --
Legal fees 14 16 14
Registration and filing fees 48 42 25
Shareholder reports 169 167 11
Shareholder servicing agent fees 27 29 25
Trustees' fees and expenses 9 15 --
Miscellaneous 69 124 1
Expenses from corresponding Portfolio
(Notes A & B) 4,645 5,326 39
-------------------------------------------
Total expenses 7,457 10,270 164
Expenses reimbursed by administrator and/or
reduced
by custodian fee expense offset
arrangement (Note B) (1) (7) (104)
-------------------------------------------
Total net expenses 7,456 10,263 60
-------------------------------------------
Net investment income (loss) (96) 6,530 (17)
-------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
FROM CORRESPONDING PORTFOLIO (NOTE A)
Net realized gain (loss) on investment
securities 71,142 118,211 432
Net realized gain (loss) on option contracts -- (25,896) --
Net realized loss on financial futures
contracts -- (1,531) (6)
Change in net unrealized appreciation
(depreciation) of investment securities,
financial futures contracts, option
contracts, and translation of assets and
liabilities in foreign currencies 73,554 75,280 223
-------------------------------------------
Net gain on investments from corresponding
Portfolio (Note A) 144,696 166,064 649
-------------------------------------------
Net increase in net assets resulting from
operations $ 144,600 $ 172,594 $ 632
-------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-6
<PAGE>
STATEMENTS OF OPERATIONS(Cont'd)
Neuberger Berman
----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
MANHATTAN MILLENNIUM
TRUST TRUST
For the For the
Year Year
Ended Ended
August 31, August 31,
(000's omitted) 2000 2000
<S> <C> <C>
------------------------
INVESTMENT INCOME
Investment income from corresponding Portfolio
(Note A) $ 381 $ 50
------------------------
Expenses:
Administration fee (Note B) 373 46
Amortization of deferred organization and
initial offering expenses (Note A) -- --
Auditing fees 8 3
Custodian fees 10 10
Distribution fees (Note B) -- 9
Legal fees 13 15
Registration and filing fees 41 24
Shareholder reports 25 12
Shareholder servicing agent fees 18 15
Trustees' fees and expenses 2 1
Miscellaneous 11 3
Expenses from corresponding Portfolio
(Notes A & B) 511 108
------------------------
Total expenses 1,012 246
Expenses reimbursed by administrator and/or
reduced
by custodian fee expense offset
arrangement (Note B) (56) (43)
------------------------
Total net expenses 956 203
------------------------
Net investment income (loss) (575) (153)
------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
FROM CORRESPONDING PORTFOLIO (NOTE A)
Net realized gain (loss) on investment
securities 21,378 1,116
Net realized gain (loss) on option contracts -- --
Net realized loss on financial futures
contracts -- --
Change in net unrealized appreciation
(depreciation) of investment securities,
financial futures contracts, option
contracts, and translation of assets and
liabilities in foreign currencies 20,889 2,415
------------------------
Net gain on investments from corresponding
Portfolio (Note A) 42,267 3,531
------------------------
Net increase in net assets resulting from
operations $ 41,692 $ 3,378
------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-7
<PAGE>
----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
SOCIALLY
PARTNERS REGENCY RESPONSIVE TECHNOLOGY
TRUST TRUST TRUST TRUST
For the
Period from
For the For the For the May 1, 2000
Year Year Year (Commencement
Ended Ended Ended of Operations) to
August 31, August 31, August 31, August 31,
2000 2000 2000 2000
<S> <C> <C> <C> <C>
--------------------------------------------------------------
INVESTMENT INCOME
Investment income from corresponding Portfolio
(Note A) $ 10,004 $ 332 $ 297 $ 13
--------------------------------------------------------------
Expenses:
Administration fee (Note B) 2,772 89 105 3
Amortization of deferred organization and
initial offering expenses (Note A) -- -- 23 --
Auditing fees 6 6 9 5
Custodian fees 10 10 10 3
Distribution fees (Note B) -- 22 19 1
Legal fees 15 11 23 32
Registration and filing fees 28 23 52 37
Shareholder reports 108 17 23 8
Shareholder servicing agent fees 29 10 18 --
Trustees' fees and expenses 9 4 1 --
Miscellaneous 75 4 5 --
Expenses from corresponding Portfolio
(Notes A & B) 3,310 196 173 11
--------------------------------------------------------------
Total expenses 6,362 392 461 100
Expenses reimbursed by administrator and/or
reduced
by custodian fee expense offset
arrangement (Note B) (7) (57) (115) (86)
--------------------------------------------------------------
Total net expenses 6,355 335 346 14
--------------------------------------------------------------
Net investment income (loss) 3,649 (3) (49) (1)
--------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
FROM CORRESPONDING PORTFOLIO (NOTE A)
Net realized gain (loss) on investment
securities 31,302 3,900 (972) (6)
Net realized gain (loss) on option contracts -- -- -- --
Net realized loss on financial futures
contracts -- -- -- --
Change in net unrealized appreciation
(depreciation) of investment securities,
financial futures contracts, option
contracts, and translation of assets and
liabilities in foreign currencies 13,994 3,674 1,858 437
--------------------------------------------------------------
Net gain on investments from corresponding
Portfolio (Note A) 45,296 7,574 886 431
--------------------------------------------------------------
Net increase in net assets resulting from
operations $ 48,945 $ 7,571 $ 837 $ 430
--------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-8
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Neuberger Berman
----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
CENTURY TRUST FOCUS TRUST
Period from
December 6, 1999
(Commencement
of Operations) to Year Ended
August 31, August 31,
(000's omitted) 2000 2000 1999
<S> <C> <C> <C>
---------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ (10) $ (525) $ (160)
Net realized gain (loss) on
investments from corresponding
Portfolio (Note A) (52) 17,197 15,737
Change in net unrealized
appreciation (depreciation) of
investments from corresponding
Portfolio (Note A) 601 96,943 55,767
---------------------------------------------
Net increase (decrease) in net
assets resulting from operations 539 113,615 71,344
---------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- -- (312)
Net realized gain on investments -- (12,691) --
Tax return of capital -- -- --
---------------------------------------------
Total distributions to shareholders -- (12,691) (312)
---------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 1,798 243,564 72,867
Proceeds from reinvestment of
dividends and distributions -- 10,728 311
Payments for shares redeemed (153) (198,818) (121,354)
---------------------------------------------
Net increase (decrease) from Trust
share transactions 1,645 55,474 (48,176)
---------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 2,184 156,398 22,856
NET ASSETS:
Beginning of year -- 216,020 193,164
---------------------------------------------
End of year $ 2,184 $ 372,418 $ 216,020
---------------------------------------------
Accumulated undistributed net
investment income (loss) at end of
year $ -- $ -- $ --
---------------------------------------------
NUMBER OF TRUST SHARES:
Sold 175 8,107 3,256
Issued on reinvestment of dividends
and distributions -- 413 14
Redeemed (13) (7,125) (5,395)
---------------------------------------------
Net increase (decrease) in shares
outstanding 162 1,395 (2,125)
---------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-9
<PAGE>
----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
INTERNATIONAL
GENESIS TRUST GUARDIAN TRUST TRUST
Year Ended Year Ended Year Ended
August 31, August 31, August 31,
2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ (96) $ 3,994 $ 6,530 $ 9,749 $ (17) $ (10)
Net realized gain (loss) on
investments from corresponding
Portfolio (Note A) 71,142 (50,517) 90,784 230,720 426 135
Change in net unrealized
appreciation (depreciation) of
investments from corresponding
Portfolio (Note A) 73,554 178,420 75,280 157,393 223 314
----------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 144,600 131,897 172,594 397,862 632 439
----------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (3,058) (5,066) (7,444) (8,934) (2) --
Net realized gain on investments -- (8,444) (227,970) (143,039) (32) --
Tax return of capital -- -- -- -- -- --
----------------------------------------------------------------------------------
Total distributions to shareholders (3,058) (13,510) (235,414) (151,973) (34) --
----------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 360,533 577,427 208,754 451,781 10,137 2,030
Proceeds from reinvestment of
dividends and distributions 3,002 11,221 233,779 151,733 34 --
Payments for shares redeemed (325,319) (820,431) (537,240) (1,127,748) (9,126) (1,857)
----------------------------------------------------------------------------------
Net increase (decrease) from Trust
share transactions 38,216 (231,783) (94,707) (524,234) 1,045 173
----------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 179,758 (113,396) (157,527) (278,345) 1,643 612
NET ASSETS:
Beginning of year 591,109 704,505 1,251,151 1,529,496 2,373 1,761
----------------------------------------------------------------------------------
End of year $ 770,867 $ 591,109 $ 1,093,624 $ 1,251,151 $ 4,016 $ 2,373
----------------------------------------------------------------------------------
Accumulated undistributed net
investment income (loss) at end of
year $ -- $ 2,832 $ 1,360 $ 2,288 $ -- $ (6)
----------------------------------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 16,163 29,655 14,007 26,757 475 130
Issued on reinvestment of dividends
and distributions 150 569 17,012 9,378 2 --
Redeemed (15,070) (41,810) (36,671) (67,053) (428) (117)
----------------------------------------------------------------------------------
Net increase (decrease) in shares
outstanding 1,243 (11,586) (5,652) (30,918) 49 13
----------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-10
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS(Cont'd)
Neuberger Berman
----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
MANHATTAN TRUST MILLENNIUM TRUST
Period from
November 4, 1998
Year (Commencement
Year Ended Ended of Operations) to
August 31, August 31, August 31,
(000's omitted) 2000 1999 2000 1999
<S> <C> <C> <C> <C>
-----------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ (575) $ (317) $ (153) $ (12)
Net realized gain (loss) on
investments from corresponding
Portfolio (Note A) 21,378 4,459 1,116 279
Change in net unrealized
appreciation (depreciation) of
investments from corresponding
Portfolio (Note A) 20,889 12,225 2,415 209
-----------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 41,692 16,367 3,378 476
-----------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- -- -- --
Net realized gain on investments (5,129) (2,903) (308) --
Tax return of capital -- -- -- --
-----------------------------------------------------------
Total distributions to shareholders (5,129) (2,903) (308) --
-----------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 130,792 39,767 19,984 2,890
Proceeds from reinvestment of
dividends and distributions 5,127 2,902 268 --
Payments for shares redeemed (79,194) (56,952) (6,054) (1,166)
-----------------------------------------------------------
Net increase (decrease) from Trust
share transactions 56,725 (14,283) 14,198 1,724
-----------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 93,288 (819) 17,268 2,200
NET ASSETS:
Beginning of year 45,284 46,103 2,200 --
-----------------------------------------------------------
End of year $ 138,572 $ 45,284 $ 19,468 $ 2,200
-----------------------------------------------------------
Accumulated undistributed net
investment income (loss) at end of
year $ -- $ -- $ -- $ --
-----------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 5,738 2,854 634 193
Issued on reinvestment of dividends
and distributions 284 200 10 --
Redeemed (3,708) (4,012) (194) (72)
-----------------------------------------------------------
Net increase (decrease) in shares
outstanding 2,314 (958) 450 121
-----------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-11
<PAGE>
----------------------------------------------------------------------
Equity Trust
<TABLE>
<CAPTION>
SOCIALLY
RESPONSIVE
PARTNERS TRUST REGENCY TRUST TRUST
Period from
June 10, 1999
Year (Commencement
Year Ended Ended of Operations) to Year Ended
August 31, August 31, August 31, August 31,
2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 3,649 $ 7,351 $ (3) $ -- $ (49) $ 2
Net realized gain (loss) on
investments from corresponding
Portfolio (Note A) 31,302 45,924 3,900 3 (972) 429
Change in net unrealized
appreciation (depreciation) of
investments from corresponding
Portfolio (Note A) 13,994 141,300 3,674 (17) 1,858 4,701
---------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 48,945 194,575 7,571 (14) 837 5,132
---------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (7,505) -- -- -- -- (42)
Net realized gain on investments (49,378) (22,347) (24) -- (462) (139)
Tax return of capital -- -- -- -- (21) --
---------------------------------------------------------------------------------------
Total distributions to shareholders (56,883) (22,347) (24) -- (483) (181)
---------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 209,405 389,153 23,320 488 11,851 11,886
Proceeds from reinvestment of
dividends and distributions 56,458 22,046 24 -- 480 181
Payments for shares redeemed (485,389) (462,985) (6,187) (117) (8,974) (5,139)
---------------------------------------------------------------------------------------
Net increase (decrease) from Trust
share transactions (219,526) (51,786) 17,157 371 3,357 6,928
---------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (227,464) 120,442 24,704 357 3,711 11,879
NET ASSETS:
Beginning of year 850,108 729,666 357 -- 25,295 13,416
---------------------------------------------------------------------------------------
End of year $ 622,644 $ 850,108 $ 25,061 $ 357 $ 29,006 $ 25,295
---------------------------------------------------------------------------------------
Accumulated undistributed net
investment income (loss) at end of
year $ 3,443 $ 7,351 $ -- $ -- $ -- $ --
---------------------------------------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 11,744 21,341 2,408 48 859 862
Issued on reinvestment of dividends
and distributions 3,228 1,228 2 -- 35 14
Redeemed (27,178) (25,015) (542) (11) (652) (382)
---------------------------------------------------------------------------------------
Net increase (decrease) in shares
outstanding (12,206) (2,446) 1,868 37 242 494
---------------------------------------------------------------------------------------
<CAPTION>
TECHNOLOGY
TRUST
Period from
May 1, 2000
(Commencement
of Operations) to
August 31,
2000
<S> <C>
-----------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ (1)
Net realized gain (loss) on
investments from corresponding
Portfolio (Note A) (6)
Change in net unrealized
appreciation (depreciation) of
investments from corresponding
Portfolio (Note A) 437
-----------------
Net increase (decrease) in net
assets resulting from operations 430
-----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income --
Net realized gain on investments --
Tax return of capital --
-----------------
Total distributions to shareholders --
-----------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 2,049
Proceeds from reinvestment of
dividends and distributions --
Payments for shares redeemed --
-----------------
Net increase (decrease) from Trust
share transactions 2,049
-----------------
NET INCREASE (DECREASE) IN NET ASSETS 2,479
NET ASSETS:
Beginning of year --
-----------------
End of year $ 2,479
-----------------
Accumulated undistributed net
investment income (loss) at end of
year $ --
-----------------
NUMBER OF TRUST SHARES:
Sold 204
Issued on reinvestment of dividends
and distributions --
Redeemed --
-----------------
Net increase (decrease) in shares
outstanding 204
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Equity Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger Berman Century Trust ("Century"), Neuberger Berman Focus
Trust ("Focus"), Neuberger Berman Genesis Trust ("Genesis"), Neuberger Berman
Guardian Trust ("Guardian"), Neuberger Berman International Trust
("International"), Neuberger Berman Manhattan Trust ("Manhattan"), Neuberger
Berman Millennium Trust ("Millennium"), Neuberger Berman Partners Trust
("Partners"), Neuberger Berman Regency Trust ("Regency"), Neuberger Berman
Socially Responsive Trust ("Socially Responsive"), and Neuberger Berman
Technology Trust ("Technology") (collectively, the "Funds") are 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 (the
"1940 Act"), and its shares are registered under the Securities Act of 1933,
as amended (the "1933 Act"). Century, Millennium, Regency, and Technology had
no operations until December 6, 1999, November 4, 1998, June 10, 1999, and
May 1, 2000, respectively, other than matters relating to their organization
and registration as diversified, open-end management investment companies
under the 1940 Act, and registration of their shares under the 1933 Act. The
trustees of the Trust may establish additional series or classes of shares
without the approval of shareholders.
The assets of each Fund belong only to that Fund, and the liabilities of
each Fund are borne solely by that Fund and no other.
Each Fund seeks to achieve its investment objective by investing all of
its net investable assets in its corresponding portfolio of Equity Managers
Trust (Global Managers Trust with respect to International) (each a
"Portfolio") having the same investment objective and policies as the Fund.
The value of each Fund's investment in its corresponding Portfolio reflects
that Fund's proportionate interest in the net assets of that Portfolio
(4.81%, 15.52%, 41.60%, 28.52%, 2.19%, 10.48%, 5.81%, 21.76%, 69.50%, 21.22%,
and 10.08%, for Century, Focus, Genesis, Guardian, International, Manhattan,
Millennium, Partners, Regency, Socially Responsive, and Technology,
respectively, at August 31, 2000). On November 16, 1999, 63.72% of Neuberger
Berman Socially Responsive Portfolio was held by another regulated investment
company, which redeemed its interest in the Portfolio through a redemption in
kind on that date. Neuberger Berman Management Inc. ("Management") carried
out this transaction in a way that
B-13
<PAGE>
minimized the effect on the Portfolio. The performance of each Fund is
directly affected by the performance of its corresponding Portfolio. The
financial statements of each Portfolio, including the Schedule of
Investments, are included elsewhere in this report and should be read in
conjunction with the corresponding Fund's financial statements.
2) PORTFOLIO VALUATION: Each Fund records its investment in its corresponding
Portfolio at value. Investment securities held by each Portfolio are valued
as indicated in the notes following the Portfolios' Schedule of Investments.
3) TAXES: The Funds are treated as separate entities for U.S. Federal income tax
purposes. It is the policy of Focus, Genesis, Guardian, International,
Manhattan, Millennium, Partners, Regency, and Socially Responsive to continue
to and the intention of Century and Technology to qualify as regulated
investment companies 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 them from all, or substantially all, U.S. Federal income taxes.
Accordingly, each 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: Each Fund earns income, net of
Portfolio expenses, daily on its investment in its corresponding Portfolio.
Income dividends and distributions from net realized capital gains, if any,
are normally distributed in December. Guardian generally distributes
substantially all of its net investment income, if any, at the end of each
calendar quarter. Income dividends and capital gain distributions to
shareholders are recorded on the ex-dividend date. To the extent each Fund's
net realized capital gains, if any, can be offset by capital loss
carryforwards ($72,756 and $913,827 expiring in 2008 for Century and Socially
Responsive, respectively, determined as of August 31, 2000), it is the policy
of each Fund not to distribute such gains.
Each Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a return of capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes are classified as
distributions in excess of net investment income or accumulated net realized
gains.
5) ORGANIZATION EXPENSES: Organization expenses incurred by International and
Socially Responsive are being amortized on a straight-line basis over a
five-year period. At August 31, 2000, the unamortized balance of such
expenses amounted to $51,697 and $34,005, for International and Socially
Responsive, respectively.
B-14
<PAGE>
6) EXPENSE ALLOCATION: Each 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) REDEMPTION OF FUND SHARES: Technology charges a 2% redemption fee on shares
redeemed or exchanged for shares of another fund within 180 days or less of
the purchase date. All redemption fees are paid to and recorded by Technology
as Paid-in capital. For the year ended August 31, 2000, Technology received
$0 in redemption fees.
8) OTHER: All net investment income and realized and unrealized capital gains
and losses of each Portfolio are allocated pro rata among its respective
Funds and any other investors in the Portfolio.
NOTE B -- ADMINISTRATION FEES, DISTRIBUTION ARRANGEMENTS, AND OTHER TRANSACTIONS
WITH AFFILIATES:
Each Fund retains Management as its administrator under an Administration
Agreement ("Agreement"). Pursuant to this Agreement each Fund pays Management an
administration fee at the annual rate of 0.40% of that Fund's average daily net
assets. Each Fund indirectly pays for investment management services through its
investment in its corresponding Portfolio (see Note B of Notes to Financial
Statements of the Portfolios).
For Century, Focus, Millennium, Regency, Socially Responsive, and Technology,
Management acts as agent in arranging for the sale of Fund shares without
commission and bears advertising and promotion expenses. The trustees of the
Trust have adopted a plan (the "Plan") with respect to these Funds, pursuant to
Rule 12b-1 under the 1940 Act. The Plan provides that, as compensation for
administrative and other services provided to these Funds, Management's
activities and expenses related to the sale and distribution of these Fund
shares, and ongoing services provided to investors in these Funds, Management
receives from each of these Funds a fee at the annual rate of 0.10% of such
Fund's average daily net assets. Management pays this amount to institutions
that distribute Fund shares and provide services to these Funds and their
shareholders. Those institutions may use the payments for, among other purposes,
compensating employees engaged in sales and/or shareholder servicing. The amount
of fees paid by these Funds during any year may be more or less than the cost of
distribution and other services provided to these Funds. NASD rules limit the
amount of annual distribution 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 those rules.
Management has voluntarily undertaken to reimburse each of Genesis, Guardian,
International, Manhattan, and Partners for its operating expenses plus its pro
rata portion of its corresponding Portfolio's operating expenses (including the
fees payable
B-15
<PAGE>
to Management, but excluding interest, taxes, brokerage commissions, and
extraordinary expenses) ("Operating Expenses") which exceed, in the aggregate,
by more than 0.10% (for International, not to exceed 1.70%) the expense ratio
per annum (each an "Expense Limitation") of a certain other mutual fund ("Sister
Fund") which also invests in the same Portfolio. Management has also voluntarily
undertaken to reimburse each of Focus and Socially Responsive, and contractually
undertaken to reimburse Regency, for any Operating Expenses which exceed, in the
aggregate, by more than 0.20% (for Regency, not to exceed 1.50%) the Expense
Limitation of a Sister Fund which also invests in the same Portfolio. Management
has also contractually undertaken to reimburse each of Century, Millennium, and
Technology for any Operating Expenses which exceed its Expense Limitation
(1.50%, 1.75%, and 2.00%, respectively). Each undertaking (except for Century,
Millennium, Regency, and Technology) is subject to termination by Management
upon at least 60 days' prior written notice to the appropriate Fund. For
Century, Millennium, Regency, and Technology, Management has contractually
undertaken to reimburse any excess Operating Expenses through December 31, 2002,
December 31, 2010, December 31, 2002, and December 31, 2003, respectively. For
the year ended August 31, 2000, such excess expenses amounted to $85,719,
$29,362, $103,947, $55,928, $42,558, $55,331, $115,370, and $86,351, for
Century, Focus, International, Manhattan, Millennium, Regency, Socially
Responsive, and Technology, respectively. For the year ended August 31, 2000,
there was no reimbursement of expenses by Management to Genesis, Guardian, and
Partners. Millennium has agreed to repay Management through December 31, 2000,
for its excess Operating Expenses previously reimbursed by Management through
December 31, 1999, so long as Millennium's annual Operating Expenses during that
period do not exceed its Expense Limitation. For the year ended August 31, 2000,
Millennium has not reimbursed Management. At August 31, 2000, Millennium has a
contingent liability to Management under the agreement of $160,842, not repaid
through December 31, 1999. Century, Regency, and Technology have each agreed to
repay Management (through December 31, 2006 for Technology) for its excess
Operating Expenses previously reimbursed by Management, so long as its annual
Operating Expenses during that period do not exceed its Expense Limitation, and
the repayments are made within three years after the year in which Management
issued the reimbursement. During the year ended August 31, 2000, neither
Century, Regency, nor Technology reimbursed Management.
Management and Neuberger Berman, LLC ("Neuberger"), a member firm of The New
York Stock Exchange and sub-adviser to each Portfolio, are wholly owned
subsidiaries of Neuberger Berman Inc., a publicly held company. Several
individuals who are officers and/or trustees of the Trust are also employees of
Neuberger and/or Management.
B-16
<PAGE>
Each Fund also has a distribution agreement with Management. Management
receives no compensation therefor (except from Century, Focus, Millennium,
Regency, Socially Responsive, and Technology) and no commissions for sales or
redemptions of shares of beneficial interest of each Fund, but receives fees
from Century, Focus, Millennium, Regency, Socially Responsive, and Technology
under the Plan, as described above.
Each Portfolio has an expense offset arrangement in connection with its
custodian contract. The impact of this arrangement, reflected in the Statements
of Operations under the caption Expenses from corresponding Portfolio, was a
reduction of $35, $680, $1,012, $7,336, $92, $140, $461, $6,794, $1,934, $120,
and $16, for Century, Focus, Genesis, Guardian, International, Manhattan,
Millennium, Partners, Regency, Socially Responsive, and Technology,
respectively.
NOTE C -- INVESTMENT TRANSACTIONS:
During the year ended August 31, 2000, additions and reductions in each
Fund's investment in its corresponding Portfolio were as follows:
<TABLE>
<CAPTION>
ADDITIONS REDUCTIONS
-----------------------------------------------------------------------------
<S> <C> <C>
CENTURY $ 1,831,000 $ 182,000
FOCUS 155,049,000 118,818,000
GENESIS 159,512,000 134,105,000
GUARDIAN 58,219,000 392,520,000
INTERNATIONAL 9,764,000 8,734,000
MANHATTAN 94,807,000 43,753,000
MILLENNIUM 16,946,000 3,134,000
PARTNERS 78,084,000 354,080,000
REGENCY 23,304,000 6,287,000
SOCIALLY RESPONSIVE 8,779,000 6,011,000
TECHNOLOGY 2,043,000 23,000
</TABLE>
At August 31, 2000, Neuberger Berman International Portfolio's cost of
investments for U.S. Federal income tax purposes was $151,343,000. Gross
unrealized appreciation of investments was $43,312,000 and gross unrealized
depreciation of investments was $5,782,000, resulting in net unrealized
appreciation of $37,530,000, based on cost for U.S. Federal income tax purposes.
B-17
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Century Trust(1)
The following table includes selected data for a share outstanding throughout
the 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>
Period from
December 6, 1999(2) to
August 31,
2000
<S> <C>
----------------------
Net Asset Value, Beginning of Period $10.00
----------------------
Income From Investment Operations
Net Investment Loss (.06)
Net Gains or Losses on Securities
(both realized and unrealized) 3.50
----------------------
Total From Investment Operations 3.44
----------------------
Net Asset Value, End of Period $13.44
----------------------
Total Return(3)(4) +34.40%
----------------------
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $ 2.2
----------------------
Ratio of Gross Expenses to Average
Net Assets(5)(6) 1.50%
----------------------
Ratio of Net Expenses to Average Net
Assets(6)(7) 1.50%
----------------------
Ratio of Net Investment Loss to
Average Net Assets(6) (.71%)
----------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-18
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Focus Trust(1)
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Year Ended August 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
----------------------------------------------
Net Asset Value, Beginning of Year $23.62 $17.14 $21.27 $14.83 $14.41
----------------------------------------------
Income From Investment Operations
Net Investment Income (Loss) (.05) (.02) .03 .01 .06
Net Gains or Losses on Securities
(both realized and unrealized) 13.40 6.53 (3.66) 6.49 .46
----------------------------------------------
Total From Investment Operations 13.35 6.51 (3.63) 6.50 .52
----------------------------------------------
Less Distributions
Dividends (from net investment
income) -- (.03) (.01) (.06) (.02)
Distributions (from net capital
gains) (1.64) -- (.49) -- (.08)
----------------------------------------------
Total Distributions (1.64) (.03) (.50) (.06) (.10)
----------------------------------------------
Net Asset Value, End of Year $35.33 $23.62 $17.14 $21.27 $14.83
----------------------------------------------
Total Return(3) +59.02% +38.07% -17.45% +43.93% +3.62%
----------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $372.4 $216.0 $193.2 $160.9 $ 55.6
----------------------------------------------
Ratio of Gross Expenses to Average
Net Assets(5) 1.05% .95% .94% .96% .99%
----------------------------------------------
Ratio of Net Expenses to Average Net
Assets(7) 1.05% .95% .94% .96% .99%
----------------------------------------------
Ratio of Net Investment Income
(Loss) to Average Net Assets (.22%) (.07%) .17% .11% .63%
----------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-19
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Genesis Trust(1)
The following table includes selected data for a share outstanding throughout
each year 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>
Year Ended August 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------
Net Asset Value, Beginning of Year $20.26 $17.28 $21.45 $14.99 $12.65
--------------------------------------------------------------------
Income From Investment Operations
Net Investment Income (Loss) -- .13 .12 (.01) (.02)
Net Gains or Losses on Securities (both realized and
unrealized) 5.19 3.17 (4.14) 6.61 2.68
--------------------------------------------------------------------
Total From Investment Operations 5.19 3.30 (4.02) 6.60 2.66
--------------------------------------------------------------------
Less Distributions
Dividends (from net investment income) (.11) (.12) -- -- --
Distributions (from net capital gains) -- (.20) (.15) (.14) (.32)
--------------------------------------------------------------------
Total Distributions (.11) (.32) (.15) (.14) (.32)
--------------------------------------------------------------------
Net Asset Value, End of Year $25.34 $20.26 $17.28 $21.45 $14.99
--------------------------------------------------------------------
Total Return(3) +25.76% +19.15% -18.88% +44.31% +21.44%
--------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $770.9 $591.1 $704.5 $382.7 $ 65.2
--------------------------------------------------------------------
Ratio of Gross Expenses to Average Net Assets(5) 1.21% 1.23% 1.17% 1.26% 1.38%
--------------------------------------------------------------------
Ratio of Net Expenses to Average Net Assets 1.21% 1.23% 1.17%(7) 1.25%(7) 1.38%(7)
--------------------------------------------------------------------
Ratio of Net Investment Income (Loss) to Average Net
Assets (.02%) .54% .68% (.16%) (.27%)
--------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-20
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Guardian Trust(1)
The following table includes selected data for a share outstanding throughout
each year 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>
Year Ended August 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------
Net Asset Value, Beginning of Year $ 16.36 $ 14.24 $ 19.47 $ 14.24 $ 13.83
--------------------------------------------------------
Income From Investment Operations
Net Investment Income .09 .12 .09 .08 .16
Net Gains or Losses on Securities
(both realized and unrealized) 2.23 3.57 (3.93) 5.48 .55
--------------------------------------------------------
Total From Investment Operations 2.32 3.69 (3.84) 5.56 .71
--------------------------------------------------------
Less Distributions
Dividends (from net investment
income) (.10) (.10) (.10) (.10) (.14)
Distributions (from net capital
gains) (3.14) (1.47) (1.29) (.23) (.16)
--------------------------------------------------------
Total Distributions (3.24) (1.57) (1.39) (.33) (.30)
--------------------------------------------------------
Net Asset Value, End of Year $ 15.44 $ 16.36 $ 14.24 $ 19.47 $ 14.24
--------------------------------------------------------
Total Return(3) +16.72% +26.07% -20.88% +39.56% +5.19%
--------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $1,093.6 $1,251.2 $1,529.5 $2,269.8 $1,340.1
--------------------------------------------------------
Ratio of Gross Expenses to Average
Net Assets(5) .91% .88% .87% .88% .92%
--------------------------------------------------------
Ratio of Net Expenses to Average Net
Assets .91% .88% .87% .88% .92%(7)
--------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets .58% .65% .50% .47% 1.26%
--------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-21
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
International Trust(1)
The following table includes selected data for a share outstanding throughout
each year 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>
Period from
June 29, 1998(2) to
Year Ended August 31, August 31,
2000 1999 1998
<S> <C> <C> <C>
---------------------------------------------
Net Asset Value, Beginning of Year $16.92 $13.87 $17.13
---------------------------------------------
Income From Investment Operations
Net Investment Loss (.08) (.07) (.02)
Net Gains or Losses on Securities
(both realized and unrealized) 4.61 3.12 (3.24)
---------------------------------------------
Total From Investment Operations 4.53 3.05 (3.26)
---------------------------------------------
Less Distributions
Dividends (from net investment
income) (.01) -- --
Distributions (from net capital
gains) (.20) -- --
---------------------------------------------
Total Distributions (.21) -- --
---------------------------------------------
Net Asset Value, End of Year $21.24 $16.92 $13.87
---------------------------------------------
Total Return(3) +26.72% +21.99% -19.03%(4)
---------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $ 4.0 $ 2.4 $ 1.8
---------------------------------------------
Ratio of Gross Expenses to Average
Net Assets(5) 1.53% 1.70% 1.70%(6)
---------------------------------------------
Ratio of Net Expenses to Average Net
Assets(7) 1.53% 1.70% 1.70%(6)
---------------------------------------------
Ratio of Net Investment Loss to
Average Net Assets (.43%) (.49%) (.54%)(6)
---------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-22
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Manhattan Trust(1)
The following table includes selected data for a share outstanding throughout
each year 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>
Year Ended August 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
----------------------------------------------
Net Asset Value, Beginning of Year $15.02 $11.61 $15.77 $12.18 $12.99
----------------------------------------------
Income From Investment Operations
Net Investment Loss (.11) (.11) (.07) (.04) (.04)
Net Gains or Losses on Securities
(both realized and unrealized) 12.64 4.29 (1.40) 4.55 (.34)
----------------------------------------------
Total From Investment Operations 12.53 4.18 (1.47) 4.51 (.38)
----------------------------------------------
Less Distributions
Distributions (from net capital
gains) (1.54) (.77) (2.69) (.92) (.43)
----------------------------------------------
Net Asset Value, End of Year $26.01 $15.02 $11.61 $15.77 $12.18
----------------------------------------------
Total Return(3) +87.95% +36.24% -11.23% +38.84% -2.98%
----------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $138.6 $ 45.3 $ 46.1 $ 51.1 $ 48.2
----------------------------------------------
Ratio of Gross Expenses to Average
Net Assets(5) 1.02% 1.11% 1.04% 1.09% 1.08%
----------------------------------------------
Ratio of Net Expenses to Average Net
Assets(7) 1.02% 1.11% 1.04% 1.09% 1.08%
----------------------------------------------
Ratio of Net Investment Loss to
Average Net Assets (.62%) (.61%) (.52%) (.30%) (.38%)
----------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-23
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Millennium Trust(1)
The following table includes selected data for a share outstanding throughout
each year 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>
Period from
November 4, 1998(2) to
Year Ended August 31, August 31,
2000 1999
<S> <C> <C>
-----------------------------------------------
Net Asset Value, Beginning of Year $18.20 $10.00
-----------------------------------------------
Income From Investment Operations
Net Investment Loss (.27) (.10)
Net Gains or Losses on Securities
(both realized and unrealized) 17.45 8.30
-----------------------------------------------
Total From Investment Operations 17.18 8.20
-----------------------------------------------
Less Distributions
Distributions (from net capital
gains) (1.28) --
-----------------------------------------------
Net Asset Value, End of Year $34.10 $18.20
-----------------------------------------------
Total Return(3) +96.66% +82.00%(4)
-----------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $ 19.5 $ 2.2
-----------------------------------------------
Ratio of Gross Expenses to Average
Net Assets(5) 1.75% 1.76%(6)
-----------------------------------------------
Ratio of Net Expenses to Average Net
Assets(7) 1.75% 1.75%(6)
-----------------------------------------------
Ratio of Net Investment Loss to
Average Net Assets (1.31%) (1.24%)(6)
-----------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-24
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Partners Trust(1)
The following table includes selected data for a share outstanding throughout
each year 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>
Year Ended August 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------
Net Asset Value, Beginning of Year $18.71 $15.24 $18.80 $13.39 $12.68
--------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .13 .16 .11 .07 .08
Net Gains or Losses on Securities (both realized and
unrealized) 1.34 3.77 (1.82) 6.06 1.59
--------------------------------------------------------------------
Total From Investment Operations 1.47 3.93 (1.71) 6.13 1.67
--------------------------------------------------------------------
Less Distributions
Dividends (from net investment income) (.19) -- (.08) (.08) (.07)
Distributions (from net capital gains) (1.25) (.46) (1.77) (.64) (.89)
--------------------------------------------------------------------
Total Distributions (1.44) (.46) (1.85) (.72) (.96)
--------------------------------------------------------------------
Net Asset Value, End of Year $18.74 $18.71 $15.24 $18.80 $13.39
--------------------------------------------------------------------
Total Return(3) +8.41% +25.91% -10.15% +47.11% +13.76%
--------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $622.6 $850.1 $729.7 $470.6 $128.5
--------------------------------------------------------------------
Ratio of Gross Expenses to Average Net Assets(5) .92% .91% .90% .91% .94%
--------------------------------------------------------------------
Ratio of Net Expenses to Average Net Assets .92% .91% .90%(7) .91%(7) .94%(7)
--------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets .53% .83% .70% .64% .84%
--------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-25
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Regency Trust(1)
The following table includes selected data for a share outstanding throughout
each year 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>
Period from
June 10, 1999(2)
Year Ended August 31, to August 31,
2000 1999
<S> <C> <C>
-----------------------------------------
Net Asset Value, Beginning of Year $ 9.76 $10.00
-----------------------------------------
Income From Investment Operations
Net Investment Income (Loss) -- .01
Net Gains or Losses on Securities
(both realized and unrealized) 3.40 (.25)
-----------------------------------------
Total From Investment Operations 3.40 (.24)
-----------------------------------------
Less Distributions
Dividends (from net investment
income) (.01) --
-----------------------------------------
Net Asset Value, End of Year $13.15 $ 9.76
-----------------------------------------
Total Return(3) +34.86% -2.40%(4)
-----------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $ 25.1 $ 0.4
-----------------------------------------
Ratio of Gross Expenses to Average
Net Assets(5) 1.51% 1.51%(6)
-----------------------------------------
Ratio of Net Expenses to Average Net
Assets(7) 1.50% 1.50%(6)
-----------------------------------------
Ratio of Net Investment Income
(Loss) to Average Net Assets (.01%) .57%(6)
-----------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-26
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Socially Responsive Trust(1)
The following table includes selected data for a share outstanding throughout
each year 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>
Period from
March 3, 1997(2) to
Year Ended August 31, August 31,
2000 1999 1998 1997
<S> <C> <C> <C> <C>
-------------------------------------------------
Net Asset Value, Beginning of Year $14.41 $10.64 $11.43 $10.00
-------------------------------------------------
Income From Investment Operations
Net Investment Income (Loss) (.02) -- .03 --
Net Gains or Losses on Securities
(both realized and unrealized) .40 3.90 (.71) 1.43
-------------------------------------------------
Total From Investment Operations .38 3.90 (.68) 1.43
-------------------------------------------------
Less Distributions
Dividends (from net investment
income) -- (.03) (.01) --
Distributions (from net capital
gains) (.25) (.10) (.10) --
Tax return of capital (.01) -- -- --
-------------------------------------------------
Total Distributions (.26) (.13) (.11) --
-------------------------------------------------
Net Asset Value, End of Year $14.53 $14.41 $10.64 $11.43
-------------------------------------------------
Total Return(3) +2.76% +36.76% -6.05% +14.30%(4)
-------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $ 29.0 $ 25.3 $ 13.4 $ 7.7
-------------------------------------------------
Ratio of Gross Expenses to Average
Net Assets(5) 1.32% 1.20% 1.20% 1.58%(6)
-------------------------------------------------
Ratio of Net Expenses to Average Net
Assets(7) 1.32% 1.20% 1.20% 1.58%(6)
-------------------------------------------------
Ratio of Net Investment Income
(Loss) to Average Net Assets (.19%) .01% .33% .06%(6)
-------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-27
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Technology Trust(1)
The following table includes selected data for a share outstanding throughout
the 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>
Period from
May 1, 2000(2) to
August 31,
2000
<S> <C>
-----------------
Net Asset Value, Beginning of Period $10.00
-----------------
Income From Investment Operations
Net Investment Loss --
Net Gains or Losses on Securities
(both realized and unrealized) 2.14
-----------------
Total From Investment Operations 2.14
-----------------
Net Asset Value, End of Period $12.14
-----------------
Total Return(3)(4) +21.40%
-----------------
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $ 2.5
-----------------
Ratio of Gross Expenses to Average
Net Assets(5)(6) 2.00%
-----------------
Ratio of Net Expenses to Average Net
Assets(6)(7) 2.00%
-----------------
Ratio of Net Investment Loss to
Average Net Assets(4) (.03%)
-----------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-28
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Equity Trust
1) The per share amounts and ratios which are shown reflect income and expenses,
including each Fund's proportionate share of its corresponding 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 each 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. In
addition, for Genesis, total return would have been lower if the investment
manager had not waived a portion of the management fee.
4) Not annualized.
5) The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
6) Annualized.
7) 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>
Period from
December 6, 1999 to
August 31,
CENTURY 2000
---------------------------------------------------------------------------
<S> <C>
Net Expenses 7.51%
</TABLE>
<TABLE>
<CAPTION>
Year Ended August 31,
FOCUS 2000 1999 1998 1997 1996
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Expenses 1.06% .98% .97% 1.06% 1.27%
</TABLE>
<TABLE>
<CAPTION>
Year Ended
August 31,
GUARDIAN 1996
-----------------------------------------------------------
<S> <C>
Net Expenses .92%
</TABLE>
B-29
<PAGE>
<TABLE>
<CAPTION>
Period from
Year Ended June 29, 1998 to
August 31, August 31,
INTERNATIONAL 2000 1999 1998
-----------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Expenses 4.21% 5.98% 6.02%
</TABLE>
<TABLE>
<CAPTION>
Year Ended August 31,
MANHATTAN 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Expenses 1.08% 1.18% 1.15% 1.23% 1.25%
</TABLE>
<TABLE>
<CAPTION>
Period from
Year Ended November 4, 1998 to
August 31, August 31,
MILLENNIUM 2000 1999
----------------------------------------------------------------------------------
<S> <C> <C>
Net Expenses 2.12% 13.39%
</TABLE>
<TABLE>
<CAPTION>
Year Ended August 31,
PARTNERS 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C>
Net Expenses .91% .94% 1.06%
</TABLE>
<TABLE>
<CAPTION>
Period from
Year Ended June 10, 1999 to
August 31, August 31,
REGENCY 2000 1999
-------------------------------------------------------------------------------
<S> <C> <C>
Net Expenses 1.75% 129.45%
</TABLE>
<TABLE>
<CAPTION>
Period from
March 3, 1997 to
Year Ended August 31, August 31,
SOCIALLY RESPONSIVE 2000 1999 1998 1997
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Expenses 1.76% 1.72% 2.05% 3.33%
</TABLE>
<TABLE>
<CAPTION>
Period from
May 1, 2000 to
August 31,
TECHNOLOGY 2000
---------------------------------------------------------------
<S> <C>
Net Expenses 14.66%
</TABLE>
After reimbursement of expenses by Management as described in Note B of Notes
to Financial Statements and/or the waiver of a portion of the management fee by
the investment manager of Neuberger Berman Genesis Portfolio. Had Management not
undertaken such action the annualized ratios of net expenses to average daily
net assets would have been:
<TABLE>
<CAPTION>
Year Ended August 31,
GENESIS 1998 1997 1996
------------------------------------------------------------------------
<S> <C> <C> <C>
Net Expenses 1.19% 1.35% 1.65%
</TABLE>
B-30
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Neuberger Berman Equity Trust and
Shareholders of Neuberger Berman Century Trust,
Neuberger Berman Manhattan Trust,
Neuberger Berman Millennium Trust,
Neuberger Berman Regency Trust,
Neuberger Berman Socially Responsive Trust, and
Neuberger Berman Technology Trust
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Neuberger Berman Century Trust, Neuberger Berman Manhattan Trust, Neuberger
Berman Millennium Trust, Neuberger Berman Regency Trust, Neuberger Berman
Socially Responsive Trust, and Neuberger Berman Technology Trust, (collectively
the "Trust"), at August 31, 2000, and the results of each of their operations,
the changes in each of their net assets and the financial highlights for each of
the periods indicated therein, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Trust's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 9, 2000
B-31
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
To the Board of Trustees
Neuberger Berman Equity Trust and
Shareholders of:
Neuberger Berman Focus Trust
Neuberger Berman Genesis Trust
Neuberger Berman Guardian Trust
Neuberger Berman International Trust and
Neuberger Berman Partners Trust
We have audited the accompanying statements of assets and liabilities of the
Neuberger Berman Focus Trust, Neuberger Berman Genesis Trust, Neuberger Berman
Guardian Trust, Neuberger Berman International Trust, and Neuberger Berman
Partners Trust, five of the series constituting the Neuberger Berman Equity
Trust (the "Trust"), as of August 31, 2000, and the related statements of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the above mentioned series of Neuberger Berman Equity Trust at August 31,
2000, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, and their
financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
October 2, 2000
B-32
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
--------------------------------------------------------------------------------
Century Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
----------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. Oracle Corp. 3.3%
2. Nortel Networks 3.1%
3. Cisco Systems 2.8%
4. General Electric 2.7%
5. Sun Microsystems 2.7%
6. Amgen, Inc. 2.7%
7. EMC Corp. 2.5%
8. Gemstar-TV Guide International 2.3%
9. Analog Devices 2.2%
10. Intel Corp. 2.1%
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
COMMON STOCKS (97.2%)
BASIC MATERIALS (1.1%)
8,800 Kimberly-Clark $ 515
-------
BUSINESS SERVICES (2.8%)
10,400 Amdocs Ltd. 743(2)
8,900 Automatic Data Processing 531
-------
1,274
-------
CAPITAL EQUIPMENT (4.8%)
21,300 General Electric 1,250
16,300 Tyco International 929
-------
2,179
-------
COMMUNICATIONS EQUIPMENT (12.9%)
18,600 Cisco Systems 1,277(2)
5,900 Comverse Technology 543(2)
7,040 JDS Uniphase 876(2)
4,000 Juniper Networks 855(2)
19,900 Nokia Corp. ADR 894
17,400 Nortel Networks 1,419
-------
5,864
-------
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
COMPUTER RELATED (6.4%)
2,400 Brocade Communications Systems $ 542(2)
11,600 EMC Corp. 1,137(2)
9,800 Sun Microsystems 1,244(2)
-------
2,923
-------
ENERGY (5.1%)
13,700 Anadarko Petroleum 901
6,725 Calpine Corp. 666(2)
8,900 Enron Corp. 755
-------
2,322
-------
ENERGY SERVICES & EQUIPMENT (2.5%)
5,400 Cooper Cameron 420(2)
8,300 Schlumberger Ltd. 708
-------
1,128
-------
FINANCIAL SERVICES (5.2%)
7,900 Capital One Financial 476
12,800 Charles Schwab 489
12,000 Citigroup Inc. 701
4,900 Merrill Lynch 710
-------
2,376
-------
FOOD & BEVERAGE (1.3%)
7,700 Anheuser-Busch 607
-------
HEALTH CARE (12.4%)
16,400 Amgen, Inc. 1,243(2)
12,100 Bristol-Myers Squibb 641
3,700 Genentech, Inc. 705(2)
10,200 MedImmune, Inc. 858(2)
9,200 Merck & Co. 643
8,500 PE Corp.-PE Biosystems Group 836
17,025 Pfizer Inc. 737
-------
5,663
-------
INTERNET (7.4%)
11,100 CMG Information Services 497(2)
11,500 Gemstar-TV Guide International 1,038(2)
</TABLE>
C-1
<PAGE>
August 31, 2000
--------------------------------------------------------------------------------
Century Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
15,900 Intuit Inc. $ 952(2)
4,100 Time Warner 350
4,600 Yahoo! Inc. 559(2)
-------
3,396
-------
MEDIA (4.0%)
12,314 Clear Channel Communications 891(2)
10,300 Univision Communications 455(2)
7,000 Viacom Inc. Class B 471(2)
-------
1,817
-------
RETAIL (3.4%)
7,900 Best Buy 488(2)
11,800 Tiffany & Co. 491
12,200 Wal-Mart Stores 579
-------
1,558
-------
SEMICONDUCTORS (9.2%)
10,000 Analog Devices 1,005(2)
7,000 Applied Materials 604(2)
2,100 Broadcom Corp. 525(2)
13,100 Intel Corp. 981
5,300 Micron Technology 433(2)
2,800 PMC-Sierra 661(2)
-------
4,209
-------
SOFTWARE (10.0%)
11,500 Bea Systems 783(2)
3,600 Check Point Software
Technologies 525(2)
16,800 Oracle Corp. 1,528(2)
7,600 Rational Software 978(2)
6,300 VERITAS Software 759(2)
-------
4,573
-------
SYSTEMS & COMPONENTS (3.2%)
8,600 Flextronics International 717(2)
6,300 Sanmina Corp. 743(2)
-------
1,460
-------
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
TELECOMMUNICATIONS (5.5%)
5,200 Level 3 Communications $ 453(2)
15,800 Metromedia Fiber Network 631(2)
7,800 Nextel Communications 432(2)
12,200 Qwest Communications
International 630(2)
3,400 VoiceStream Wireless 383(2)
-------
2,529
-------
TOTAL COMMON STOCKS (COST
$34,690) 44,393
-------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
---------------------
<C> <S> <C>
REPURCHASE AGREEMENTS (3.0%)
$1,393,000 State Street Bank and Trust
Co. Repurchase Agreement,
6.58%, due 9/1/00, dated
8/31/00, Maturity Value
$1,393,255, Collateralized by
$1,405,000 Fannie Mae, Notes,
6.40%, due 9/27/01
(Collateral Value $1,439,112)
(COST $1,393) 1,393(3)
-------
</TABLE>
C-2
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman August 31, 2000
--------------------------------------------------------------------------------
Century Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (0.9%)
$ 401,885 N&B Securities Lending Quality
Fund, LLC (COST $402) $ 402(3)
-------
TOTAL INVESTMENTS (101.1%)
(COST $36,485) 46,188(4)
Liabilities, less cash,
receivables and other assets
[(1.1%)] (518)
-------
TOTAL NET ASSETS (100.0%) $45,670
-------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-3
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman August 31, 2000
--------------------------------------------------------------------------------
Focus Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
----------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. Citigroup Inc. 10.5%
2. Rational Software 7.9%
3. Morgan Stanley Dean Witter 7.4%
4. Capital One Financial 7.0%
5. Providian Financial 6.6%
6. Countrywide Credit Industries 5.9%
7. Chase Manhattan 5.0%
8. FleetBoston Financial 4.3%
9. Wellpoint Health Networks 4.0%
10. Compaq Computer 3.2%
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
COMMON STOCKS (97.8%)
FINANCIAL SERVICES (50.9%)
2,767,500 Capital One Financial $ 166,915
2,122,500 Chase Manhattan 118,595
4,244,500 Citigroup Inc. 247,773
3,687,400 Countrywide Credit Industries 139,660
2,380,000 FleetBoston Financial 101,596
440,000 Hartford Financial Services
Group 29,315
1,626,000 Morgan Stanley Dean Witter 174,896
1,745,000 Nationwide Financial Services 69,582(5)
1,366,000 Providian Financial 157,005
----------
1,205,337
----------
HEALTH CARE (5.0%)
1,360,000 Foundation Health Systems 23,885(2)
1,098,000 Wellpoint Health Networks 94,771(2)
----------
118,656
----------
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
RETAIL (8.9%)
1,025,000 American Eagle Outfitters $ 30,558(2)
3,500,000 Furniture Brands International 56,437(2)(5)
2,510,000 Jones Apparel Group 61,495(2)
369,500 Neiman Marcus Group Class B 11,639(2)
970,000 Pacific Sunwear of California 12,913(2)
2,040,000 TJX Cos. 38,378
----------
211,420
----------
TECHNOLOGY (33.0%)
1,285,000 Amkor Technology 43,851(2)
1,560,000 Atmel Corp. 31,200(2)
2,235,000 Compaq Computer 76,130
885,000 Cypress Semiconductor 43,752(2)
2,340,000 Gartner Group Class A 31,005(2)
845,000 International Rectifier 53,182(2)
700,000 Lattice Semiconductor 54,513(2)
807,000 Microchip Technology 54,926(2)
713,000 Oracle Corp. 64,838(2)
165,000 Photronics, Inc. 4,837(2)(5)
1,458,000 Rational Software 187,626(2)
1,313,500 Tech Data 67,809(2)
1,875,000 WorldCom, Inc. 68,438(2)
----------
782,107
----------
TOTAL COMMON STOCKS (COST
$1,126,849) 2,317,520
----------
</TABLE>
C-4
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman August 31, 2000
--------------------------------------------------------------------------------
Focus Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
REPURCHASE AGREEMENTS (1.2%)
$28,494,000 State Street Bank and Trust
Co. Repurchase Agreement,
6.58%, due 9/1/00, dated
8/31/00, Maturity Value
$28,499,208, Collateralized
by $28,655,000 Fannie Mae,
Notes, 6.40%, due 9/27/01
(Collateral Value
$29,350,715) (COST $28,494) $ 28,494(3)
----------
</TABLE>
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (0.4%)
$10,008,312 N&B Securities Lending Quality
Fund, LLC (COST $10,008) $ 10,008(3)
----------
TOTAL INVESTMENTS (99.4%)
(COST $1,165,351) 2,356,022(4)
Cash, receivables and other
assets, less liabilities
(0.6%) 14,236
----------
TOTAL NET ASSETS (100.0%) $2,370,258
----------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-5
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman August 31, 2000
--------------------------------------------------------------------------------
Genesis Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
----------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. National-Oilwell 2.7%
2. Zebra Technologies 2.5%
3. Dallas Semiconductor 2.4%
4. Newport News Shipbuilding 2.4%
5. Alliant Techsystems 2.2%
6. AptarGroup Inc. 2.2%
7. Mutual Risk Management 2.1%
8. Fair, Isaac & Co. 2.1%
9. Trigon Healthcare 2.0%
10. United Stationers 1.7%
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
COMMON STOCKS (94.7%)
AEROSPACE (1.9%)
1,427,050 AAR Corp. $ 16,054(5)
754,100 Aviall Inc. 4,525(2)(5)
248,750 Ducommun Inc. 3,607(2)
329,700 Moog, Inc. Class A 10,715(2)
----------
34,901
----------
AUTOMOTIVE (0.8%)
674,100 Donaldson Co. 14,240
----------
BANKING & FINANCIAL (8.2%)
1,347,400 Banknorth Group 22,064
745,600 Cullen/Frost Bankers 23,114
100,000 Haven Bancorp 2,662
331,400 Highland Bancorp 8,368(5)
178,199 Hudson United Bancorp 4,488
28,200 M&T Bank 13,668
195,800 MBIA, Inc. 12,874
532,100 OceanFirst Financial 10,975
125,000 Queens County Bancorp 3,297
130,000 Richmond County Financial 2,616
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
1,031,975 Sterling Bancshares $ 14,625
317,350 Texas Regional Bancshares 8,092
1,014,100 Webster Financial 25,004
----------
151,847
----------
BUILDING, CONSTRUCTION & FURNISHING (0.9%)
238,300 Lincoln Electric Holdings 3,485
298,500 Simpson Manufacturing 14,030(2)
----------
17,515
----------
BUSINESS SERVICES (0.1%)
789,400 SOS Staffing Services 2,171(2)(5)
----------
CONSUMER CYCLICALS (0.4%)
226,300 Valassis Communications 6,534(2)
----------
CONSUMER PRODUCTS & SERVICES (5.3%)
854,700 Alberto-Culver Class A 20,513
560,238 Block Drug 22,690
1,353,200 Church & Dwight 24,273
396,000 Matthews International 11,484
1,105,200 Ruddick Corp. 13,539
475,500 The First Years 5,230
----------
97,729
----------
DEFENSE (5.6%)
532,800 Alliant Techsystems 41,059(2)(5)
1,062,700 Newport News Shipbuilding 45,165
729,300 Primex Technologies 17,685(5)
----------
103,909
----------
ELECTRONICS (4.2%)
334,100 Benchmark Electronics 17,394(2)
1,092,000 Dallas Semiconductor 45,181
</TABLE>
C-6
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
--------------------------------------------------------------------------------
Genesis Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
151,800 SCI Systems $ 9,374(2)
49,600 Technitrol, Inc. 6,324
----------
78,273
----------
ENERGY (3.7%)
677,300 Cabot Oil & Gas 13,546
655,200 Cross Timbers Oil 17,322
808,290 Swift Energy 23,390(2)
894,500 Unit Corp. 13,976(2)
----------
68,234
----------
FINANCIAL TECHNOLOGY (2.4%)
839,500 Fair, Isaac & Co. 38,565(5)
123,900 Investment Technology Group 5,947(2)
----------
44,512
----------
HEALTH CARE (9.9%)
148,000 Acuson Corp. 2,128(2)
303,700 Charles River Laboratories
International 8,333(2)
286,500 Datascope Corp. 10,099
669,300 DENTSPLY International 22,338
1,105,800 Haemonetics Corp. 27,852(2)
1,191,100 Mentor Corp. 25,236(5)
1,138,800 Patterson Dental 27,047(2)
198,700 STAAR Surgical 3,316(2)
714,000 Trigon Healthcare 36,860(2)
280,600 Universal Health Services
Class B 19,852(2)
----------
183,061
----------
INDUSTRIAL & COMMERCIAL PRODUCTS (7.4%)
615,500 Brady Corp. 17,811
733,700 Dionex Corp. 21,644(2)
689,600 IDEX Corp. 20,947
1,247,600 Kaydon Corp. 27,525
645,800 Roper Industries 20,908
2,135,300 Wallace Computer Services 24,823(5)
207,650 Woodhead Industries 4,101
----------
137,759
----------
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
INSURANCE (8.5%)
949,200 Annuity and Life Re $ 24,916
514,200 Brown & Brown 13,723
652,800 FBL Financial Group 9,629
698,600 HCC Insurance Holdings 14,758
1,822,500 Mutual Risk Management 38,728
579,500 PartnerRe Ltd. 24,303
891,500 Scottish Annuity & Life
Holdings 8,135(5)
878,600 W. R. Berkley 23,283
----------
157,475
----------
INTERMEDIATES (0.8%)
612,900 Delta & Pine Land 14,978
----------
LODGING (0.2%)
441,700 Prime Hospitality 4,583(2)
----------
MACHINERY & EQUIPMENT (0.5%)
612,120 Gardner Denver Machinery 8,914(2)
----------
OFFICE EQUIPMENT (1.7%)
977,800 United Stationers 31,717(2)
----------
OIL SERVICES (9.4%)
302,700 Cal Dive International 17,405(2)
651,600 Friede Goldman Halter 3,665(2)
978,800 Global Industries 12,174(2)
320,400 Nabors Industries 15,239(2)
1,467,278 National-Oilwell 50,896(2)
798,400 Oceaneering International 13,922(2)
781,600 Offshore Logistics 13,580(2)
767,300 Pride International 18,895(2)
33,500 Smith International 2,663(2)
345,600 UTI Energy 12,874(2)
631,000 Varco International 12,739(2)
----------
174,052
----------
PACKING & CONTAINERS (2.2%)
1,723,900 AptarGroup Inc. 40,188
----------
</TABLE>
C-7
<PAGE>
August 31, 2000
--------------------------------------------------------------------------------
Genesis Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
PUBLISHING & BROADCASTING (1.0%)
258,300 Houghton Mifflin $ 12,705
232,900 Meredith Corp. 6,361
----------
19,066
----------
RESTAURANTS (1.1%)
650,050 Brinker International 20,639(2)
----------
RETAILING (4.7%)
28,224 99 Cents Only Stores 1,268(2)
212,800 Ann Taylor Stores 7,661(2)
1,299,900 Claire's Stores 25,592
693,900 Linens 'n Things 18,735(2)
181,500 Payless ShoeSource 9,688(2)
575,000 ShopKo Stores 6,577(2)
360,300 Whole Foods Market 18,195(2)
----------
87,716
----------
TECHNOLOGY (11.4%)
847,500 Analysts International 7,045
442,200 Black Box 26,311(2)
496,200 CACI International 11,164(2)
1,453,200 CIBER, Inc. 14,986(2)
807,900 Davox Corp. 10,200(2)(5)
1,085,500 Electronics for Imaging 28,223(2)
565,000 InterVoice-Brite 7,027(2)
126,400 Jack Henry & Associates 5,609
238,500 Keane, Inc. 4,129(2)
389,000 Kronos Inc. 14,539(2)
625,000 META Group 9,062(5)
625,400 MICROS Systems 10,984(2)
10,800 Power Intergrations 184(2)
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
289,200 SBS Technologies $ 14,912(2)
859,400 Zebra Technologies 46,408(2)
----------
210,783
----------
TRANSPORTATION (1.8%)
869,900 Circle International Group 31,153
213,600 Maritrans Inc. 1,228
----------
32,381
----------
UTILITIES, ELECTRIC & GAS (0.6%)
144,900 Montana Power 5,225
183,500 NUI Corp. 5,517
----------
10,742
----------
TOTAL COMMON STOCKS (COST
$1,439,732) 1,753,919
----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
---------------------
--------------------- ---------------
<C> <S> <C>
REPURCHASE AGREEMENTS (2.3%)
$42,140,000 State Street Bank and Trust
Co. Repurchase Agreement,
6.58%, due 9/1/00, dated
8/31/00, Maturity Value
$42,147,702, Collateralized
by $42,380,000 Fannie Mae,
Notes, 6.40%, due 9/27/01
(Collateral Value
$43,408,944) (COST $42,140) 42,140(3)
----------
</TABLE>
C-8
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman August 31, 2000
--------------------------------------------------------------------------------
Genesis Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (5.2%)
$30,000,000 Prudential Funding Corp.,
6.48%, due 9/5/00 $ 29,978
30,000,000 American Express Credit Corp.,
6.46%, due 9/7/00 29,968
36,226,183 N&B Securities Lending Quality
Fund, LLC 36,226
----------
TOTAL SHORT-TERM INVESTMENTS
(COST $96,172) 96,172(3)
----------
TOTAL INVESTMENTS (102.2%)
(COST $1,578,044) 1,892,231(4)
Liabilities, less cash,
receivables and other assets
[(2.2%)] (41,103)
----------
TOTAL NET ASSETS (100.0%) $1,851,128
----------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-9
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman August 31, 2000
--------------------------------------------------------------------------------
Guardian Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
----------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. Wellpoint Health Networks 3.8%
2. Citigroup Inc. 3.3%
3. Exxon Mobil 2.9%
4. Gateway Inc. 2.8%
5. Capital One Financial 2.7%
6. News Corp. ADR 2.7%
7. SCI Systems 2.6%
8. Chase Manhattan 2.5%
9. Wells Fargo 2.4%
10. Lexmark International Group 2.4%
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
COMMON STOCKS (83.7%)
BANKING & FINANCIAL (5.5%)
402,400 Bank of America $ 21,554
1,745,600 Chase Manhattan 97,535
2,132,000 Wells Fargo 92,076
----------
211,165
----------
BASIC MATERIALS (3.3%)
2,090,000 Cabot Corp. 77,330
1,424,000 Dow Chemical 37,291
250,700 duPont 11,250
----------
125,871
----------
CAPITAL GOODS (5.3%)
193,600 Emerson Electric 12,814
490,200 General Dynamics 30,852
375,900 Illinois Tool Works 21,074
1,292,900 Republic Services 18,909(2)
1,606,000 SCI Systems 99,170(2)
349,100 United Technologies 21,797
----------
204,616
----------
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
COMMUNICATIONS (2.7%)
1,815,600 AT&T Corp. $ 57,191
1,040,000 NTL Inc. 45,565(2)
----------
102,756
----------
CONSUMER CYCLICALS (2.7%)
1,159,400 Carnival Corp. 23,116
1,051,300 Costco Wholesale 36,204(2)
429,800 Lear Corp. 9,268(2)
745,615 Safeway Inc. 36,768(2)
----------
105,356
----------
CONSUMER GOODS & SERVICES (0.5%)
445,400 PepsiCo, Inc. 18,985
----------
CONSUMER STAPLES (4.6%)
820,996 Clear Channel Communications 59,419(2)
1,292,219 Kimberly-Clark 75,595
889,700 McDonald's Corp. 26,580
293,300 Nabisco Holdings 15,673
----------
177,267
----------
DRUGS (2.2%)
836,550 Pfizer Inc. 36,181(6)
1,196,095 Schering-Plough 47,993
----------
84,174
----------
ENERGY (10.8%)
907,200 Amerada Hess 62,087
523,715 Anadarko Petroleum 34,445
608,700 Chevron Corp. 51,435
887,200 Diamond Offshore Drilling 39,758
1,344,446 Exxon Mobil 109,740
692,474 Halliburton Co. 36,701
513,900 Royal Dutch Petroleum - NY
Shares 31,444
439,000 The Williams Cos. 20,221
511,200 Transocean Sedco Forex 30,544
----------
416,375
----------
</TABLE>
C-10
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
--------------------------------------------------------------------------------
Guardian Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
FINANCIAL SERVICES (12.8%)
1,275,200 Associates First Capital $ 35,865
1,716,600 Capital One Financial 103,532
2,182,533 Citigroup Inc. 127,405(6)
1,510,200 Household International 72,490
634,900 MetLife, Inc. 15,436(2)
609,300 Morgan Stanley Dean Witter 65,538
462,300 Providian Financial 53,136
481,600 USA Education 18,873
----------
492,275
----------
FOOD PRODUCTS (0.6%)
922,300 Kroger Co. 20,925(2)
----------
HEALTH CARE (7.4%)
1,531,700 American Home Products 82,999
924,400 Bristol-Myers Squibb 48,993
100,000 Pharmacia Corp. 5,856
1,689,900 Wellpoint Health Networks 145,859(2)(6)
----------
283,707
----------
TECHNOLOGY (18.2%)
1,463,800 Apple Computer 89,200(2)
1,790,000 Compaq Computer 60,972
644,600 Computer Sciences 50,964(2)
1,581,100 Gateway Inc. 107,673(2)
2,246,300 General Motors Class H 74,409(2)
125,890 Hewlett-Packard 15,201(6)
487,200 IBM 64,310
1,345,000 Lexmark International Group 91,208(2)
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
581,400 Micron Technology $ 47,529(2)
1,046,400 Motorola, Inc. 37,736
290,800 Rational Software 37,422(2)(6)
374,800 Seagate Technology 22,254(2)
----------
698,878
----------
TELECOMMUNICATIONS (4.8%)
1,586,400 AT&T Wireless Group 41,544(2)
428,200 Lucent Technologies 17,904
637,800 Nextel Communications 35,358(2)
1,033,600 Verizon Communications 45,091
1,160,050 WorldCom, Inc. 42,342(2)
----------
182,239
----------
TRANSPORTATION (1.4%)
574,500 AMR Corp. 18,851(2)
711,000 Continental Airlines Class B 34,217(2)
----------
53,068
----------
MISCELLANEOUS (0.9%)
387,700 Minnesota Mining &
Manufacturing 36,056
----------
TOTAL COMMON STOCKS (COST
$2,452,175) 3,213,713
----------
PREFERRED STOCKS (2.6%)
2,313,500 News Corp. ADR (COST $67,929) 102,372
----------
</TABLE>
C-11
<PAGE>
August 31, 2000
--------------------------------------------------------------------------------
Guardian Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY SECURITIES (0.7%)
$ 10,000,000 Federal Farm Credit Bank,
Discount Notes, 6.36%,
due 9/18/00 $ 9,970
8,000,000 Fannie Mae, Discount Notes,
6.38%, due 9/21/00 7,971
8,000,000 Freddie Mac, Discount Notes,
6.41%, due 9/28/00 7,962
----------
TOTAL U.S. GOVERNMENT AGENCY
SECURITIES (COST $25,903) 25,903(3)
----------
REPURCHASE AGREEMENTS (1.8%)
67,823,000 State Street Bank and Trust
Co. Repurchase Agreement,
6.58%, due 9/1/00, dated
8/31/00, Maturity Value
$67,835,397, Collateralized
by $68,205,000 Fannie Mae,
Notes, 6.40%, due 9/27/01
(Collateral Value
$69,860,949) (COST $67,823) 67,823(3)
----------
</TABLE>
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (12.4%)
$ 69,206,000 Panasonic Finance Co., 6.63%,
due 9/1/00 $ 69,206
100,000,000 Ford Motor Credit Corp., 6.45%
& 6.48%, due 9/6/00 & 9/8/00 99,892
50,000,000 General Electric Capital
Corp., 6.50%, due 9/14/00 49,883
50,000,000 Prudential Funding Corp.,
6.50%, due 9/15/00 49,874
30,000,000 GOVCO Inc., 6.52%,
due 9/18/00 29,908
40,000,000 American Express Credit Corp.,
6.47%, due 9/20/00 39,863
50,000,000 Coca-Cola Co., 6.48%,
due 9/25/00 49,784
89,019,109 N&B Securities Lending Quality
Fund, LLC 89,019
----------
TOTAL SHORT-TERM INVESTMENTS
(COST $477,429) 477,429(3)
----------
TOTAL INVESTMENTS (101.2%)
(COST $3,091,259) 3,887,240(4)
Liabilities, less cash,
receivables and other assets
[(1.2%)] (47,361)
----------
TOTAL NET ASSETS (100.0%) $3,839,879
----------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-12
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
--------------------------------------------------------------------------------
International Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
------------------------------------------------------------------------------------------------
HOLDING COUNTRY INDUSTRY PERCENTAGE
<C> <S> <C> <C> <C>
1. Datacraft Asia Singapore Technology - Hardware 3.8%
2. Nokia Corp. ADR Finland Technology - Hardware 2.6%
3. Takeda Chemical Industries Japan Pharmaceutical 2.4%
Telecommunications -
4. Vodafone AirTouch United Kingdom Wireless 2.4%
5. Nortel Networks Canada Technology - Hardware 2.3%
6. ProSieben Media, Germany Germany Media 2.2%
7. WPP Group United Kingdom Media 1.8%
Health Products &
8. Disetronic Holding Switzerland Services 1.7%
Health Products &
9. William Demant Denmark Services 1.7%
10. Vivendi France Utilities 1.7%
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
COMMON STOCKS (84.0%)
BELGIUM (1.1%)
16,260 Telindus Group $ 2,071(2)
--------
CANADA (3.5%)
51,160 Nortel Networks 4,173
105,570 Petro-Canada 2,241
--------
6,414
--------
DENMARK (3.4%)
4,230 Novo Nordisk, B Shares 859
49,440 Vestas Wind Systems 2,196
66,890 William Demant 3,067
--------
6,122
--------
FINLAND (5.0%)
15,000 Comptel Oyj 253
104,800 Nokia Corp. ADR 4,709
90,770 Perlos Oyj 2,736
40,880 Tietoenator Oyj 1,330
--------
9,028
--------
FRANCE (7.3%)
13,135 BNP Paribas 1,207
32,175 Coflexip SA ADR 1,911
18,040 Dassault Systemes ADR 1,606
8,000 France Telecom ADR 923
27,760 Sanofi-Synthelabo 1,353
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
8,130 Sodexho Alliance $ 1,273
26,070 Total Fina Elf ADR 1,942
36,914 Vivendi 3,015
--------
13,230
--------
GERMANY (1.5%)
41,750 Infineon Technologies ADR 2,753(2)
--------
HONG KONG (1.2%)
167,000 Cheung Kong 2,184
--------
IRELAND (0.5%)
157,985 Bank of Ireland 940
--------
ISRAEL (2.7%)
28,430 Amdocs Ltd. 2,031(2)
19,820 Check Point Software
Technologies 2,890(2)
--------
4,921
--------
ITALY (1.1%)
202,000 ENI SpA 1,178
90,000 TIM SpA 780
--------
1,958
--------
JAPAN (23.2%)
14,500 Aiful Corp. 1,251
120,000 Bank of Tokyo-Mitsubishi 1,470
</TABLE>
C-13
<PAGE>
August 31, 2000
--------------------------------------------------------------------------------
International Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
101,000 Chugai Pharmaceutical $ 1,799
10,500 Drake Beam Morin-Japan 1,280
12,750 Kyocera Corp. ADR 2,319
42,390 Lawson, Inc. 2,198
23,800 Matsumotokiyoshi Co. 2,142
77,000 Minebea Co. 996
151,000 Mitsui Fudosan 1,635
103,000 Nippon Electric Glass 2,342
75 NTT Corp. 893
69 NTT DoCoMo 1,825
41,000 Shin-Etsu Chemical 2,014
8,400 Shohkoh Fund & Co. 1,355
25,600 Sony Corp. 2,857
155,000 Sumitomo Bakelite 2,049
75,000 Takeda Chemical Industries 4,437
51,100 THK Co. 2,415
16,000 Tokyo Denpa 810
362,000 Tokyu Corp. 1,891
28,400 Uni-Charm Corp. 1,478
54,000 Yamanouchi Pharmaceutical 2,673
--------
42,129
--------
MALAYSIA (0.3%)
80,220 iShares MSCI Malaysia 476
--------
NETHERLANDS (3.0%)
48,965 Philips Electronics 2,382
50,000 Versatel Telecom International 1,425(2)
79,900 Wolters Kluwer 1,617
--------
5,424
--------
SINGAPORE (4.8%)
830,960 Datacraft Asia 6,980
134,000 Venture Manufacturing 1,713
--------
8,693
--------
SOUTH KOREA (0.8%)
6,010 Samsung Electronics 1,483
--------
SPAIN (2.5%)
60,625 Banco Popular Espanol 1,800
48,477 Telefonica SA ADR 2,778(2)
--------
4,578
--------
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
SWEDEN (3.3%)
120,051 Assa Abloy, B Shares $ 2,296
123,440 Nobel Biocare 2,811
60,100 SKF AB, B Shares 872
--------
5,979
--------
SWITZERLAND (6.5%)
3,656 Disetronic Holding 3,117(2)
507 Julius Baer Holding, B Shares 2,503
1,900 Kudelski SA 2,541(2)
55,190 Novartis AG ADR 2,087
515 Phonak Holding 1,552
--------
11,800
--------
UNITED KINGDOM (12.3%)
206,475 BAA PLC 1,648
239,881 BP Amoco 2,195(2)
33,620 Cable & Wireless ADR 1,857
76,000 COLT Telecom Group 2,559(2)
238,000 Diageo PLC 2,031
71,345 Glaxo Wellcome 2,051
507,000 Invensys PLC 1,979
61,150 Lloyds TSB Group 575
1,079,119 Vodafone AirTouch 4,357
225,800 WPP Group 3,204
--------
22,456
--------
TOTAL COMMON STOCKS (COST
$117,534) 152,639
--------
PREFERRED STOCKS (2.2%)
27,320 ProSieben Media, Germany
(COST $2,038) 4,087
--------
RIGHTS (0.2%)
380 Kudelski SA, Expire 9/6/00,
Switzerland (COST $0) 376(2)
--------
</TABLE>
C-14
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman August 31, 2000
--------------------------------------------------------------------------------
International Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY SECURITIES (0.7%)
$ 475,000 Freddie Mac, Discount Notes,
6.43% & 6.45%, due 9/7/00 $ 475
750,000 Fannie Mae, Discount Notes,
6.43%, due 10/5/00 745
--------
TOTAL U.S. GOVERNMENT AGENCY
SECURITIES (COST $1,220) 1,220(3)
--------
REPURCHASE AGREEMENTS (3.8%)
6,880,000 State Street Bank and Trust
Co. Repurchase Agreement,
6.58%, due 9/1/00, dated
8/31/00, Maturity Value
$6,881,258, Collateralized by
$6,920,000 Fannie Mae, Notes,
6.40%, due 9/27/01
(Collateral Value $7,088,011)
(COST $6,880) 6,880(3)
--------
</TABLE>
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (13.0%)
$5,000,000 Panasonic Finance Co., 6.63%,
due 9/1/00 $ 5,000
5,000,000 Prudential Funding Corp.,
6.45%, due 9/5/00 4,996
4,000,000 General Electric Capital
Corp., 6.52%, due 9/11/00 3,993
9,681,897 N&B Securities Lending Quality
Fund, LLC 9,682
--------
TOTAL SHORT-TERM INVESTMENTS
(COST $23,671) 23,671(3)
--------
TOTAL INVESTMENTS (103.9%)
(COST $151,343) 188,873
Liabilities, less cash,
receivables and other assets
[(3.9%)] (7,055)
--------
TOTAL NET ASSETS (100.0%) $181,818
--------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-15
<PAGE>
SUMMARY SCHEDULE OF INVESTMENTS BY INDUSTRY
Neuberger Berman
--------------------------------------------------------------------------------
International Portfolio
<TABLE>
<CAPTION>
Market
Value(1) Percentage
Industry (000's omitted) of Net Assets
-------- --------------- ---------------
<S> <C> <C>
Technology-Hardware $ 32,165 17.7%
Other Assets-Net 24,716 13.6%
Health Products & Services 13,493 7.4%
Pharmaceutical 12,314 6.8%
Capital Goods 11,055 6.1%
Telecommunications 10,435 5.7%
Technology-Software 10,181 5.6%
Energy 9,468 5.2%
Media 8,542 4.7%
Telecommunications-Wireless 6,961 3.8%
Basic Materials 4,936 2.7%
Banking 4,477 2.5%
Food & Drug Stores 4,340 2.4%
Real Estate 3,819 2.1%
Transportation 3,539 1.9%
Utilities 3,015 1.7%
Finance 2,979 1.6%
Consumer Durables 2,856 1.6%
Banking & Financial 2,294 1.3%
Beverages 2,031 1.1%
Machinery & Equipment 1,979 1.1%
Publishing & Broadcasting 1,617 0.9%
Consumer Products & Services 1,478 0.8%
Commercial Services 1,280 0.7%
Restaurants 1,273 0.7%
Financial & Insurance 575 0.3%
-------- ------
TOTAL NET ASSETS $181,818 100.0%
-------- ------
</TABLE>
C-16
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
--------------------------------------------------------------------------------
Manhattan Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
----------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. Applied Micro Circuits 2.9%
2. Calpine Corp. 2.8%
3. Rational Software 2.3%
4. Sanmina Corp. 2.2%
5. Integrated Device Technology 2.2%
6. Bea Systems 2.1%
7. Gemstar-TV Guide International 2.0%
8. Portal Software 1.9%
9. Anadarko Petroleum 1.9%
10. MedImmune, Inc. 1.9%
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
COMMON STOCKS (96.0%)
BUSINESS SERVICES - IT BUSINESS SERVICES (4.3%)
248,800 Amdocs Ltd. $ 17,774(2)
534,200 Concord EFS 17,161(2)
197,200 CSG Systems International 8,911(2)
233,900 Fiserv, Inc. 12,674(2)
----------
56,520
----------
COMMUNICATIONS EQUIPMENT (5.0%)
166,600 Comverse Technology 15,317(2)
228,300 Phone.com 21,103(2)
128,000 Redback Networks 19,120(2)
28,300 SDL, Inc. 11,244(2)
----------
66,784
----------
COMMUNICATION SERVICES (3.9%)
155,000 Digex, Inc. 13,127(2)
554,300 McLeodUSA Inc. 8,765(2)
259,800 Metromedia Fiber Network 10,376(2)
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
76,100 VoiceStream Wireless $ 8,566(2)
385,800 WinStar Communications 10,368(2)
----------
51,202
----------
COMPUTER RELATED (2.1%)
100,600 Brocade Communications Systems 22,717(2)
48,600 QLogic Corp. 5,516(2)
----------
28,233
----------
CONSUMER CYCLICAL - LEISURE & CONSUMER SERVICE (1.2%)
57,000 Four Seasons Hotels 4,318
237,800 Harley-Davidson 11,845
----------
16,163
----------
CONSUMER STAPLES (0.8%)
256,900 Estee Lauder 10,517
----------
ELECTRICAL EQUIPMENT (0.4%)
109,200 RF Micro Devices 4,873
----------
ENERGY (9.2%)
390,857 Anadarko Petroleum 25,707
374,900 Calpine Corp. 37,115(2)
200,300 Cooper Cameron 15,586(2)
392,000 Dynegy Inc. 17,640
544,000 Rowan Cos. 16,864(2)
194,800 Weatherford International 9,143(2)
----------
122,055
----------
FINANCE (3.3%)
181,800 Capital One Financial 10,965
81,500 Lehman Brothers Holdings 11,817
180,600 Providian Financial 20,758
----------
43,540
----------
</TABLE>
C-17
<PAGE>
August 31, 2000
--------------------------------------------------------------------------------
Manhattan Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
HEALTH CARE (13.8%)
126,100 ALZA Corp. $ 9,536(2)
165,000 Forest Laboratories 16,149(2)
527,900 Health Management Associates 8,611(2)
58,600 Human Genome Sciences 9,783(2)
121,900 IDEC Pharmaceuticals 17,020(2)
148,900 Immunex Corp. 7,482(2)
189,100 King Pharmaceuticals 6,075(2)
305,200 MedImmune, Inc. 25,675(2)
114,100 Millennium Pharmaceuticals 16,331(2)
242,000 MiniMed Inc. 17,375(2)
216,800 PE Corp.-PE Biosystems Group 21,328
160,200 QLT PhotoTherapeutics 11,865(2)
142,600 Sepracor Inc. 15,686(2)
----------
182,916
----------
INSTRUMENTS (3.8%)
244,500 Millipore Corp. 14,884
183,700 Tektronix, Inc. 13,996
261,400 Waters Corp. 20,797(2)
----------
49,677
----------
INTERNET (6.7%)
109,125 CacheFlow Inc. 11,936(2)
298,900 Gemstar-TV Guide International 26,976(2)
372,100 Intuit Inc. 22,279(2)
218,750 PurchasePro.com 12,640(2)
265,600 Safeguard Scientifics 7,586(2)
38,000 VeriSign, Inc. 7,557(2)
----------
88,974
----------
MEDIA (5.4%)
149,100 Charter Communications 2,283
379,200 Emmis Communications 12,442(2)
207,900 Entercom Communications $ 8,589(2)
283,581 NTL Inc. 12,424(2)
351,200 Univision Communications 15,497
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
750,800 Westwood One 20,882(2)
----------
72,117
----------
RETAIL (3.3%)
234,400 Best Buy 14,474(2)
131,500 Dollar Tree Stores 5,334(2)
241,600 Starbucks Corp. 8,849(2)
352,600 Tiffany & Co. 14,677
----------
43,334
----------
SEMICONDUCTORS (13.2%)
77,700 Analog Devices 7,809(2)
191,200 Applied Micro Circuits 38,802(2)
1,123,000 Atmel Corp. 22,460(2)
193,600 GlobeSpan, Inc. 23,317(2)
327,400 Integrated Device Technology 28,729(2)
325,800 Intersil Holding 17,593(2)
341,700 KLA-Tencor 22,424(2)
35,100 Rambus Inc. 2,867(2)
116,300 Vitesse Semiconductor 10,329(2)
----------
174,330
----------
SOFTWARE (14.5%)
87,700 Adobe Systems 11,401
139,900 Art Technology Group 14,261(2)
401,900 Bea Systems 27,354(2)
190,700 Mercury Interactive 23,301(2)
77,900 Micromuse Inc. 11,831(2)
484,100 Peregrine Systems 15,461(2)
465,900 Portal Software 25,741(2)
234,900 Rational Software 30,229(2)
236,100 RealNetworks 11,495(2)
525,900 Vignette Corp. 20,050(2)
----------
191,124
----------
</TABLE>
C-18
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman August 31, 2000
--------------------------------------------------------------------------------
Manhattan Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
SYSTEMS (5.1%)
204,000 Flextronics International $ 16,996(2)
183,200 Jabil Circuit 11,691(2)
251,300 Sanmina Corp. 29,653(2)
217,800 Vishay Intertechnology 8,780(2)
----------
67,120
----------
TOTAL COMMON STOCKS (COST
$920,749) 1,269,479
----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
---------------------
<C> <S> <C>
REPURCHASE AGREEMENTS (2.9%)
$ 37,934,000 State Street Bank and Trust
Co. Repurchase Agreement,
6.58%, due 9/1/00, dated
8/31/00, Maturity Value
$37,940,933, Collateralized
by $38,150,000 Fannie Mae,
Notes, 6.40%, due 9/27/01
(Collateral Value
$39,076,244)
(COST $37,934) 37,934(3)
----------
</TABLE>
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (11.2%)
$ 20,000,000 Prudential Funding Corp.,
6.45%, due 9/5/00 $ 19,986
127,345,387 N&B Securities Lending Quality
Fund, LLC 127,345
----------
TOTAL SHORT-TERM INVESTMENTS
(COST $147,331) 147,331(3)
----------
TOTAL INVESTMENTS (110.1%)
(COST $1,106,014) 1,454,744(4)
Liabilities, less cash,
receivables and other assets
[(10.1%)] (132,981)
----------
TOTAL NET ASSETS (100.0%) $1,321,763
----------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-19
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman August 31, 2000
--------------------------------------------------------------------------------
Millennium Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
----------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. AirGate PCS 3.7%
2. Insight Enterprises 3.6%
3. MCK Communications 3.5%
4. LifeMinders, Inc. 2.9%
5. IONA Technologies ADR 2.5%
6. Integrated Device Technology 2.5%
7. AudioCodes Ltd. 2.3%
8. Corinthian Colleges 2.2%
9. Osicom Technologies 2.2%
10. About.com 2.1%
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
COMMON STOCKS (96.6%)
BUSINESS SERVICES (13.0%)
50,200 Cal Dive International $ 2,887(2)
138,400 Corinthian Colleges 7,473(2)
239,000 Crown Media Holdings 3,839(2)
114,450 Iron Mountain 3,906(2)
89,600 Manufacturers' Services
Limited 2,285(2)
97,200 Marine Drilling 2,643(2)
102,600 National-Oilwell 3,559(2)
90,400 Photon Dynamics 4,243(2)
78,200 Precision Drilling 2,659(2)
82,600 UTI Energy 3,077(2)
78,900 Veeco Instruments 7,071(2)
--------
43,642
--------
BUSINESS SERVICES - IT BUSINESS SERVICES (0.6%)
60,300 Hall, Kinion & Associates 1,990(2)
--------
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
CONSUMER CYCLICAL - CONSUMER MEDIA (1.6%)
201,800 Entravision Communications $ 3,998(2)
80,000 Oakley, Inc. 1,355(2)
--------
5,353
--------
CONSUMER GOODS & SERVICES (0.8%)
50,400 Advanced Lighting Technologies 806(2)
32,000 Proxim, Inc. 1,922(2)
--------
2,728
--------
ENERGY (4.0%)
105,100 Hanover Compressor 3,337(2)
189,400 Maverick Tube 5,315(2)
149,000 Patterson Energy 4,675(2)
--------
13,327
--------
FINANCIAL SERVICES (2.5%)
86,000 Affiliated Managers Group 4,794(2)
111,500 eSPEED, Inc. 3,429(2)
--------
8,223
--------
HEALTH CARE (9.0%)
13,600 Arena Pharmaceuticals 629(2)
53,800 Cephalon, Inc. 2,707(2)
35,500 Charles River Laboratories
International 974(2)
189,200 ChromaVision Medical Systems 2,365(2)
25,900 Cubist Pharmaceuticals 1,583(2)
15,100 CV Therapeutics 1,133(2)
62,200 Enzon, Inc. 3,786(2)
196,400 InKine Pharmaceutical 1,866(2)
42,500 Noven Pharmaceuticals 1,785(2)
50,200 OSI Pharmaceuticals 2,509(2)
51,900 Pharmacyclics, Inc. 2,601(2)
61,320 Physiometrix, Inc. 1,418(2)
</TABLE>
C-20
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
--------------------------------------------------------------------------------
Millennium Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
112,200 PolyMedia Corp. $ 3,983(2)
25,600 Tanox, Inc. 1,191(2)
36,800 Titan Pharmaceuticals 1,727(2)
--------
30,257
--------
HEALTH PRODUCTS & SERVICES (0.4%)
45,200 Orthodontic Centers of America 1,480(2)
--------
INTERNET (11.1%)
164,300 About.com 7,167(2)
128,800 IntraNet Solutions 5,836(2)
208,700 iVillage Inc. 1,396(2)
329,600 LifeMinders, Inc. 9,888(2)
484,548 MyPoints.com 6,602(2)
112,300 PurchasePro.com 6,489(2)
--------
37,378
--------
RETAIL (5.1%)
8,600 Christopher & Banks 305(2)
130,500 Factory 2-U Stores 4,511(2)
241,700 Insight Enterprises 12,145(2)
--------
16,961
--------
SEMICONDUCTORS (2.3%)
104,300 Helix Technology 3,950
85,500 SIPEX Corp. 3,682(2)
--------
7,632
--------
SOFTWARE (4.2%)
124,300 Accrue Software 2,649(2)
203,200 Actuate Software 5,270(2)
94,700 Eprise Corp. 1,474(2)
63,700 Jack Henry & Associates 2,827
85,900 Primus Knowledge Solutions 2,024(2)
--------
14,244
--------
TECHNOLOGY (6.2%)
62,300 Keithley Instruments 4,731
45,100 LightPath Technologies 2,379(2)
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
127,300 Rainbow Technologies $ 5,044(2)
195,150 REMEC, Inc. 5,562(2)
38,400 Zygo Corp. 3,048(2)
--------
20,764
--------
TECHNOLOGY - HARDWARE (9.6%)
67,600 AudioCodes Ltd. 7,596(2)
73,700 Natural MicroSystems 5,495(2)
175,800 Netopia, Inc. 6,439(2)
123,000 Osicom Technologies 7,257(2)
78,800 Virata Corp. 5,418(2)
--------
32,205
--------
TECHNOLOGY - SEMICONDUCTOR (7.7%)
434,500 Artisan Components 4,997(2)
95,100 Integrated Device Technology 8,345(2)
138,100 Kopin Corp. 4,618(2)
140,900 Oak Technology 4,104(2)
96,900 Parlex Corp. 3,694(2)
--------
25,758
--------
TECHNOLOGY - SOFTWARE (5.4%)
114,000 Allaire Corp. 3,869(2)
101,500 IONA Technologies ADR 8,456(2)
14,000 Netegrity, Inc. 1,232(2)
102,400 SERENA Software 4,506(2)
--------
18,063
--------
TELECOMMUNICATIONS (13.1%)
180,800 AirGate PCS 12,306(2)
86,300 Alamosa PCS Holdings 2,147(2)
403,600 MCK Communications 11,603(2)
146,800 Pinnacle Holdings 5,909(2)
35,600 SBA Communications 1,588(2)
203,200 SMTC Corp. 4,877(2)
</TABLE>
C-21
<PAGE>
August 31, 2000
--------------------------------------------------------------------------------
Millennium Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
200,400 UbiquiTel Inc. $ 2,279(2)
210,800 US Unwired 3,149(2)
--------
43,858
--------
TOTAL COMMON STOCKS (COST
$269,160) 323,863
--------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
---------------------
<C> <S> <C>
REPURCHASE AGREEMENTS (1.1%)
$ 3,760,000 State Street Bank and Trust
Co. Repurchase Agreement,
6.58%, due 9/1/00, dated
8/31/00, Maturity Value
$3,760,687, Collateralized by
$3,785,000 Fannie Mae, Notes,
6.40%, due 9/27/01
(Collateral Value $3,876,896)
(COST $3,760) 3,760(3)
--------
</TABLE>
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (15.9%)
$53,425,725 N&B Securities Lending Quality
Fund, LLC (COST $53,426) $ 53,426(3)
--------
TOTAL INVESTMENTS (113.6%)
(COST $326,346) 381,049(4)
Liabilities, less cash,
receivables and other assets
[(13.6%)] (45,481)
--------
TOTAL NET ASSETS (100.0%) $335,568
--------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-22
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
--------------------------------------------------------------------------------
Partners Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
----------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. Lexmark International Group 3.5%
2. Kroger Co. 3.5%
3. Chase Manhattan 3.1%
4. Computer Sciences 2.9%
5. CIGNA Corp. 2.6%
6. News Corp. ADR 2.5%
7. IBM 2.4%
8. Exxon Mobil 2.4%
9. The Williams Cos. 2.4%
10. XL Capital 2.3%
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
COMMON STOCKS (95.4%)
AUTOMOBILE MANUFACTURING (0.7%)
265,500 General Motors $ 19,166
----------
AUTO/TRUCK REPLACEMENT PARTS (0.8%)
1,007,800 Lear Corp. 21,731(2)
----------
BANKING & FINANCIAL (8.6%)
987,700 Bank of New York 51,793
1,611,750 Chase Manhattan 90,056
847,600 Citigroup Inc. 49,479
73,200 Countrywide Credit Industries 2,772
1,252,100 Wells Fargo 54,075
----------
248,175
----------
CHEMICALS (2.7%)
1,374,000 Alcoa Inc. 45,685
704,000 duPont 31,592
----------
77,277
----------
COMMUNICATIONS (3.5%)
885,300 AT&T Corp. 27,887
588,500 NTL Inc. 25,783(2)
1,310,000 WorldCom, Inc. 47,815(2)
----------
101,485
----------
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
CONSUMER PRODUCTS & SERVICES (2.1%)
458,532 Clear Channel Communications $ 33,186(2)
734,900 Pitney Bowes 26,870
----------
60,056
----------
DIVERSIFIED (3.2%)
19,000 Berkshire Hathaway Class B 36,347(2)
766,900 Procter & Gamble 47,404
375,400 Thermo Electron 8,728(2)
----------
92,479
----------
ENTERTAINMENT (1.1%)
1,628,800 Carnival Corp. 32,474
----------
FINANCIAL SERVICES (5.1%)
1,535,900 Ceridian Corp. 37,150(2)
284,200 Morgan Stanley Dean Witter 30,569
494,900 Providian Financial 56,883
549,200 USA Education 21,522
----------
146,124
----------
FOOD & TOBACCO (2.0%)
727,900 Anheuser-Busch 57,368
----------
FOOD PRODUCTS (3.5%)
4,386,600 Kroger Co. 99,521(2)
----------
GAS (1.9%)
1,216,900 Praxair, Inc. 53,848
----------
HEALTH CARE (10.8%)
774,200 American Home Products 41,952
735,700 Bristol-Myers Squibb 38,992
757,000 CIGNA Corp. 73,618
407,200 Johnson & Johnson 37,437
920,200 Merck & Co. 64,299
479,800 Pharmacia Corp. 28,098
681,600 Schering-Plough 27,349
----------
311,745
----------
INDUSTRIAL GOODS & SERVICES (2.2%)
1,022,300 General Dynamics 64,341
----------
</TABLE>
C-23
<PAGE>
August 31, 2000
--------------------------------------------------------------------------------
Partners Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
INSURANCE (5.7%)
507,500 American International Group $ 45,231
1,379,800 Aon Corp. 51,484
960,159 XL Capital 66,191
----------
162,906
----------
MEDIA & ENTERTAINMENT (1.8%)
1,306,000 Walt Disney 50,852
----------
OIL & GAS (7.9%)
549,900 Anadarko Petroleum 36,167
473,900 Chevron Corp. 40,045
848,500 Exxon Mobil 69,259
807,000 Halliburton Co. 42,771
670,400 Transocean Sedco Forex 40,056
----------
228,298
----------
RESTAURANTS (1.1%)
1,073,100 McDonald's Corp. 32,059
----------
RETAILING (1.4%)
736,600 Costco Wholesale 25,367(2)
610,900 Target Corp. 14,203
----------
39,570
----------
TECHNOLOGY (20.4%)
400,000 Apple Computer 24,375(2)
2,027,400 Cadence Design Systems 43,082(2)
1,062,300 Computer Associates 33,728
1,047,400 Computer Sciences 82,810(2)
599,300 Gateway Inc. 40,812(2)
1,648,500 General Motors Class H 54,606(2)
528,800 IBM 69,802
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
1,478,800 Lexmark International Group $ 100,281(2)
405,600 Micron Technology 33,158(2)
1,685,800 Motorola, Inc. 60,794
1,911,400 Parametric Technology 25,565(2)
144,300 Samsung Electronics GDR 18,182(7)
----------
587,195
----------
TELECOMMUNICATIONS (6.5%)
1,771,800 AT&T Corp.- Liberty Media
Group Class A 37,872(2)
765,500 AT&T Wireless Group 20,047(2)
237,400 Crown Castle International 8,235(2)
793,500 Nextel Communications 43,990(2)
1,341,582 Verizon Communications 58,526
709,400 WinStar Communications 19,065(2)
----------
187,735
----------
UTILITIES (2.4%)
1,490,900 The Williams Cos. 68,674
----------
TOTAL COMMON STOCKS (COST
$2,396,081) 2,743,079
----------
PREFERRED STOCKS (2.5%)
1,617,100 News Corp. ADR (COST $42,513) 71,557
----------
</TABLE>
C-24
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman August 31, 2000
--------------------------------------------------------------------------------
Partners Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
REPURCHASE AGREEMENTS (1.5%)
$42,017,000 State Street Bank and Trust
Co. Repurchase Agreement,
6.58%, due 9/1/00, dated
8/31/00, Maturity Value
$42,024,680, Collateralized
by $42,255,000 Fannie Mae,
Notes, 6.40%, due 9/27/01
(Collateral Value
$43,280,909) (COST $42,017) $ 42,017(3)
----------
</TABLE>
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (2.2%)
$64,211,597 N&B Securities Lending Quality
Fund, LLC (COST $64,212) $ 64,212(3)
----------
TOTAL INVESTMENTS (101.6%)
(COST $2,544,823) 2,920,865(4)
Liabilities, less cash,
receivables and other assets
[(1.6%)] (46,733)
----------
TOTAL NET ASSETS (100.0%) $2,874,132
----------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-25
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman August 31, 2000
--------------------------------------------------------------------------------
Regency Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
----------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. Unicom Corp. 2.5%
2. MetLife, Inc. 2.2%
3. General Dynamics 2.2%
4. ChoicePoint Inc. 2.1%
5. A.H. Belo 1.9%
6. XL Capital 1.8%
7. AES Corp. 1.8%
8. Tenet Healthcare 1.7%
9. Intuit Inc. 1.5%
10. FMC Corp. 1.5%
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
COMMON STOCKS (97.1%)
AIRLINES (1.5%)
23,800 Southwest Airlines $ 538
-------
AUTOMOTIVE (1.3%)
21,200 Lear Corp. 457(2)
-------
BANKING & FINANCIAL (4.1%)
8,000 Countrywide Credit Industries 303
9,900 Household International 475
21,100 IndyMac Mortgage Holdings 356
700 M&T Bank 340
-------
1,474
-------
CONSUMER GOODS & SERVICES (2.3%)
8,900 Hershey Foods 380
5,600 Tricon Global Restaurants 163(2)
4,100 Wm. Wrigley Jr. 304
-------
847
-------
CONSUMER PRODUCTS & SERVICES (4.6%)
19,100 Energizer Holdings 377(2)
5,400 Fiserv, Inc. 293(2)
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
14,600 Iron Mountain $ 498(2)
6,000 Sealed Air 308(2)
2,900 TMP Worldwide 201(2)
-------
1,677
-------
ELECTRICAL & ELECTRONICS (1.8%)
10,100 AES Corp. 644(2)
-------
ENERGY (1.3%)
6,600 Coastal Corp. 455
-------
ENTERTAINMENT (0.7%)
7,400 Starwood Hotels & Resorts
Worldwide 237
-------
FINANCIAL SERVICES (9.0%)
7,000 Ambac Financial Group 452
3,700 Bear Stearns 248
15,900 Ceridian Corp. 385(2)
5,800 Charles Schwab 222
14,700 Dun & Bradstreet 485
7,300 Franklin Resources 277
19,100 John Hancock Financial
Services 482(2)
4,800 MBIA, Inc. 316
3,200 Providian Financial 368
-------
3,235
-------
GAS (1.3%)
10,300 Praxair, Inc. 456
-------
HARDWARE (0.8%)
3,300 Flextronics International 275(2)
-------
HEALTH CARE (10.2%)
7,900 C. R. Bard 386
16,400 Charles River Laboratories
International 450(2)
17,800 Edwards Lifesciences 467(2)
11,100 IVAX Corp. 384(2)
33,300 MetLife, Inc. 810(2)
9,600 Oxford Health Plans 293(2)
</TABLE>
C-26
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
--------------------------------------------------------------------------------
Regency Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
20,000 Tenet Healthcare $ 620(2)
3,100 Wellpoint Health Networks 267(2)
-------
3,677
-------
INDUSTRIAL GOODS & SERVICES (7.0%)
8,600 American Standard 398(2)
18,500 Crane Co. 465
8,100 FMC Corp. 549(2)
12,400 General Dynamics 781
23,100 Republic Services 338(2)
-------
2,531
-------
INSURANCE (5.8%)
15,300 Ace, Ltd. 537
10,900 Aon Corp. 407
12,900 Nationwide Financial Services 514
9,400 XL Capital 648
-------
2,106
-------
MACHINERY & EQUIPMENT (2.6%)
5,600 Danaher Corp. 315
3,900 Eaton Corp. 259(2)
2,300 SPX Corp. 377(2)
-------
951
-------
MEDIA (2.0%)
9,100 E.W. Scripps 461
8,100 Emmis Communications 266(2)
-------
727
-------
OIL & GAS (10.1%)
1,700 Amerada Hess 116
6,700 Anadarko Petroleum 441
5,600 Apache Corp. 353
7,826 Dynegy Inc. 352
8,300 EOG Resources 317
34,400 Gulf Canada Resources 191(2)
10,200 Kinder Morgan 375
7,700 Noble Drilling 373(2)
9,400 Santa Fe International 370
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
5,900 Transocean Sedco Forex $ 353
14,200 USX-Marathon Group 390
-------
3,631
-------
REAL ESTATE (4.6%)
10,500 Boston Properties 424
14,200 Lennar Corp. 392
6,400 Spieker Properties 350
13,700 Vornado Realty Trust 507
-------
1,673
-------
RETAIL (1.4%)
23,200 Kroger Co. 526(2)
-------
RETAILING (0.8%)
20,500 Consolidated Stores 279(2)
-------
RETAILING & APPAREL (0.6%)
5,300 Tiffany & Co. 221
-------
TECHNOLOGY (15.0%)
8,700 Apple Computer 530(2)
3,800 Beckman Coulter 289
10,800 Cabletron Systems 404(2)
16,100 ChoicePoint Inc. 755(2)
17,600 Citrix Systems 387(2)
15,300 Comdisco, Inc. 367
6,800 DENTSPLY International 227
7,500 Engelhard Corp. 141
6,300 Gateway Inc. 429(2)
10,500 General Motors Class H 348(2)
9,200 Intuit Inc. 551(2)
4,900 Stryker Corp. 220
12,400 SunGard Data Systems 446(2)
11,800 VISX, Inc. 325(2)
-------
5,419
-------
TELECOMMUNICATIONS (4.6%)
19,400 3Com Corp. 323(2)
36,000 A.H. Belo 688
</TABLE>
C-27
<PAGE>
August 31, 2000
--------------------------------------------------------------------------------
Regency Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
10,300 American Tower $ 374(2)
11,600 Spectrasite Holdings 272(2)
-------
1,657
-------
UTILITIES (3.7%)
6,800 DPL Inc. 185
10,500 Northeast Utilities 239
20,000 Unicom Corp. 914
-------
1,338
-------
TOTAL COMMON STOCKS (COST
$29,789) 35,031
-------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
---------------------
<C> <S> <C>
REPURCHASE AGREEMENTS (3.4%)
$1,242,000 State Street Bank and Trust
Co. Repurchase Agreement,
6.58%, due 9/1/00, dated
8/31/00, Maturity Value
$1,242,227, Collateralized by
$1,250,000 Fannie Mae, Notes,
6.40%, due 9/27/01
(Collateral Value $1,280,349)
(COST $1,242) 1,242(3)
-------
</TABLE>
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (1.0%)
$ 375,164 N&B Securities Lending Quality
Fund, LLC (COST $375) $ 375(3)
-------
TOTAL INVESTMENTS (101.5%)
(COST $31,406) 36,648(4)
Liabilities, less cash,
receivables and other assets
[(1.5%)] (554)
-------
TOTAL NET ASSETS (100.0%) $36,094
-------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-28
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
--------------------------------------------------------------------------------
Socially Responsive Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
----------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. Citigroup Inc. 5.1%
2. Intel Corp. 4.9%
3. Anadarko Petroleum 4.6%
4. Compaq Computer 3.7%
5. Hewlett-Packard 3.4%
6. KeySpan Corp. 3.0%
7. Comcast Corp. Class A Special 3.0%
8. Enron Corp. 2.9%
9. Hartford Financial Services Group 2.9%
10. Tyco International 2.9%
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
COMMON STOCKS (98.6%)
BANKING (2.4%)
180,000 Dime Bancorp $ 3,308
--------
BASIC MATERIALS (1.1%)
46,200 Alcoa Inc. 1,536
--------
COMMUNICATIONS (3.0%)
109,000 Comcast Corp. Class A Special 4,060(2)
--------
CONSUMER GOODS & SERVICES (5.0%)
53,300 Kimberly-Clark 3,118
94,000 Marriott International 3,713
--------
6,831
--------
DIVERSIFIED (8.1%)
60,000 Danaher Corp. 3,371
40,000 Minnesota Mining &
Manufacturing 3,720
70,000 Tyco International 3,990
--------
11,081
--------
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
ENERGY (7.3%)
50,000 BP Amoco ADR $ 2,762
120,000 KeySpan Corp. 4,133
37,000 Schlumberger Ltd. 3,157
--------
10,052
--------
ENTERTAINMENT (2.9%)
137,000 Fox Entertainment Group 3,964(2)
--------
FINANCIAL SERVICES (16.6%)
40,500 American International Group 3,610
62,000 AXA Financial 3,208
56,400 Chase Manhattan 3,151
120,000 Citigroup Inc. 7,005
60,000 Hartford Financial Services
Group 3,998
16,000 Morgan Stanley Dean Witter 1,721
--------
22,693
--------
HEALTH CARE (11.3%)
60,000 Bristol-Myers Squibb 3,180
150,000 IMS Health 2,831
22,800 Johnson & Johnson 2,096
86,250 Pfizer Inc. 3,730
42,900 Wellpoint Health Networks 3,703(2)
--------
15,540
--------
OIL & GAS (11.7%)
95,000 Anadarko Petroleum 6,248
44,000 Cooper Cameron 3,424(2)
47,300 Enron Corp. 4,014
50,600 Nabors Industries 2,407(2)
--------
16,093
--------
PUBLISHING & BROADCASTING (1.7%)
78,800 Valassis Communications 2,275(2)
--------
</TABLE>
C-29
<PAGE>
August 31, 2000
--------------------------------------------------------------------------------
Socially Responsive Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
RETAIL (3.3%)
60,000 Safeway Inc. $ 2,959(2)
67,200 Target Corp. 1,562
--------
4,521
--------
RETAILING (1.4%)
40,000 Wal-Mart Stores 1,898
--------
TECHNOLOGY (16.9%)
55,100 Agilent Technologies 3,323(2)
150,000 Compaq Computer 5,110
39,100 Hewlett-Packard 4,721
25,000 IBM 3,300
88,800 Intel Corp. 6,649
--------
23,103
--------
TELECOMMUNICATIONS (5.9%)
40,000 NTL Inc. 1,753(2)
70,000 SBC Communications 2,923
8,900 TyCom, Ltd. 370(2)
81,900 WorldCom, Inc. 2,989(2)
--------
8,035
--------
TOTAL COMMON STOCKS (COST
$95,854) 134,990
--------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
---------------------
<C> <S> <C>
REPURCHASE AGREEMENTS (1.3%)
$1,720,000 State Street Bank and Trust
Co. Repurchase Agreement,
6.58%, due 9/1/00, dated
8/31/00, Maturity Value
$1,720,314, Collateralized by
$1,730,000 Fannie Mae, Notes,
6.40%, due 9/27/01
(Collateral Value $1,772,003)
(COST $1,720) 1,720(3)
--------
</TABLE>
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (0.3%)
$ 100,000 Community Capital Bank, 5.00%,
due 9/30/00 $ 100
100,000 Self Help Credit Union, 5.92%,
due 11/21/00 100
244,761 N&B Securities Lending Quality
Fund, LLC 245
--------
TOTAL SHORT-TERM INVESTMENTS
(COST $445) 445(3)
--------
TOTAL INVESTMENTS (100.2%)
(COST $98,019) 137,155(4)
Liabilities, less cash,
receivables and other assets
[(0.2%)] (254)
--------
TOTAL NET ASSETS (100.0%) $136,901
--------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-30
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
--------------------------------------------------------------------------------
Technology Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
----------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. Cisco Systems 3.2%
2. Nortel Networks 3.2%
3. Rational Software 3.1%
4. Bea Systems 3.1%
5. Oracle Corp. 3.0%
6. Gemstar-TV Guide International 2.6%
7. MedImmune, Inc. 2.5%
8. Juniper Networks 2.5%
9. Integrated Device Technology 2.4%
10. Analog Devices 2.3%
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
COMMON STOCKS (95.6%)
COMMUNICATIONS EQUIPMENT (21.1%)
2,150 Brocade Communications Systems $ 486
11,325 Cisco Systems 777(2)
4,800 Comverse Technology 441(2)
3,525 JDS Uniphase 439(2)
2,800 Juniper Networks 599
5,100 Nextel Communications 283(2)
11,400 Nokia Corp. ADR 512
9,500 Nortel Networks 775
5,000 Phone.com 462(2)
2,500 Redback Networks 373
-------
5,147
-------
COMPUTERS AND SYSTEMS (8.2%)
3,900 EMC Corp. 382(2)
5,900 Flextronics International 491
2,900 QLogic Corp. 329
3,200 SonicWALL, Inc. 244(2)
4,300 Sun Microsystems 546(2)
-------
1,992
-------
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
CONSUMER STAPLES (3.6%)
6,935 Gemstar-TV Guide International $ 626(2)
3,000 Time Warner 257
-------
883
-------
ELECTRICAL EQUIPMENT (19.1%)
5,600 Analog Devices 563(2)
2,500 Applied Materials 216(2)
2,675 Applied Micro Circuits 543(2)
1,525 Broadcom Corp. 381
1,400 Cree, Inc. 193(2)
3,700 GlobeSpan, Inc. 446(2)
6,775 Integrated Device Technology 595(2)
5,450 Intel Corp. 408
6,950 Intersil Holding 375
1,975 PMC-Sierra 466(2)
5,000 RF Micro Devices 223
2,775 Vitesse Semiconductor 246(2)
-------
4,655
-------
HEALTH CARE (7.9%)
5,950 Amgen, Inc. 451(2)
1,800 Human Genome Sciences 301(2)
7,150 MedImmune, Inc. 602(2)
3,000 MiniMed Inc. 215(2)
3,500 PE Corp.-PE Biosystems Group 344
-------
1,913
-------
INTERNET (7.5%)
2,300 CacheFlow Inc. 251(2)
4,750 CMG Information Services 213(2)
9,300 PurchasePro.com 537(2)
6,650 RealNetworks 324
2,550 VeriSign, Inc. 507
-------
1,832
-------
</TABLE>
C-31
<PAGE>
August 31, 2000
--------------------------------------------------------------------------------
Technology Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
SEMICONDUCTORS (0.5%)
2,900 SIPEX Corp. $ 125(2)
-------
SOFTWARE (23.5%)
10,950 Bea Systems 745
2,800 Check Point Software
Technologies 408(2)
3,600 Mercury Interactive 440(2)
3,100 Micromuse Inc. 471(2)
2,500 Netegrity, Inc. 220(2)
8,000 Oracle Corp. 727(2)
12,500 Peregrine Systems 399(2)
4,700 Portal Software 260
5,900 Rational Software 759(2)
2,400 Siebel Systems 475
3,400 VERITAS Software 410(2)
10,400 Vignette Corp. 397
-------
5,711
-------
TECHNOLOGY (1.5%)
2,400 Micron Technology 196
2,850 Osicom Technologies 168(2)
-------
364
-------
TELECOMMUNICATIONS (2.7%)
3,200 Digex, Inc. 271(2)
9,525 Metromedia Fiber Network 380(2)
-------
651
-------
TOTAL COMMON STOCKS (COST
$18,762) 23,273
-------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
---------------------
--------------------- ---------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY SECURITIES (4.1%)
$1,000,000 Federal Farm Credit Bank,
Discount Notes, 6.51%,
due 9/1/00 (COST $1,000) 1,000(3)
-------
</TABLE>
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
REPURCHASE AGREEMENTS (1.2%)
$ 290,000 State Street Bank and Trust
Co. Repurchase Agreement,
6.58%, due 9/1/00, dated
8/31/00, Maturity Value
$290,053, Collateralized by
$295,000 Fannie Mae, Notes,
6.40%, due 9/27/01
(Collateral Value $302,162)
(COST $290) $ 290(3)
-------
TOTAL INVESTMENTS (100.9%)
(COST $20,052) 24,563(4)
Liabilities, less cash,
receivables and other assets
[(0.9%)] (230)
-------
TOTAL NET ASSETS (100.0%) $24,333
-------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-32
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
August 31, 2000
----------------------------------------------------------------------
Equity Managers Trust and Global Managers Trust
1) Investment securities of each Portfolio are valued at the latest sales price;
securities for which no sales were reported, unless otherwise noted, are
valued at the mean between the closing bid and asked prices, with the
exception of securities held by Neuberger Berman International Portfolio,
which are valued at the last available bid price. The Portfolios value all
other securities by a method the trustees of Equity Managers Trust or Global
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) Non-income producing security.
3) At cost, which approximates market value.
4) At August 31, 2000, selected Portfolio information on a U.S. Federal income
tax basis was as follows:
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
NEUBERGER BERMAN COST APPRECIATION DEPRECIATION APPRECIATION
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------
CENTURY PORTFOLIO $ 36,493,000 $ 10,447,000 $ 752,000 $ 9,695,000
FOCUS PORTFOLIO 1,168,582,000 1,196,466,000 9,026,000 1,187,440,000
GENESIS PORTFOLIO 1,579,972,000 420,625,000 108,366,000 312,259,000
GUARDIAN PORTFOLIO 3,115,046,000 839,660,000 67,466,000 772,194,000
MANHATTAN PORTFOLIO 1,106,100,000 380,421,000 31,777,000 348,644,000
MILLENNIUM PORTFOLIO 329,240,000 72,651,000 20,842,000 51,809,000
PARTNERS PORTFOLIO 2,555,689,000 472,050,000 106,874,000 365,176,000
REGENCY PORTFOLIO 31,970,000 5,383,000 705,000 4,678,000
SOCIALLY RESPONSIVE PORTFOLIO 98,032,000 40,680,000 1,557,000 39,123,000
TECHNOLOGY PORTFOLIO 20,148,000 4,676,000 261,000 4,415,000
</TABLE>
5) Affiliated issuer (see Note E of Notes to Financial Statements).
C-33
<PAGE>
6) The following securities were held in escrow at August 31, 2000, to cover
outstanding call options written:
<TABLE>
<CAPTION>
PREMIUM
SECURITIES AND MARKET VALUE ON MARKET VALUE
NEUBERGER BERMAN SHARES OPTIONS OF SECURITIES OPTIONS OF OPTIONS
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------
GUARDIAN PORTFOLIO 800,000 Pfizer Inc. $34,600,000 $4,575,847 $ 2,150,000
December 2000
@ 45
97,000 Wellpoint Health 8,372,313 870,061 606,250
Networks
January 2001 @ 100
160,000 Citigroup Inc. 9,340,000 415,186 320,000
October 2000 @ 60
280,000 Rational Software 36,032,500 5,976,474 10,080,000
January 2001 @ 105
125,000 Hewlett-Packard 15,093,750 1,511,824 1,945,313
November 2000
@ 115
</TABLE>
7) Security exempt from registration under the Securities Act of 1933. These
securities may be resold in transactions exempt from registration normally to
qualified institutional buyers under Rule 144A. At August 31, 2000, these
securities amounted to $18,182,000 or 0.6% of net assets for Neuberger Berman
Partners Portfolio.
SEE NOTES TO FINANCIAL STATEMENTS
C-34
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS TRUST
----------------------------------------------------------
CENTURY FOCUS GENESIS GUARDIAN
(000'S OMITTED) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
----------------------------------------------------------
ASSETS
Investments in securities, at market value*
(Notes A & E) -- see Schedule of
Investments:
Unaffiliated issuers $ 46,188 $ 2,225,166 $ 1,686,348 $ 3,887,240
Non-controlled affiliated issuers -- 130,856 205,883 --
----------------------------------------------------------
46,188 2,356,022 1,892,231 3,887,240
Cash -- 1 1 1
Dividends and interest receivable 13 936 1,609 4,586
Prepaid expenses and other assets 1 16 28 65
Receivable for securities sold 367 33,969 1,994 127,496
Receivable for variation margin (Note A) -- -- -- 4,136
----------------------------------------------------------
46,569 2,390,944 1,895,863 4,023,524
----------------------------------------------------------
LIABILITIES
Option contracts written, at market value
(Note A) -- -- -- 15,102
Payable for collateral on securities loaned
(Note A) 402 10,008 36,226 89,019
Payable for securities purchased 447 9,666 7,124 77,540
Payable to investment manager (Note B) 20 869 1,088 1,432
Accrued expenses and other payables 30 143 297 552
----------------------------------------------------------
899 20,686 44,735 183,645
----------------------------------------------------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 45,670 $ 2,370,258 $ 1,851,128 $ 3,839,879
----------------------------------------------------------
NET ASSETS consist of:
Paid-in capital $ 35,967 $ 1,179,587 $ 1,536,941 $ 3,037,228
Net unrealized appreciation in value of
investment securities, financial futures
contracts, and option contracts 9,703 1,190,671 314,187 802,651
----------------------------------------------------------
NET ASSETS $ 45,670 $ 2,370,258 $ 1,851,128 $ 3,839,879
----------------------------------------------------------
*Cost of investments:
Unaffiliated issuers $ 36,485 $ 1,063,334 $ 1,343,716 $ 3,091,259
Non-controlled affiliated issuers -- 102,017 234,328 --
----------------------------------------------------------
Total cost of investments $ 36,485 $ 1,165,351 $ 1,578,044 $ 3,091,259
----------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-35
<PAGE>
August 31, 2000
----------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
MANAGERS
TRUST EQUITY MANAGERS TRUST
------------- -------------------------------------------
INTERNATIONAL MANHATTAN MILLENNIUM PARTNERS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
----------------------------------------------------------
ASSETS
Investments in securities, at market value*
(Notes A & E) -- see Schedule of
Investments:
Unaffiliated issuers $ 188,873 $ 1,454,744 $ 381,049 $ 2,920,865
Non-controlled affiliated issuers -- -- -- --
----------------------------------------------------------
188,873 1,454,744 381,049 2,920,865
Cash 1 1 -- 1
Dividends and interest receivable 226 703 265 3,880
Prepaid expenses and other assets 8 80 28 68
Receivable for securities sold 3,598 3,355 21,254 28,678
Receivable for variation margin (Note A) 7 -- -- --
----------------------------------------------------------
192,713 1,458,883 402,596 2,953,492
----------------------------------------------------------
LIABILITIES
Option contracts written, at market value
(Note A) -- -- -- --
Payable for collateral on securities loaned
(Note A) 9,682 127,345 53,426 64,212
Payable for securities purchased 956 8,544 13,073 13,557
Payable to investment manager (Note B) 135 518 220 1,106
Accrued expenses and other payables 122 713 309 485
----------------------------------------------------------
10,895 137,120 67,028 79,360
----------------------------------------------------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 181,818 $ 1,321,763 $ 335,568 $ 2,874,132
----------------------------------------------------------
NET ASSETS consist of:
Paid-in capital $ 144,571 $ 973,033 $ 280,865 $ 2,498,090
Net unrealized appreciation in value of
investment securities, financial futures
contracts, and option contracts 37,247 348,730 54,703 376,042
----------------------------------------------------------
NET ASSETS $ 181,818 $ 1,321,763 $ 335,568 $ 2,874,132
----------------------------------------------------------
*Cost of investments:
Unaffiliated issuers $ 151,343 $ 1,106,014 $ 326,346 $ 2,544,823
Non-controlled affiliated issuers -- -- -- --
----------------------------------------------------------
Total cost of investments $ 151,343 $ 1,106,014 $ 326,346 $ 2,544,823
----------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-36
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES(Cont'd)
August 31, 2000
----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS TRUST
-------------------------------------------
SOCIALLY
REGENCY RESPONSIVE TECHNOLOGY
(000'S OMITTED) PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
-------------------------------------------
ASSETS
Investments in securities, at market value*
(Notes A & E) -- see Schedule of
Investments:
Unaffiliated issuers $ 36,648 $ 137,155 $ 24,563
Non-controlled affiliated issuers -- -- --
-------------------------------------------
36,648 137,155 24,563
Cash 1 -- 1
Dividends and interest receivable 28 110 1
Prepaid expenses and other assets -- 3 --
Receivable for securities sold -- -- 174
Receivable for variation margin (Note A) -- -- --
-------------------------------------------
36,677 137,268 24,739
-------------------------------------------
LIABILITIES
Option contracts written, at market value
(Note A) -- -- --
Payable for collateral on securities loaned
(Note A) 375 245 --
Payable for securities purchased 159 -- 364
Payable to investment manager (Note B) 16 61 15
Accrued expenses and other payables 33 61 27
-------------------------------------------
583 367 406
-------------------------------------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 36,094 $ 136,901 $ 24,333
-------------------------------------------
NET ASSETS consist of:
Paid-in capital $ 30,852 $ 97,765 $ 19,822
Net unrealized appreciation in value of
investment securities, financial futures
contracts, and option contracts 5,242 39,136 4,511
-------------------------------------------
NET ASSETS $ 36,094 $ 136,901 $ 24,333
-------------------------------------------
*Cost of investments:
Unaffiliated issuers $ 31,406 $ 98,019 $ 20,052
Non-controlled affiliated issuers -- -- --
-------------------------------------------
Total cost of investments $ 31,406 $ 98,019 $ 20,052
-------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-37
<PAGE>
(This page has been left blank intentionally.)
C-38
<PAGE>
STATEMENTS OF OPERATIONS
----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS
TRUST
CENTURY FOCUS
PORTFOLIO PORTFOLIO
For the
Period from
December 6, 1999 For the
(Commencement Year
of Operations) to Ended
-------------------------------------------
August 31, August 31,
(000's omitted) 2000 2000
-------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividend income -- unaffiliated
issuers $ 56 $ 12,183
Dividend income -- non-controlled
affiliated issuers -- 1,013
Interest income 108 1,702
Foreign taxes withheld (Note A) (1) --
-------------------------------------------
Total income 163 14,898
-------------------------------------------
Expenses:
Investment management fee
(Note B) 129 8,689
Accounting fees 8 10
Auditing fees 15 45
Custodian fees (Note B) 33 308
Insurance expense -- 21
Legal fees 23 23
Trustees' fees and expenses 5 27
Miscellaneous -- --
-------------------------------------------
Total expenses 213 9,123
Expenses reduced by custodian fee
expense offset arrangement
(Note B) (1) (5)
-------------------------------------------
Total net expenses 212 9,118
-------------------------------------------
Net investment income (loss) (49) 5,780
-------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on
investment securities sold in
unaffiliated issuers (2,635) 162,326
Net realized gain (loss) on
investment securities sold in
non-controlled affiliated issuers -- 13,304
Net realized gain (loss) on option
contracts (Note A) -- 263
Net realized loss on financial
futures contracts (Note A) -- --
Net realized loss on foreign
currency transactions (Note A) -- --
Change in net unrealized
appreciation (depreciation) of
investment securities, financial
futures contracts, option
contracts, and translation of
assets and liabilities in foreign
currencies (Note A) 9,703 683,324
-------------------------------------------
Net gain on investments 7,068 859,217
-------------------------------------------
Net increase in net assets
resulting from operations $ 7,019 $ 864,997
-------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-39
<PAGE>
----------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
MANAGERS
EQUITY MANAGERS TRUST TRUST
------------------------------------- ----------------
GENESIS GUARDIAN INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO
For the For the For the
Year Year Year
Ended Ended Ended
August 31, August 31, August 31,
2000 2000 2000
----------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividend income -- unaffiliated
issuers $ 12,039 $ 47,067 $ 1,044
Dividend income -- non-controlled
affiliated issuers 2,354 -- --
Interest income 5,017 13,511 1,181
Foreign taxes withheld (Note A) -- (347) (180)
----------------------------------------------------------
Total income 19,410 60,231 2,045
----------------------------------------------------------
Expenses:
Investment management fee
(Note B) 11,889 18,304 1,558
Accounting fees 10 10 10
Auditing fees 41 51 32
Custodian fees (Note B) 320 616 247
Insurance expense 21 63 1
Legal fees 20 22 23
Trustees' fees and expenses 25 51 7
Miscellaneous 33 -- --
----------------------------------------------------------
Total expenses 12,359 19,117 1,878
Expenses reduced by custodian fee
expense offset arrangement
(Note B) (3) (26) (4)
----------------------------------------------------------
Total net expenses 12,356 19,091 1,874
----------------------------------------------------------
Net investment income (loss) 7,054 41,140 171
----------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on
investment securities sold in
unaffiliated issuers 201,347 461,016 29,147
Net realized gain (loss) on
investment securities sold in
non-controlled affiliated issuers (3,841) -- --
Net realized gain (loss) on option
contracts (Note A) -- (92,778) --
Net realized loss on financial
futures contracts (Note A) -- (5,940) (324)
Net realized loss on foreign
currency transactions (Note A) -- -- (11)
Change in net unrealized
appreciation (depreciation) of
investment securities, financial
futures contracts, option
contracts, and translation of
assets and liabilities in foreign
currencies (Note A) 173,266 221,730 2,361
----------------------------------------------------------
Net gain on investments 370,772 584,028 31,173
----------------------------------------------------------
Net increase in net assets
resulting from operations $ 377,826 $ 625,168 $ 31,344
----------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-40
<PAGE>
STATEMENTS OF OPERATIONS(Cont'd)
----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS
TRUST
MANHATTAN MILLENNIUM
PORTFOLIO PORTFOLIO
For the For the
Year Year
Ended Ended
----------------------------------
August 31, August 31,
(000's omitted) 2000 2000
----------------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividend income -- unaffiliated
issuers $ 624 $ 33
Dividend income -- non-controlled
affiliated issuers -- --
Interest income 3,307 1,012
Foreign taxes withheld (Note A) -- --
----------------------------------
Total income 3,931 1,045
----------------------------------
Expenses:
Investment management fee
(Note B) 4,978 2,006
Accounting fees 10 10
Auditing fees 40 17
Custodian fees (Note B) 217 117
Insurance expense 8 1
Legal fees 27 25
Trustees' fees and expenses 17 9
Miscellaneous 23 6
----------------------------------
Total expenses 5,320 2,191
Expenses reduced by custodian fee
expense offset arrangement
(Note B) (2) (9)
----------------------------------
Total net expenses 5,318 2,182
----------------------------------
Net investment income (loss) (1,387) (1,137)
----------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on
investment securities sold in
unaffiliated issuers 313,974 42,114
Net realized gain (loss) on
investment securities sold in
non-controlled affiliated issuers -- --
Net realized gain (loss) on option
contracts (Note A) -- --
Net realized loss on financial
futures contracts (Note A) -- --
Net realized loss on foreign
currency transactions (Note A) -- --
Change in net unrealized
appreciation (depreciation) of
investment securities, financial
futures contracts, option
contracts, and translation of
assets and liabilities in foreign
currencies (Note A) 226,396 48,586
----------------------------------
Net gain on investments 540,370 90,700
----------------------------------
Net increase in net assets
resulting from operations $ 538,983 $ 89,563
----------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-41
<PAGE>
----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS TRUST
-----------------------------------------------------------------------
SOCIALLY
PARTNERS REGENCY RESPONSIVE TECHNOLOGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
For the
Period from
For the For the For the May 1, 2000
Year Year Year (Commencement
Ended Ended Ended of Operations) to
August 31, August 31, August 31, August 31,
2000 2000 2000 2000
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividend income -- unaffiliated issuers $ 41,798 $ 337 $ 1,630 $ 1
Dividend income -- non-controlled affiliated
issuers -- -- -- --
Interest income 4,009 126 476 94
Foreign taxes withheld (Note A) (220) -- (3) --
-----------------------------------------------------------------------
Total income 45,587 463 2,103 95
-----------------------------------------------------------------------
Expenses:
Investment management fee (Note B) 14,477 171 1,033 48
Accounting fees 10 10 10 --
Auditing fees 48 18 30 15
Custodian fees (Note B) 497 49 80 16
Insurance expense 48 -- 5 --
Legal fees 22 22 38 10
Trustees' fees and expenses 42 7 7 3
Miscellaneous -- -- -- --
-----------------------------------------------------------------------
Total expenses 15,144 277 1,203 92
Expenses reduced by custodian fee expense
offset arrangement (Note B) (31) (3) (1) --
-----------------------------------------------------------------------
Total net expenses 15,113 274 1,202 92
-----------------------------------------------------------------------
Net investment income (loss) 30,474 189 901 3
-----------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investment
securities sold in unaffiliated issuers 198,792 4,398 61,526 (51)
Net realized gain (loss) on investment
securities sold in non-controlled affiliated
issuers -- -- -- --
Net realized gain (loss) on option contracts
(Note A) -- -- -- --
Net realized loss on financial futures
contracts (Note A) -- -- -- --
Net realized loss on foreign currency
transactions (Note A) -- -- -- --
Change in net unrealized appreciation
(depreciation) of investment securities,
financial futures contracts, option
contracts, and translation of assets and
liabilities in foreign currencies (Note A) 16,151 5,760 (58,823) 4,511
-----------------------------------------------------------------------
Net gain on investments 214,943 10,158 2,703 4,460
-----------------------------------------------------------------------
Net increase in net assets resulting from
operations $ 245,417 $ 10,347 $ 3,604 $ 4,463
-----------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-42
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS
TRUST
---------------------------------------------
CENTURY FOCUS
PORTFOLIO PORTFOLIO
Period from
December 6, 1999
(Commencement Year
of Operations) to Ended
August 31, August 31,
(000's omitted) 2000 2000 1999
<S> <C> <C> <C>
---------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ (49) $ 5,780 $ 5,971
Net realized gain (loss) on
investments (2,635) 175,893 203,107
Change in net unrealized
appreciation (depreciation) of
investments 9,703 683,324 283,206
---------------------------------------------
Net increase (decrease) in net
assets resulting from operations 7,019 864,997 492,284
---------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 41,427 293,813 50,568
Reductions (2,776) (334,950) (313,932)
---------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests 38,651 (41,137) (263,364)
---------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 45,670 823,860 228,920
NET ASSETS:
Beginning of year -- 1,546,398 1,317,478
---------------------------------------------
End of year $ 45,670 $ 2,370,258 $ 1,546,398
---------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-43
<PAGE>
----------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL MANAGERS
EQUITY MANAGERS TRUST TRUST
----------------------------------------------------------------------------------
GENESIS GUARDIAN INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO
Year Year Year
Ended Ended Ended
August 31, August 31, August 31,
2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 7,054 $ 18,739 $ 41,140 $ 60,087 $ 171 $ 96
Net realized gain (loss) on
investments 197,506 (110,390) 362,298 991,845 28,812 11,780
Change in net unrealized
appreciation (depreciation) of
investments 173,266 413,682 221,730 406,548 2,361 12,624
----------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 377,826 322,031 625,168 1,458,480 31,344 24,500
----------------------------------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 242,189 528,302 61,327 164,857 423,142 91,521
Reductions (519,991) (911,584) (1,570,336) (2,687,422) (387,184) (129,327)
----------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests (277,802) (383,282) (1,509,009) (2,522,565) 35,958 (37,806)
----------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 100,024 (61,251) (883,841) (1,064,085) 67,302 (13,306)
NET ASSETS:
Beginning of year 1,751,104 1,812,355 4,723,720 5,787,805 114,516 127,822
----------------------------------------------------------------------------------
End of year $ 1,851,128 $ 1,751,104 $ 3,839,879 $ 4,723,720 $ 181,818 $ 114,516
----------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-44
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS(Cont'd)
----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS
TRUST
-----------------------------------------------------------
MANHATTAN MILLENNIUM
PORTFOLIO PORTFOLIO
Period from
October 20, 1998
Year Year (Commencement
Ended Ended of Operations) to
August 31, August 31, August 31,
(000's omitted) 2000 1999 2000 1999
<S> <C> <C> <C> <C>
-----------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ (1,387) $ (502) $ (1,137) $ (186)
Net realized gain (loss) on
investments 313,974 57,698 42,114 8,249
Change in net unrealized
appreciation (depreciation) of
investments 226,396 135,208 48,586 6,117
-----------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 538,983 192,404 89,563 14,180
-----------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 350,012 47,432 256,345 57,892
Reductions (180,091) (150,336) (78,577) (3,835)
-----------------------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests 169,921 (102,904) 177,768 54,057
-----------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 708,904 89,500 267,331 68,237
NET ASSETS:
Beginning of year 612,859 523,359 68,237 --
-----------------------------------------------------------
End of year $ 1,321,763 $ 612,859 $ 335,568 $ 68,237
-----------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-45
<PAGE>
----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS TRUST
-------------------------------------------------------------------------
SOCIALLY
PARTNERS REGENCY RESPONSIVE
PORTFOLIO PORTFOLIO PORTFOLIO
Period from
June 1, 1999
Year Year (Commencement Year
Ended Ended of Operations) to Ended
August 31, August 31, August 31, August 31,
2000 1999 2000 1999 2000
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 30,474 $ 51,968 $ 189 $ (7) $ 901
Net realized gain (loss) on
investments 198,792 353,820 4,398 75 61,526
Change in net unrealized
appreciation (depreciation) of
investments 16,151 531,136 5,760 (518) (58,823)
-------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 245,417 936,924 10,347 (450) 3,604
-------------------------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 114,599 230,354 29,173 8,958 34,685
Reductions (1,254,624) (979,875) (11,704) (230) (298,501)
-------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests (1,140,025) (749,521) 17,469 8,728 (263,816)
-------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (894,608) 187,403 27,816 8,278 (260,212)
NET ASSETS:
Beginning of year 3,768,740 3,581,337 8,278 -- 397,113
-------------------------------------------------------------------------
End of year $ 2,874,132 $ 3,768,740 $ 36,094 $ 8,278 $ 136,901
-------------------------------------------------------------------------
<CAPTION>
EQUITY MANAGERS TRUST
-------------------------------
SOCIALLY
RESPONSIVE TECHNOLOGY
PORTFOLIO PORTFOLIO
Period from
May 1, 2000
Year (Commencement
Ended of Operations) to
August 31, August 31,
1999 2000
<S> <C> <C>
-------------------------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 2,271 $ 3
Net realized gain (loss) on
investments 22,484 (51)
Change in net unrealized
appreciation (depreciation) of
investments 81,446 4,511
-------------------------------
Net increase (decrease) in net
assets resulting from operations 106,201 4,463
-------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 53,231 20,606
Reductions (45,169) (736)
-------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests 8,062 19,870
-------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 114,263 24,333
NET ASSETS:
Beginning of year 282,850 --
-------------------------------
End of year $ 397,113 $ 24,333
-------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-46
<PAGE>
NOTES TO FINANCIAL STATEMENTS
August 31, 2000
----------------------------------------------------------------------
Equity Managers Trust and Global Managers Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger Berman Century Portfolio ("Century"), Neuberger Berman
Focus Portfolio ("Focus"), Neuberger Berman Genesis Portfolio ("Genesis"),
Neuberger Berman Guardian Portfolio ("Guardian"), Neuberger Berman Manhattan
Portfolio ("Manhattan"), Neuberger Berman Millennium Portfolio
("Millennium"), Neuberger Berman Partners Portfolio ("Partners"), Neuberger
Berman Regency Portfolio ("Regency"), Neuberger Berman Socially Responsive
Portfolio ("Socially Responsive"), and Neuberger Berman Technology Portfolio
("Technology") are separate operating series of Equity Managers Trust
("Managers Trust"), a New York common law trust organized as of December 1,
1992. Neuberger Berman International Portfolio ("International") is a
separate operating series of Global Managers Trust ("Global"), a New York
common law trust organized as of March 18, 1994, with its principal office in
the Cayman Islands. These eleven aforementioned series are collectively
referred to as the "Portfolios." Managers Trust and Global (collectively, the
"Trusts") are registered as diversified, open-end management investment
companies under the Investment Company Act of 1940, as amended (the "1940
Act"). Century, Millennium, Regency, and Technology had no operations until
December 6, 1999, October 20, 1998, June 1, 1999, and May 1, 2000,
respectively, other than matters relating to their organization and
registration as series' of Managers Trust. Other regulated investment
companies sponsored by Neuberger Berman Management Inc. ("Management"), whose
financial statements are not presented herein, also invest in the Trusts.
Global currently has only one 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.
2) PORTFOLIO VALUATION: Investment securities are valued as indicated in the
notes following the Portfolios' Schedule of Investments.
3) FOREIGN CURRENCY TRANSLATION: The accounting records of the Portfolios are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars at the current rate of exchange of such currency against the U.S.
dollar to determine the value of investments, other assets and liabilities.
Purchase and sale prices of securities, and income and expenses are
translated into U.S. dollars at the prevailing rate of exchange on the
respective dates of such transactions.
4) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the
ex-dividend date or, for certain foreign dividends, as soon as the Portfolio
becomes aware of
C-47
<PAGE>
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 and foreign
currency transactions are recorded on the basis of identified cost.
5) TAXES: Managers Trust intends to comply with the requirements of the Internal
Revenue Code. Each Portfolio of the Trusts also intends to conduct its
operations so that each of its investors (in the case of Global, its U.S.
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. There is,
at present, no direct taxation in the Cayman Islands, and therefore interest,
dividends, and capital gains derived by Global are not subject to taxes in
that jurisdiction.
6) FOREIGN TAXES: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
7) EXPENSE ALLOCATION: Each Portfolio bears all costs of its operations.
Expenses incurred by each of the Trusts with respect to any two or more
Portfolios are 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.
8) CALL OPTIONS: Premiums received by each Portfolio upon writing a covered call
option are recorded in the liability section of each Portfolio's Statement of
Assets and Liabilities and are subsequently adjusted to the current market
value. When an option is exercised, closed, or expired, the Portfolio
realizes a gain or loss and the liability is eliminated. A Portfolio bears
the risk of a decline in the price of the security during the period,
although any potential loss during the period would be reduced by the amount
of the option premium received. In general, written covered call options may
serve as a partial hedge against decreases in value in the underlying
securities to the extent of the premium received. All securities covering
outstanding options are held in escrow by the custodian bank.
Summary of option transactions for the year ended August 31, 2000:
<TABLE>
<CAPTION>
VALUE
WHEN
FOCUS NUMBER WRITTEN
<S> <C> <C>
-------------------------------------------------------------
CONTRACTS OUTSTANDING 8/31/99 3,000 $ 441,000
CONTRACTS WRITTEN 2,000 1,078,000
CONTRACTS EXPIRED (1,600) (533,000)
CONTRACTS EXERCISED 0 0
CONTRACTS CLOSED (3,400) (986,000)
------------------------
CONTRACTS OUTSTANDING 8/31/00 0 $ 0
------------------------
</TABLE>
C-48
<PAGE>
<TABLE>
<CAPTION>
VALUE
WHEN
GUARDIAN NUMBER WRITTEN
<S> <C> <C>
-----------------------------------------------------------------
CONTRACTS OUTSTANDING 8/31/99 23,750 $ 15,446,000
CONTRACTS WRITTEN 86,796 79,702,000
CONTRACTS EXPIRED (5,000) (2,985,000)
CONTRACTS EXERCISED (4,769) (2,647,000)
CONTRACTS CLOSED (86,157) (76,167,000)
----------------------------
CONTRACTS OUTSTANDING 8/31/00 14,620 $ 13,349,000
----------------------------
</TABLE>
9) FINANCIAL FUTURES CONTRACTS: Each Portfolio may buy and sell stock index
futures contracts for purposes of managing cash flow. Century, International,
Millennium, Socially Responsive, and Technology may each buy and sell
financial futures contracts to hedge against a possible decline in the value
of their portfolio securities. International may also buy currency futures
contracts for non-hedging purposes. At the time a Portfolio enters into a
financial futures contract, it is required to deposit with its custodian a
specified amount of cash or liquid securities, known as "initial margin,"
ranging upward from 1.1% of the value of the financial futures contract being
traded. Each day, the futures contract is valued at the official settlement
price of the board of trade or U.S. commodity exchange on which such futures
contract is traded. Subsequent payments, known as "variation margin," to and
from the broker are made on a daily basis as the market price of the
financial futures contract fluctuates. Daily variation margin adjustments,
arising from this "mark to market," are recorded by the Portfolios as
unrealized gains or losses.
Although some financial futures contracts by their terms call for actual
delivery or acceptance of financial instruments, in most cases the contracts
are closed out prior to delivery by offsetting purchases or sales of matching
financial futures contracts. When the contracts are closed, a Portfolio
recognizes a gain or loss. Risks of entering into futures contracts include
the possibility there may be an illiquid market and/or a change in the value
of the contract may not correlate with changes in the value of the underlying
securities.
For U.S. Federal income tax purposes, the futures transactions undertaken
by a Portfolio may cause that Portfolio to recognize gains or losses from
marking to market even though its positions have not been sold or terminated,
may affect the character of the gains or losses recognized as long-term or
short-term, and may affect the timing of some capital gains and losses
realized by the Portfolios. Also, a Portfolio's losses on transactions
involving futures contracts may be deferred rather than being taken into
account currently in calculating such Portfolio's taxable income. During the
year ended August 31, 2000, Century, Focus, Genesis, Manhattan, Millennium,
Partners, Regency, Socially Responsive, and Technology did not enter into any
financial futures contracts.
C-49
<PAGE>
At August 31, 2000, open positions in financial futures contracts for
Guardian were as follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION OPEN CONTRACTS POSITION APPRECIATION
<S> <C> <C> <C>
-----------------------------------------------------------------------
September 2000 940 S&P 500 Futures Long $8,422,000
</TABLE>
At August 31, 2000, open positions in financial futures contracts for
International were as follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION OPEN CONTRACTS POSITION DEPRECIATION
<S> <C> <C> <C>
---------------------------------------------------------------------------
September 2000 170 DJ Euro Stoxx 50 Futures Long $275,000
</TABLE>
At August 31, 2000, Guardian had the following securities deposited in a
segregated account to cover margin requirements on open financial futures
contracts:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT SECURITY
<S> <C>
--------------------------------------------------------------------------------------------
$8,000,000 Federal Farm Credit Bank, Discount Notes, 6.36%, due 9/18/2000
8,000,000 Fannie Mae, Discount Notes, 6.38%, due 9/21/2000
8,000,000 Freddie Mac, Discount Notes, 6.41%, due 9/28/2000
</TABLE>
At August 31, 2000, International had the following security deposited in
a segregated account to cover margin requirements on open financial futures
contracts:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT SECURITY
<S> <C>
--------------------------------------------------------------------
$475,000 Freddie Mac, Discount Notes, 6.43% & 6.45%, due 9/7/2000
</TABLE>
10) 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 the Trusts' Boards of Trustees,
monitors the creditworthiness of the parties to whom the Portfolios make
security loans. The Portfolios will not lend securities on which covered
call options have been written, or lend securities on terms which would
prevent each of their investors from qualifying as a regulated investment
company. The Portfolios entered into a Securities Lending Agreement with
Morgan Stanley & Co. Incorporated ("Morgan"). The Portfolios receive cash
collateral equal to at least 100% of the current market value of the loaned
securities. The Portfolios invest the cash collateral in the N&B Securities
Lending Quality Fund, LLC ("investment vehicle"), which is managed by State
Street Bank and Trust Company ("State Street") pursuant to guidelines
approved by the Trusts' investment manager. Income earned on the investment
vehicle is paid to Morgan monthly. The Portfolios receive a fee, payable
monthly, negotiated by the
C-50
<PAGE>
Portfolios and Morgan, based on the number and duration of the lending
transactions. At August 31, 2000, the value of the securities loaned and the
value of the collateral were as follows:
<TABLE>
<CAPTION>
VALUE OF
SECURITIES VALUE OF
LOANED COLLATERAL
<S> <C> <C>
-------------------------------------------------------------------
CENTURY $ 394,000 $ 402,000
FOCUS 9,812,000 10,008,000
GENESIS 35,516,000 36,226,000
GUARDIAN 87,274,000 89,019,000
INTERNATIONAL 9,492,000 9,682,000
MANHATTAN 124,848,000 127,345,000
MILLENNIUM 52,378,000 53,426,000
PARTNERS 62,953,000 64,212,000
REGENCY 368,000 375,000
SOCIALLY RESPONSIVE 240,000 245,000
</TABLE>
11) REPURCHASE AGREEMENTS: Each 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. A Portfolio
requires that the securities purchased in a repurchase transaction be
transferred to the custodian in a manner sufficient to enable a Portfolio to
obtain those securities in the event of a default under the repurchase
agreement. A 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 a Portfolio under each such
repurchase agreement.
NOTE B -- MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
Each Portfolio retains Management as its investment manager under a
Management Agreement. For such investment management services, each Portfolio
(except Genesis, International, Millennium, and Technology) pays Management a
fee at the annual rate of 0.55% of the first $250 million of that Portfolio's
average daily net assets, 0.525% of the next $250 million, 0.50% of the next
$250 million, 0.475% of the next $250 million, 0.45% of the next $500 million,
and 0.425% of average daily net assets in excess of $1.5 billion. Genesis and
Millennium pay Management a fee for investment management services at the annual
rate of 0.85% of the first $250 million of that Portfolio's average daily net
assets, 0.80% of the next $250 million, 0.75% of the next $250 million, 0.70% of
the next $250 million, and 0.65% of average daily net assets in excess of
$1 billion. International pays Management a fee for investment management
services at the annual rate of 0.85% of the first $250 million of that
Portfolio's average daily net assets, 0.825% 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
C-51
<PAGE>
average daily net assets in excess of $1.5 billion. Technology pays Management a
fee for investment management services at the annual rate of 0.85% of the
Portfolio's average daily net assets.
Management and Neuberger Berman, LLC ("Neuberger"), a member firm of The New
York Stock Exchange and sub-adviser to each Portfolio, are wholly owned
subsidiaries of Neuberger Berman Inc., a publicly held company. Neuberger is
retained by Management to furnish it with investment recommendations and
research information without added cost to each Portfolio. Several individuals
who are officers and/or trustees of the Trusts are also employees of Neuberger
and/or Management.
Each Portfolio has an expense offset arrangement in connection with its
custodian contract. The impact of this arrangement, reflected in the Statements
of Operations under the caption Custodian fees, was a reduction of $729, $5,067,
$2,694, $26,334, $4,213, $1,460, $9,400, $31,086, $2,723, $888, and $135, for
Century, Focus, Genesis, Guardian, International, Manhattan, Millennium,
Partners, Regency, Socially Responsive, and Technology, respectively.
NOTE C -- SECURITIES TRANSACTIONS:
During the year ended August 31, 2000, there were purchase and sale
transactions (excluding short-term securities, financial futures contracts, and
option contracts) as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
<S> <C> <C>
-------------------------------------------------------------------
CENTURY $ 56,022,000 $ 18,696,000
FOCUS 985,133,000 1,020,999,000
GENESIS 592,552,000 899,085,000
GUARDIAN 3,199,167,000 4,688,263,000
INTERNATIONAL 145,225,000 130,368,000
MANHATTAN 1,124,602,000 967,149,000
MILLENNIUM 563,624,000 392,803,000
PARTNERS 2,963,180,000 3,916,490,000
REGENCY 76,219,000 58,644,000
SOCIALLY RESPONSIVE 139,353,000 379,760,000
TECHNOLOGY 26,430,000 7,617,000
</TABLE>
C-52
<PAGE>
During the year ended August 31, 2000, there were brokerage commissions on
securities paid to Neuberger and other brokers as follows:
<TABLE>
<CAPTION>
OTHER
NEUBERGER BROKERS TOTAL
<S> <C> <C> <C>
-----------------------------------------------------------------------------------
CENTURY $ 21,000 $ 8,000 $ 29,000
FOCUS 895,000 775,000 1,670,000
GENESIS 681,000 965,000 1,646,000
GUARDIAN 5,141,000 3,978,000 9,119,000
INTERNATIONAL -- 591,000 591,000
MANHATTAN 199,000 600,000 799,000
MILLENNIUM 58,000 80,000 138,000
PARTNERS 3,901,000 3,199,000 7,100,000
REGENCY 88,000 104,000 192,000
SOCIALLY RESPONSIVE 261,000 111,000 372,000
TECHNOLOGY 2,000 1,000 3,000
</TABLE>
NOTE D -- LINE OF CREDIT:
At August 31, 2000, Genesis, Manhattan, and Millennium were three of the
holders of a single committed, unsecured $100,000,000 line of credit with State
Street, to be used only for temporary or emergency purposes. Interest is charged
on borrowings under this agreement at the overnight Federal Funds Rate plus
0.75% per annum. A facility fee of 0.09% (0.07% prior to October 1, 1999) per
annum of the available line of credit is charged, of which Genesis, Manhattan,
and Millennium each has agreed to pay its pro rata share, based on the ratio of
its individual net assets to the net assets of all the participants at the time
the fee is due and payable. The fee is paid quarterly in arrears. No
compensating balance is required. Other investment companies managed by
Management also participate in this line of credit on the same terms. Because
several investment companies participate, there is no assurance that an
individual Portfolio will have access to the entire $100,000,000 at any
particular time. Genesis, Manhattan, and Millennium had no loans outstanding
pursuant to this line of credit at August 31, 2000. During the year ended
August 31, 2000, Genesis, Manhattan, and Millennium did not utilize this line of
credit.
At August 31, 2000, International was one of two holders of a single
$20,000,000 uncommitted, secured line of credit with State Street to be used for
temporary or emergency purposes or for leverage. Interest is charged at LIBOR,
or the overnight Federal Funds Rate, plus a spread to be determined at the time
of borrowing. Another investment company managed by Management also participates
in this line of credit on the same terms. Because another investment company
participates, there is no assurance that an individual Portfolio will have
access to the entire $20,000,000 at any particular time. International had no
loans outstanding pursuant to this line of credit at August 31, 2000, nor had it
utilized this line of credit at any time prior to that date.
C-53
<PAGE>
NOTE E -- INVESTMENTS IN NON-CONTROLLED AFFILIATES*:
<TABLE>
<CAPTION>
FOCUS
BALANCE OF GROSS GROSS BALANCE OF
SHARES HELD PURCHASES SALES SHARES HELD VALUE
AUGUST 31, AND AND AUGUST 31, AUGUST 31,
NAME OF ISSUER: 1999 ADDITIONS REDUCTIONS 2000 2000
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Furniture Brands International 1,800,000 1,700,000 0 3,500,000 $56,437,000
Nationwide Financial Services 568,700 1,235,400 59,100 1,745,000 69,582,000
Photronics, Inc.** 1,302,500 0 1,137,500 165,000 4,837,000
</TABLE>
<TABLE>
<CAPTION>
GENESIS
BALANCE OF GROSS GROSS BALANCE OF
SHARES HELD PURCHASES SALES SHARES HELD VALUE
AUGUST 31, AND AND AUGUST 31, AUGUST 31,
NAME OF ISSUER: 1999 ADDITIONS REDUCTIONS 2000 2000
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
AAR Corp. 1,771,350 85,900 430,200 1,427,050 $16,054,000
Alliant Techsystems 663,200 6,000 136,400 532,800 41,059,000
Aviall Inc.** 1,219,500 0 465,400 754,100 4,525,000
Davox Corp.** 1,075,600 386,300 654,000 807,900 10,200,000
DONCASTERS PLC ADR** 478,300 0 478,300 0 0
Fair, Isaac & Co. 343,500 500,200 4,200 839,500 38,565,000
Highland Bancorp 331,400 0 0 331,400 8,368,000
Mentor Corp. 885,300 310,800 5,000 1,191,100 25,236,000
META Group 0 632,000 7,000 625,000 9,062,000
Primex Technologies 800,400 7,000 78,100 729,300 17,685,000
SOS Staffing Services 814,400 0 25,000 789,400 2,171,000
Scottish Annuity & Life Holdings 857,900 33,600 0 891,500 8,135,000
Wallace Computer Services 1,247,400 892,100 4,200 2,135,300 24,823,000
</TABLE>
*AFFILIATED ISSUERS, AS DEFINED IN THE 1940 ACT, INCLUDE ISSUERS IN WHICH THE
PORTFOLIO HELD 5% OR MORE OF THE OUTSTANDING VOTING SECURITIES.
**AT AUGUST 31, 2000, THE ISSUERS OF THESE SECURITIES WERE NO LONGER AFFILIATED
WITH THE PORTFOLIO.
C-54
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Century Portfolio
<TABLE>
<CAPTION>
Period from
December 6, 1999 (1)
to August 31,
2000
<S> <C>
--------------------
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(2)(3) .91%
--------------------
Net Expenses(3) .91%
--------------------
Net Investment Loss(3) (.21%)
--------------------
Portfolio Turnover Rate 65%
--------------------
Net Assets, End of Period (in millions) $45.7
--------------------
</TABLE>
1) The date investment operations commenced.
2) The Portfolio is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
3) Annualized.
C-55
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Focus Portfolio
<TABLE>
<CAPTION>
Year Ended August 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(1) .50% .51% .51% .53% .54%
--------------------------------------------------------
Net Expenses .50% .51% .51% .53% .54%
--------------------------------------------------------
Net Investment Income .32% .37% .59% .54% 1.04%
--------------------------------------------------------
Portfolio Turnover Rate 55% 57% 64% 63% 39%
--------------------------------------------------------
Net Assets, End of Year (in millions) $2,370.3 $1,546.4 $1,317.5 $1,573.4 $1,122.4
--------------------------------------------------------
</TABLE>
1) The Portfolio is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
C-56
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Genesis Portfolio
<TABLE>
<CAPTION>
Year Ended August 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(1) .76% .75% .72% .77% .85%
---------------------------------------------------------------
Net Expenses .75% .75% .72%(2) .77%(2) .85%(2)
---------------------------------------------------------------
Net Investment Income .43% 1.02% 1.13% .32% .27%
---------------------------------------------------------------
Portfolio Turnover Rate 38% 33% 18% 18% 21%
---------------------------------------------------------------
Net Assets, End of Year (in millions) $1,851.1 $1,751.1 $1,812.4 $1,083.7 $259.9
---------------------------------------------------------------
</TABLE>
1) The Portfolio is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
2) Had the investment manager not waived a portion of the management fee, the
annualized ratios of net expenses to average daily net assets would have
been:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
1998 1997 1996
<S> <C> <C> <C>
---------------------------------------------------------------------
Net Expenses .74% .87% .95%
</TABLE>
C-57
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Guardian Portfolio
<TABLE>
<CAPTION>
Year Ended August 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(1) .47% .46% .46% .46% .46%
--------------------------------------------------------
Net Expenses .47% .46% .46% .46% .46%
--------------------------------------------------------
Net Investment Income 1.01% 1.06% .92% .89% 1.72%
--------------------------------------------------------
Portfolio Turnover Rate 83% 73% 60% 50% 37%
--------------------------------------------------------
Net Assets, End of Year (in millions) $3,839.9 $4,723.7 $5,787.8 $8,758.2 $6,232.5
--------------------------------------------------------
</TABLE>
1) The Portfolio is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
C-58
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
International Portfolio
<TABLE>
<CAPTION>
Year Ended August 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(1) 1.02% 1.11% 1.18% 1.21% 1.37%
--------------------------------------------------------
Net Expenses 1.02% 1.10% 1.18% 1.21% 1.37%(2)
--------------------------------------------------------
Net Investment Income .09% .08% .29% .47% .58%
--------------------------------------------------------
Portfolio Turnover Rate 80% 94% 46% 37% 45%
--------------------------------------------------------
Net Assets, End of Year (in millions) $181.8 $114.5 $127.8 $115.3 $57.0
--------------------------------------------------------
</TABLE>
1) The Portfolio is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
2) After reimbursement of expenses by the investment adviser. Had the investment
adviser not undertaken such action, the annualized ratio of net expenses to
average daily net assets would have been:
<TABLE>
<CAPTION>
YEAR ENDED
AUGUST 31,
1996
<S> <C>
-----------------------------------------------------------
Net Expenses 1.49%
</TABLE>
C-59
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Manhattan Portfolio
<TABLE>
<CAPTION>
Year Ended August 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(1) .55% .58% .57% .59% .58%
------------------------------------------------
Net Expenses .55% .58% .57% .59% .58%
------------------------------------------------
Net Investment Income (Loss) (.14%) (.08%) (.05%) .20% .13%
------------------------------------------------
Portfolio Turnover Rate 105% 115% 90% 89% 53%
------------------------------------------------
Net Assets, End of Year (in millions) $1,321.8 $612.9 $523.4 $621.7 $567.4
------------------------------------------------
</TABLE>
1) The Portfolio is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
C-60
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Millennium Portfolio
<TABLE>
<CAPTION>
Period from
Year Ended October 20, 1998 (1)
August 31, to August 31,
2000 1999
<S> <C> <C>
----------------------------------
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(2) .93% 1.20%(3)
----------------------------------
Net Expenses .92% 1.19%(3)
----------------------------------
Net Investment Loss (.48%) (.67%)(3)
----------------------------------
Portfolio Turnover Rate 176% 208%
----------------------------------
Net Assets, End of Year (in millions) $335.6 $68.2
----------------------------------
</TABLE>
1) The date investment operations commenced.
2) The Portfolio is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
3) Annualized.
C-61
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Partners Portfolio
<TABLE>
<CAPTION>
Year Ended August 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(1) .48% .47% .47% .48% .51%
--------------------------------------------------------
Net Expenses .48% .47% .47% .48% .51%
--------------------------------------------------------
Net Investment Income .96% 1.29% 1.11% 1.05% 1.26%
--------------------------------------------------------
Portfolio Turnover Rate 95% 132% 109% 77% 96%
--------------------------------------------------------
Net Assets, End of Year (in millions) $2,874.1 $3,768.7 $3,581.3 $3,575.6 $1,999.6
--------------------------------------------------------
</TABLE>
1) The Portfolio is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
C-62
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Regency Portfolio
<TABLE>
<CAPTION>
Period from
Year Ended June 1, 1999(1)
August 31, to August 31,
2000 1999
<S> <C> <C>
-----------------------------
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(2) .89% 2.65%(3)
-----------------------------
Net Expenses .88% 2.64%(3)
-----------------------------
Net Investment Income (Loss) .61% (.48%)(3)
-----------------------------
Portfolio Turnover Rate 200% 42%
-----------------------------
Net Assets, End of Year (in millions) $36.1 $8.3
-----------------------------
</TABLE>
1) The date investment operations commenced.
2) The Portfolio is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
3) Annualized.
C-63
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Socially Responsive Portfolio
<TABLE>
<CAPTION>
Year Ended August 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
----------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(1) .64% .59% .60% .63% .65%
----------------------------------------------
Net Expenses .64% .59% .60% .63% .65%
----------------------------------------------
Net Investment Income .48% .63% .92% 1.08% 1.02%
----------------------------------------------
Portfolio Turnover Rate 76% 53% 47% 51% 53%
----------------------------------------------
Net Assets, End of Year (in millions) $136.9 $397.1 $282.9 $256.3 $158.5
----------------------------------------------
</TABLE>
1) The Portfolio is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
C-64
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Technology Portfolio
<TABLE>
<CAPTION>
Period from
May 1, 2000 (1)
to August 31,
2000
<S> <C>
---------------
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(2)(3) 1.62%
---------------
Net Expenses(3) 1.62%
---------------
Net Investment Income(4) .02%
---------------
Portfolio Turnover Rate 55%
---------------
Net Assets, End of Period (in millions) $24.3
---------------
</TABLE>
1) The date investment operations commenced.
2) The Portfolio is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
3) Annualized.
4) Not annualized.
C-65
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Equity Managers Trust and
Owners of Beneficial Interest of
Neuberger Berman Century Portfolio,
Neuberger Berman Manhattan Portfolio,
Neuberger Berman Millennium Portfolio,
Neuberger Berman Regency Portfolio,
Neuberger Berman Socially Responsive Portfolio, and
Neuberger Berman Technology Portfolio
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Neuberger Berman Century Portfolio,
Neuberger Berman Manhattan Portfolio, Neuberger Berman Millennium Portfolio,
Neuberger Berman Regency Portfolio, Neuberger Berman Socially Responsive
Portfolio, and Neuberger Berman Technology Portfolio (collectively the
"Portfolios") at August 31, 2000, the results of each of their operations, the
changes in each of their net assets and the financial highlights for each of the
periods indicated therein, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolios' management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at August 31, 2000 by correspondence with the custodian and brokers,
provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 9, 2000
C-66
<PAGE>
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
To the Board of Trustees
Equity Managers Trust and Global Managers Trust and
Owners of Beneficial Interest of
Neuberger Berman Focus Portfolio
Neuberger Berman Genesis Portfolio
Neuberger Berman Guardian Portfolio
Neuberger Berman Partners Portfolio and
Neuberger Berman International Portfolio
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of the Neuberger Berman Focus Portfolio,
Neuberger Berman Genesis Portfolio, Neuberger Berman Guardian Portfolio, and
Neuberger Berman Partners Portfolio, four of the series constituting Equity
Managers Trust, and the Neuberger Berman International Portfolio, the only
series constituting Global Managers Trust, as of August 31, 2000, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
management of Equity Managers Trust and Global Managers Trust. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of August 31, 2000, by correspondence with
the custodian and brokers or other appropriate auditing procedures where replies
from brokers were not received. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the above mentioned series of Equity Managers Trust and Global Managers Trust
at August 31, 2000, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended,
and their financial highlights for each of the five years in the period then
ended, in conformity with accounting principles generally accepted in the United
States.
Boston, Massachusetts /s/ ERNST & YOUNG LLP
October 2, 2000
C-67
<PAGE>
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:
Neuberger Berman Funds
Institutional Services
605 Third Avenue 2nd Floor
New York, NY 10158-0180
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, NW
2nd Floor
Washington, DC 20036-1800
INDEPENDENT ACCOUNTANTS/AUDITORS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, MA 02110
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
-C- 2000 Neuberger Berman Management Inc.
D-1
<PAGE>
OFFICERS AND TRUSTEES
EQUITY MANAGERS TRUST/
NEUBERGER BERMAN EQUITY TRUST
Peter E. Sundman
CHAIRMAN OF THE BOARD AND TRUSTEE
Michael M. Kassen
PRESIDENT AND TRUSTEE
Faith Colish
TRUSTEE
Howard A. Mileaf
TRUSTEE
Edward I. O'Brien
TRUSTEE
John P. Rosenthal
TRUSTEE
Cornelius T. Ryan
TRUSTEE
Gustave H. Shubert
TRUSTEE
Daniel J. Sullivan
VICE PRESIDENT
Richard Russell
TREASURER
Claudia A. Brandon
SECRETARY
Barbara DiGiorgio
ASSISTANT TREASURER
Celeste Wischerth
ASSISTANT TREASURER
Stacy Cooper-Shugrue
ASSISTANT SECRETARY
GLOBAL MANAGERS TRUST
Peter E. Sundman
CHAIRMAN OF THE BOARD AND TRUSTEE
Michael M. Kassen
PRESIDENT
Howard A. Mileaf
TRUSTEE
John P. Rosenthal
TRUSTEE
Daniel J. Sullivan
VICE PRESIDENT
Richard Russell
TREASURER
Claudia A. Brandon
SECRETARY
Barbara DiGiorgio
ASSISTANT TREASURER
Jacqueline Henning
ASSISTANT TREASURER
Celeste Wischerth
ASSISTANT TREASURER
Stacy Cooper-Shugrue
ASSISTANT SECRETARY
Lenore Joan McCabe
ASSISTANT SECRETARY
Notice to Shareholders (Unaudited)
For Neuberger Berman Guardian Trust 91% of the dividends distributed during
the fiscal year ended August 31, 2000 qualifies for the dividend received
deduction for corporate shareholders. The Fund will notify shareholders in
January 2001 of the applicable percentage of qualifying dividends for corporate
shareholders for use in preparing 2000 income tax returns.
D-2
<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 Funds. This report is prepared for the
general information of shareholders and is not an offer of shares
of the Funds. Shares are sold only through the currently
effective prospectus, which must precede or accompany this report.
NEUBERGER BERMAN
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
[RECYCLED LOGO] A0086 10/00
Kirkpatrick & Lockhart
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036
October 27, 2000
VIA EDGAR
---------
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: NEUBERGER BERMAN EQUITY TRUST:
Neuberger Berman Century Trust
Neuberger Berman Focus Trust
Neuberger Berman International Trust
Neuberger Berman Genesis Trust
Neuberger Berman Guardian Trust
Neuberger Berman Manhattan Trust
Neuberger Berman Millennium Trust
Neuberger Berman Partners Trust
Neuberger Berman Regency Trust
Neuberger Berman Socially Responsive Trust
Neuberger Berman Technology Trust
1933 Act File No. 33-64368
1940 Act File No. 811-7784
--------------------------
Dear Sir or Madam:
Transmitted herewith for filing is the Annual Report to Shareholders of
the above-referenced series of Neuberger Berman Equity Trust for the period
ended August 31, 2000. This filing is being made pursuant to Section 30(b)(2) of
the Investment Company Act of 1940, as amended, and Rule 30b2-1 thereunder.
If you should have any questions regarding this filing, please contact the
undersigned at (202) 778-9223.
Sincerely,
/s/ Fatima Sulaiman
-------------------
Fatima Sulaiman
Enclosures
