As filed with the Securities and Exchange Commission on March 31, 1997
1933 Act Registration No. 33-82568
1940 Act Registration No. 811-8106
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
---
Pre-Effective Amendment No. _____ [___]
Post-Effective Amendment No. __8__ [_X_]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [_X_]
Amendment No. 10 [_X_]
(Check appropriate box or boxes)
NEUBERGER & BERMAN EQUITY ASSETS
(Exact Name of the Registrant as Specified in Charter)
605 Third Avenue
New York, New York 10158-0180
(Address of Principal Executive Offices)
Registrant's Telephone Number, including area code: (212) 476-8800
Lawrence Zicklin, President
Neuberger & Berman Equity Assets
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
Arthur C. Delibert, Esq.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W., 2nd Floor
Washington, D.C. 20036-1800
(Names and Addresses of agents for service)
Approximate Date of Proposed Public Offering: Continuous
It is proposed that this filing will become effective:
_X_ immediately upon filing pursuant to paragraph (b)
___ on ______________ pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)(1)
___ on __________ pursuant to paragraph (a)(1)
___ 75 days after filing pursuant to paragraph (a)(2)
___ on __________ to paragraph (a)(2)
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 as amended, and filed the notice required by such
rule for its 1996 fiscal year on October 29, 1996.
Neuberger & Berman Equity Assets is a "master/feeder fund." This
Post-Effective Amendment No. 8 includes a signature page for the master fund,
Equity Managers Trust, and appropriate officers and trustees thereof.
<PAGE>
NEUBERGER & BERMAN EQUITY ASSETS
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 8 ON FORM N-1A
This Post-Effective Amendment consists of the following papers and
documents:
Cover Sheet
Contents of Post-Effective Amendment No. 8 on Form N-1A
Cross Reference Sheet
NEUBERGER & BERMAN FOCUS ASSETS, NEUBERGER & BERMAN GENESIS ASSETS, NEUBERGER &
BERMAN GUARDIAN ASSETS, NEUBERGER & BERMAN MANHATTAN ASSETS AND NEUBERGER &
BERMAN PARTNERS ASSETS
Part A - Prospectus
Part B - Statement of Additional Information
Part C - Other Information
Signature Pages
Exhibits
No change is intended to be made by this Post-Effective Amendment No. 8 to
the prospectus or statement of additional information for Neuberger & Berman
Socially Responsive Trust.
<PAGE>
NEUBERGER & BERMAN EQUITY ASSETS
POST-EFFECTIVE AMENDMENT NO. 8 ON FORM N-1A
Cross Reference Sheet
This cross reference sheet relates to the Prospectus and Statement
of Additional Information for:
NEUBERGER & BERMAN FOCUS ASSETS
-------------------------------
NEUBERGER & BERMAN GENESIS ASSETS
---------------------------------
NEUBERGER & BERMAN GUARDIAN ASSETS
----------------------------------
NEUBERGER & BERMAN MANHATTAN ASSETS
-----------------------------------
NEUBERGER & BERMAN PARTNERS ASSETS
----------------------------------
FORM N-1A ITEM NO. CAPTION IN PART A PROSPECTUS
------------------ ----------------------------
Item 1. Cover Page Front Cover Page
Item 2. Synopsis Expense Information; Summary
Item 3. Condensed Financial Financial Highlights; Performance
Information Information
Item 4. General Description of Investment Programs; Description of
Registrant Investments; Special Information
Regarding Organization, Capitalization,
and Other Matters
Item 5. Management of the Fund Management and Administration;
Directory; Back Cover Page
Item 6. Capital Stock and Front Cover Page; Dividends, Other
Other Securities Distributions, and Taxes; Special
Information Organization,
Capitalization, and Other Matters
Item 7. Purchase of Securities Shareholder Services; Share Prices and
Being Offered Net Asset Value; Management and
Administration
Item 8. Redemption or Shareholder Services; Share Prices and
Repurchase Net Asset Value
Item 9. Pending Legal Not Applicable
Proceedings
<PAGE>
CAPTION IN PART B
FORM N-1A ITEM NO. STATEMENT OF ADDITIONAL INFORMATION
------------------ -----------------------------------
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information Organization
and History
Item 13. Investment Objectives Investment Information; Certain Risk
and Policies Considerations
Item 14. Management of the Fund Trustees and Officers
Item 15. Control Persons and Control Persons and Principal Holders
Principal Holders of of Securities
Securities
Item 16. Investment Advisory Investment Management and
and Other Services Administration Services; Trustees and
Officers; Distribution Arrangements;
Reports To Shareholders; Custodian and
Transfer Agent; Independent
Auditors/Accountants
Item 17 Brokerage Allocation Portfolio Transactions
Item 18. Capital Stock and Investment Information; Additional
Other Securities Redemption Information; Dividends and
Other Distributions
Item 19. Purchase and Redemption Additional Exchange Information;
Additional Redemption Information;
Distribution Arrangements
Item 20. Tax Status Dividends and Other Distributions;
Additional Tax Information
Item 21. Underwriters Investment Management and
Administration Services; Distribution
Arrangements
Item 22. Calculation of Performance Information
Performance Data
Item 23. Financial Statements Financial Statements
PART C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Post-Effective Amendment No. 8.
<PAGE>
<PAGE>
PROSPECTUS
- ---------------------------------------------------------
March 31, 1997
Neuberger&Berman
EQUITY ASSETS [SERVICE MARK]
Neuberger&Berman
FOCUS ASSETS
Neuberger&Berman
GENESIS ASSETS
Neuberger&Berman
GUARDIAN ASSETS
Neuberger&Berman
MANHATTAN ASSETS
Neuberger&Berman
PARTNERS ASSETS
No Redemption Fees
<PAGE>
Neuberger&Berman
EQUITY ASSETS
Equity Funds
- ----------------------------------------------------------------------
Neuberger&Berman FOCUS ASSETS Neuberger&Berman MANHATTAN ASSETS
Neuberger&Berman GENESIS ASSETS Neuberger&Berman PARTNERS ASSETS
Neuberger&Berman GUARDIAN ASSETS
YOU CAN BUY, OWN, AND SELL FUND SHARES ONLY THROUGH AN ACCOUNT WITH AN
ADMINISTRATOR, BROKER-DEALER, OR OTHER INSTITUTION THAT PROVIDES ACCOUNTING,
RECORDKEEPING, AND/OR OTHER SERVICES TO INVESTORS AND THAT HAS AN ADMINISTRATIVE
SERVICES AGREEMENT WITH NEUBERGER&BERMAN MANAGEMENT INCORPORATED ("N&B
MANAGEMENT") AND/OR AN AGREEMENT WITH N&B MANAGEMENT TO MAKE FUND SHARES
AVAILABLE TO ITS CLIENTS (EACH AN "INSTITUTION").
- ----------------------------------------------------------------------
Each of the above-named funds (a "Fund") invests all of its net investable
assets in its corresponding portfolio (a "Portfolio") of Equity Managers Trust
("Managers Trust"), an open-end management investment company managed by N&B
Management. Each Portfolio invests in securities in accordance with an
investment objective, policies, and limitations identical to those of its
corresponding Fund. The investment performance of each Fund directly corresponds
with the investment performance of its corresponding Portfolio. This
"master/feeder fund" structure is different from that of many other investment
companies which directly acquire and manage their own portfolios of securities.
For more information on this unique structure that you should consider, see
"Summary" on page 3, and "Special Information Regarding Organization,
Capitalization, and Other Matters" on page 23.
Please read this Prospectus before investing in any of the Funds and keep it
for future reference. It contains information about the Funds that a prospective
investor should know before investing. A Statement of Additional Information
("SAI") about the Funds and Portfolios, dated March 31, 1997, is on file with
the Securities and Exchange Commission ("SEC"). The SAI is incorporated herein
by reference (so it is legally considered a part of this Prospectus). You can
obtain a free copy of the SAI by calling N&B Management at 800-366-6264.
PROSPECTUS DATED MARCH 31, 1997
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY 3
The Funds and Portfolios;
Risk Factors 3
Management 5
The Neuberger&Berman Investment
Approach 5
EXPENSE INFORMATION 7
Shareholder Transaction Expenses for
Each Fund 7
Annual Fund Operating Expenses 7
Example 9
FINANCIAL HIGHLIGHTS 10
Selected Per Share Data and Ratios 10
Focus Assets 11
Guardian Assets 12
Manhattan Assets 13
Partners Assets 14
INVESTMENT PROGRAMS 16
Focus Portfolio 16
Genesis Portfolio 17
Guardian Portfolio 18
Manhattan Portfolio 18
Partners Portfolio 19
Short-Term Trading;
Portfolio Turnover 19
Borrowings 20
Other Investments 20
PERFORMANCE INFORMATION 21
Total Return Information 22
SPECIAL INFORMATION REGARDING
ORGANIZATION, CAPITALIZATION,
AND OTHER MATTERS 23
The Funds 23
The Portfolios 24
SHAREHOLDER SERVICES 26
How to Buy Shares 26
How to Sell Shares 26
Exchanging Shares 27
SHARE PRICES AND NET ASSET VALUE 28
DIVIDENDS, OTHER DISTRIBUTIONS,
AND TAXES 29
Distribution Options 29
Taxes 29
MANAGEMENT AND ADMINISTRATION 31
Trustees and Officers 31
Investment Manager, Administrator,
Distributor, and Sub-Adviser 31
Expenses 33
Transfer Agent 34
DESCRIPTION OF INVESTMENTS 35
USE OF JOINT PROSPECTUS AND
STATEMENT OF ADDITIONAL
INFORMATION 38
DIRECTORY 39
FUNDS ELIGIBLE FOR EXCHANGE 40
</TABLE>
<PAGE>
SUMMARY
The Funds and Portfolios; Risk Factors
- ----------------------------------------------------------------------
Each Fund is a series of Neuberger&Berman Equity Assets (the "Trust") and
invests in its corresponding Portfolio which, in turn, invests in securities in
accordance with an investment objective, policies, and limitations that are
identical to those of the Fund. This is sometimes called a master/feeder fund
structure, because each Fund "feeds" shareholders' investments into its
corresponding Portfolio, a "master" fund. The structure looks like this:
--------------------------
SHAREHOLDERS
--------------------------
BUY SHARES IN
--------------------------
FUNDS
--------------------------
INVEST IN
--------------------------
PORTFOLIOS
--------------------------
INVEST IN
--------------------------
STOCKS & OTHER SECURITIES
--------------------------
The trustees who oversee the Funds believe that this structure may benefit
shareholders; investment in a Portfolio by investors in addition to a Fund may
enable the Portfolio to achieve economies of scale that could reduce expenses.
For more information about the organization of the Funds and the Portfolios,
including certain features of the master/feeder fund structure, see "Special
Information Regarding Organization, Capitalization, and Other Matters" on page
23. An investment in any Fund involves certain risks, depending upon the types
of investments made by its corresponding Portfolio. For more details about each
Portfolio, its investments and their risks, see "Investment Programs" on page 16
and "Description of Investments" on page 35.
The following table is a summary highlighting features of the Funds and their
corresponding Portfolios. You may want to invest in a variety of Funds to fit
your particular investment needs. Of course, there can be no assurance that a
Fund will meet its investment objective.
3
<PAGE>
<TABLE>
<CAPTION>
NEUBERGER&BERMAN INVESTMENT PORTFOLIO
EQUITY ASSETS STYLE CHARACTERISTICS
- ------------------------------------------------------------------------------------
<S> <C> <C>
GUARDIAN ASSETS Broadly diversified, large-cap A growth and income fund that
value fund. invests primarily in stocks of
established, high-quality
companies that are not well
followed on Wall Street or are
temporarily out of favor.
FOCUS ASSETS Large-cap value fund, more Invests principally in common
concentrated portfolio than stocks selected from 13 multi-
Guardian. industry sectors of the
economy. To maximize potential
return, the Portfolio normally
makes at least 90% of its
investments in not more than
six sectors believed by the
portfolio managers to be
undervalued.
GENESIS ASSETS Broadly diversified, small-cap Invests primarily in stocks of
value fund. companies with small market
capitalizations (usually up to
$1.5 billion). Portfolio
manager seeks to buy the
stocks of strong companies
with a history of solid
performance and a proven
management team, which are
selling at attractive prices.
MANHATTAN ASSETS Broadly diversified, small-, Invests in securities believed
medium- and large-cap growth to have the maximum potential
fund. for long-term capital
appreciation. Portfolio
manager follows a "growth at a
reasonable price" philosophy
and searches for financially
sound, growing companies with
special competitive advantages
or products that make their
stocks attractive.
PARTNERS ASSETS Broadly diversified, medium-to Seeks capital growth through
large-cap value fund. an approach that is intended
to increase capital with
reasonable risk. Portfolio
managers look at fundamentals,
focusing particularly on cash
flow, return on capital, and
asset values.
</TABLE>
4
<PAGE>
Management
- ----------------------------------------------------------------------
N&B Management, with the assistance of Neuberger&Berman, LLC
("Neuberger&Berman") as sub-adviser, selects investments for the Portfolios. N&B
Management also provides administrative services to the Portfolios and the Funds
and acts as distributor of Fund shares. See "Management and Administration" on
page 31. If you want to know how to buy and sell shares of the Funds or exchange
them for shares of other Neuberger&Berman Funds-Registered Trademark- made
available through an Institution, see "Shareholder Services -- How to Buy
Shares" on page 26, "Shareholder Services -- How to Sell Shares" on page 26,
"Shareholder Services -- Exchanging Shares" on page 27, and the policies of the
Institution through which you are purchasing shares.
The Neuberger&Berman Investment Approach
- ----------------------------------------------------------------------
While each Portfolio has its own investment objective, policies, and
limitations, each Portfolio is managed using one of two basic investment
approaches -- value or growth.
A value-oriented portfolio manager buys stocks that are selling for less than
their perceived market values. These include stocks that are currently
under-researched or are temporarily out of favor on Wall Street.
Portfolio managers identify value stocks in several ways. One of the most
common identifiers is a low price-to-earnings ratio -- that is, stocks selling
at multiples of earnings per share that are lower than that of the market as a
whole. Other criteria are high dividend yield, a strong balance sheet and
financial position, a recent company restructuring with the potential to realize
hidden values, strong management, and low price-to-book value (net value of the
company's assets).
While a value approach concentrates on securities that are undervalued in
relation to their fundamental economic values, a growth approach seeks stocks of
companies that are projected to grow at above-average rates and may appear
poised for a period of accelerated earnings.
The growth portfolio manager is willing to pay a higher share price in the
hope that the stock's earnings momentum will carry its price higher. As a
stock's price increases based on strong earnings, the stock's original price
appears low in relation to the growth rate of its earnings. Sometimes this
happens when a particular company or industry is temporarily out of favor with
the market or under-researched. This strategy is called "growth at a reasonable
price."
Neuberger&Berman believes that, over time, securities that are undervalued
are more likely to appreciate in price and be subject to less risk of price
decline than securities whose market prices have already reached their perceived
economic values. This approach also contemplates selling portfolio securities
when they are considered to have reached their potential.
5
<PAGE>
In general, Neuberger&Berman FOCUS, Neuberger&Berman GENESIS,
Neuberger&Berman GUARDIAN, and Neuberger&Berman PARTNERS Portfolios adhere to a
value-oriented investment approach. Neuberger&Berman MANHATTAN Portfolio places
a greater emphasis on finding securities whose measures of fundamental value are
low in relation to the growth rates of their future earnings and cash flows, as
projected by the portfolio manager. Neuberger&Berman MANHATTAN Portfolio is
therefore willing to invest in securities with prices that have somewhat higher
multiples of earnings than securities likely to be purchased by other
Portfolios.
6
<PAGE>
EXPENSE INFORMATION
This section gives you certain information about the expenses of each Fund
and its corresponding Portfolio. See "Performance Information" for important
facts about the investment performance of each Fund, after taking expenses into
account.
Shareholder Transaction Expenses for Each Fund
- ----------------------------------------------------------------------
As shown by this table, the Funds impose no transaction charges when you buy
or sell Fund shares.
<TABLE>
<S> <C>
Sales Charge Imposed on Purchases NONE
Sales Charge Imposed on Reinvested Dividends NONE
Deferred Sales Charges NONE
Redemption Fees NONE
Exchange Fees NONE
</TABLE>
Annual Fund Operating Expenses
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------------------------------------------------
The following table shows anticipated annual operating expenses for each Fund
which are paid out of the assets of the Fund and which include the Fund's pro
rata portion of the operating expenses of its corresponding Portfolio ("Total
Operating Expenses"). "Total Operating Expenses" exclude interest, taxes,
brokerage commissions, and extraordinary expenses.
Each Fund pays N&B Management an administration fee based on the Fund's
average daily net assets. Each Portfolio pays N&B Management a management fee
based on the Portfolio's average daily net assets; a pro rata portion of this
fee is borne indirectly by the corresponding Fund. "Management and
Administration Fees" in the following table are based upon current
administration fees for each Fund and current management fees for its
corresponding Portfolio. For more information, see "Management and
Administration" and the SAI.
The Funds and Portfolios incur other expenses for things such as accounting
and legal fees, transfer agency fees, custodial fees, printing and furnishing
shareholder statements and Fund reports and compensating trustees who are not
affiliated with N&B Management ("Other Expenses"). "Other Expenses" in the
following table are estimated amounts for each Fund and its corresponding
Portfolio for the current fiscal year and assume average daily net assets of $25
million. There can be no assurance that any Fund will achieve that asset level.
All expenses are factored into the Funds' share prices and dividends and are not
charged directly to Fund shareholders.
7
<PAGE>
<TABLE>
<CAPTION>
OTHER TOTAL
MANAGEMENT AND 12B-1 EXPENSES OPERATING
NEUBERGER&BERMAN EQUITY ASSETS ADMINISTRATION FEES FEES (ESTIMATED) EXPENSES
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FOCUS ASSETS 0.85%* 0.25% 0.40% 1.50%*
GENESIS ASSETS 0.85%* 0.25% 0.40% 1.50%*
GUARDIAN ASSETS 0.84% 0.25% 0.36% 1.45%
MANHATTAN ASSETS 0.84%* 0.25% 0.41% 1.50%*
PARTNERS ASSETS 0.86% 0.25% 0.37% 1.48%
</TABLE>
*REFLECTS N&B MANAGEMENT'S EXPENSE REIMBURSEMENT UNDERTAKING AND WAIVER OF
CERTAIN MANAGEMENT FEES, DESCRIBED BELOW
The trustees of the Trust believe that investment in a Portfolio by investors
in addition to a Fund may enable the Portfolio to achieve economies of scale
which could reduce expenses. The expenses and, accordingly, the returns of other
funds that may invest in the Portfolios may differ from those of the Funds.
As set forth in "Expenses" on page 33, N&B Management has voluntarily
undertaken to reimburse each Fund for a portion of its Total Operating Expenses
and has voluntarily agreed to waive a portion of the management fee borne
directly by Neuberger&Berman GENESIS Portfolio. Absent the reimbursement,
Management and Administration Fees would be 0.89% and 0.93% per annum and Total
Operating Expenses would be 1.54% and 1.59% per annum of the average daily net
assets of Neuberger&Berman FOCUS Assets and Neuberger&Berman MANHATTAN Assets,
respectively. Absent the reimbursement and fee waiver, Management and
Administration Fees and Total Operating Expenses would be 1.23% and 1.88% per
annum, respectively, of the average daily net assets of Neuberger&Berman GENESIS
Assets.
Because the Funds pay 12b-1 fees, long-term investors in Fund shares may pay
more in distribution expenses than the economic equivalent of the maximum front-
end sales charge permitted by the National Association of Securities Dealers,
Inc. ("NASD").
For more information, see "Expenses" on page 33.
8
<PAGE>
Example
- ----------------------------------------------------------------------
To illustrate the effect of Total Operating Expenses, let's assume that each
Fund's annual return is 5% and that it had Total Operating Expenses described in
the table above. For every $1,000 you invested in each Fund, you would have paid
the following amounts of total expenses if you closed your account at the end of
each of the following time periods:
<TABLE>
<CAPTION>
NEUBERGER&BERMAN
EQUITY ASSETS 1 YEAR 3 YEARS
- -------------------------------------------------------------
<S> <C> <C>
FOCUS ASSETS $15 $47
GENESIS ASSETS $15 $47
GUARDIAN ASSETS $15 $46
MANHATTAN ASSETS $15 $47
PARTNERS ASSETS $15 $47
</TABLE>
The assumption in this example of a 5% annual return is required by
regulations of the SEC applicable to all mutual funds. THE INFORMATION IN THE
PREVIOUS TABLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR RATES OF RETURN; ACTUAL EXPENSES OR RETURNS MAY BE GREATER OR LESS
THAN THOSE SHOWN AND MAY CHANGE IF EXPENSE REIMBURSEMENTS CHANGE.
9
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
- ----------------------------------------------------------------------
The financial information in the following tables is for each Fund from the
commencement of its operations through February 28, 1997. Neuberger&Berman
PARTNERS Assets commenced operations on August 19, 1996. Information for
Neuberger&Berman PARTNERS Assets for the fiscal period ended August 31, 1996, is
from that Fund's annual report to shareholders and has been audited by the
Fund's independent auditors. The auditors' report with respect to
Neuberger&Berman PARTNERS Assets is incorporated in the SAI by reference to the
annual report. Information for each Fund (except Neuberger&Berman GENESIS
Assets, which had not commenced operations) for the period ended February 28,
1997, is from the Funds' semi-annual report to shareholders and has not been
audited by the Funds' respective independent auditors/accountants. You may
obtain, at no cost, further information about the performance of
Neuberger&Berman PARTNERS Assets in its annual report and information about the
performance of all of the Funds (except Neuberger& Berman GENESIS Assets) in
their semi-annual report. Please call 800-366-6264 for a free copy of the annual
or semi-annual report and for up-to-date information. Also, see "Performance
Information."
10
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Focus Assets
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
the period and other performance information derived from the Financial
Statements. The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of its corresponding
Portfolio's income and expenses. It should be read in conjunction with the
corresponding Portfolio's Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Period
from
September
4,
1996(1)
to
February
28,
1997
(UNAUDITED)
-------
<S> <C>
Net Asset Value, Beginning of Period $10.00
-------
Income From Investment Operations
Net Investment Income (Loss) (.03)
Net Gains or Losses on Securities
(both realized and unrealized) 2.21
-------
Total From Investment Operations 2.18
-------
Net Asset Value, End of Period $12.18
-------
Total Return(2)(3) +21.80%
-------
Ratios/Supplemental Data
Net Assets, End of Period (in
thousands) $121.8
-------
Ratio of Expenses to Average Net
Assets(4)(5) 1.50%
-------
Ratio of Net Investment Income
(Loss) to Average Net Assets(4)(5) (.38%)
-------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
11
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Guardian Assets
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
the period and other performance information derived from the Financial
Statements. The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of its corresponding
Portfolio's income and expenses. It should be read in conjunction with the
corresponding Portfolio's Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Period
from
September
4,
1996(1)
to
February
28,
1997
(UNAUDITED)
---------
<S> <C>
Net Asset Value, Beginning of Period $ 10.00
---------
Income From Investment Operations
Net Investment Income --
Net Gains or Losses on Securities
(both realized and unrealized) 2.01
---------
Total From Investment Operations 2.01
---------
Less Distributions
Dividends (from net investment
income) (.01)
---------
Net Asset Value, End of Period $ 12.00
---------
Total Return(2)(3) +20.10%
---------
Ratios/Supplemental Data
Net Assets, End of Period (in
thousands) $1,676.8
---------
Ratio of Expenses to Average Net
Assets(4)(5) 1.50%
---------
Ratio of Net Investment Income
(Loss) to Average Net Assets(4)(5) (.16%)
---------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
12
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Manhattan Assets
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
the period and other performance information derived from the Financial
Statements. The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of its corresponding
Portfolio's income and expenses. It should be read in conjunction with the
corresponding Portfolio's Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Period
from
September
4,
1996(1)
to
February
28,
1997
(UNAUDITED)
-------
<S> <C>
Net Asset Value, Beginning of Period $10.00
-------
Income From Investment Operations
Net Investment Income (Loss) (.05)
Net Gains or Losses on Securities
(both realized and unrealized) 2.13
-------
Total From Investment Operations 2.08
-------
Less Distributions
Distributions (from net capital
gains) (.11)
-------
Net Asset Value, End of Period $11.97
-------
Total Return(2)(3) +20.88%
-------
Ratios/Supplemental Data
Net Assets, End of Period (in
thousands) $120.9
-------
Ratio of Expenses to Average Net
Assets(4)(5) 1.50%
-------
Ratio of Net Investment Income
(Loss) to Average Net Assets(4)(5) (.88%)
-------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
13
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Partners Assets
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements. The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of its corresponding
Portfolio's income and expenses. It should be read in conjunction with the
corresponding Portfolio's Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Period
from
Six August
Months 19,
Ended 1996(1)
February to
28, August
1997 31,
(UNAUDITED) 1996
-------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 9.91 $10.00
-------------------
Income From Investment Operations
Net Investment Income .01 --
Net Gains or Losses on Securities
(both realized and unrealized) 2.28 (.09)
-------------------
Total From Investment Operations 2.29 (.09)
-------------------
Less Distributions
Dividends (from net investment
income) (.01) --
Distributions (from net capital
gains) (.05) --
-------------------
Total Distributions (.06) --
-------------------
Net Asset Value, End of Period $12.14 $ 9.91
-------------------
Total Return(2)(3) +23.14% -0.90%
-------------------
Ratios/Supplemental Data
Net Assets, End of Period (in
thousands) $612.1 $103.5
-------------------
Ratio of Expenses to Average Net
Assets(4)(5) 1.50% 1.50%
-------------------
Ratio of Net Investment Income to
Average Net Assets(4)(5) .05% 2.38%
-------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
14
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
1)The date investment operations commenced.
2)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
N&B Management had not reimbursed certain expenses.
3)Not annualized.
4)After reimbursement of expenses by N&B Management. Had N&B Management
not undertaken such action the annualized ratios of expenses and net
investment income to average daily net assets would have been higher and
lower, respectively.
5)Annualized.
6)Because each Fund invests only in its corresponding Portfolio and that
Portfolio (rather than the Fund) engages in securities transactions, no Fund
calculates a portfolio turnover rate or pays any brokerage commissions. For
the year ended August 31, 1996, the portfolio turnover rate for
Neuberger&Berman PARTNERS Portfolio was 96%, and the average commission rate
paid by that Portfolio was $0.0494. For the six months ended February 28,
1997, the portfolio turnover rates (not annualized) for and average commission
rates paid by each Portfolio were as follows:
<TABLE>
<CAPTION>
PORTFOLIO AVERAGE
TURNOVER RATE COMMISSION RATE
- ----------------------------------------------------------------------------------
<S> <C> <C>
Neuberger&Berman FOCUS Portfolio 42% $0.0569
Neuberger&Berman GUARDIAN Portfolio 20% $0.0538
Neuberger&Berman MANHATTAN Portfolio 22% $0.0587
Neuberger&Berman PARTNERS Portfolio 33% $0.0480
</TABLE>
For additional information, see the SAI.
15
<PAGE>
INVESTMENT PROGRAMS
The investment policies and limitations of each Fund are identical to those
of its corresponding Portfolio. Each Fund invests only in its corresponding
Portfolio. Therefore, the following shows you the kinds of securities in which
each Portfolio invests. For an explanation of some types of investments, see
"Description of Investments" on page 35.
Investment policies and limitations of the Funds and Portfolios are not
fundamental unless otherwise specified in this Prospectus or the SAI.
Fundamental policies may not be changed without shareholder approval. A
non-fundamental policy or limitation may be changed by the trustees of the Trust
or of Managers Trust without shareholder approval.
The investment objectives of the Funds and Portfolios are not fundamental.
There can be no assurance that the Funds or Portfolios will achieve their
objectives. Each Fund, by itself, does not represent a comprehensive investment
program.
Additional investment techniques, features, and limitations concerning the
Portfolios' investment programs are described in the SAI.
Neuberger&Berman Focus Portfolio
- ----------------------------------------------------------------------
The investment objective of Neuberger&Berman FOCUS Portfolio and
Neuberger&Berman FOCUS Assets is to seek long-term capital appreciation.
Neuberger&Berman FOCUS Portfolio invests principally in common stocks
selected from the following 13 multi-industry sectors of the economy:
/ / Autos & Housing / / Health Care / / Technology
/ / Consumer Goods & Services / / Heavy Industry / / Transportation
/ / Defense & Aerospace / / Machinery & Equipment / / Utilities
/ / Energy / / Media & Entertainment
/ / Financial Services / / Retailing
To maximize potential return, the Portfolio normally makes at least 90% of
its investments in not more than six sectors it identifies as undervalued. Where
a particular industry may fall within more than one sector, N&B Management uses
its judgment and experience to determine the placement of that industry within a
sector. The Portfolio uses the value-oriented investment approach to identify
stocks believed to be undervalued, including stocks that are temporarily out of
favor in the market. The Portfolio then focuses its investments in the sectors
in which the undervalued stocks are clustered. These sectors are believed to
offer the greatest potential for capital growth. This investment approach is
different from that of most other mutual funds that emphasize sector investment.
Those funds either invest in only a single economic sector or choose a number of
sectors by analyzing general economic trends. Further information on the
Portfolio's securities holdings and their allocation by sector as of
16
<PAGE>
the end of the Fund's most recent fiscal period is included in the Fund's
semi-annual report to shareholders, which is available at no cost upon request.
The sectors are more fully described in the SAI.
The Portfolio may be affected more by any single economic, political, or
regulatory development than a more diversified mutual fund. The risk of decline
in the Portfolio's asset value due to an adverse development may be partially
offset by the value-oriented investment approach. To further reduce this risk,
the Portfolio may not purchase any security if, as a result, (1) more than 50%
of its total assets would be invested in any one sector, (2) 25% or more of its
total assets would be invested in the securities of companies having their
principal business activities in any one industry (this policy is fundamental)
or (3) more than 5% of its total assets would be invested in the securities of
any one company.
Neuberger&Berman Genesis Portfolio
- ----------------------------------------------------------------------
The investment objective of Neuberger&Berman GENESIS Portfolio and
Neuberger&Berman GENESIS Assets is to seek capital appreciation.
Neuberger&Berman GENESIS Portfolio invests primarily in common stocks of
companies with small market capitalizations ("small-cap companies"). Market
capitalization means the total market value of a company's outstanding common
stock. The Portfolio regards companies with market capitalizations of up to $1.5
billion at the time of the Portfolio's investment as small-cap companies.
Companies whose market capitalizations exceed $1.5 billion after purchase
continue to be considered small-cap companies for purposes of the Portfolio's
investment policies. There is no necessary correlation between market
capitalization and the financial attributes -- such as levels of assets,
revenues, or income -- commonly used to measure the size of a company.
Studies indicate that the market values of small-cap company stocks, such as
those included in the Russell 2000 Index and the Wilshire 1750 Index or quoted
on Nasdaq, have a cyclical relationship with larger capitalization stocks. Over
the last 30 years, small-cap company stocks have outperformed larger
capitalization stocks about two-thirds of the time, even though small-cap stocks
have usually declined more than larger capitalization stocks in declining
markets. There can be no assurance that this pattern will continue.
Small-cap company stocks generally are considered to offer greater potential
for appreciation than securities of companies with larger market
capitalizations. Most small-cap company stocks pay low or no dividends, and the
Portfolio seeks long-term appreciation, rather than income. Small-cap company
stocks also have higher risk and volatility, because most are not as broadly
traded as stocks of companies with larger capitalizations and their prices thus
may fluctuate more widely and abruptly. Small-cap company securities are also
less researched and often overlooked and undervalued in the market.
17
<PAGE>
The Portfolio tries to enhance the potential for appreciation and limit the
risk of decline in the value of its securities by employing the value-oriented
investment approach. The Portfolio seeks securities that appear to be
underpriced and are issued by companies with proven management, sound finances,
and strong potential for market growth. To reduce risk, the Portfolio
diversifies its holdings among many companies and industries. The Portfolio
focuses on the fundamentals of each small-cap company, instead of trying to
anticipate what changes might occur in the stock market, the economy, or the
political environment. This approach differs from that used by many other funds
investing in small-cap company stocks. Those funds often buy stocks of companies
they believe will have above-average earnings growth, based on anticipated
future developments. In contrast, the Portfolio's securities are generally
selected with the belief that they are currently undervalued, based on EXISTING
conditions.
Neuberger&Berman Guardian Portfolio
- ----------------------------------------------------------------------
The investment objective of Neuberger&Berman GUARDIAN Portfolio and
Neuberger&Berman GUARDIAN Assets is to seek capital appreciation and,
secondarily, current income.
Neuberger&Berman GUARDIAN Portfolio invests primarily in common stocks of
long-established, high-quality companies. The Portfolio uses the value-oriented
investment approach in selecting securities. Thus, N&B Management looks for such
factors as low price-to-earnings ratios, strong balance sheets, solid
managements, and consistent earnings.
Neuberger&Berman GUARDIAN Fund, a mutual fund administered by N&B Management
that also invests all of its net investable assets in Neuberger&Berman GUARDIAN
Portfolio, has paid its shareholders an income dividend every quarter and a
capital gain distribution every year since its inception in 1950. Of course,
this past record does not necessarily predict the Fund's future practices.
Neuberger&Berman Manhattan Portfolio
- ----------------------------------------------------------------------
The investment objective of Neuberger&Berman MANHATTAN Portfolio and
Neuberger&Berman MANHATTAN Assets is to seek capital appreciation without regard
to income.
Neuberger&Berman MANHATTAN Portfolio generally invests in securities of
small-, medium- and large-capitalization companies believed to have the maximum
potential for long-term capital appreciation. It does not seek to invest in
securities that pay dividends or interest, and any such income is incidental.
The Portfolio uses a "growth at a reasonable price" investment approach. When
N&B Management believes that particular securities have greater potential for
long-term capital appreciation, the Portfolio may purchase such securities at
prices with
18
<PAGE>
relatively higher multiples to measures of economic value (such as earnings or
cash flow) than securities likely to be purchased by other Portfolios. The
Portfolio focuses on companies with strong balance sheets and reasonable
valuations relative to their growth rates. It also diversifies its investments
among many companies and industries.
The Portfolio's growth investment program involves greater risks and share
price volatility than programs that invest in more undervalued securities.
Small-cap company stocks are subject to the risks described with respect to the
investment program of Neuberger&Berman GENESIS Portfolio. Moreover, the
Portfolio does not follow a policy of active trading for short-term profits.
Accordingly, the Portfolio may be more appropriate for investors with a
longer-range perspective.
Neuberger&Berman Partners Portfolio
- ----------------------------------------------------------------------
The investment objective of Neuberger&Berman PARTNERS Portfolio and
Neuberger&Berman PARTNERS Assets is to seek capital growth.
Neuberger&Berman PARTNERS Portfolio invests principally in common stocks of
medium- to large-capitalization established companies, using the value-oriented
investment approach. The Portfolio seeks capital growth through an investment
approach that is designed to increase capital with reasonable risk. N&B
Management looks for securities believed to be undervalued based on strong
fundamentals, including a low price-to-earnings ratio, consistent cash flow, and
the company's track record through all parts of the market cycle.
The Portfolio considers additional factors when selecting securities,
including ownership by a company's management of the company's stock and the
dominance of a company in its particular field.
Short-Term Trading; Portfolio Turnover
- ----------------------------------------------------------------------
Although none of the Portfolios purchases securities with the intention of
profiting from short-term trading, each Portfolio may sell portfolio securities
when N&B Management believes that such action is advisable. It is anticipated
that the annual turnover rate of Neuberger&Berman MANHATTAN Portfolio and of
Neuberger& Berman PARTNERS Portfolio may exceed 100% in some fiscal years.
Turnover rates in excess of 100% generally result in higher transaction costs
(which are borne directly by the Portfolio) and a possible increase in realized
short-term capital gains or losses. See "Dividends, Other Distributions, and
Taxes" on page 29 and the SAI.
19
<PAGE>
Borrowings
- ----------------------------------------------------------------------
Each Portfolio has a fundamental policy that it may not borrow money, except
that it may (1) borrow money from banks for temporary or emergency purposes and
not for leveraging or investment and (2) enter into reverse repurchase
agreements for any purpose, so long as the aggregate amount of borrowings and
reverse repurchase agreements does not exceed one-third of the Portfolio's total
assets (including the amount borrowed) less liabilities (other than borrowings).
None of the Portfolios expects to borrow money or to enter into reverse
repurchase agreements. As a non-fundamental policy, none of the Portfolios may
purchase portfolio securities if its outstanding borrowings, including reverse
repurchase agreements, exceed 5% of its total assets.
Other Investments
- ----------------------------------------------------------------------
For temporary defensive purposes, each Portfolio may invest up to 100% of its
total assets in cash and cash equivalents, U.S. Government and Agency
Securities, commercial paper and certain other money market instruments, as well
as repurchase agreements collateralized by the foregoing.
20
<PAGE>
PERFORMANCE INFORMATION
The performance of the Funds is commonly measured as TOTAL RETURN. TOTAL
RETURN is the change in value of an investment in a fund over a particular
period, assuming that all distributions have been reinvested. Thus, total return
reflects dividends, other distributions, and variations in share prices from the
beginning to the end of a period.
An average annual total return is a hypothetical rate of return that, if
achieved annually, would result in the same cumulative total return as was
actually achieved for the period. This smooths out year-to-year variations in
actual performance. Past results do not, of course, guarantee future
performance. Share prices may vary, and your shares when redeemed may be worth
more or less than your original purchase price.
The Funds commenced operations in August or September 1996, except for
Neuberger&Berman GENESIS Assets, which has no past performance as of the date of
this Prospectus. However, five mutual funds that are series of Neuberger&Berman
Equity Funds-Registered Trademark- ("N&B Equity Funds"), each of which has a
name similar to a Fund and the same investment objective, policies, and
limitations as that Fund ("Sister Fund"), also invest in the five Portfolios
described herein. The following table shows the average annual total returns of
each Fund for the 1-year, 5-year, and 10-year periods ended February 28, 1997.
Returns for periods prior to each Fund's inception represent the performance of
the respective Sister Fund. The table also shows a comparison with the S&P "500"
Index for each Fund and its respective Sister Fund (except Neuberger&Berman
GENESIS Assets' Sister Fund, which is compared with the Russell 2000 Index). The
S&P "500" Index is the Standard & Poor's 500 Composite Stock Price Index, an
unmanaged index generally considered to be representative of overall stock
market activity. The Russell 2000 is an unmanaged index of the securities of the
2,000 issuers having the smallest capitalization in the Russell 3000 Index,
representing about 11% of the Russell 3000's total market capitalization. Please
note that indices do not take into account any fees or expenses of investing in
the individual securities they track. Further information regarding the Funds'
performance is presented in their semi-annual report to shareholders, which is
available without charge by calling 800-366-6264.
21
<PAGE>
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS
ENDED FEBRUARY 28, 1997
(INCLUDES PERFORMANCE RESULTS OF THE SISTER FUNDS)
<TABLE>
<CAPTION>
10 SINCE INCEPTION
1 YEAR 5 YEARS YEARS INCEPTION DATE
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOCUS +20.82% +18.18% +14.05% +12.13% 10/19/55
GUARDIAN +20.51 +16.87 +14.04 +13.21 6/1/50
MANHATTAN +12.72 +14.08 +11.52 +17.08 3/1/79+
PARTNERS +25.36 +17.66 +13.70 +18.18 1/20/75+
S&P "500" +26.19 +16.95 +14.15 N/A N/A
GENESIS* +24.73 +14.28 N/A +14.28 9/27/88
RUSSELL 2000 +12.56 +13.09 N/A N/A N/A
</TABLE>
+THE DATES WHEN N&B MANAGEMENT BECAME INVESTMENT ADVISER TO THE SISTER FUNDS.
*PERFORMANCE RESULTS OF THE SISTER FUND ONLY.
The Sister Funds have a different fee structure than the Funds and do not pay
12b-1 fees. Had the higher fees of the Funds been reflected, the total returns
for periods prior to the Funds' inceptions would have been lower. Had N&B
Management not reimbursed certain expenses or waived certain fees, the total
returns of the Funds would have been lower. Prior to November 1991, the
investment policies of Neuberger&Berman FOCUS Assets' 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 might have been achieved had the Fund's current
policies been in effect during that period.
The following table lets you take a closer look at how each Sister Fund
performed year by year, in terms of an annual per share total return for each of
the last ten calendar years (ending December 31). Please note that the previous
chart reflects information for periods ended on February 28, 1997.
TOTAL RETURNS FOR CALENDAR YEARS ENDED DECEMBER 31
(PERFORMANCE RESULTS OF THE SISTER FUNDS)
<TABLE>
<CAPTION>
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996*
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOCUS +0.6% +16.5% +29.8% -5.9% +24.7% +21.1% +16.3% +0.9% +36.2% +16.10%
GUARDIAN -1.0 +28.0 +21.5 -4.7 +34.3 +19.0 +14.5 +0.6 +32.1 +17.69
MANHATTAN +0.4 +18.3 +29.1 -8.1 +30.9 +17.8 +10.0 -3.6 +31.0 +9.60
PARTNERS +4.3 +15.5 +22.8 -5.1 +22.4 +17.5 +16.5 -1.9 +35.2 +26.37
S&P "500" +5.2 +16.5 +31.6 -3.1 +30.3 +7.6 +10.0 +1.4 +37.5 +22.90
GENESIS N/A N/A +17.3 -16.2 +41.6 +15.6 +13.9 -1.8 +27.3 +29.96
RUSSELL 2000 N/A N/A +16.3 -19.5 +46.0 +18.4 +18.9 -1.8 +28.5 +16.59
</TABLE>
*INCLUDES PERFORMANCE RESULTS OF THE FUNDS (EXCEPT FOR NEUBERGER&BERMAN GENESIS
ASSETS) FOR PERIODS FOLLOWING THEIR INCEPTIONS.
TOTAL RETURN INFORMATION. You can obtain current performance information
about each Fund by calling N&B Management at 800-366-6264.
22
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Funds
- ----------------------------------------------------------------------
Each Fund is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated as of October 18, 1993. The Trust
is registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has six separate series. Each Fund invests all of its net
investable assets in its corresponding Portfolio, in each case receiving a
beneficial interest in that Portfolio. The trustees of the Trust may establish
additional series or classes of shares without the approval of shareholders. The
assets of each series belong only to that series, and the liabilities of each
series are borne solely by that series and no other.
DESCRIPTION OF SHARES. Each Fund is authorized to issue an unlimited number
of shares of beneficial interest (par value $0.001 per share). Shares of each
Fund represent equal proportionate interests in the assets of that Fund only and
have identical voting, dividend, redemption, liquidation, and other rights. All
shares issued are fully paid and non-assessable, and shareholders have no
preemptive or other rights to subscribe to any additional shares.
SHAREHOLDER MEETINGS. The trustees of the Trust do not intend to hold annual
meetings of shareholders of the Funds. The trustees will call special meetings
of shareholders of a Fund only if required under the 1940 Act or in their
discretion or upon the written request of holders of 10% or more of the
outstanding shares of that Fund entitled to vote.
CERTAIN PROVISIONS OF TRUST INSTRUMENT. Under Delaware law, the shareholders
of a Fund will not be personally liable for the obligations of any Fund; a
shareholder is entitled to the same limitation of personal liability extended to
shareholders of a corporation. To guard against the risk that Delaware law might
not be applied in other states, the Trust Instrument requires that every written
obligation of the Trust or a Fund contain a statement that such obligation may
be enforced only against the assets of the Trust or Fund and provides for
indemnification out of Trust or Fund property of any shareholder nevertheless
held personally liable for Trust or Fund obligations, respectively.
OTHER. Because Fund shares can be bought, owned and sold only through an
account with an Institution, a client of an Institution may be unable to
purchase additional shares and/or may be required to redeem shares (and possibly
incur a tax liability) if the client no longer has a relationship with the
Institution or if the Institution no longer has a contract with N&B Management
to perform services. Depending on the policies of the Institutions involved, an
investor may be able to transfer an account from one Institution to another.
23
<PAGE>
The Portfolios
- ----------------------------------------------------------------------
Each Portfolio is a separate operating series of Managers Trust, a New York
common law trust organized as of December 1, 1992. Managers Trust is registered
under the 1940 Act as a diversified, open-end management investment company.
Managers Trust has six separate Portfolios. The assets of each Portfolio belong
only to that Portfolio, and the liabilities of each Portfolio are borne solely
by that Portfolio and no other.
FUNDS' INVESTMENTS IN PORTFOLIOS. Each Fund is a "feeder fund" that seeks to
achieve its investment objective by investing all of its net investable assets
in its corresponding Portfolio, which is a "master fund." The Portfolio, which
has the same investment objective, policies, and limitations as the Fund, in
turn invests in securities; its corresponding Fund thus acquires an indirect
interest in those securities. This "master/feeder fund" structure is depicted in
the "Summary" on page 3.
Each Fund's investment in its corresponding Portfolio is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in a Portfolio. The five Sister Funds that are series
of N&B Equity Funds and five mutual funds that are series of Neuberger&Berman
Equity Trust-Registered Trademark- ("N&B Equity Trust") invest all of their
respective net investable assets in five corresponding Portfolios of Managers
Trust. The shares of each series of N&B Equity Funds (but not of N&B Equity
Trust) are available for purchase by members of the general public.
Each Portfolio may also permit other investment companies and/or other
institutional investors to invest in the Portfolio. All investors will invest in
a Portfolio on the same terms and conditions as a Fund and will pay a
proportionate share of the Portfolio's expenses. The Trust does not sell its
shares directly to members of the general public. Other investors in a Portfolio
(including the series of N&B Equity Funds and N&B Equity Trust) are not required
to sell their shares at the same public offering price as a Fund, could have a
different administration fee and expenses than a Fund, and (except N&B Equity
Funds and N&B Equity Trust) might charge a sales commission. Therefore, Fund
shareholders may have different returns than shareholders in another investment
company that invests exclusively in the Portfolio. Information regarding any
fund that may invest in a Portfolio in the future will be available from N&B
Management by calling 800-366-6264.
The trustees of the Trust believe that investment in a Portfolio by a series
of N&B Equity Funds or N&B Equity Trust or by other potential investors in
addition to a Fund may enable the Portfolio to realize economies of scale that
could reduce its operating expenses, thereby producing higher returns and
benefitting all shareholders. However, a Fund's investment in its corresponding
Portfolio may be affected by the actions of other large investors in the
Portfolio, if any. For example, if a large investor in a Portfolio (other than a
Fund) redeemed its interest in the Portfolio, the Portfolio's remaining
investors (including the Fund) might, as a result, experience higher pro rata
operating expenses, thereby producing lower returns.
24
<PAGE>
Each Fund may withdraw its entire investment from its corresponding Portfolio
at any time, if the trustees of the Trust determine that it is in the best
interests of the Fund and its shareholders to do so. A Fund might withdraw, for
example, if there were other investors in a Portfolio with power to, and who did
by a vote of all investors (including the Fund), change the investment
objective, policies, or limitations of the Portfolio in a manner not acceptable
to the trustees of the Trust. A withdrawal could result in a distribution in
kind of portfolio securities (as opposed to a cash distribution) by the
Portfolio to the Fund. That distribution could result in a less diversified
portfolio of investments for the Fund and could affect adversely the liquidity
of the Fund's investment portfolio. If the Fund decided to convert those
securities to cash, it usually would incur brokerage fees or other transaction
costs. If a Fund withdrew its investment from a Portfolio, the trustees of the
Trust would consider what actions might be taken, including the investment of
all of the Fund's net investable assets in another pooled investment entity
having substantially the same investment objective as the Fund or the retention
by the Fund of its own investment manager to manage its assets in accordance
with its investment objective, policies, and limitations. The inability of the
Fund to find a suitable replacement could have a significant impact on
shareholders.
INVESTOR MEETINGS AND VOTING. Each Portfolio normally will not hold meetings
of investors except as required by the 1940 Act. Each investor in a Portfolio
will be entitled to vote in proportion to its relative beneficial interest in
the Portfolio. On most issues subjected to a vote of investors, a Fund will
solicit proxies from its shareholders and will vote its interest in the
Portfolio in proportion to the votes cast by the Fund's shareholders. If there
are other investors in a Portfolio, there can be no assurance that any issue
that receives a majority of the votes cast by Fund shareholders will receive a
majority of votes cast by all Portfolio investors; indeed, if other investors
hold a majority interest in a Portfolio, they could have voting control of the
Portfolio.
CERTAIN PROVISIONS. Each investor in a Portfolio, including a Fund, will be
liable for all obligations of the Portfolio. However, the risk of an investor in
a Portfolio incurring financial loss beyond the amount of its investment on
account of such liability would be limited to circumstances in which the
Portfolio had inadequate insurance and was unable to meet its obligations out of
its assets. Upon liquidation of a Portfolio, investors would be entitled to
share pro rata in the net assets of the Portfolio available for distribution to
investors.
25
<PAGE>
SHAREHOLDER SERVICES
How to Buy Shares
- ----------------------------------------------------------------------
YOU CAN BUY AND OWN FUND SHARES ONLY THROUGH AN ACCOUNT WITH AN INSTITUTION.
N&B Management and the Funds do not recommend, endorse, or receive payments from
any Institution. N&B Management compensates Institutions for services they
provide in connection with investments in the Funds. N&B Management does not
provide investment advice to any Institution or its clients or make decisions
regarding their investments.
Each Institution will establish its own procedures for the purchase of Fund
shares, including minimum initial and additional investments for shares of each
Fund and the acceptable methods of payment for shares. Shares are purchased at
the next price calculated on a day the New York Stock Exchange ("NYSE") is open,
after a purchase order is received and accepted by an Institution. Prices for
shares of all Funds are usually calculated as of 4 p.m. Eastern time. An
Institution may be closed on days when the NYSE is open. As a result, prices for
Fund shares may be significantly affected on days when an investor has no access
to that Institution to buy shares.
Other Information:
/ / An Institution must pay for shares it purchases on its clients' behalf in
U.S. dollars.
/ / Each Fund has the right to suspend the offering of its shares for a
period of time. Each Fund also has the right to accept or reject a
purchase order in its sole
discretion, including certain purchase orders using an exchange of shares.
See "Shareholder Services -- Exchanging Shares."
/ / The Funds do not issue certificates for shares.
/ / Some Institutions may charge their clients a fee in connection with
purchases of shares of the Funds.
How to Sell Shares
- ----------------------------------------------------------------------
You can sell (redeem) all or some of your Fund shares only through an account
with an Institution. Each Institution will establish its own procedures for the
sale of Fund shares and the payment of redemption proceeds. Shares are sold at
the next price calculated on a day the NYSE is open, after a sales order is
received and accepted by an Institution. Prices for shares of all Funds are
usually calculated as of 4 p.m. Eastern time. An Institution may be closed on
days when the NYSE is open. As a result, prices for Fund shares may be
significantly affected on days when an investor has no access to that
Institution to sell shares.
26
<PAGE>
Other Information:
/ / Redemption proceeds will be paid to Institutions as agreed with N&B
Management, but in any case within three business days (under unusual
circumstances a Fund may take longer, as permitted by law). An
Institution may not follow the same procedures for payment of redemption
proceeds to its clients.
/ / Each Fund may suspend redemptions or postpone payments on days when the
NYSE is closed (besides weekends and holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.
/ / Some Institutions may charge their clients a fee in connection with
redemptions of shares of the Funds.
Exchanging Shares
- ----------------------------------------------------------------------
Through an account with an Institution, you may be able to exchange shares of
a Fund for shares of another Fund described in this Prospectus. Each Institution
will establish its own exchange policy and procedures. Shares are exchanged at
the next price calculated on a day the NYSE is open, after an exchange order is
received and accepted by an Institution.
/ / Shares can be exchanged ONLY between accounts registered in the same
name, address, and taxpayer ID number of the Institution.
/ / An exchange can be made only into a Fund whose shares are eligible for
sale in the state where the Institution is located.
/ / An exchange may have tax consequences.
/ / Each Fund may refuse any exchange orders from any Institution if, for any
reason, they are deemed not to be in the best interests of the Fund and
its shareholders.
/ / Each Fund may impose other restrictions on the exchange privilege, or
modify or terminate the privilege, but will try to give each Institution
advance notice whenever it can reasonably do so.
27
<PAGE>
SHARE PRICES AND NET ASSET VALUE
Each Fund's shares are bought or sold at a price that is the Fund's net asset
value ("NAV") per share. The NAVs for each Fund and its corresponding Portfolio
are calculated by subtracting liabilities from total assets (in the case of a
Portfolio, the market value of the securities the Portfolio holds plus cash and
other assets; in the case of a Fund, its percentage interest in its
corresponding Portfolio, multiplied by the Portfolio's NAV, plus any other
assets). Each Fund's per share NAV is calculated by dividing its NAV by the
number of Fund shares outstanding and rounding the result to the nearest full
cent. Each Fund and its corresponding Portfolio calculate their NAVs as of the
close of regular trading on the NYSE, usually 4 p.m. Eastern time, on each day
the NYSE is open.
Each Portfolio values securities (including options) listed on the NYSE, the
American Stock Exchange, or other national securities exchanges or quoted on
Nasdaq, and other securities for which market quotations are readily available,
at the last sale price on the day the securities are being valued. If there is
no reported sale of such a security on that day, the security is valued at the
mean between its closing bid and asked prices on that day. The Portfolios value
all other securities and assets, including restricted securities, by a method
that the trustees of Managers Trust believe accurately reflects fair value.
28
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS,
AND TAXES
Each Fund distributes, normally in December, substantially all of its share
of any net investment income (net of the Fund's expenses), any net capital gains
from investment transactions, and any net gains from foreign currency
transactions earned or realized by its corresponding Portfolio. In addition,
Neuberger&Berman GUARDIAN Assets distributes substantially all of its share of
Neuberger&Berman GUARDIAN Portfolio's net investment income, if more than a DE
MINIMIS amount, near the end of each calendar quarter.
Distribution Options
- ----------------------------------------------------------------------
REINVESTMENT IN SHARES. All dividends and other distributions paid on shares
of a Fund are automatically reinvested in additional shares of that Fund, unless
an Institution elects to receive them in cash. Dividends and other distributions
are reinvested at the Fund's per share NAV, usually as of the date the dividend
or other distribution is payable.
DISTRIBUTIONS IN CASH. An Institution may elect to receive dividends in
cash, with other distributions being reinvested in additional Fund shares, or to
receive all dividends and other distributions in cash.
Taxes
- ----------------------------------------------------------------------
An investment has certain tax consequences, depending on the type of account.
FOR AN ACCOUNT UNDER A QUALIFIED RETIREMENT PLAN OR AN INDIVIDUAL RETIREMENT
ACCOUNT, TAXES ARE DEFERRED.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax and
may also be subject to state and local income taxes. Distributions are taxable
when they are paid, whether in cash or by reinvestment in additional Fund
shares, except that distributions declared in December to shareholders of record
on a date in that month and paid in the following January are taxable as if they
were paid on December 31 of the year in which the distributions were declared.
Investors who buy Fund shares just before a Fund deducts a dividend or other
distribution from its NAV will pay the full price for the shares and then
receive a portion of the price back in the form of a taxable distribution.
Investors who are considering the purchase of Fund shares in December (or, in
the case of Neuberger&Berman GUARDIAN Assets, near the end of a calendar
quarter) should take this into account.
For federal income tax purposes, dividends and distributions of net
short-term capital gain and net gains from certain foreign currency transactions
are taxed as ordinary income. Distributions of net capital gain (the excess of
net long-term capital gain over net short-term capital loss), when designated as
such, are generally taxed as
29
<PAGE>
long-term capital gain, no matter how long an investor has owned Fund shares.
Distributions of net capital gain may include gains from the sale of portfolio
securities that appreciated in value before an investor bought Fund shares.
Every January, each Fund will send each Institution that is a shareholder
therein a statement showing the amount of distributions paid in cash or
reinvested in Fund shares for the previous year. Information accompanying that
statement will show the portion, if any, of those distributions that generally
are not subject to state and local income taxes.
TAXES ON REDEMPTIONS. Capital gains realized on redemptions of Fund shares,
including redemptions in connection with exchanges to other Funds, are subject
to tax. A capital gain or loss is the difference between the amount paid for
shares (including the amount of any dividends and other distributions that were
reinvested) and the amount received when shares are sold.
When an Institution sells shares, it will receive a confirmation statement
showing the number of shares sold and the price.
OTHER. Every January, Institutions will receive a consolidated transaction
statement for the previous year. Each Institution is required annually to send
investors in its accounts statements showing distribution and transaction
information for the previous year.
Each Fund intends to qualify for treatment as a regulated investment company
for federal income tax purposes so that it will be relieved of federal income
tax on that part of its taxable income and realized gains that it distributes to
its shareholders.
The foregoing is only a summary of some of the important income tax
considerations affecting each Fund and its shareholders. See the SAI for
additional tax information. There may be other federal, state, local, or foreign
tax considerations applicable to a particular investor. Therefore, investors
should consult their tax advisers.
30
<PAGE>
MANAGEMENT AND ADMINISTRATION
Trustees and Officers
- ----------------------------------------------------------------------
The trustees of the Trust and the trustees of Managers Trust, who are
currently the same individuals, have oversight responsibility for the operations
of each Fund and each Portfolio, respectively. The SAI contains general
background information about each trustee and officer of the Trust and of
Managers Trust. The trustees and officers of the Trust and of Managers Trust who
are officers and/or directors of N&B Management and/or principals of
Neuberger&Berman serve without compensation from the Funds or the Portfolios.
The trustees of the Trust and of Managers Trust, including a majority of those
trustees who are not "interested persons" (as defined in the 1940 Act) of the
Trust or Managers Trust, have adopted written procedures reasonably appropriate
to deal with potential conflicts of interest between the Trust and Managers
Trust, including, if necessary, creating a separate board of trustees of
Managers Trust.
Investment Manager, Administrator,
Distributor, and Sub-Adviser
- ----------------------------------------------------------------------
N&B Management serves as the investment manager of each Portfolio, as
administrator of each Fund, and as distributor of the shares of each Fund. N&B
Management and its predecessor firms have specialized in the management of
no-load mutual funds since 1950. In addition to serving the five Portfolios, N&B
Management currently serves as investment manager of other mutual funds.
Neuberger&Berman, which acts as sub-adviser for the Portfolios and other mutual
funds managed by N&B Management, also serves as investment adviser of one other
investment company. The mutual funds managed by N&B Management and
Neuberger&Berman had aggregate net assets of approximately $15.2 billion as of
December 31, 1996.
As sub-adviser, Neuberger&Berman furnishes N&B Management with investment
recommendations and research without added cost to the Portfolios.
Neuberger&Berman is a member firm of the NYSE and other principal exchanges and
acts as the Portfolios' principal broker in the purchase and sale of their
securities. Neuberger&Berman and its affiliates, including N&B Management,
manage securities accounts that had approximately $44.7 billion of assets as of
December 31, 1996. All of the voting stock of N&B Management is owned by
individuals who are principals of Neuberger&Berman.
The following is information about the individuals who are primarily
responsible for the day-to-day management of the Portfolios:
Neuberger&Berman FOCUS Portfolio and Neuberger&Berman GUARDIAN
Portfolio -- Kent C. Simons and Kevin L. Risen. Mr. Simons is a Vice President
of N&B
31
<PAGE>
Management and a principal of Neuberger&Berman. Mr. Simons has had
responsibility for Neuberger&Berman FOCUS Portfolio and its predecessor since
1988, and for Neuberger&Berman GUARDIAN Portfolio and its predecessor since
1983. Mr. Risen has had those responsibilities since 1996. Mr. Risen is a
principal of Neuberger& Berman and has been an Assistant Vice President of N&B
Management since May 1996 and a portfolio manager for Neuberger&Berman since
1995. He was a research analyst at Neuberger&Berman from 1992 to 1995; from 1990
to 1992, he was a research analyst at another prominent financial services firm.
Neuberger&Berman GENESIS Portfolio -- Judith M. Vale. Ms. Vale has been a
member of Neuberger&Berman's Small Cap Group since 1992, a Vice President of N&B
Management since November 1994 and a principal of Neuberger&Berman since July
1996. She has been primarily responsible for the day-to-day management of
Neuberger&Berman GENESIS Portfolio since February 1994. Ms. Vale was a portfolio
manager for another investment management group from 1990 to 1992.
Neuberger&Berman MANHATTAN Portfolio -- Mark R. Goldstein and Susan Switzer.
Mr. Goldstein is a Vice President of N&B Management and a principal of
Neuberger&Berman. Previously he was a securities analyst and portfolio manager
with Neuberger&Berman. He has had responsibility for Neuberger&Berman MANHATTAN
Portfolio and its predecessor since June 1992. Ms. Switzer has been an Assistant
Vice President of N&B Management since March 1995 and a portfolio manager for
Neuberger&Berman since January 1995. Ms. Switzer was a research analyst and
assistant portfolio manager for another money management firm from 1989 to 1994.
Neuberger&Berman PARTNERS Portfolio -- Michael M. Kassen and Robert I.
Gendelman. Mr. Kassen is a Vice President of N&B Management and a principal of
Neuberger&Berman. He has had responsibility for Neuberger&Berman PARTNERS
Portfolio and its predecessor since June 1990. Mr. Kassen was an employee of N&B
Management from 1990 to December 1992. Mr. Gendelman is a principal of
Neuberger&Berman and an Assistant Vice President of N&B Management. Mr.
Gendelman has had responsibility for Neuberger&Berman PARTNERS Portfolio since
October 1994. He was a portfolio manager for another mutual fund manager from
1992 to 1993 and was managing partner of an investment partnership from 1988 to
1992.
Neuberger&Berman acts as the principal broker for the Portfolios in the
purchase and sale of portfolio securities and in the sale of covered call
options, and for those services receives brokerage commissions. In effecting
securities transactions, each Portfolio seeks to obtain the best price and
execution of orders. For more information, see the SAI.
32
<PAGE>
The principals and employees of Neuberger&Berman and officers and employees
of N&B Management, together with their families, have invested over $100 million
of their own money in Neuberger&Berman Funds.
To mitigate the possibility that a Portfolio will be adversely affected by
employees' personal trading, the Trust, Managers Trust, N&B Management, and
Neuberger& Berman have adopted policies that restrict securities trading in the
personal accounts of the portfolio managers and others who normally come into
possession of information on portfolio transactions.
Expenses
- ----------------------------------------------------------------------
N&B Management provides investment management services to each Portfolio that
include, among other things, making and implementing investment decisions and
providing facilities and personnel necessary to operate the Portfolio. For
investment management services, each Portfolio (except Neuberger&Berman GENESIS
Portfolio) pays N&B Management a fee at the annual rate of 0.55% of the first
$250 million of that Portfolio's average daily net assets, 0.525% of the next
$250 million, 0.50% of the next $250 million, 0.475% of the next $250 million,
0.45% of the next $500 million, and 0.425% of average daily net assets in excess
of $1.5 billion. Neuberger&Berman GENESIS Portfolio pays N&B Management a fee
for investment management services at the annual rate of 0.85% of the first $250
million of the Portfolio's average daily net assets, 0.80% of the next $250
million, 0.75% of the next $250 million, 0.70% of the next $250 million, and
0.65% of average daily net assets in excess of $1 billion. However, N&B
Management has voluntarily agreed to waive a portion of the management fee borne
directly by Neuberger&Berman GENESIS Portfolio and indirectly by
Neuberger&Berman GENESIS Assets to reduce that fee by 0.10% per annum of the
average daily net assets of Neuberger&Berman GENESIS Portfolio.
N&B Management has voluntarily undertaken until December 31, 1998, to
reimburse each Fund for its Total Operating Expenses which exceed 1.50% per
annum of the Fund's average daily net assets.
The effect of reimbursement or a waiver by N&B Management is to reduce a
Fund's expenses and thereby increase its total return.
N&B Management provides administrative services to each Fund that include
furnishing facilities and personnel for the Fund and performing accounting,
recordkeeping, and other services. For such administrative services, each Fund
pays N&B Management a fee at the annual rate of 0.40% of that Fund's average
daily net assets. With a Fund's consent, N&B Management may subcontract to
Institutions some of its responsibilities to that Fund under the administration
agreement and may compensate each Institution that provides such services at an
annual rate of up to 0.25% of the average net asset value of Fund shares held
through that Institution.
33
<PAGE>
N&B Management acts as agent in arranging for the sale of Fund shares to
Institutions without commission and bears advertising and promotion expenses.
The trustees of the Trust have adopted a plan pursuant to Rule 12b-1 under the
1940 Act ("Plan"), under which each Fund compensates N&B Management for
administrative and other services provided to the Funds, its activities and
expenses related to the sale and distribution of Fund shares, and ongoing
services provided to investors in the Funds. Under the Plan, N&B Management
receives from each Fund a fee at the annual rate of 0.25% of that Fund's average
daily net assets. N&B Management may pay up to the full amount of this fee to
Institutions that distribute (or make available) Fund shares and/or provide
services to the Funds and their shareholders. The fee paid to an Institution is
based on the level of such services provided. Institutions may use the payments
for, among other purposes, compensating employees engaged in sales and/or
shareholder servicing. The amount of fees paid by a Fund during any year may be
more or less than the cost of distribution and other services provided to the
Fund. NASD rules limit the amount of annual distribution and service fees that
may be paid by a mutual fund and impose a ceiling on the cumulative distribution
fees paid. The Trust's Plan complies with those rules.
Each Fund bears all expenses of its operations other than those borne by N&B
Management as administrator of the Fund and as distributor of its shares. Each
Portfolio bears all expenses of its operations other than those borne by N&B
Management as investment manager of the Portfolio. These expenses are the "Other
Expenses" described on page 7.
See "Expense Information -- Annual Fund Operating Expenses" for information
about how these fees and expenses may affect the value of your investment.
Transfer Agent
- ----------------------------------------------------------------------
The Funds' transfer agent is State Street Bank and Trust Company ("State
Street"). State Street administers purchases, redemptions, and transfers of Fund
shares with respect to Institutions and the payment of dividends and other
distributions to Institutions. All correspondence should be addressed to the
Neuberger&Berman Funds, Institutional Services, 605 Third Avenue, 2nd Floor, New
York, NY 10158-0180.
34
<PAGE>
DESCRIPTION OF INVESTMENTS
In addition to common stocks and other securities referred to in "Investment
Programs" herein, each Portfolio may make the following investments, among
others, individually or in combination, although it may not necessarily buy all
of the types of securities or use all of the investment techniques that are
described. For additional information on the following investments and on other
types of investments which the Portfolios may make, see the SAI.
ILLIQUID SECURITIES. Each Portfolio may invest up to 10% of its net assets
(5% in the case of Neuberger&Berman GENESIS Portfolio) in illiquid securities,
which are securities that cannot be expected to be sold within seven days at
approximately the price at which they are valued. Due to the absence of an
active trading market, a Portfolio may experience difficulty in valuing or
disposing of illiquid securities. N&B Management determines the liquidity of the
Portfolios' securities, under general supervision of the trustees of Managers
Trust.
RESTRICTED SECURITIES AND RULE 144A SECURITIES. Each Portfolio may invest in
restricted securities and Rule 144A securities. Restricted securities cannot be
sold to the public without registration under the Securities Act of 1933, as
amended ("1933 Act"). Unless registered for sale, these securities can be sold
only in privately negotiated transactions or pursuant to an exemption from
registration. Rule 144A securities, although not registered, may be resold to
qualified institutional buyers in accordance with Rule 144A under the 1933 Act.
Unregistered securities may also be sold abroad pursuant to Regulation S under
the 1933 Act. Foreign securities that are freely tradable in their principal
market are not considered restricted securities even if they are not registered
for sale in the United States. Restricted securities are generally considered
illiquid. N&B Management, acting pursuant to guidelines established by the
trustees of Managers Trust, may determine that some restricted or Rule 144A
securities are liquid.
FOREIGN SECURITIES. Foreign securities are those of issuers organized and
doing business principally outside the United States, including non-U.S.
governments, their agencies, and instrumentalities. Each Portfolio may invest up
to 10% of the value of its total assets in foreign securities. The 10%
limitation does not apply to foreign securities that are denominated in U.S.
dollars, including American Depositary Receipts ("ADRs"). Foreign securities
(including those denominated in U.S. dollars and ADRs) are affected by political
and economic developments in foreign countries. Foreign companies may not be
subject to accounting standards or governmental supervision comparable to U.S.
companies, and there may be less public information about their operations. In
addition, foreign markets may be less liquid and more volatile than U.S. markets
and may offer less protection to investors. Investments in foreign securities
that are not denominated in U.S. dollars (including those made
35
<PAGE>
through ADRs) may be subject to special risks, such as governmental regulation
of foreign exchange transactions and changes in rates of exchange with the U.S.
dollar, irrespective of the performance of the underlying investment.
COVERED CALL OPTIONS. Each Portfolio may try to reduce the risk of
securities price changes (hedge) or generate income by writing (selling) covered
call options against portfolio securities having a market value not exceeding
10% of its net assets and may purchase call options in related closing
transactions. When a Portfolio writes a covered call option against a security,
the Portfolio is obligated to sell that security to the purchaser of the option
at a fixed price at any time during a specified period if the purchaser decides
to exercise the option. The maximum price the Portfolio may realize on the
security during the option period is the fixed price; the Portfolio continues to
bear the risk of a decline in the security's price, although this risk is
reduced, at least in part, by the premium received for writing the option.
The primary risks in using call options are (1) possible lack of a liquid
secondary market for options and the resulting inability to close out options
when desired; (2) the fact that use of options is a highly specialized activity
that involves skills, techniques, and risks (including price volatility and a
high degree of leverage) different from those associated with selection of a
Portfolio's securities; (3) the fact that, although use of these instruments for
hedging purposes can reduce the risk of loss, they also can reduce the
opportunity for gain, by offsetting favorable price movements in hedged
investments; and (4) the possible inability of a Portfolio to sell a security at
a time that would otherwise be favorable for it to do so, or the possible need
for a Portfolio to sell a security at a disadvantageous time, due to its need to
maintain "cover" in connection with its use of these instruments. Options are
considered "derivatives."
SHORT SALES AGAINST-THE-BOX. Each Portfolio may make short sales
against-the-box, in which it sells securities short only if it owns or has the
right to obtain without payment of additional consideration an equal amount of
the same type of securities sold. Short selling against-the-box may defer
recognition of gains or losses to a later tax period.
REPURCHASE AGREEMENTS/SECURITIES LOANS. In a repurchase agreement, a
Portfolio buys a security from a Federal Reserve member bank or a securities
dealer and simultaneously agrees to sell it back at a higher price, at a
specified date, usually less than a week later. The underlying securities must
fall within the Portfolio's investment policies and limitations. Each Portfolio
also may lend portfolio securities to banks, brokerage firms, or institutional
investors to earn income. Costs, delays, or losses could result if the selling
party to a repurchase agreement or the borrower of portfolio securities becomes
bankrupt or otherwise defaults. N&B Management monitors the creditworthiness of
sellers and borrowers.
OTHER INVESTMENTS. Although each Portfolio invests primarily in common
stocks, when market conditions warrant it may invest in preferred stocks,
securities
36
<PAGE>
convertible into or exchangeable for common stocks, U.S. Government and Agency
Securities, investment grade debt securities, or money market instruments, or
may retain assets in cash or cash equivalents.
U.S. Government Securities are obligations of the U.S. Treasury backed by the
full faith and credit of the United States. U.S. Government Agency Securities
are issued or guaranteed by U.S. Government agencies or by instrumentalities of
the U.S. Government, such as the Government National Mortgage Association,
Fannie Mae (formerly, Federal National Mortgage Association), Federal Home Loan
Mortgage Corporation, Student Loan Marketing Association, and Tennessee Valley
Authority. Some U.S. Government Agency Securities are supported by the full
faith and credit of the United States, while others may be supported by the
issuer's ability to borrow from the U.S. Treasury, subject to the Treasury's
discretion in certain cases, or only by the credit of the issuer. U.S.
Government Agency Securities include U.S. Government Agency mortgage-backed
securities. The market prices of U.S. Government and Agency Securities are not
guaranteed by the Government.
"Investment grade" debt securities are those receiving one of the four
highest ratings from Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's ("S&P"), or another nationally recognized statistical rating organization
("NRSRO") or, if unrated by any NRSRO, deemed comparable by N&B Management to
such rated securities ("Comparable Unrated Securities"). Securities rated by
Moody's in its fourth highest category (Baa) or Comparable Unrated Securities
may be deemed to have speculative characteristics. The value of the fixed income
securities in which a Portfolio may invest is likely to decline in times of
rising market interest rates. Conversely, when rates fall, the value of a
Portfolio's fixed income investments is likely to rise.
Neuberger&Berman PARTNERS Portfolio may invest up to 15% of its net assets in
debt securities rated below investment grade and Comparable Unrated Securities.
Such securities may be considered predominantly speculative, although, as debt
securities, they generally have priority over equity securities of the same
issuer and are generally better secured. Debt securities in the lowest rating
categories may involve a substantial risk of default or may be in default.
Changes in economic conditions or developments regarding the individual issuer
are more likely to cause price volatility and weaken the capacity of the issuer
of such securities to make principal and interest payments than is the case for
higher-grade debt securities. An economic downturn affecting the issuer may
result in an increased incidence of default. The market for lower-rated
securities may be thinner and less active than for higher-rated securities.
Neuberger&Berman PARTNERS Portfolio will invest in such securities only when N&B
Management concludes that the anticipated return to the Portfolio on such an
investment warrants exposure to the additional level of risk. A further
description of Moody's and S&P's ratings is included in the Appendix to the SAI.
37
<PAGE>
USE OF JOINT PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION
Each Fund and its corresponding Portfolio acknowledges that it is solely
responsible for all information or lack of information about that Fund and
Portfolio in this Prospectus or in the SAI, and no other Fund or Portfolio is
responsible therefor. The trustees of the Trust and of Managers Trust have
considered this factor in approving each Fund's use of a single combined
Prospectus and combined SAI.
38
<PAGE>
DIRECTORY
INVESTMENT MANAGER, ADMINISTRATOR,
AND DISTRIBUTOR
Neuberger&Berman Management Incorporated
605 Third Avenue 2nd Floor
New York, NY 10158-0180
SUB-ADVISER
Neuberger&Berman, LLC
605 Third Avenue
New York, NY 10158-3698
CUSTODIAN AND TRANSFER 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
800-366-6264
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, NW
2nd Floor
Washington, DC 20036-1800
39
<PAGE>
FUNDS ELIGIBLE FOR EXCHANGE
EQUITY ASSETS
Neuberger&Berman Focus Assets
Neuberger&Berman Genesis Assets
Neuberger&Berman Guardian Assets
Neuberger&Berman Manhattan Assets
Neuberger&Berman Partners Assets
Neuberger&Berman, LLC, Neuberger&Berman Management Inc., and the above named
Funds are service marks or registered trademarks of Neuberger&Berman Management
Inc.
- -C- 1997 Neuberger&Berman Management Inc.
40
<PAGE>
Neuberger&Berman Management Inc.
605 THIRD AVENUE 2ND FLOOR
NEW YORK, NY 10158-0180
SHAREHOLDER SERVICES
800.877.9700
This wrapper is not part of the prospectus.
(recycle PRINTED ON RECYCLED PAPER
logo) NBEAPR000397
<PAGE>
- --------------------------------------------------------------------------------
NEUBERGER & BERMAN EQUITY ASSETS AND PORTFOLIOS
STATEMENT OF ADDITIONAL INFORMATION
DATED MARCH 31, 1997
Neuberger & Berman Neuberger & Berman Genesis
Manhattan Assets (and Neuberger Assets (and Neuberger & Berman
& Berman Manhattan Portfolio) Genesis Portfolio)
Neuberger & Berman Focus Assets (and Neuberger & Berman Guardian
Neuberger & Berman Focus Portfolio) Assets (and Neuberger & Berman
Guardian Portfolio)
Neuberger & Berman
Partners Assets
(and Neuberger & Berman Partners Portfolio)
605 Third Avenue, 2nd Floor, New York, NY 10158-0180
Toll-Free 800-366-6264
- --------------------------------------------------------------------------------
Neuberger & Berman MANHATTAN Assets, Neuberger & Berman GENESIS Assets,
Neuberger & Berman Focus Assets, Neuberger & Berman GUARDIAN Assets, and
Neuberger & Berman PARTNERS Assets (each a "Fund") are mutual funds that offer
shares pursuant to a Prospectus dated March 31, 1997. The Funds invest all of
their net investable assets in Neuberger & Berman MANHATTAN Portfolio, Neuberger
& Berman GENESIS Portfolio, Neuberger & Berman FOCUS Portfolio, Neuberger &
Berman GUARDIAN Portfolio, and Neuberger & Berman PARTNERS Portfolio (each a
"Portfolio"), respectively.
AN INVESTOR CAN BUY, OWN, AND SELL FUND SHARES ONLY THROUGH AN ACCOUNT
WITH AN ADMINISTRATOR, BROKER-DEALER, OR OTHER INSTITUTION THAT PROVIDES
ACCOUNTING, RECORDKEEPING, AND OTHER SERVICES TO INVESTORS AND THAT HAS AN
ADMINISTRATIVE SERVICES AGREEMENT WITH NEUBERGER & BERMAN MANAGEMENT
INCORPORATED ("N&B MANAGEMENT") AND/OR AN AGREEMENT WITH N&B MANAGEMENT TO MAKE
FUND SHARES AVAILABLE TO ITS CLIENTS (EACH AN "INSTITUTION").
The Funds' Prospectus provides basic information that an investor
should know before investing. A copy of the Prospectus may be obtained, without
charge, from N&B Management, Institutional Services, 605 Third Avenue, 2nd
Floor, New York, NY 10158-0180, or by calling 800-366-6264.
This Statement of Additional Information ("SAI") is not a prospectus
and should be read in conjunction with the Prospectus.
No person has been authorized to give any information or to make any
representations not contained in the Prospectus or in this SAI in connection
with the offering made by the Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by a Fund or its distributor. The Prospectus and this SAI do not constitute an
offering by a Fund or its distributor in any jurisdiction in which such offering
may not lawfully be made.
<PAGE>
TABLE OF CONTENTS
PAGE
----
INVESTMENT INFORMATION.........................................................1
Investment Policies and Limitations...................................1
Neuberger & Berman MANHATTAN Portfolio................................6
Neuberger & Berman GENESIS Portfolio..................................7
Neuberger & Berman FOCUS and Neuberger & Berman
GUARDIAN Portfolios.............................................9
Neuberger & Berman PARTNERS Portfolio................................11
Additional Investment Information....................................12
Neuberger & Berman FOCUS Portfolio - Description
of Economic Sectors............................................23
PERFORMANCE INFORMATION.......................................................27
Total Return Computations............................................27
Comparative Information..............................................29
Other Performance Information........................................30
CERTAIN RISK CONSIDERATIONS...................................................31
TRUSTEES AND OFFICERS.........................................................31
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES.............................39
Investment Manager and Administrator.................................39
Sub-Adviser..........................................................41
Investment Companies Managed.........................................42
Management and Control of N&B Management.............................45
DISTRIBUTION ARRANGEMENTS.....................................................46
Distributor..........................................................46
Rule 12b-1 Plan......................................................47
ADDITIONAL EXCHANGE INFORMATION...............................................48
ADDITIONAL REDEMPTION INFORMATION.............................................48
Suspension of Redemptions............................................48
Redemptions in Kind..................................................48
DIVIDENDS AND OTHER DISTRIBUTIONS.............................................49
ADDITIONAL TAX INFORMATION....................................................50
Taxation of the Funds................................................50
Taxation of the Portfolios...........................................51
Taxation of the Funds' Shareholders..................................54
PORTFOLIO TRANSACTIONS........................................................54
Portfolio Turnover...................................................61
i
<PAGE>
PAGE
----
REPORTS TO SHAREHOLDERS.......................................................62
ORGANIZATION..................................................................62
CUSTODIAN AND TRANSFER AGENT..................................................63
INDEPENDENT AUDITORS/ACCOUNTANTS..............................................63
LEGAL COUNSEL.................................................................63
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES...........................63
REGISTRATION STATEMENT........................................................64
FINANCIAL STATEMENTS..........................................................65
Appendix A....................................................................67
RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER......................67
Appendix B....................................................................70
THE ART OF INVESTMENT: A CONVERSATION WITH ROY NEUBERGER
ii
<PAGE>
INVESTMENT INFORMATION
Each Fund is a separate series of Neuberger & Berman Equity Assets
("Trust"), a Delaware business trust that is registered with the Securities and
Exchange Commission ("SEC") as an open-end management investment company. Each
Fund seeks its investment objective by investing all of its net investable
assets in a Portfolio of Equity Managers Trust ("Managers Trust") that has an
investment objective identical to, and a name similar to, that of the Fund. Each
Portfolio, in turn, invests in securities in accordance with an investment
objective, policies, and limitations identical to those of its corresponding
Fund. (The Trust and Managers Trust, which is an open-end management investment
company managed by N&B Management, are together referred to below as the
"Trusts.")
The following information supplements the discussion in the Prospectus
of the investment objective, policies, and limitations of each Fund and
Portfolio. The investment objective and, unless otherwise specified, the
investment policies and limitations of each Fund and Portfolio are not
fundamental. Any investment policy or limitation that is not fundamental may be
changed by the trustees of the Trust ("Fund Trustees") or of Managers Trust
("Portfolio Trustees") without shareholder approval. The fundamental investment
policies and limitations of a Fund or a Portfolio may not be changed without the
approval of the lesser of (1) 67% of the total units of beneficial interest
("shares") of the Fund or Portfolio represented at a meeting at which more than
50% of the outstanding Fund or Portfolio shares are represented or (2) a
majority of the outstanding shares of the Fund or Portfolio. These percentages
are required by the Investment Company Act of 1940 ("1940 Act") and are referred
to in this SAI as a "1940 Act majority vote." Whenever a Fund is called upon to
vote on a change in a fundamental investment policy or limitation of its
corresponding Portfolio, the Fund casts its votes in proportion to the votes of
its shareholders at a meeting thereof called for that purpose.
INVESTMENT POLICIES AND LIMITATIONS
Each Fund has the following fundamental investment policy, to enable it
to invest in its corresponding Portfolio:
Notwithstanding any other investment policy of the Fund, the Fund
may invest all of its net investable assets (cash, securities,
and receivables relating to securities) in an open-end management
investment company having substantially the same investment
objective, policies, and limitations as the Fund.
All other fundamental investment policies and limitations and the
non-fundamental investment policies and limitations of each Fund are identical
to those of its corresponding Portfolio. Therefore, although the following
discusses the investment policies and limitations of the Portfolios, it applies
equally to their corresponding Funds.
<PAGE>
Except for the limitation on borrowing and the limitation on ownership
of portfolio securities by officers and trustees, any investment policy or
limitation that involves a maximum percentage of securities or assets will not
be considered to be violated unless the percentage limitation is exceeded
immediately after, and because of, a transaction by a Portfolio.
The following fundamental investment policies and limitations apply to
all Portfolios:
1. BORROWING. No Portfolio may borrow money, except that a Portfolio
may (i) borrow money from banks for temporary or emergency purposes and not for
leveraging or investment and (ii) enter into reverse repurchase agreements for
any purpose; provided that (i) and (ii) in combination do not exceed 33-1/3% of
the value of its total assets (including the amount borrowed) less liabilities
(other than borrowings). If at any time borrowings exceed 33-1/3% of the value
of a Portfolio's total assets, that Portfolio will reduce its borrowings within
three days (excluding Sundays and holidays) to the extent necessary to comply
with the 33-1/3% limitation.
2. COMMODITIES. No Portfolio may purchase physical commodities or
contracts thereon, unless acquired as a result of the ownership of securities or
instruments, but this restriction shall not prohibit a Portfolio from purchasing
futures contracts or options (including options on futures contracts, but
excluding options or futures contracts on physical commodities) or from
investing in securities of any kind.
3. DIVERSIFICATION. No Portfolio may, with respect to 75% of the value
of its total assets, purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, (i) more than 5% of the value of the
Portfolio's total assets would be invested in the securities of that issuer or
(ii) the Portfolio would hold more than 10% of the outstanding voting securities
of that issuer.
4. INDUSTRY CONCENTRATION. No Portfolio may purchase any security if,
as a result, 25% or more of its total assets (taken at current value) would be
invested in the securities of issuers having their principal business activities
in the same industry. This limitation does not apply to securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities.
5. LENDING. No Portfolio may lend any security or make any other loan
if, as a result, more than 33-1/3% of its total assets (taken at current value)
would be lent to other parties, except, in accordance with its investment
objective, policies, and limitations, (i) through the purchase of a portion of
an issue of debt securities or (ii) by engaging in repurchase agreements.
2
<PAGE>
6. REAL ESTATE. No Portfolio may purchase real estate unless acquired
as a result of the ownership of securities or instruments, but this restriction
shall not prohibit a Portfolio from purchasing securities issued by entities or
investment vehicles that own or deal in real estate or interests therein or
instruments secured by real estate or interests therein.
7. SENIOR SECURITIES. No Portfolio may issue senior securities, except
as permitted under the 1940 Act.
8. UNDERWRITING. No Portfolio may underwrite securities of other
issuers, except to the extent that a Portfolio, in disposing of portfolio
securities, may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 ("1933 Act").
The following non-fundamental investment policies and limitations apply
to all Portfolios:
1. BORROWING. No Portfolio may purchase securities if outstanding
borrowings, including any reverse repurchase agreements, exceed 5% of its total
assets.
2. LENDING. Except for the purchase of debt securities and engaging in
repurchase agreements, no Portfolio may make any loans other than securities
loans.
3. INVESTMENTS IN OTHER INVESTMENT COMPANIES. No Portfolio may purchase
securities of other investment companies, except to the extent permitted by the
1940 Act and in the open market at no more than customary brokerage commission
rates. This limitation does not apply to securities received or acquired as
dividends, through offers of exchange, or as a result of a reorganization,
consolidation, or merger.
4. MARGIN TRANSACTIONS. No Portfolio may purchase securities on margin
from brokers or other lenders, except that a Portfolio may obtain such
short-term credits as are necessary for the clearance of securities
transactions. Margin payments in connection with transactions in futures
contracts and options on futures contracts shall not constitute the purchase of
securities on margin and shall not be deemed to violate the foregoing
limitation.
5. SHORT SALES. No Portfolio may sell securities short unless it owns,
or has the right to obtain without payment of additional consideration,
securities equivalent in kind and amount to the securities sold. Transactions in
forward contracts, futures contracts and options shall not constitute selling
securities short.
3
<PAGE>
6. OWNERSHIP OF PORTFOLIO SECURITIES BY OFFICERS AND TRUSTEES. No
Portfolio may purchase or retain the securities of any issuer if, to the
knowledge of N&B Management, those officers and trustees of Managers Trust and
officers and directors of N&B Management who each owns individually more than
1/2 of 1% of the outstanding securities of such issuer, together own more than
5% of such securities.
7. UNSEASONED ISSUERS. No Portfolio may purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than 5% of
the Portfolio's total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three years
of continuous operation. For purposes of this limitation, pass-through entities
and other special purpose vehicles or pools of financial assets are not
considered to be business enterprises.
8. PUTS, CALLS, STRADDLES, OR SPREADS. No Portfolio may invest in puts,
calls, straddles, spreads, or any combination thereof, except that each
Portfolio may (i) write (sell) covered call options against portfolio securities
having a market value not exceeding 10% of its net assets and (ii) purchase call
options in related closing transactions. The Portfolios do not construe the
foregoing limitation to preclude them from purchasing or writing options on
futures contracts or from purchasing securities with rights to put the
securities to the issuer or a guarantor.
9. ILLIQUID SECURITIES. No Portfolio may purchase any security if, as a
result, more than 10% (5% in the case of Neuberger & Berman GENESIS Portfolio)
of its net assets would be invested in illiquid securities. Illiquid securities
include securities that cannot be sold within seven days in the ordinary course
of business for approximately the amount at which the Portfolio has valued the
securities, such as repurchase agreements maturing in more than seven days.
10. FOREIGN SECURITIES. No Portfolio may invest more than 10% of the
value of its total assets in securities of foreign issuers, provided that this
limitation shall not apply to foreign securities denominated in U.S. dollars,
including American Depositary Receipts ("ADRs").
11. OIL AND GAS PROGRAMS. No Portfolio may invest in participations or
other direct interests in oil, gas, or other mineral leases or exploration or
development programs, but each Portfolio may purchase securities of companies
that own interests in any of the foregoing.
4
<PAGE>
12. REAL ESTATE. No Portfolio may purchase or sell real property
(including partnership or similar interests in real estate limited partnerships,
but excluding readily marketable interests in real estate investment trusts and
readily marketable securities of companies that invest in real estate); provided
that no Portfolio may purchase any security if, as a result, more than 10% of
its total assets would be invested in securities of real estate investment
trusts.
In addition to the foregoing non-fundamental investment policies and
limitations, which apply to each Portfolio, the following non-fundamental
investment policies and limitations apply to the indicated Portfolios:
13. INVESTMENTS IN ANY ONE ISSUER (NEUBERGER & BERMAN GENESIS,
NEUBERGER & BERMAN FOCUS, AND NEUBERGER & BERMAN GUARDIAN PORTFOLIOS). None of
these Portfolios may purchase the securities of any one issuer (other than
securities issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 5% of the Portfolio's total assets
would be invested in the securities of that issuer.
14. WARRANTS (NEUBERGER & BERMAN GENESIS, NEUBERGER & BERMAN FOCUS AND
NEUBERGER & BERMAN GUARDIAN PORTFOLIOS). None of these Portfolios may invest
more than 5% of its net assets in warrants, including warrants that are listed
on the New York Stock Exchange ("NYSE") or American Stock Exchange, or more than
2% of its net assets in warrants that are not so listed. For purposes of this
limitation, warrants are valued at the lower of cost or market value, and
warrants acquired by a Portfolio in units or attached to securities may be
deemed to be without value.
15. PLEDGING (NEUBERGER & BERMAN GENESIS AND NEUBERGER & BERMAN
GUARDIAN PORTFOLIOS). Neither of these Portfolios may pledge or hypothecate any
of its assets, except that (i) for Neuberger & Berman GENESIS Portfolio, this
limitation does not apply to the deposit of portfolio securities as collateral
in connection with short sales against-the-box, and the Portfolio may pledge or
hypothecate up to 15% of its total assets to collateralize a borrowing permitted
under fundamental policy 1 above or a letter of credit issued for a purpose set
forth in that policy and (ii) each Portfolio may pledge or hypothecate up to 5%
of its total assets in connection with its entry into any agreement or
arrangement pursuant to which a bank furnishes a letter of credit to
collateralize a capital commitment made by the Portfolio to a mutual insurance
company of which the Portfolio is a member. The other Portfolios are not subject
to any restrictions on their ability to pledge or hypothecate assets and may do
so in connection with permitted borrowings.
5
<PAGE>
16. SECTOR CONCENTRATION (NEUBERGER & BERMAN FOCUS PORTFOLIO). This
Portfolio may not invest more than 50% of its total assets in any one economic
sector.
Each Portfolio, as an operating policy, does not intend to invest in
futures contracts and options thereon during the coming year.
NEUBERGER & BERMAN MANHATTAN PORTFOLIO
- --------------------------------------
Neuberger & Berman MANHATTAN Portfolio's objective is capital
appreciation, without regard to income. The Portfolio differs from other
Portfolios in its willingness to invest in stocks with price/earnings ratios or
price-to-cash-flow ratios that are reasonable relative to a company's growth
prospects and those of the general market. The Portfolio is comprised of what
the manager believes are stocks of financially sound companies with a special
market capability, a competitive advantage or a product that makes them
particularly attractive over the long term, but that are selling at a reasonable
price relative to their growth rate. N&B Management calls this approach "GARP"
- -- growth at a reasonable price.
Neuberger & Berman MANHATTAN Portfolio's manager views value on both a
relative and an absolute basis, so the Portfolio may buy stocks with somewhat
above-market historical growth rates. The Portfolio tends to stay more fully
invested when the manager thinks the market is attractive for quality growth
companies. But the Portfolio will get out of stocks and into cash when the
manager thinks there are no reasonable values available. The Portfolio steers
clear of popular growth stocks selling at extremely high prices.
6
<PAGE>
NEUBERGER & BERMAN GENESIS PORTFOLIO
- ------------------------------------
The predecessor of Neuberger & Berman GENESIS Fund (which, like
Neuberger & Berman GENESIS Assets, invests all of its net investable assets in
Neuberger & Berman GENESIS Portfolio) was established in 1988. A fund dedicated
primarily to small-capitalization stocks (companies with total market value of
outstanding common stock of up to $1.5 billion at the time the Portfolio
invests), Neuberger & Berman GENESIS Portfolio is devoted to the same value
principles as the other equity funds managed by N&B Management. The Portfolio is
comprised of what the manager believes are small-cap stocks with solid earnings
today, not just promises for tomorrow.
Many people think that small-capitalization stock funds are
predominantly invested in high-risk companies. That is not necessarily the case.
Neuberger & Berman GENESIS Portfolio looks for the same fundamentals in
small-capitalization stocks as other Portfolios look for in stocks of larger
companies. The portfolio manager sticks to the areas she understands. The
portfolio manager looks for the most persistent earnings growth at the lowest
multiple, as well as for well-established companies with entrepreneurial
management and sound finances. Also considered are catalysts to exposing value,
such as management changes and new product lines. Often, these are firms that
have suffered temporary setbacks or undergone a restructuring.
Neuberger & Berman GENESIS Portfolio's motto is "boring is beautiful."
Instead of investing in trendy, high-priced stocks that tend to hurt
shareholders on the downside, the Portfolio looks for little-known, solid,
growing companies whose stocks the manager believes are wonderful bargains.
AN INTERVIEW WITH THE PORTFOLIO MANAGER
Q: If I already own a large-cap stock fund, why should I consider
investing in a small-cap fund as well?
A: Look at how fast a sapling grows compared to, say, a mature tree.
Much of the same can be true about companies. It's possible for a smaller
company to grow 50% faster than an IBM or a Coca-Cola.
7
<PAGE>
So, many small-cap stocks offer superior growth potential. Consider the
cereal you eat, the detergent you use, the coffee you drink -- and imagine if
you had invested in these products BEFORE they became household names. If you
had invested only in the blue-chip companies of the day, you would have missed
out on these opportunities.
Of course, we're not advocating investing in a portfolio consisting
only of small-cap stock funds. It pays to diversify. Let's look back about 25
years. While past performance cannot indicate future performance, small-cap
stocks outperformed larger-cap stocks 16 out of the 25 years from 1971 to 1996,
which means larger-cap stocks did better the rest of the time.1/
Q: Neuberger & Berman GENESIS Assets is classified as a "small-cap
value fund." To many people, "small-cap value" is an oxymoron. Can you clarify
the Portfolio's investment approach?
A: We understand the confusion. After all, a lot of people equate
"small-cap" with "growth." They also equate "value" with "cheap." At Neuberger &
Berman GENESIS Portfolio, we're 100% behind finding GROWING small-cap companies
- -- what we believe are highly profitable companies with solid records and
promising futures. So where do we part company with managers who follow a
"small-cap growth" style? It comes down to how much growth and at what price.
Small-cap growth investors seem willing to pay a premium for vastly superior
growth. This results in two problems: a) growth tends to be discounted by the
premium valuations, and b) the growth expectations are so high as to be
unsustainable. We believe superior yet more stable returns can be purchased at
significant discounts. They may be found in mundane, perhaps even boring,
industries. Remember, the same glamorous appeal that attracts so many growth
investors also attracts competitors.
___________________________
1/ Results are on a total return basis and include reinvestment of all
dividends and capital gain distributions. Small-cap stocks are represented by
the fifth capitalization quintile of stocks on the NYSE from 1971 to 1981 and
performance of the Dimensional Fund Advisors (DFA) Small Company Fund from 1982
to 1996. Larger-cap stocks are represented by the S&P "500" Index, an unmanaged
group of stocks. Please note that indices do not take into account any fees or
expenses of investing in the individual securities that they track. Data about
these indices are prepared or obtained by N&B Management. The Portfolio may
invest in many securities not included in the above-described indices. Source:
STOCKS, BONDS, BILL AND INFLATION 1996 YEARBOOK[TRADEMARK], Ibbotson Associates,
Chicago (annually updates work by Roger G. Ibbotson and Rex A. Sinquefield).
Used with permission. All rights reserved.
8
<PAGE>
In that respect, we're "value" managers. Yet we'd like to make this
point clear: Low price-to-earnings multiples, in and of themselves, cannot
justify a "buy" decision. When we search for growing, high-quality small-cap
companies selling at what we feel are bargain prices, we ask ourselves: Is the
company cheap for a good reason? Or, does it have the financial muscle and the
management talent to make it into the big leagues?
Q: Let's turn to specifics. What criteria are used to decide which
small-cap companies make the cut -- and which ones don't?
A: Over the years, we've seen hundreds of small-cap companies that
flourished and just as many that failed to deliver on their early promises. What
made the difference? While every case is unique, here are a few important traits
of the winners.
First of all, a successful small-cap company normally produces
high returns. In practice, this means the business has a number of barriers to
entry. Perhaps the company has a technology that's hard to duplicate. Or maybe
it can make a product at a substantially lower cost than anyone else. Unlike
most businesses, it has an advantage that allows it to continue earning
above-market returns.
In addition to having a competitive edge, a successful small-cap
company should generate healthy cash flow. With excess cash, a company has the
ability to finance its own growth without diluting the ownership stake of
existing stockholders by issuing more shares.
No small-cap company can grow without having the right people on board.
That's why we spend so much time meeting the CEOs and CFOs of small-cap
companies. While we question the managers about future plans and strategies, we
spend as much time evaluating them as people. Do they seem honest and capable?
Or do they puff up their case? Making portfolio decisions is a lot about making
character judgments -- who has the stuff to manage a growing company, and who
doesn't.
THE RISKS INVOLVED IN SEEKING CAPITAL APPRECIATION FROM INVESTMENTS
PRIMARILY IN COMPANIES WITH SMALL MARKET CAPITALIZATION ARE SET FORTH IN THE
PROSPECTUS.
9
<PAGE>
NEUBERGER & BERMAN FOCUS AND NEUBERGER & BERMAN GUARDIAN PORTFOLIOS
- -------------------------------------------------------------------
Neuberger & Berman FOCUS Portfolio's investment objective is long-term
capital appreciation. Like the other Portfolios that use a value-oriented
investment approach, it seeks to buy undervalued securities that offer
opportunities for growth, but then it focuses its assets in those sectors where
undervalued stocks are clustered. The portfolio co-managers begin by looking for
stocks that are selling for less than the managers think they're worth, a
"bottom-up approach." More often than not, such stocks are in a few economic
sectors that are out of favor and are undervalued as a group. The portfolio
co-managers think 90% of cheap stocks deserve to be cheap and their job is to
find the 10% that don't.
The portfolio co-managers don't pick sectors for Neuberger & Berman
FOCUS Portfolio based on their perception of how the economy is going to do. Nor
do they engage in making economic or currency predictions. They look for stocks
with either low relative or low absolute valuations. Often, these stocks will be
found in a particular sector, but the managers didn't start out being bullish on
that sector. It's just where they happened to find the values. They find that if
one company comes under a cloud, it tends to happen to its whole industry. If an
investment manager rotates the sectors in a portfolio by buying sectors when
they are undervalued and selling them when they become fully valued, the manager
would be able to achieve above-average performance.
Neuberger & Berman GUARDIAN Portfolio subscribes to the same
stock-picking philosophy followed since 1950, when Roy R. Neuberger founded the
predecessor of Neuberger & Berman GUARDIAN Fund, which, like Neuberger & Berman
GUARDIAN Assets, invests all of its net investable assets in Neuberger & Berman
GUARDIAN Portfolio.
It's no great trick for a mutual fund to make money when the market is
rising. The tide that lifts stock values will carry most funds along. The true
test of management is its ability to make money even when the market is flat or
declining. By that measure, Neuberger & Berman GUARDIAN Fund and its predecessor
have served shareholders well and have paid a dividend every quarter and a
capital gain distribution EVERY YEAR since 1950. Of course, this past record
does not necessarily predict the Fund's future practices.
10
<PAGE>
The portfolio co-managers place a high premium on being knowledgeable
about the companies whose stocks they buy. That knowledge is important, because
sometimes it takes courage to buy stocks that the rest of the market has
forsaken. The Portfolio is usually early in and early out. The managers would
rather buy an undervalued stock because they expect it to become fairly valued
than buy one fairly valued and hope it becomes overvalued. The managers like a
stock "under a rock" or with a cloud over it; they believe an investor is not
going to get great companies at great valuations when the market perception is
great.
Investors who switch around a lot are not going to benefit from
Neuberger & Berman GUARDIAN Portfolio's approach. They're following the market
- -- the Portfolio is looking at fundamentals.
NEUBERGER & BERMAN PARTNERS PORTFOLIO
- -------------------------------------
Neuberger & Berman PARTNERS Portfolio's objective is capital growth. It
seeks to make money in good markets and not give up those gains during rough
times.
Investors in the Portfolio typically seek consistent performance and
have a moderate risk tolerance. They do know, however, that stock investments
can provide the long-term upside potential essential to meeting their long-term
investment goals, particularly a comfortable retirement and planning for a
college education.
The portfolio co-managers look for stocks that are undervalued in the
marketplace either in relation to strong current fundamentals, such as a low
price-to-earnings ratio, consistent cash flow, and support from asset values, or
in relation to their projection of the growth of the company's future earnings.
If the market goes down, those stocks the Portfolio elects to hold,
historically, have gone down less.
The portfolio co-managers monitor stocks of medium- to large-sized
companies that often are not closely scrutinized by other investors. The
managers research these companies in order to determine if they are likely to
produce a new product, become an acquisition target, or undergo a financial
restructuring.
11
<PAGE>
What else catches the portfolio co-managers' eyes? Companies whose
managements own their own stock. These companies usually seek to build
shareholder wealth by buying back shares or making acquisitions that have a
swift and positive impact on the bottom line.
To increase the upside potential, the managers zero in on companies
that dominate their industries or their specialized niches. The managers'
reasoning? Market leaders tend to earn higher levels of profits.
Neuberger & Berman PARTNERS Portfolio invests in a wide array of
stocks, and no single stock makes up more than a small fraction of the
Portfolio's total assets. Of course, the Portfolio's holdings are subject to
change.
ADDITIONAL INVESTMENT INFORMATION
- ---------------------------------
Some or all of the Portfolios, as indicated below, may make the
following investments, among others, although they may not buy all of the types
of securities or use all of the investment techniques that are described.
REPURCHASE AGREEMENTS (ALL PORTFOLIOS). In a repurchase agreement, a
Portfolio purchases securities from a bank that is a member of the Federal
Reserve System or from a securities dealer that agrees to repurchase the
securities from the Portfolio at a higher price on a designated future date.
Repurchase agreements generally are for a short period of time, usually less
than a week. Repurchase agreements with a maturity of more than seven days are
considered to be illiquid securities. No Portfolio may enter into such a
repurchase agreement if, as a result, more than 10% (5% in the case of Neuberger
& Berman GENESIS Portfolio) of the value of its net assets would then be
invested in such repurchase agreements and other illiquid securities. A
Portfolio may enter into a repurchase agreement only if (1) the underlying
securities are of a type that the Portfolio's investment policies and
limitations would allow it to purchase directly, (2) the market value of the
underlying securities, including accrued interest, at all times equals or
exceeds the repurchase price, and (3) payment for the underlying securities is
made only upon satisfactory evidence that the securities are being held for the
Portfolio's account by its custodian or a bank acting as the Portfolio's agent.
SECURITIES LOANS (ALL PORTFOLIOS). In order to realize income, each
Portfolio may lend portfolio securities with a value not exceeding 33-1/3% of
its total assets to banks, brokerage firms, or other institutional investors
judged creditworthy by N&B Management. Borrowers are required continuously to
secure their obligations to return securities on loan from a Portfolio by
depositing collateral in a form determined to be satisfactory by the Portfolio
Trustees. The collateral, which must be marked to market daily, must be equal to
at least 100% of the market value of the loaned securities, which will also be
12
<PAGE>
marked to market daily. N&B Management believes the risk of loss on these
transactions is slight because, if a borrower were to default for any reason,
the collateral should satisfy the obligation. However, as with other extensions
of secured credit, loans of portfolio securities involve some risk of loss of
rights in the collateral should the borrower fail financially.
RESTRICTED SECURITIES AND RULE 144A SECURITIES (ALL PORTFOLIOS). Each
Portfolio may invest in restricted securities, which are securities that may not
be sold to the public without an effective registration statement under the 1933
Act. Before they are registered, such securities may be sold only in a privately
negotiated transaction or pursuant to an exemption from registration. In
recognition of the increased size and liquidity of the institutional market for
unregistered securities and the importance of institutional investors in the
formation of capital, the SEC has adopted Rule 144A under the 1933 Act. Rule
144A is designed to facilitate efficient trading among institutional investors
by permitting the sale of certain unregistered securities to qualified
institutional buyers. To the extent privately placed securities held by a
Portfolio qualify under Rule 144A and an institutional market develops for those
securities, the Portfolio likely will be able to dispose of the securities
without registering them under the 1933 Act. To the extent that institutional
buyers become, for a time, uninterested in purchasing these securities,
investing in Rule 144A securities could increase the level of a Portfolio's
illiquidity. N&B Management, acting under guidelines established by the
Portfolio Trustees, may determine that certain securities qualified for trading
under Rule 144A are liquid. Foreign securities that are freely tradable in their
principal market are not considered to be restricted. Regulation S under the
1933 Act permits the sale abroad of securities that are not registered for sale
in the United States.
Where registration is required, a Portfolio may be obligated to pay all
or part of the registration expenses, and a considerable period may elapse
between the decision to sell and the time the Portfolio may be permitted to sell
a security under an effective registration statement. If, during such a period,
adverse market conditions were to develop, the Portfolio might obtain a less
favorable price than prevailed when it decided to sell. To the extent restricted
securities, including Rule 144A securities, are illiquid, purchases thereof will
be subject to each Portfolio's 10% (5% in the case of Neuberger & Berman GENESIS
Portfolio) limit on investments in illiquid securities. Restricted securities
for which no market exists are priced by a method that the Portfolio Trustees
believe accurately reflects fair value.
13
<PAGE>
REVERSE REPURCHASE AGREEMENTS (ALL PORTFOLIOS). In a reverse repurchase
agreement, a Portfolio sells portfolio securities subject to its agreement to
repurchase the securities at a later date for a fixed price reflecting a market
rate of interest; these agreements are considered borrowings for purposes of
each Portfolio's investment policies and limitations concerning borrowings.
While a reverse repurchase agreement is outstanding, a Portfolio will deposit in
a segregated account with its custodian cash, liquid equity securities, or
liquid debt securities, marked to market daily, in an amount at least equal to
the Portfolio's obligations under the agreement. There is a risk that the
counter-party to a reverse repurchase agreement will be unable or unwilling to
complete the transaction as scheduled, which may result in losses to the
Portfolio.
FOREIGN SECURITIES (ALL PORTFOLIOS). Each Portfolio may invest in U.S.
dollar-denominated securities of foreign issuers (including banks, governments,
and quasi-governmental organizations) and foreign branches of U.S. banks,
including negotiable certificates of deposit ("CDs"), bankers' acceptances and
commercial paper. These investments are subject to each Portfolio's quality
standards. While investments in foreign securities are intended to reduce risk
by providing further diversification, such investments involve sovereign and
other risks, in addition to the credit and market risks normally associated with
domestic securities. These additional risks include the possibility of adverse
political and economic developments (including political instability) and the
potentially adverse effects of unavailability of public information regarding
issuers, less governmental supervision and regulation of financial markets,
reduced liquidity of certain financial markets, and the lack of uniform
accounting, auditing, and financial reporting standards or the application of
standards that are different or less stringent than those applied in the United
States.
Each Portfolio also may invest in equity, debt, or other
income-producing securities that are denominated in or indexed to foreign
currencies, including (1) common and preferred stocks, (2) CDs, commercial
paper, fixed time deposits, and bankers' acceptances issued by foreign banks,
(3) obligations of other corporations, and (4) obligations of foreign
governments and their subdivisions, agencies, and instrumentalities,
international agencies, and supranational entities. Investing in foreign
currency denominated securities involves the special risks associated with
investing in non-U.S. issuers, as described in the preceding paragraph, and the
additional risks of (1) adverse changes in foreign exchange rates, (2)
nationalization, expropriation, or confiscatory taxation, and (3) adverse
changes in investment or exchange control regulations (which could prevent cash
from being brought back to the United States). Additionally, dividends and
interest payable on foreign securities may be subject to foreign taxes,
14
<PAGE>
including taxes withheld from those payments. Commissions on foreign securities
exchanges are often at fixed rates and are generally higher than negotiated
commissions on U.S. exchanges, although the Portfolios endeavor to achieve the
most favorable net results on portfolio transactions. Each Portfolio may invest
only in securities of issuers in countries whose governments are considered
stable by N&B Management.
Foreign securities often trade with less frequency and in less volume
than domestic securities and therefore may exhibit greater price volatility.
Additional costs associated with an investment in foreign securities may include
higher custodial fees than apply to domestic custody arrangements and
transaction costs of foreign currency conversions.
Foreign markets also have different clearance and settlement
procedures. In certain markets, there have been times when settlements have been
unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when a portion of the assets of a Portfolio are uninvested and
no return is earned thereon. The inability of a Portfolio to make intended
security purchases due to settlement problems could cause the Portfolio to miss
attractive investment opportunities. Inability to dispose of portfolio
securities due to settlement problems could result in losses to a Portfolio due
to subsequent declines in value of the securities or, if the Portfolio has
entered into a contract to sell the securities, could result in possible
liability to the purchaser.
Interest rates prevailing in other countries may affect the prices of
foreign securities and exchange rates for foreign currencies. Local factors,
including the strength of the local economy, the demand for borrowing, the
government's fiscal and monetary policies, and the international balance of
payments, often affect interest rates in other countries. Individual foreign
economies may differ favorably or unfavorably from the U.S. economy in such
respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency, and balance of payments position.
In order to limit the risks inherent in investing in foreign currency
denominated securities, a Portfolio may not purchase any such security if, as a
result, more than 10% of its total assets (taken at market value) would be
15
<PAGE>
invested in foreign currency denominated securities. Within that limitation,
however, no Portfolio is restricted in the amount it may invest in securities
denominated in any one foreign currency.
COVERED CALL OPTIONS (ALL PORTFOLIOS). Each Portfolio may write covered
call options on portfolio securities valued at up to 10% of its net assets and
may purchase call options in related closing transactions. Generally, the
purpose of writing and purchasing these options is to reduce, at least in part,
the effect of price fluctuations of securities held by the Portfolio on the
Portfolio's and its corresponding Fund's net asset values ("NAVs"). Portfolio
securities on which call options may be written and purchased by a Portfolio are
purchased solely on the basis of investment considerations consistent with the
Portfolio's investment objective.
When a Portfolio writes a call option, it is obligated to sell a
security to a purchaser at a specified price at any time until a certain date if
the purchaser decides to exercise the option. The Portfolio receives a premium
for writing the call option. So long as the obligation of the call option
continues, the Portfolio may be assigned an exercise notice, requiring it to
deliver the underlying security against payment of the exercise price. The
Portfolio may be obligated to deliver securities underlying an option at less
than the market price, thereby giving up any additional gain on the security.
Each Portfolio writes only "covered" call options on securities it
owns. The writing of covered call options is a conservative investment technique
that is believed to involve relatively little risk (in contrast to the writing
of "naked" or uncovered call options, which the Portfolios will not do) but is
capable of enhancing the Portfolios' total return. When writing a covered call
option, a Portfolio, in return for the premium, gives up the opportunity for
profit from a price increase in the underlying security above the exercise
price, but conversely retains the risk of loss should the price of the security
decline.
If a call option that a Portfolio has written expires unexercised, the
Portfolio will realize a gain in the amount of the premium; however, that gain
may be offset by a decline in the market value of the underlying security during
the option period. If the call option is exercised, the Portfolio will realize a
gain or loss from the sale of the underlying security.
When a Portfolio purchases a call option, it pays a premium for the
right to purchase a security from the writer at a specified price until a
specified date. A Portfolio would purchase a call option to offset a previously
written call option.
16
<PAGE>
The exercise price of an option may be below, equal to, or above the
market value of the underlying security at the time the option is written.
Options normally have expiration dates between three and nine months from the
date written. The obligation under any option terminates upon expiration of the
option or, at an earlier time, when the writer offsets the option by entering
into a "closing purchase transaction" to purchase an option of the same series.
If an option is purchased by a Portfolio and is never exercised, the Portfolio
will lose the entire amount of the premium paid.
Options are traded both on national securities exchanges and in the
over-the-counter ("OTC") market. Exchange-traded options in the United States
are issued by a clearing organization affiliated with the exchange on which the
option is listed; the clearing organization in effect guarantees completion of
every exchange-traded option. In contrast, OTC options are contracts between a
Portfolio and a counter-party, with no clearing organization guarantee. Thus,
when a Portfolio writes an OTC option, it generally will be able to "close out"
the option prior to its expiration only by entering into a closing purchase
transaction with the dealer to whom the Portfolio originally sold the option.
There can be no assurance that the Portfolio would be able to liquidate an OTC
option at any time prior to expiration. Unless a Portfolio is able to effect a
closing purchase transaction in a covered OTC call option it has written, it
will not be able to liquidate securities used as cover until the option expires
or is exercised or until different cover is substituted. In the event of the
counter-party's insolvency, a Portfolio may be unable to liquidate its options
position and the associated cover. N&B Management monitors the creditworthiness
of dealers with which a Portfolio may engage in OTC options transactions, and
limits the Portfolios' counter-parties in such transactions to dealers with a
net worth of at least $20 million as reported in their latest financial
statements.
The assets used as cover for OTC options written by a Portfolio will be
considered illiquid unless the OTC options are sold to qualified dealers who
agree that the Portfolio may repurchase any OTC option it writes at a maximum
price to be calculated by a formula set forth in the option agreement. The cover
for an OTC call option written subject to this procedure will be considered
illiquid only to the extent that the maximum repurchase price under the formula
exceeds the intrinsic value of the option.
The premium received (or paid) by a Portfolio when it writes (or
purchases) an option is the amount at which the option is currently traded on
the applicable exchange, less (or plus) a commission. The premium may reflect,
among other things, the current market price of the underlying security, the
relationship of the exercise price to the market price, the historical price
volatility of the underlying security, the length of the option period, the
general supply of and demand for credit, and the interest rate environment. The
17
<PAGE>
premium received by a Portfolio for writing an option is recorded as a liability
on the Portfolio's statement of assets and liabilities. This liability is
adjusted daily to the option's current market value, which is the last sales
price on the day the option is being valued or, in the absence of any trades
thereof on that day, the mean between the closing bid and asked prices.
Closing transactions are effected in order to realize a profit on an
outstanding option, to prevent an underlying security from being called, or to
permit the sale or the put of the underlying security. If a Portfolio desires to
sell a security on which it has written a call option, it will seek to effect a
closing transaction prior to, or concurrently with, the sale of the security.
There is, of course, no assurance that a Portfolio will be able to effect
closing transactions at favorable prices. If a Portfolio cannot enter into such
a transaction, it may be required to hold a security that it might otherwise
have sold, in which case it would continue to be at market risk on the security.
A Portfolio will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more than the premium
received from writing the call option. Because increases in the market price of
a call option generally reflect increases in the market price of the underlying
security, any loss resulting from the repurchase of a call option is likely to
be offset, in whole or in part, by appreciation of the underlying security owned
by the Portfolio; however, the Portfolio could be in a less advantageous
position than if it had not written the call option.
A Portfolio pays brokerage commissions in connection with purchasing or
writing options, including those used to close out existing positions. These
brokerage commissions normally are higher than those applicable to purchases and
sales of portfolio securities.
FORWARD FOREIGN CURRENCY CONTRACTS (ALL PORTFOLIOS). Each Portfolio may
enter into contracts for the purchase or sale of a specific currency at a future
date at a fixed price ("forward contracts") in amounts not exceeding 5% of its
net assets. The Portfolios enter into forward contracts in an attempt to hedge
against changes in prevailing currency exchange rates. The Portfolios do not
engage in transactions in forward contracts for speculation; they view
investments in forward contracts as a means of establishing more definitely the
effective return on, or the purchase price of, securities denominated in foreign
18
<PAGE>
currencies that are held or intended to be acquired by them. Forward contract
transactions include forward sales or purchases of foreign currencies for the
purpose of protecting the U.S. dollar value of securities held or to be acquired
by a Portfolio or protecting the U.S. dollar equivalent of dividends, interest,
or other payments on those securities.
N&B Management believes that the use of foreign currency hedging
techniques, including "proxy-hedges," can provide significant protection of NAV
in the event of a general rise in the U.S. dollar against foreign currencies.
For example, the return available from securities denominated in a particular
foreign currency would diminish if the value of the U.S. dollar increased
against that currency. Such a decline could be partially or completely offset by
an increase in value of a hedge involving a forward contract to sell that
foreign currency or a proxy-hedge involving a forward contract to sell a
different foreign currency whose behavior is expected to resemble the currency
in which the securities being hedged are denominated and which is available on
more advantageous terms. However, a hedge or proxy-hedge cannot protect against
exchange rate risks perfectly, and, if N&B Management is incorrect in its
judgment of future exchange rate relationships, a Portfolio could be in a less
advantageous position than if such a hedge had not been established. If a
Portfolio uses proxy-hedging, it may experience losses on both the currency in
which it has invested and the currency used for hedging if the two currencies do
not vary with the expected degree of correlation. Because forward contracts are
not traded on an exchange, the assets used to cover such contracts may be
illiquid.
OPTIONS ON FOREIGN CURRENCIES (ALL PORTFOLIOS). Each Portfolio may
write and purchase covered call and put options on foreign currencies in amounts
not exceeding 5% of its net assets. A Portfolio would engage in such
transactions to protect against declines in the U.S. dollar value of portfolio
securities or increases in the U.S. dollar cost of securities to be acquired, or
to protect the U.S. dollar equivalent of dividends, interest, or other payments
on those securities. As with other types of options, however, writing an option
on foreign currency constitutes only a partial hedge, up to the amount of the
premium received. A Portfolio could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses. The
risks of currency options are similar to the risks of other options, as
discussed herein. Certain options on foreign currencies are traded on the OTC
market and involve liquidity and credit risks that may not be present in the
case of exchange-traded currency options. To the extent a Portfolio writes
options on foreign currencies that are traded on an exchange regulated by the
Commodity Futures Trading Commission ("CFTC") other than for BONA FIDE hedging
purposes (as defined by the CFTC), the aggregate initial margin and premiums on
those positions (excluding the amount by which options are "in-the-money") may
not exceed 5% of the Portfolio's net assets.
19
<PAGE>
COVER FOR OPTIONS AND FORWARD CONTRACTS (COLLECTIVELY, "HEDGING
INSTRUMENTS")(ALL PORTFOLIOS). Each Portfolio will comply with SEC guidelines
regarding "cover" for Hedging Instruments and, if the guidelines so require, set
aside in a segregated account with its custodian the prescribed amount of cash,
liquid equity securities or liquid debt securities. Securities held in a
segregated account cannot be sold while the options or forward strategy covered
by those securities is outstanding, unless they are replaced with other suitable
assets. As a result, segregation of a large percentage of a Portfolio's assets
could impede portfolio management or the Portfolio's ability to meet current
obligations. A Portfolio may be unable promptly to dispose of assets which
cover, or are segregated with respect to, an illiquid options or forward
position; this inability may result in a loss to the Portfolio.
GENERAL RISKS OF HEDGING INSTRUMENTS (ALL PORTFOLIOS). The primary
risks in using Hedging Instruments are (1) imperfect correlation or no
correlation between changes in market value of the securities or currencies held
or to be acquired by a Portfolio and the prices of Hedging Instruments; (2)
possible lack of a liquid secondary market for Hedging Instruments and the
resulting inability to close out Hedging Instruments when desired; (3) the fact
that the skills needed to use Hedging Instruments are different from those
needed to select a Portfolio's securities; (4) the fact that, although use of
these instruments for hedging purposes can reduce the risk of loss, they also
can reduce the opportunity for gain, or even result in losses, by offsetting
favorable price movements in hedged investments; and (5) the possible inability
of a Portfolio to purchase or sell a portfolio security at a time that would
otherwise be favorable for it to do so, or the possible need for a Portfolio to
sell a portfolio security at a disadvantageous time, due to its need to maintain
cover or to segregate securities in connection with its use of Hedging
Instruments. N&B Management intends to reduce the risk of imperfect correlation
by investing only in Hedging Instruments whose behavior is expected to resemble
or offset that of a Portfolio's underlying securities or currency. N&B
Management intends to reduce the risk that a Portfolio will be unable to close
out Hedging Instruments by entering into such transactions only if N&B
Management believes there will be an active and liquid secondary market. Hedging
Instruments used by the Portfolios are generally considered "derivatives." There
can be no assurance that a Portfolio's use of Hedging Instruments will be
successful.
20
<PAGE>
Each Portfolio's use of Hedging Instruments may be limited by the
provisions of the Internal Revenue Code of 1986, as amended ("Code"), with which
it must comply if its corresponding Fund is to qualify as a regulated investment
company ("RIC"). See "Additional Tax Information."
FIXED INCOME SECURITIES (ALL PORTFOLIOS). While the emphasis of the
Portfolios' investment programs is on common stocks and other equity securities,
the Portfolios may also invest in money market instruments, U.S. Government and
Agency Securities, and other fixed income securities. Each Portfolio may invest
in corporate bonds and debentures receiving one of the four highest ratings from
Standard & Poor's ("S&P"), Moody's Investors Service, Inc. ("Moody's"), or any
other nationally recognized statistical rating organization ("NRSRO") or, if not
rated by any NRSRO, deemed comparable by N&B Management to such rated securities
("Comparable Unrated Securities"). In addition, Neuberger & Berman PARTNERS
Portfolio may invest up to 15% of its net assets in corporate debt securities
rated below investment grade or Comparable Unrated Securities.
The ratings of an NRSRO represent its opinion as to the quality of
securities it undertakes to rate. Ratings are not absolute standards of quality;
consequently, securities with the same maturity, coupon, and rating may have
different yields. Although the Portfolios may rely on the ratings of any NRSRO,
the Portfolios primarily refer to ratings assigned by S&P and Moody's, which are
described in Appendix A to this SAI.
Fixed income securities are subject to the risk of an issuer's
inability to meet principal and interest payments on its obligations ("credit
risk") and are subject to price volatility due to such factors as interest rate
sensitivity, market perception of the creditworthiness of the issuer, and market
liquidity ("market risk"). Lower-rated securities are more likely to react to
developments affecting market and credit risk than are more highly rated
securities, which react primarily to movements in the general level of interest
rates. Debt securities in the lowest rating categories may involve a substantial
risk of default or may be in default. Changes in economic conditions or
developments regarding the individual issuer are more likely to cause price
volatility and weaken the capacity of the issuer of such securities to make
principal and interest payments than is the case for higher-grade debt
securities. An economic downturn affecting the issuer may result in an increased
incidence of default. The market for lower-rated securities may be thinner and
less active than for higher-rated securities. Pricing of thinly traded
securities requires greater judgment than pricing of securities for which market
transactions are regularly reported. N&B Management will invest in lower-rated
securities only when it concludes that the anticipated return on such an
investment to Neuberger & Berman PARTNERS Portfolio warrants exposure to the
additional level of risk.
21
<PAGE>
Subsequent to its purchase by a Portfolio, an issue of debt securities
may cease to be rated or its rating may be reduced, so that the securities would
no longer be eligible for purchase by that Portfolio. In such a case, each
Portfolio will engage in an orderly disposition of the downgraded securities to
the extent necessary to ensure that the Portfolio's holdings of securities rated
below investment grade and Comparable Unrated Securities will not exceed 5% of
its net assets (15% in the case of Neuberger & Berman PARTNERS Portfolio).
COMMERCIAL PAPER (ALL PORTFOLIOS). Commercial paper is a short-term
debt security issued by a corporation or bank, usually for purposes such as
financing current operations. The Portfolios may invest only in commercial paper
receiving the highest rating from S&P (A-1) or Moody's (P-1) or deemed by N&B
Management to be of comparable quality.
Each Portfolio may invest in commercial paper that cannot be resold to
the public without an effective registration statement under the 1933 Act. While
restricted commercial paper normally is deemed illiquid, N&B Management may in
certain cases determine that such paper is liquid, pursuant to guidelines
established by the Portfolio Trustees.
ZERO COUPON SECURITIES (NEUBERGER & BERMAN PARTNERS PORTFOLIO). This
Portfolio may invest up to 5% of its net assets in zero coupon securities, which
are debt obligations that do not entitle the holder to any periodic payment of
interest prior to maturity or that specify a future date when the securities
begin to pay current interest. Zero coupon securities are issued and traded at a
discount from their face amount or par value. This discount varies depending on
prevailing interest rates, the time remaining until cash payments begin, the
liquidity of the security, and the perceived credit quality of the issuer.
The discount on zero coupon securities ("original issue discount") must
be taken into account ratably by the Portfolio prior to the receipt of any
actual payments. Because Neuberger & Berman PARTNERS Assets must distribute
substantially all of its net income (including its share of the Portfolio's
accrued original issue discount) to its shareholders each year for income and
excise tax purposes, the Portfolio may have to dispose of portfolio securities
under disadvantageous circumstances to generate cash, or may be required to
borrow, to satisfy that Fund's distribution requirements. See "Additional Tax
Information."
22
<PAGE>
The market prices of zero coupon securities generally are more volatile
than the prices of securities that pay interest periodically. Zero coupon
securities are likely to respond to changes in interest rates to a greater
degree than other types of debt securities having a similar maturity and credit
quality.
CONVERTIBLE SECURITIES (ALL PORTFOLIOS). Each Portfolio may invest in
convertible securities. A convertible security entitles the holder to receive
the interest paid or accrued on debt or the dividend paid on preferred stock
until the convertible security matures or is redeemed, converted or exchanged.
Before conversion, such securities ordinarily provide a stream of income with
generally higher yields than common stocks of the same or similar issuers, but
lower than the yields on non-convertible debt. Convertible securities are
usually subordinated to comparable-tier non-convertible securities but rank
senior to common stock in a corporation's capital structure. The value of a
convertible security is a function of (1) its yield in comparison to the yields
of other securities of comparable maturity and quality that do not have a
conversion privilege and (2) its worth if converted into the underlying common
stock. Convertible debt securities are subject to each Portfolio's investment
policies and limitations concerning fixed income securities.
The price of a convertible security often reflects variations in the
price of the underlying common stock in a way that non-convertible debt may not.
Convertible securities are typically issued by smaller capitalization companies
whose stock prices may be volatile. A convertible security may be subject to
redemption at the option of the issuer at a price established in the security's
governing instrument. If a convertible security held by a Portfolio is called
for redemption, the Portfolio will be required to convert it into the underlying
common stock, sell it to a third party or permit the issuer to redeem the
security. Any of these actions could have an adverse effect on the Portfolio's
and its corresponding Fund's ability to achieve their investment objectives.
PREFERRED STOCK (ALL PORTFOLIOS). Each Portfolio may invest in
preferred stock. Unlike interest payments on debt securities, dividends on
preferred stock are generally payable at the discretion of the issuer's board of
directors. Preferred shareholders may have certain rights if dividends are not
paid but generally have no legal recourse against the issuer . Shareholders may
suffer a loss of value if dividends are not paid. The market prices of preferred
stocks are generally more sensitive to changes in the issuer's creditworthiness
than are the prices of debt securities.
23
<PAGE>
NEUBERGER & BERMAN FOCUS PORTFOLIO - DESCRIPTION OF ECONOMIC SECTORS
- ---------------------------------------------------------------------------
Neuberger & Berman FOCUS Portfolio seeks to achieve its investment
objective by investing principally in common stocks in the following thirteen
multi-industry economic sectors, normally making at least 90% of its investments
in not more than six such sectors:
(1) AUTOS AND HOUSING SECTOR: Companies engaged in design, production,
or sale of automobiles, automobile parts, mobile homes, or related products
("automobile industries") or design, construction, renovation, or refurbishing
of residential dwellings. The value of securities of companies in the automobile
industries is affected by, among other things, foreign competition, the level of
consumer confidence and consumer debt, and installment loan rates. The housing
construction industry may be affected by the level of consumer confidence and
consumer debt, mortgage rates, tax laws, and the inflation outlook.
(2) CONSUMER GOODS AND SERVICES SECTOR: Companies engaged in providing
consumer goods or services, including design, processing, production, sale, or
storage of packaged, canned, bottled, or frozen foods and beverages and design,
production, or sale of home furnishings, appliances, clothing, accessories,
cosmetics, or perfumes. Certain of these companies are subject to government
regulation affecting the use of various food additives and production methods,
which could affect profitability. Also, the success of food- and fashion-related
products may be strongly affected by fads, marketing campaigns, health concerns,
and other factors affecting supply and demand.
(3) DEFENSE AND AEROSPACE SECTOR: Companies engaged in research,
manufacture, or sale of products or services related to the defense or aerospace
industries, including air transport; data processing or computer-related
services; communications systems; military weapons or transportation; general
aviation equipment, missiles, space launch vehicles, or spacecraft; machinery
for guidance, propulsion, or control of flight vehicles; and airborne or
ground-based equipment essential to the test, operation, or maintenance of
flight vehicles. Because these companies rely largely on U.S. (and foreign)
governmental demand for their products and services, their financial conditions
are heavily influenced by defense spending policies.
(4) ENERGY SECTOR: Companies involved in the production, transmission,
or marketing of energy from oil, gas, or coal, as well as nuclear, geothermal,
oil shale, or solar sources of energy (but excluding public utility companies).
Also included are companies that provide component products or services for
those activities. The value of these companies' securities varies based on the
price and supply of energy fuels and may be affected by international politics,
energy conservation, the success of exploration projects, environmental
considerations, and the tax and other regulatory policies of various
governments.
24
<PAGE>
(5) FINANCIAL SERVICES SECTOR: Companies providing financial services
to consumers or industry, including commercial banks and savings and loan
associations, consumer and industrial finance companies, securities brokerage
companies, leasing companies, and insurance companies. These companies are
subject to extensive governmental regulations. Their profitability may fluctuate
significantly as a result of volatile interest rates, concerns about particular
banks and savings institutions, and general economic conditions.
(6) HEALTH CARE SECTOR: Companies engaged in design, manufacture, or
sale of products or services used in connection with the provision of health
care, including pharmaceutical companies; firms that design, manufacture, sell,
or supply medical, dental, or optical products, hardware, or services; companies
involved in biotechnology, medical diagnostic, or biochemical research and
development; and companies that operate health care facilities. Many of these
companies are subject to government regulation and potential health care
reforms, which could affect the price and availability of their products and
services. Also, products and services of these companies could quickly become
obsolete.
(7) HEAVY INDUSTRY SECTOR: Companies engaged in research, development,
manufacture, or marketing of products, processes, or services related to the
agriculture, chemicals, containers, forest products, non-ferrous metals, steel,
or pollution control industries, including synthetic and natural materials (for
example, chemicals, plastics, fertilizers, gases, fibers, flavorings, or
fragrances), paper, wood products, steel, and cement. Certain of these companies
are subject to state and federal regulation, which could require alteration or
cessation of production of a product, payment of fines, or cleaning of a
disposal site. Furthermore, because some of the materials and processes used by
these companies involve hazardous components, there are additional risks
associated with their production, handling, and disposal. The risk of product
obsolescence also is present.
(8) MACHINERY AND EQUIPMENT SECTOR: Companies engaged in the research,
development, or manufacture of products, processes, or services relating to
electrical equipment, machinery, pollution control, or construction services,
including transformers, motors, turbines, hand tools, earth-moving equipment,
and waste disposal services. The profitability of most of these companies may
fluctuate significantly in response to capital spending and general economic
conditions. As is the case for the heavy industry sector, there are risks
associated with the production, handling, and disposal of materials and
processes that involve hazardous components and the risk of product
obsolescence.
(9) MEDIA AND ENTERTAINMENT SECTOR: Companies engaged in design,
production, or distribution of goods or services for the media industries
(including television or radio broadcasting or manufacturing, publishing,
recordings and musical instruments, motion pictures, and photography) and the
entertainment industries (including sports arenas, amusement and theme parks,
gaming casinos, sporting goods, camping and recreational equipment, toys and
games, travel-related services, hotels and motels, and fast food and other
restaurants). Many products produced by companies in this sector -- for example,
video and electronic games -- may become obsolete quickly. Additionally,
companies engaged in television and radio broadcast are subject to government
regulation.
25
<PAGE>
(10) RETAILING SECTOR: Companies engaged in retail distribution of home
furnishings, food products, clothing, pharmaceuticals, leisure products, or
other consumer goods, including department stores, supermarkets, and retail
chains specializing in particular items such as shoes, toys, or pharmaceuticals.
The value of these companies' securities fluctuates based on consumer spending
patterns, which depend on inflation and interest rates, the level of consumer
debt, and seasonal shopping habits. The success or failure of a company in this
highly competitive sector depends on its ability to predict rapidly changing
consumer tastes.
(11) TECHNOLOGY SECTOR: Companies that are expected to have or develop
products, processes, or services that will provide, or will benefit
significantly from, technological advances and improvements or future automation
trends, including semiconductors, computers and peripheral equipment, scientific
instruments, computer software, telecommunications equipment, and electronic
components, instruments, and systems. These companies are sensitive to foreign
competition and import tariffs. Also, many of their products may become obsolete
quickly.
(12) TRANSPORTATION SECTOR: Companies involved in providing
transportation of people and products, including airlines, railroads, and
trucking firms. Revenues of these companies are affected by fluctuations in fuel
prices and government regulation of fares.
(13) UTILITIES SECTOR: Companies in the public utilities industry and
companies that derive a substantial majority of their revenues through supplying
public utilities (including companies engaged in the manufacture, production,
generation, transmission, or sale of gas and electric energy) and that provide
telephone, telegraph, satellite, microwave, and other communication facilities
to the public. The gas and electric public utilities industries are subject to
various uncertainties, including the outcome of political issues concerning the
environment, prices of fuel for electric generation, availability of natural
gas, and risks associated with the construction and operation of nuclear power
facilities.
26
<PAGE>
PERFORMANCE INFORMATION
Each Fund's performance figures are based on historical results and are
not intended to indicate future performance. The share price and total return of
each Fund will vary, and an investment in a Fund, when redeemed, may be worth
more or less than an investor's original cost.
TOTAL RETURN COMPUTATIONS
- -------------------------
Each Fund may advertise certain total return information. An average
annual compounded rate of return ("T") may be computed by using the redeemable
value at the end of a specified period ("ERV") of a hypothetical initial
investment of $1,000 ("P") over a period of time ("n") according to the formula:
P(1+T)n[SUPERSCRIPT] = ERV
Average annual total return smooths out year-to-year variations in
performance and, in that respect, differs from actual year-to-year results.
The Funds commenced operations in August or September 1996, except for
Neuberger & Berman GENESIS Assets, which has not commenced operations as of the
date of this SAI and, therefore, has no past performance. However, five mutual
funds that are series of Neuberger & Berman Equity Funds ("N&B Equity Funds"),
each of which has a name similar to a Fund and the same investment objective,
policies, and limitations as that Fund ("Sister Fund"), also invest in the five
Portfolios described herein. Each Sister Fund had a predecessor. The following
total return data is for each Fund (except Neuberger & Berman GENESIS Assets)
since its inception and, for periods prior to each Fund's inception, its Sister
Fund (which, as used herein, includes data for that Sister Fund's predecessor).
The Sister Funds have a different fee structure than the Funds and do not pay
12b-1 fees. Had the higher fees of the Funds been reflected, the total returns
shown below would have been lower.
The average annual total returns for Neuberger & Berman MANHATTAN
Assets and its Sister Fund for the one-, five-, and ten-year periods ended
February 28, 1997, were +12.72%, +14.08%, and +11.52%, respectively. If an
investor had invested $10,000 in that predecessor's shares on March 1, 1979 and
had reinvested all income dividends and other distributions, the NAV of that
investor's holdings would have been $171,569 on February 28, 1997.
27
<PAGE>
The average annual total returns for Neuberger & Berman GENESIS Assets'
Sister Fund for the one- and five-year periods ended February 28, 1997 and for
the period from September 27, 1988 (commencement of operations) through February
28, 1997, were +24.73%, +14.28%, and +14.28%, respectively. If an investor had
invested $10,000 in that predecessor's shares on September 27, 1988 and had
reinvested all income dividends and other distributions, the NAV of that
investor's holdings would have been $30,798 on February 28, 1997.
The average annual total returns for Neuberger & Berman FOCUS Assets
and its Sister Fund for the one-, five-, and ten-year periods ended February 28,
1997, were +20.82%, +18.18%, and +14.05%, respectively. If an investor had
invested $10,000 in that predecessor's shares on October 19, 1955 and had
reinvested all income dividends and other distributions, the NAV of that
investor's holdings would have been $1,142,884 on February 28, 1997.
The average annual total returns for Neuberger & Berman GUARDIAN Assets
and its Sister Fund for the one-, five-, and ten-year periods ended February 28,
1997, were +20.51%, +16.87%, and +14.04%, respectively. If an investor had
invested $10,000 in that predecessor's shares on June 1, 1950 and had reinvested
all income dividends and other distributions, the NAV of that investor's
holdings would have been $3,318,739 on February 28, 1997.
The average annual total returns for Neuberger & Berman PARTNERS Assets
and its Sister Fund for the one-, five-, and ten-year periods ended February 28,
1997, were +25.36%, +17.66%, and +13.70%, respectively. If an investor had
invested $10,000 in that predecessor's shares on January 20, 1975 and had
reinvested all income dividends and other distributions, the NAV of that
investor's holdings would have been $402,893 on February 28, 1997.
Prior to January 5, 1989, the investment policies of the predecessor of
Neuberger & Berman FOCUS Assets' Sister Fund required that at least 80% of its
investments normally be in energy-related investments; prior to November 1,
1991, those investment policies required that at least 25% of its investments
normally be in the energy sector. Neuberger & Berman FOCUS Assets may include
information reflecting the Sister Fund's predecessor's performance and expenses
for periods before November 1, 1991, in its advertisements, sales literature,
28
<PAGE>
financial statements, and other documents filed with the SEC and/or provided to
current and prospective shareholders. Investors should be aware that such
information may not necessarily reflect the level of performance and expenses
that would have been experienced had the Sister Fund's predecessor been
operating under the Fund's current investment policies.
COMPARATIVE INFORMATION
- -----------------------
From time to time each Fund's performance may be compared with:
(1) data (that may be expressed as rankings or ratings) published
by independent services or publications (including newspapers,
newsletters, and financial periodicals) that monitor the performance
of mutual funds, such as Lipper Analytical Services, Inc., C.D.A.
Investment Technologies, Inc., Wiesenberger Investment Companies
Service, Investment Company Data Inc., Morningstar, Inc., Micropal
Incorporated, and quarterly mutual fund rankings by Money, Fortune,
Forbes, Business Week, Personal Investor, and U.S. News & World Report
magazines, The Wall Street Journal, The New York Times, Kiplinger's
Personal Finance, and Barron's Newspaper, or
(2) recognized stock and other indices, such as the S&P "500"
Composite Stock Price Index ("S&P 500 Index"), S&P Small Cap 600 Index
("S&P 600 Index"), S&P Mid Cap 400 Index ("S&P 400 Index"), Russell
2000 Stock Index, Dow Jones Industrial Average ("DJIA"), Wilshire 1750
Index, Nasdaq Composite Index, Value Line Index, Montgomery Securities
Growth Stock Index, U.S. Department of Labor Consumer Price Index
("Consumer Price Index"), College Board Annual Survey of Colleges,
Kanon Bloch's Family Performance Index, the Barra Growth Index, the
Barra Value Index, and various other domestic, international, and
global indices. The S&P 500 Index is a broad index of common stock
prices, while the DJIA represents a narrower segment of industrial
companies. The S&P 600 Index includes stocks that range in market
value from $40 million to $2.3 billion, with an average of $451
million. The S&P 400 Index measures mid-sized companies that have an
average market capitalization of $1.6 billion. Each assumes
reinvestment of distributions and is calculated without regard to tax
consequences or the costs of investing. Each Portfolio may invest in
different types of securities from those included in some of the above
indices.
29
<PAGE>
Evaluations of the Funds' performance, their total returns, and
comparisons may be used in advertisements and in information furnished to
current and prospective shareholders (collectively, "Advertisements"). The Funds
may also be compared to individual asset classes such as common stocks,
small-cap stocks, or Treasury bonds, based on information supplied by Ibbotson
and Sinquefield.
OTHER PERFORMANCE INFORMATION
- -----------------------------
From time to time, information about a Portfolio's portfolio allocation
and holdings as of a particular date may be included in Advertisements for the
corresponding Fund. This information may include the Portfolio's portfolio
diversification by asset type. Information used in Advertisements may include
statements or illustrations relating to the appropriateness of types of
securities and/or mutual funds that may be employed to meet specific financial
goals, such as (1) funding retirement, (2) paying for children's education, and
(3) financially supporting aging parents.
N&B Management believes that many of its common stock funds may be
attractive investment vehicles for conservative investors who are interested in
long-term appreciation from stock investments, but who have a moderate tolerance
for risk. Such investors may include, for example, individuals (1) planning for
or facing retirement, (2) receiving or expecting to receive lump-sum
distributions from individual retirement accounts ("IRAs"), self-employed
individual retirement plans ("Keogh plans"), or other retirement plans, (3)
anticipating rollovers of CDs or IRAs, Keogh plans, or other retirement plans,
and (4) receiving a significant amount of money as a result of inheritance, sale
of a business, or termination of employment.
Investors who may find Neuberger & Berman PARTNERS Assets, Neuberger &
Berman GUARDIAN Assets or Neuberger & Berman FOCUS Assets to be an attractive
investment vehicle also include parents saving to meet college costs for their
children. For instance, the cost of a college education is rapidly approaching
the cost of the average family home. Estimates of total four-year costs
(including tuition, room and board, books and other expenses) for students
starting college in various years may be included in Advertisements, based on
the College Board Annual Survey of Colleges.
30
<PAGE>
Information relating to inflation and its effects on the dollar also
may be included in Advertisements. For example, after ten years, the purchasing
power of $25,000 would shrink to $16,621, $14,968, $13,465, and $12,100,
respectively, if the annual rates of inflation during that period were 4%, 5%,
6%, and 7%, respectively. (To calculate the purchasing power, the value at the
end of each year is reduced by the inflation rate for the ten-year period.)
From time to time the investment philosophy of N&B Management's
founder, Roy R. Neuberger, may be included in the Funds' Advertisements. This
philosophy is described in further detail in "The Art of Investing: A
Conversation with Roy Neuberger," attached as Appendix B to this SAI.
CERTAIN RISK CONSIDERATIONS
Although each Portfolio seeks to reduce risk by investing in a
diversified portfolio of securities, diversification does not eliminate all
risk. There can, of course, be no assurance any Portfolio will achieve its
investment objective.
TRUSTEES AND OFFICERS
The following table sets forth information concerning the trustees and
officers of the Trusts, including their addresses and principal business
experience during the past five years. Some persons named as trustees and
officers also serve in similar capacities for other funds and their
corresponding portfolios administered or managed by N&B Management and Neuberger
& Berman, LLC ("Neuberger & Berman").
31
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD
NAME, AGE, AND ADDRESS(1) WITH THE TRUSTS PRINCIPAL OCCUPATION(S)(2)
- ------------------------- --------------- --------------------------
<S> <C> <C>
Faith Colish (61) Trustee of each Trust Attorney at Law, Faith Colish,
63 Wall Street A Professional Corporation.
24th Floor
New York, NY 10005
Donald M. Cox (74) Trustee of each Trust Retired. Formerly Senior Vice
435 East 52nd Street President and Director of Exxon
New York, NY 10022 Corporation; Director of Emigrant
Savings Bank.
Stanley Egener* (62) Chairman of the Board, Principal of Neuberger & Berman;
Chief Executive President and Director of N&B
Officer, and Trustee Management; Chairman of the Board,
of each Trust Chief Executive Officer and Trustee
of eight other mutual funds for
which N&B Management acts as
investment manager or administrator.
Alan R. Gruber (69) Trustee of each Trust Chairman of the Executive and
Orion Capital Investment Committees of Orion
Corporation Capital Corporation (property and
600 Fifth Avenue casualty insurance) since 1997;
24th Floor prior thereto, Chairman and Chief
New York, NY 10020 Executive Officer of Orion Capital
Corporation; Director of Trenwick
Group, Inc. (property and casualty
reinsurance); Chairman of the Board
and Director of Guaranty National
Corporation (property and casualty
insurance); formerly Director of
Ketema, Inc. (diversified
manufacturer).
Howard A. Mileaf (60) Trustee of each Trust Vice President and Special Counsel
WHX Corporation to WHX Corporation (holding company)
110 East 59th Street since 1992; formerly Vice President
30th Floor and General Counsel of Keene
New York, NY 10022 Corporation (manufacturer of
Director of Kevlin Corporation
industrial products); (manufacturer
of microwave and other products).
32
<PAGE>
POSITIONS HELD
NAME, AGE, AND ADDRESS(1) WITH THE TRUSTS PRINCIPAL OCCUPATION(S)(2)
- ------------------------- --------------- --------------------------
Edward I. O'Brien* (68) Trustee of each Trust Until 1993, President of the
12 Woods Lane Securities Industry Association
Scarsdale, NY 10583 ("SIA") (securities industry's
representative in government
relations and regulatory matters at
the federal and state levels); until
November 1993, employee of the SIA;
Director of Legg Mason, Inc.
John T. Patterson, Jr. (68) Trustee of each Trust Retired. Formerly, President of
183 Ledge Drive SOBRO (South Bronx Overall Economic
Torrington, CT 06790 Development Corporation).
John P. Rosenthal (64) Trustee of each Trust Senior Vice President of Burnham
Burnham Securities Inc. Securities Inc. (a registered
Burnham Asset Management Corp. broker-dealer) since 1991; formerly
1325 Avenue of the Americas Partner of Silberberg, Rosenthal &
17th Floor Co. (member of National Association
New York, NY 10019 of Securities Dealers, Inc.);
Director, Cancer Treatment Holdings,
Inc.
Cornelius T. Ryan (65) Trustee of each Trust General Partner of Oxford Partners
Oxford Bioscience and Oxford Bioscience Partners
Partners (venture capital partnerships) and
315 Post Road West President of Oxford Venture
Westport, CT 06880 Corporation; Director of Capital
Cash Management Trust (money market
fund) and Prime Cash Fund.
Gustave H. Shubert (68) Trustee of each Trust Senior Fellow/ Corporate Advisor and
13838 Sunset Boulevard Advisory Trustee of Rand (a
Pacific Palisades, CA 90272 non-profit public interest research
institution) since 1989; Honorary
Member of the Board of Overseers of
the Institute for Civil Justice, the
Policy Advisory Committee of the
Clinical Scholars Program at the
University of California, the
American Association for the
Advancement of Science, the Counsel
on Foreign Relations, and the
Institute for Strategic Studies
(London); advisor to the Program
Evaluation and Methodology Division
of the U.S. General Accounting
Office; formerly Senior Vice
President and Trustee of Rand.
33
<PAGE>
POSITIONS HELD
NAME, AGE, AND ADDRESS(1) WITH THE TRUSTS PRINCIPAL OCCUPATION(S)(2)
- ------------------------- --------------- --------------------------
Lawrence Zicklin* (60) President and Trustee Principal of Neuberger & Berman;
of each Trust Director of N&B Management;
President and/or Trustee of five
other mutual funds for which N&B
Management acts as investment
manager or administrator.
Daniel J. Sullivan (57) Vice President of each Senior Vice President of N&B
Trust Management since 1992; prior
thereto, Vice President of N&B
Management; Vice President of eight
other mutual funds for which N&B
Management acts as investment
manager or administrator.
Michael J. Weiner (50) Vice President and Senior Vice President of N&B
Principal Financial Management since 1992; Treasurer of
Officer of each Trust N&B Management from 1992 to 1996;
prior thereto, Vice President and
Treasurer of N&B Management and
Treasurer of certain mutual funds
for which N&B Management acted as
investment adviser; Vice President
and Principal Financial Officer of
eight other mutual funds for which
N&B Management acts as investment
manager or administrator.
Claudia A. Brandon (40) Secretary of each Trust Vice President of N&B Management;
Secretary of eight other mutual
funds for which N&B Management acts
as investment manager or
administrator.
Richard Russell (50) Treasurer and Principal Vice President of N&B Management
Accounting Officer since 1993; prior thereto, Assistant
of each Trust Vice President of N&B Management;
Treasurer and Principal Accounting
Officer of eight other mutual funds
for which N&B Management acts as
investment manager or administrator.
34
<PAGE>
POSITIONS HELD
NAME, AGE, AND ADDRESS(1) WITH THE TRUSTS PRINCIPAL OCCUPATION(S)(2)
- ------------------------- --------------- --------------------------
Stacy Cooper-Shugrue (34) Assistant Secretary Assistant Vice President of N&B
of each Trust Management since 1993; prior
thereto, employee of N&B Management;
Assistant Secretary of eight other
mutual funds for which N&B
Management acts as investment
manager or administrator.
C. Carl Randolph (59) Assistant Secretary Principal of Neuberger & Berman
of each Trust since 1992; prior thereto, employee
of Neuberger & Berman; Assistant
Secretary of eight other mutual
funds for which N&B Management acts
as investment manager or
administrator.
Barbara DiGiorgio (38) Assistant Treasurer Assistant Vice President of N&B
of each Trust Management since 1993; prior
thereto, employee of N&B Management;
Assistant Treasurer since 1996 of
eight other mutual funds for which
N&B Management acts as investment
manager or administrator.
Celeste Wischerth (36) Assistant Treasurer Assistant Vice President of N&B
of each Trust Management since 1994; prior
thereto, employee of N&B Management;
Assistant Treasurer since 1996 of
eight other mutual funds for which
N&B Management acts as investment
manager or administrator.
</TABLE>
- --------------------
(1) Unless otherwise indicated, the business address of each listed person is
605 Third Avenue, New York, New York 10158.
(2) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
35
<PAGE>
* Indicates a trustee who is an "interested person" of each Trust within the
meaning of the 1940 Act. Messrs. Egener and Zicklin are interested persons by
virtue of the fact that they are officers and/or directors of N&B Management and
principals of Neuberger & Berman. Mr. O'Brien is an interested person by virtue
of the fact that he is a director of Legg Mason, Inc., a wholly owned subsidiary
of which, from time to time, serves as a broker or dealer to the Portfolios and
other funds for which N&B Management serves as investment manager.
The Trust's Trust Instrument and Managers Trust's Declaration
of Trust provide that each such Trust will indemnify its trustees and officers
against liabilities and expenses reasonably incurred in connection with
litigation in which they may be involved because of their offices with the
Trust, unless it is adjudicated that they (a) engaged in bad faith, willful
misfeasance, gross negligence, or reckless disregard of the duties involved in
the conduct of their offices, or (b) did not act in good faith in the reasonable
belief that their action was in the best interest of the Trust. In the case of
settlement, such indemnification will not be provided unless it has been
determined (by a court or other body approving the settlement or other
disposition, by a majority of disinterested trustees based upon a review of
readily available facts, or in a written opinion of independent counsel) that
such officers or trustees have not engaged in willful misfeasance, bad faith,
gross negligence, or reckless disregard of their duties.
The following table sets forth information concerning the compensation
of the trustees of the Trust. None of the Neuberger & Berman Funds(R) has any
retirement plan for its trustees or officers.
36
<PAGE>
TABLE OF COMPENSATION
FOR THE FISCAL YEAR ENDED 8/31/96
---------------------------------
TOTAL COMPENSATION FROM
AGGREGATE TRUSTS IN THE NEUBERGER &
NAME AND POSITION WITH COMPENSATION BERMAN FUND COMPLEX
THE TRUST FROM THE TRUST PAID TO TRUSTEES
- ----------------------- -------------- -------------------------
Faith Colish $0 $38,500
Trustee (5 other investment
companies)
Donald M. Cox $0 $31,000
Trustee (3 other investment
companies)
Stanley Egener $0 $0
Chairman of the Board, (9 other investment
Chief Executive companies)
Officer, and Trustee
Alan R. Gruber $0 $28,000
Trustee (3 other investment
companies)
Howard A. Mileaf $0 $37,000
Trustee (4 other investment
companies)
Edward I. O'Brien Trustee $0 $31,500
(3 other investment
companies)
John T. Patterson, Jr. $0 $40,500
Trustee (4 other investment
companies)
37
<PAGE>
TOTAL COMPENSATION FROM
AGGREGATE TRUSTS IN THE NEUBERGER &
NAME AND POSITION WITH COMPENSATION BERMAN FUND COMPLEX
THE TRUST FROM THE TRUST PAID TO TRUSTEES
- ----------------------- -------------- -------------------------
John P. Rosenthal $0 $36,500
Trustee (4 other investment
companies)
Cornelius T. Ryan $0 $30,500
Trustee (3 other investment
companies)
Gustave H. Shubert $0 $30,500
Trustee (3 other investment
companies)
Lawrence Zicklin $0 $0
President and Trustee (5 other investment
companies)
At March 1, 1997, the trustees and officers of the Trusts, as a group,
owned beneficially or of record less than 1% of the outstanding shares of each
Fund.
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
INVESTMENT MANAGER AND ADMINISTRATOR
- ------------------------------------
Because all of the Funds' net investable assets are invested in their
corresponding Portfolios, the Funds do not need an investment manager. N&B
Management serves as the Portfolios' investment manager pursuant to a management
agreement with Managers Trust, dated as of August 2, 1993 ("Management
Agreement"). The Management Agreement was approved for each Portfolio by the
Portfolio Trustees, including a majority of the Portfolio Trustees who were not
"interested persons" of N&B Management or Managers Trust ("Independent Portfolio
Trustees"), on July 15, 1993, and was approved by the holders of the interests
in all the Portfolios on August 2, 1993.
38
<PAGE>
The Management Agreement provides, in substance, that N&B Management
will make and implement investment decisions for the Portfolios in its
discretion and will continuously develop an investment program for the
Portfolios' assets. The Management Agreement permits N&B Management to effect
securities transactions on behalf of each Portfolio through associated persons
of N&B Management. The Management Agreement also specifically permits N&B
Management to compensate, through higher commissions, brokers and dealers who
provide investment research and analysis to the Portfolios, although N&B
Management has no current plans to pay a material amount of such compensation.
N&B Management provides to each Portfolio, without separate cost,
office space, equipment, and facilities and the personnel necessary to perform
executive, administrative, and clerical functions. N&B Management pays all
salaries, expenses, and fees of the officers, trustees, and employees of
Managers Trust who are officers, directors, or employees of N&B Management. Two
directors of N&B Management (who also are principals of Neuberger & Berman), one
of whom also serves as an officer of N&B Management, presently serve as trustees
and officers of the Trusts. See "Trustees and Officers." Each Portfolio pays N&B
Management a management fee based on the Portfolio's average daily net assets,
as described in the Prospectus.
N&B Management provides facilities, services and personnel, as well as
accounting, recordkeeping, and other services, to each Fund pursuant to an
administration agreement with the Trust, dated November 1, 1994, as amended
August 2, 1996 ("Administration Agreement"). Each Fund (except Neuberger &
Berman GENESIS Assets) was authorized to become subject to the Administration
Agreement by vote of the Fund Trustees on October 25, 1995, and became subject
to it on February 12, 1996. Neuberger & Berman GENESIS Assets was authorized to
become subject to the Administration Agreement by vote of the Fund Trustees on
October 24, 1996, and became subject to it on March 31, 1997. For such
administrative services, each Fund pays N&B Management a fee based on the Fund's
average daily net assets, as described in the Prospectus. N&B Management enters
into administrative services agreements with Institutions, pursuant to which it
compensates Institutions for accounting, recordkeeping and other services that
they provide in connection with investments in the Funds.
39
<PAGE>
Institutions may be subject to federal or state laws that limit their
ability to provide certain administrative or distribution-related services. For
example, the Glass-Steagall Act is generally interpreted to prohibit most banks
from underwriting mutual fund shares. N&B Management intends to contract with
Institutions for only those services they may legally provide. If, due to a
change in the laws governing Institutions or in the interpretation of any such
law, an Institution is prohibited from performing some or all of the
above-described services, N&B Management may be required to find alternative
means of providing those services. Any such change is not expected to impact the
Funds or their shareholders adversely.
During the period from August 19, 1996 (commencement of operations) to
August 31, 1996, Neuberger & Berman PARTNERS Assets accrued management and
administration fees of $4. As of August 31, 1996, none of the other Funds had
commenced operations; therefore, they had not accrued any management or
administration fees.
N&B Management has voluntarily undertaken until December 31, 1998, to
reimburse each Fund for its Total Operating Expenses and its pro rata share of
its corresponding Portfolio's Total Operating Expenses which, in the aggregate,
exceed 1.50% per annum of the Fund's average daily net assets. "Total Operating
Expenses" exclude interest, taxes, brokerage commissions, and extraordinary
expenses. During the period from August 19, 1996 (commencement of operations) to
August 31, 1996, N&B Management reimbursed Neuberger & Berman PARTNERS Assets
for $13,840 of expenses. As noted above, none of the other Funds had commenced
operations or accrued any fees or expenses as of August 31, 1996.
The Management Agreement continues until August 2, 1997. The Management
Agreement is renewable thereafter from year to year with respect to each
Portfolio, so long as its continuance is approved at least annually (1) by the
vote of a majority of the Independent Portfolio Trustees, cast in person at a
meeting called for the purpose of voting on such approval, and (2) by the vote
of a majority of the Portfolio Trustees or by a 1940 Act majority vote of the
outstanding interests in that Portfolio. The Administration Agreement continues
until August 2, 1997. The Administration Agreement is renewable from year to
year with respect to a Fund, so long as its continuance is approved at least
annually (1) by the vote of a majority of the Fund Trustees who are not
"interested persons" of N&B Management or the Trust ("Independent Fund
Trustees"), cast in person at a meeting called for the purpose of voting on such
approval, and (2) by the vote of a majority of the Fund Trustees or by a 1940
Act majority vote of the outstanding shares in that Fund.
40
<PAGE>
The Management Agreement is terminable, without penalty, with respect
to a Portfolio on 60 days' written notice either by Managers Trust or by N&B
Management. The Administration Agreement is terminable, without penalty, with
respect to a Fund on 60 days' written notice either by N&B Management or by the
Trust. Each Agreement terminates automatically if it is assigned.
SUB-ADVISER
- -----------
N&B Management retains Neuberger & Berman, 605 Third Avenue, New York,
NY 10158-3698, as sub-adviser with respect to each Portfolio pursuant to a
sub-advisory agreement dated August 2, 1993 ("Sub-Advisory Agreement"). The
Sub-Advisory Agreement was approved by the Portfolio Trustees, including a
majority of the Independent Portfolio Trustees, on July 15, 1993 and was
approved by the holders of the interests in the Portfolios on August 2, 1993.
The Sub-Advisory Agreement provides in substance that Neuberger &
Berman will furnish to N&B Management, upon reasonable request, the same type of
investment recommendations and research that Neuberger & Berman, from time to
time, provides to its principals and employees for use in managing client
accounts. In this manner, N&B Management expects to have available to it, in
addition to research from other professional sources, the capability of the
research staff of Neuberger & Berman. This staff consists of approximately
fourteen investment analysts, each of whom specializes in studying one or more
industries, under the supervision of the Director of Research, who is also
available for consultation with N&B Management. The Sub-Advisory Agreement
provides that N&B Management will pay for the services rendered by Neuberger &
Berman based on the direct and indirect costs to Neuberger & Berman in
connection with those services. Neuberger & Berman also serves as sub-adviser
for all of the other mutual funds managed by N&B Management.
The Sub-Advisory Agreement continues until August 2, 1997 and is
renewable from year to year, subject to approval of its continuance in the same
manner as the Management Agreement. The Sub-Advisory Agreement is subject to
termination, without penalty, with respect to each Portfolio by the Portfolio
Trustees or a 1940 Act majority vote of the outstanding interests in that
Portfolio, by N&B Management, or by Neuberger & Berman on not less than 30 nor
more than 60 days' written notice. The Sub-Advisory Agreement also terminates
automatically with respect to each Portfolio if it is assigned or if the
Management Agreement terminates with respect to that Portfolio.
Most money managers that come to the Neuberger & Berman organization
have at least fifteen years experience. Neuberger & Berman and N&B Management
employ experienced professionals that work in a competitive environment.
41
<PAGE>
INVESTMENT COMPANIES MANAGED
- ----------------------------
N&B Management currently serves as investment manager of the following
investment companies. As of December 31, 1996, these companies, along with one
other investment company advised by Neuberger & Berman, had aggregate net assets
of approximately $15.2 billion, as shown in the following list:
Approximate
Net Assets at
December 31,
NAME 1996
---- -------------
Neuberger & Berman Cash Reserves Portfolio.........................$499,989,187
(investment portfolio for Neuberger & Berman
Cash Reserves)
Neuberger & Berman Government Money Portfolio......................$402,843,399
(investment portfolio for Neuberger & Berman
Government Money Fund)
Neuberger & Berman Limited Maturity Bond Portfolio.................$272,342,178
(investment portfolio for Neuberger & Berman
Limited Maturity Bond Fund and Neuberger &
Berman Limited Maturity Bond Trust)
Neuberger & Berman Ultra Short Bond Portfolio.......................$89,819,435
(investment portfolio for Neuberger & Berman
Ultra Short Bond Fund and Neuberger & Berman
Ultra Short Bond Trust)
Neuberger & Berman Municipal Money Portfolio.......................$135,494,410
(investment portfolio for Neuberger & Berman
Municipal Money Fund)
Neuberger & Berman Municipal Securities Portfolio...................$38,634,808
(investment portfolio for Neuberger & Berman
Municipal Securities Trust)
Neuberger & Berman New York Insured
Intermediate Portfolio...........................................$9,877,137
(investment portfolio for Neuberger & Berman
New York Insured Intermediate Fund)
42
<PAGE>
Approximate
Net Assets at
December 31,
NAME 1996
---- -------------
Neuberger & Berman Focus Portfolio...............................$1,260,252,029
(investment portfolio for Neuberger & Berman
Focus Fund, Neuberger & Berman Focus Trust,
and Neuberger & Berman Focus Assets)
Neuberger & Berman Genesis Portfolio...............................$398,343,946
(investment portfolio for Neuberger & Berman
Genesis Fund and Neuberger & Berman Genesis Trust)
Neuberger & Berman Guardian Portfolio............................$7,071,702,448
(investment portfolio for Neuberger & Berman
Guardian Fund, Neuberger & Berman Guardian
Trust, and Neuberger & Berman Guardian Assets)
Neuberger & Berman International Portfolio..........................$73,377,704
(investment portfolio for Neuberger & Berman
International Fund)
Neuberger & Berman Manhattan Portfolio.............................$574,606,109
(investment portfolio for Neuberger & Berman
Manhattan Fund, Neuberger & Berman
Manhattan Trust, and Neuberger & Berman Manhattan Assets)
Neuberger & Berman Partners Portfolio............................$2,405,865,742
(investment portfolio for Neuberger & Berman
Partners Fund, Neuberger & Berman Partners
Trust, and Neuberger & Berman Partners Assets)
Neuberger & Berman Socially Responsive Portfolio...................$188,366,394
(investment portfolio for Neuberger & Berman
Socially Responsive Fund, Neuberger & Berman
NYCDC Socially Responsive Trust, and
Neuberger & Berman Socially Responsive Trust)
Advisers Managers Trust (six series).............................$1,695,378,078
43
<PAGE>
In addition, Neuberger & Berman serves as investment adviser to one
investment company, Plan Investment Fund, with assets of $70,276,858 at December
31, 1996.
The investment decisions concerning the Portfolios and the other mutual
funds managed by N&B Management (collectively, "Other N&B Funds") have been and
will continue to be made independently of one another. In terms of their
investment objectives, most of the Other N&B Funds differ from the Portfolios.
Even where the investment objectives are similar, however, the methods used by
the Other N&B Funds and the Portfolios to achieve their objectives may differ.
The investment results achieved by all of the mutual funds managed by N&B
Management have varied from one another in the past and are likely to vary in
the future.
There may be occasions when a Portfolio and one or more of the Other
N&B Funds or other accounts managed by Neuberger & Berman are contemporaneously
engaged in purchasing or selling the same securities from or to third parties.
When this occurs, the transactions are averaged as to price and allocated, in
terms of amount, in accordance with a formula considered to be equitable to the
funds involved. Although in some cases this arrangement may have a detrimental
effect on the price or volume of the securities as to a Portfolio, in other
cases it is believed that a Portfolio's ability to participate in volume
transactions may produce better executions for it. In any case, it is the
judgment of the Portfolio Trustees that the desirability of the Portfolios'
having their advisory arrangements with N&B Management outweighs any
disadvantages that may result from contemporaneous transactions.
The Portfolios are subject to certain limitations imposed on all
advisory clients of Neuberger & Berman (including the Portfolios, the Other N&B
Funds, and other managed accounts) and personnel of Neuberger & Berman and its
affiliates. These include, for example, limits that may be imposed in certain
industries or by certain companies, and policies of Neuberger & Berman that
limit the aggregate purchases, by all accounts under management, of the
outstanding shares of public companies.
MANAGEMENT AND CONTROL OF N&B MANAGEMENT
- ----------------------------------------
The directors and officers of N&B Management, all of whom have offices
at the same address as N&B Management, are Richard A. Cantor, Chairman of the
Board and director; Stanley Egener, President and director; Theodore P.
Giuliano, Vice President and director; Michael M. Kassen, Vice President and
director; Irwin Lainoff, director; Lawrence Zicklin, director; Daniel J.
Sullivan, Senior Vice President; Peter E. Sundman, Senior Vice President;
Michael J. Weiner, Senior Vice President; Claudia A. Brandon, Vice President;
44
<PAGE>
Patrick T. Byrne, Vice President; William Cunningham, Vice President; Clara Del
Villar, Vice President; Mark R. Goldstein, Vice President; Michael Lamberti,
Vice President; Josephine P. Mahaney, Vice President; Ellen Metzger, Vice
President and Secretary; Paul Metzger, Vice President; Janet W. Prindle, Vice
President; Felix Rovelli, Vice President; Richard Russell, Vice President; Kent
C. Simons, Vice President; Frederick B. Soule, Vice President; Judith M. Vale,
Vice President; Susan Walsh, Vice President; Thomas Wolfe, Vice President;
Andrea Trachtenberg, Vice President of Marketing; Robert Conti, Treasurer; Stacy
Cooper-Shugrue, Assistant Vice President; Barbara DiGiorgio, Assistant Vice
President; Roberta D'Orio, Assistant Vice President; Joseph G. Galli, Assistant
Vice President; Robert I. Gendelman, Assistant Vice President; Leslie
Holliday-Soto, Assistant Vice President; Jody L. Irwin, Assistant Vice
President; Carmen G. Martinez, Assistant Vice President; Joseph S. Quirk,
Assistant Vice President; Kevin L. Risen, Assistant Vice President; Susan
Switzer, Assistant Vice President; Celeste Wischerth, Assistant Vice President;
KimMarie Zamot, Assistant Vice President; and Loraine Olavarria, Assistant
Secretary. Messrs. Cantor, Egener, Giuliano, Lainoff, Zicklin, Sundman,
Goldstein, Kassen, Simons, Gendelman and Risen and Mmes. Prindle and Vale are
principals of Neuberger & Berman.
Messrs. Egener and Zicklin are trustees and officers, and Messrs.
Sullivan, Weiner, and Russell and Mmes. Brandon, Cooper-Shugrue, DiGiorgio, and
Wischerth are officers, of each Trust. C. Carl Randolph, a principal of
Neuberger & Berman, also is an officer of each Trust.
All of the outstanding voting stock in N&B Management is owned by
persons who are also principals of Neuberger & Berman.
DISTRIBUTION ARRANGEMENTS
DISTRIBUTOR
- -----------
N&B Management serves as the distributor ("Distributor") in connection
with the offering of each Fund's shares to Institutions. In connection with the
sale of its shares, each Fund has authorized the Distributor to give only the
information, and to make only the statements and representations, contained in
the Prospectus and this SAI or that properly may be included in sales literature
and advertisements in accordance with the 1933 Act, the 1940 Act, and applicable
rules of self-regulatory organizations. Sales may be made only by the
Prospectus, which may be delivered personally, through the mails, or by
electronic means. The Distributor is the Funds' "principal underwriter" within
the meaning of the 1940 Act and, as such, acts as agent in arranging for the
sale of each Fund's shares to Institutions without sales commission and bears
advertising and promotion expenses incurred in the sale of the Funds' shares.
45
<PAGE>
The Trust, on behalf of each Fund, and the Distributor are parties to a
Distribution and Services Agreement dated February 12, 1996, as amended August
2, 1996 ("Distribution Agreement"). The Distribution Agreement was approved by
the Fund Trustees, including a majority of the Independent Fund Trustees and a
majority of those Independent Fund Trustees who have no direct or indirect
financial interest in the Distribution Agreement or the Trust's plan pursuant to
Rule 12b-1 under the 1940 Act ("Plan") ("Rule 12b-1 Trustees"), on October 25,
1995. The Distribution Agreement continues until August 2, 1997. The
Distribution Agreement may be renewed annually if specifically approved by (1)
the vote of a majority of the Fund Trustees or a 1940 Act majority vote of the
Fund's outstanding shares and (2) the vote of a majority of the Independent Fund
Trustees and a majority of the Rule 12b-1 Trustees, cast in person at a meeting
called for the purpose of voting on such approval. The Distribution Agreement
may be terminated by either party and will terminate automatically on its
assignment, in the same manner as the Management Agreement.
RULE 12B-1 PLAN
- ---------------
The Fund Trustees adopted the Plan on October 25, 1995, as amended on
January 31, 1996 and August 2, 1996. Neuberger & Berman GENESIS Assets was
authorized to become subject to the Plan by vote of the Fund Trustees on October
24, 1996, and became subject to it on March 31, 1997. The Plan provides that
each Fund will compensate N&B Management for administrative and other services
provided to the Funds, its activities and expenses related to the sale and
distribution of Fund shares, and ongoing services to investors in the Funds.
Under the Plan, N&B Management receives from each Fund a fee at the annual rate
of 0.25% of that Fund's average daily net assets. N&B Management may pay up to
the full amount of this fee to Institutions that distribute or make available
Fund shares and/or provide services to the Funds and their shareholders. The fee
paid to an Institution is based on the level of such services provided.
Institutions may use the payments for, among other purposes, compensating
employees engaged in sales and/or shareholder servicing. The amount of fees paid
by a Fund during any year may be more or less than the cost of distribution and
other services provided to the Fund.
The Plan provides that a written report identifying the amounts
expended by each Fund and the purposes for which such expenditures were made
must be provided to the Fund Trustees for their review at least quarterly.
46
<PAGE>
Prior to approving the Plan, the Fund Trustees considered various
factors relating to the implementation of the Plan and determined that there is
a reasonable likelihood that the Plan will benefit the Funds and their
shareholders. The Fund Trustees noted that the purpose of the master/feeder fund
structure is to permit access to a variety of markets. To the extent the Plan
allows the Funds to penetrate markets to which they would not otherwise have
access, the Plan may result in additional sales of Fund shares; this, in turn,
may enable the Funds to achieve economies of scale that could reduce expenses.
In addition, certain on-going shareholder services may be provided more
effectively by Institutions with which shareholders have an existing
relationship.
The Plan continues until August 2, 1997. The Plan is renewable
thereafter from year to year with respect to each Fund, so long as its
continuance is approved at least annually (1) by the vote of a majority of the
Fund Trustees and (2) by a vote of the majority of the Rule 12b-1 Trustees, cast
in person at a meeting called for the purpose of voting on such approval. The
Plan may not be amended to increase materially the amount of fees paid by any
Fund thereunder unless such amendment is approved by a 1940 Act majority vote of
the outstanding shares of the Fund and by the Fund Trustees in the manner
described above. The Plan is terminable with respect to a Fund at any time by a
vote of a majority of the Rule 12b-1 Trustees or by a 1940 Act majority vote of
the outstanding shares in the Fund.
ADDITIONAL EXCHANGE INFORMATION
As more fully set forth in the section of the Prospectus entitled
"Exchanging Shares," an Institution may exchange shares of any Fund for shares
of one or more of the other Funds described in the Prospectus. Any Fund may
terminate or modify its exchange privilege in the future.
Before effecting an exchange, Fund shareholders must obtain and should
review a currently effective Prospectus of the Fund into which the exchange is
to be made. An exchange is treated as a sale for federal income tax purposes
and, depending on the circumstances, a short- or long-term capital gain or loss
may be realized.
47
<PAGE>
ADDITIONAL REDEMPTION INFORMATION
SUSPENSION OF REDEMPTIONS
- -------------------------
The right to redeem a Fund's shares may be suspended or payment of the
redemption price postponed (1) when the NYSE is closed (other than weekend and
holiday closings), (2) when trading on the NYSE is restricted, (3) when an
emergency exists as a result of which it is not reasonably practicable for its
corresponding Portfolio to dispose of securities it owns or fairly to determine
the value of its net assets, or (4) for such other period as the SEC may by
order permit for the protection of the Fund's shareholders. Applicable SEC rules
and regulations shall govern whether the conditions prescribed in (2) or (3)
exist. If the right of redemption is suspended, shareholders may withdraw their
offers of redemption, or they will receive payment at the NAV per share in
effect at the close of business on the first day the NYSE is open ("Business
Day") after termination of the suspension.
REDEMPTIONS IN KIND
- -------------------
Each Fund reserves the right, under certain conditions, to honor any
request for redemption (or a combination of requests from the same shareholder
in any 90-day period) exceeding $250,000 or 1% of the net assets of the Fund,
whichever is less, by making payment in whole or in part in securities valued as
described under "Share Prices and Net Asset Value" in the Prospectus. If payment
is made in securities, an Institution generally will incur brokerage expenses or
other transaction costs in converting those securities into cash and will be
subject to fluctuation in the market prices of those securities until they are
sold. The Funds do not redeem in kind under normal circumstances, but would do
so when the Fund Trustees determined that it was in the best interests of a
Fund's shareholders as a whole.
DIVIDENDS AND OTHER DISTRIBUTIONS
Each Fund distributes to its shareholders amounts equal to
substantially all of its share of any net investment income (after deducting
expenses incurred directly by the Fund), any net realized capital gains (both
48
<PAGE>
long-term and short-term), and any net realized gains from foreign currency
transactions earned or realized by its corresponding Portfolio. Each Fund
calculates its net investment income and NAV per share as of the close of
regular trading on the NYSE on each Business Day (usually 4:00 p.m. Eastern
time).
A Portfolio's net investment income consists of all income accrued on
portfolio assets less accrued expenses, but does not include capital and foreign
currency gains and losses. Net investment income and realized gains and losses
are reflected in a Portfolio's NAV (and, hence, its corresponding Fund's NAV)
until they are distributed. Dividends from net investment income and
distributions of net realized capital and foreign currency gains, if any,
normally are paid once annually, in December, except that Neuberger & Berman
GUARDIAN Assets distributes substantially all of its share of Neuberger & Berman
GUARDIAN Portfolio's net investment income, if more than a de minimis amount,
near the end of each calendar quarter.
Dividends and other distributions are automatically reinvested in
additional shares of the distributing Fund, unless the Institution elects to
receive them in cash ("cash election"). To the extent dividends and other
distributions are subject to federal, state, or local income taxation, they are
taxable to the shareholders whether received in cash or reinvested in Fund
shares. A cash election with respect to any Fund remains in effect until the
Institution notifies the Fund in writing to discontinue the election.
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUNDS
- ---------------------
In order to qualify for treatment as a RIC under the Code, each Fund
must distribute to its shareholders for each taxable year at least 90% of its
investment company taxable income (consisting generally of net investment
income, net short-term capital gain, and net gains from certain foreign currency
transactions) ("Distribution Requirement") and must meet several additional
requirements. With respect to each Fund, these requirements include the
following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities
loans, and gains from the sale or other disposition of securities or foreign
49
<PAGE>
currencies, or other income (including gains from Hedging Instruments) derived
with respect to its business of investing in securities or those currencies
("Income Requirement"); (2) the Fund must derive less than 30% of its gross
income each taxable year from the sale or other disposition of securities, or
any of the following, that were held for less than three months -- (i) options
(other than those on foreign currencies), or (ii) foreign currencies or Hedging
Instruments thereon that are not directly related to the Fund's principal
business of investing in securities (or options with respect thereto)
("Short-Short Limitation"); and (3) at the close of each quarter of the Fund's
taxable year, (i) at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. Government securities, securities of
other RICs, and other securities limited, in respect of any one issuer, to an
amount that does not exceed 5% of the value of the Fund's total assets and that
does not represent more than 10% of the issuer's outstanding voting securities,
and (ii) not more than 25% of the value of its total assets may be invested in
securities (other than U.S. Government securities or securities of other RICs)
of any one issuer.
Certain funds that invest in portfolios managed by N&B Management,
including the Sister Funds, have received rulings from the Internal Revenue
Service ("Service") that each such fund, as an investor in its corresponding
portfolio, will be deemed to own a proportionate share of the portfolio's assets
and income for purposes of determining whether the fund satisfies all the
requirements described above to qualify as a RIC. Although these rulings may not
be relied on as precedent by the Funds, N&B Management believes that the
reasoning thereof and, hence, their conclusion apply to the Funds as well.
Each Fund will be subject to a nondeductible 4% excise tax ("Excise
Tax") to the extent it fails to distribute by the end of any calendar year
substantially all of its ordinary income for that year and capital gain net
income for the one-year period ended on October 31 of that year, plus certain
other amounts.
See the next section for a discussion of the tax consequences to the
Funds of distributions to them from the Portfolios, investments by the
Portfolios in certain securities, and hedging transactions engaged in by the
Portfolios.
TAXATION OF THE PORTFOLIOS
- --------------------------
The Portfolios have received rulings from the Service to the
effect that, among other things, each Portfolio will be treated as a separate
partnership for federal income tax purposes and will not be a "publicly traded
partnership." As a result, no Portfolio is subject to federal income tax;
instead, each investor in a Portfolio, such as a Fund, is required to take into
account in determining its federal income tax liability its share of the
Portfolio's income, gains, losses, deductions, and credits, without regard to
whether it has received any cash distributions from the Portfolio. Each
Portfolio also is not subject to Delaware or New York income or franchise tax.
50
<PAGE>
Because each Fund is deemed to own a proportionate share of its
corresponding Portfolio's assets and income for purposes of determining whether
the Fund qualifies as a RIC, each Portfolio intends to continue to conduct its
operations so that its corresponding Fund will be able to continue to satisfy
all those requirements.
Distributions to a Fund from its corresponding Portfolio (whether
pursuant to a partial or complete withdrawal or otherwise) will not result in
the Fund's recognition of any gain or loss for federal income tax purposes,
except that (1) gain will be recognized to the extent any cash that is
distributed exceeds the Fund's basis for its interest in the Portfolio before
the distribution, (2) income or gain will be recognized if the distribution is
in liquidation of the Fund's entire interest in the Portfolio and includes a
disproportionate share of any unrealized receivables held by the Portfolio, and
(3) loss will be recognized if a liquidation distribution consists solely of
cash and/or unrealized receivables. A Fund's basis for its interest in its
corresponding Portfolio generally equals the amount of cash the Fund invests in
the Portfolio, increased by the Fund's share of the Portfolio's net income and
capital gains and decreased by (1) the amount of cash and the basis of any
property the Portfolio distributes to the Fund and (2) the Fund's share of the
Portfolio's losses.
Dividends and interest received by a Portfolio may be subject to
income, withholding, or other taxes imposed by foreign countries and U.S.
possessions that would reduce the yield on its securities. Tax treaties between
certain countries and the United States may reduce or eliminate these foreign
taxes, however, and many foreign countries do not impose taxes on capital gains
in respect of investments by foreign investors.
A Portfolio may invest in the stock of "passive foreign investment
companies" ("PFICs"). A PFIC is a foreign corporation that, in general, meets
either of the following tests: (1) at least 75% of its gross income is passive
or (2) an average of at least 50% of its assets produce, or are held for the
production of, passive income. Under certain circumstances, if a Portfolio holds
stock of a PFIC, its corresponding Fund (indirectly through its interest in the
Portfolio) will be subject to federal income tax on its share of a portion of
any "excess distribution" received by the Portfolio on the stock or of any gain
on the Portfolio's disposition of the stock (collectively, "PFIC income"), plus
51
<PAGE>
interest thereon, even if the Fund distributes its share of the PFIC income as a
taxable dividend to its shareholders. The balance of the Fund's share of the
PFIC income will be included in its investment company taxable income and,
accordingly, will not be taxable to it to the extent that income is distributed
to its shareholders.
If a Portfolio invests in a PFIC and elects to treat the PFIC as a
"qualified electing fund," then in lieu of its corresponding Fund's incurring
the foregoing tax and interest obligation, the Fund would be required to include
in income each year its share of the Portfolio's pro rata share of the qualified
electing fund's annual ordinary earnings and net capital gain (the excess of net
long-term capital gain over net short-term capital loss) -- which most likely
would have to be distributed by the Fund to satisfy the Distribution Requirement
and avoid imposition of the Excise Tax -- even if those earnings and gain were
not received by the Portfolio. In most instances it will be very difficult, if
not impossible, to make this election because of certain requirements thereof.
Pursuant to proposed regulations, open-end RICs, such as the Funds,
would be entitled to elect to mark to market their stock in certain PFICs.
Marking to market, in this context, means recognizing as gain for each taxable
year the excess, as of the end of that year, of the fair market value of each
such PFIC's stock over the adjusted basis in that stock (including
mark-to-market gain for each prior year for which an election was in effect).
The Portfolios' use of hedging strategies, such as writing (selling)
and purchasing options and entering into forward contracts, involves complex
rules that will determine for income tax purposes the character and timing of
recognition of the gains and losses the Portfolios realize in connection
therewith. Gains from the disposition of foreign currencies (except certain
gains that may be excluded by future regulations), and gains from Hedging
Instruments derived by the Portfolio with respect to its business of investing
in securities or foreign currencies, will qualify as permissible income for its
corresponding Fund under the Income Requirement. However, income from the
disposition by a Portfolio of options (other than those on foreign currencies)
will be subject to the Short-Short Limitation for its corresponding Fund if they
are held for less than three months. Income from the disposition of foreign
currencies, and Hedging Instruments on foreign currencies, that are not directly
related to a Portfolio's principal business of investing in securities (or
options with respect thereto) also will be subject to the Short-Short Limitation
for its corresponding Fund if they are held for less than three months.
52
<PAGE>
If a Portfolio satisfies certain requirements, any increase in value of
a position that is part of a "designated hedge" will be offset by any decrease
in value (whether realized or not) of the offsetting hedging position during the
period of the hedge for purposes of determining whether its corresponding Fund
satisfies the Short-Short Limitation. Thus, only the net gain (if any) from the
designated hedge will be included in gross income for purposes of that
limitation. Each Portfolio will consider whether it should seek to satisfy those
requirements to enable its corresponding Fund to qualify for this treatment for
hedging transactions. To the extent a Portfolio does not do so, it may be forced
to defer the closing out of certain Hedging Instruments or foreign currency
positions beyond the time when it otherwise would be advantageous to do so, in
order for its corresponding Fund to continue to qualify as a RIC.
Neuberger & Berman PARTNERS Portfolio may acquire zero coupon
securities or other securities issued with original issue discount ("OID"). As a
holder of those securities, the Portfolio (and, through it, Neuberger & Berman
PARTNERS Assets) must take into income the OID that accrues on the securities
during the taxable year, even if it receives no corresponding payment on the
securities during the year. Because the Fund annually must distribute
substantially all of its investment company taxable income (including its share
of the Portfolio's accrued OID) to satisfy the Distribution Requirement and
avoid imposition of the Excise Tax, the Fund may be required in a particular
year to distribute as a dividend an amount that is greater than its share of the
total amount of cash Neuberger & Berman PARTNERS Portfolio actually receives.
Those distributions will be made from the Fund's (or its share of the
Portfolio's) cash assets or, if necessary, from the proceeds of sales of the
Portfolio's securities. The Portfolio may realize capital gains or losses from
those sales, which would increase or decrease Neuberger & Berman PARTNERS
Assets' investment company taxable income and/or net capital gain. In addition,
any such gains may be realized on the disposition of securities held for less
than three months. Because of the Short-Short Limitation, any such gains would
reduce Neuberger & Berman PARTNERS Portfolio's ability to sell other securities,
or certain Hedging Instruments or foreign currency positions, held for less than
three months that it might wish to sell in the ordinary course of its portfolio
management.
TAXATION OF THE FUNDS' SHAREHOLDERS
- -----------------------------------
If Fund shares are sold at a loss after being held for six months or
less, the loss will be treated as long-term, instead of short-term, capital loss
to the extent of any capital gain distributions received on those shares.
53
<PAGE>
PORTFOLIO TRANSACTIONS
Neuberger & Berman acts as each Portfolio's principal broker in the
purchase and sale of its portfolio securities (other than the substantial
portion of the portfolio transactions of Neuberger & Berman GENESIS Portfolio
that involves securities traded on the OTC market; that Portfolio purchases and
sells OTC securities in principal transactions with dealers who are the
principal market makers for such securities) and in connection with the writing
of covered call options on its securities.
During the fiscal year ended August 31, 1994, Neuberger & Berman
MANHATTAN Portfolio paid brokerage commissions of $655,640, of which $525,610
was paid to Neuberger & Berman. During the fiscal year ended August 31, 1995,
that Portfolio paid brokerage commissions of $654,982, of which $436,568 was
paid to Neuberger & Berman.
During the fiscal year ended August 31, 1996, Neuberger & Berman
MANHATTAN Portfolio paid brokerage commissions of $940,324, of which $543,020
was paid to Neuberger & Berman. Transactions in which that Portfolio used
Neuberger & Berman as broker comprised 65.36% of the aggregate dollar amount of
transactions involving the payment of commissions, and 57.75% of the aggregate
brokerage commissions paid by the Portfolio, during the fiscal year ended August
31, 1996. 85.38% of the $397,304 paid to other brokers by that Portfolio during
that fiscal year (representing commissions on transactions involving
approximately $144,595,529) was directed to those brokers because of research
services they provided. During the fiscal year ended August 31, 1996, that
Portfolio acquired securities of the following of its "regular brokers or
dealers" (as defined in the 1940 Act) ("Regular B/Ds"): Bear Stearns & Co. Inc.,
Exxon Credit Corp., General Electric Capital Corp., and Morgan Stanley & Co.,
Inc.; at that date, that Portfolio held the securities of its Regular B/Ds with
an aggregate value as follows: Bear Stearns & Co. Inc., $5,142,500 and Morgan
Stanley & Co., Inc., $10,266,250.
During the fiscal year ended August 31, 1994, Neuberger & Berman
GENESIS Portfolio paid brokerage commissions of $287,587, of which $170,883 was
paid to Neuberger & Berman. During the fiscal year ended August 31, 1995, that
Portfolio paid brokerage commissions of $199,718, of which $118,014 was paid to
Neuberger & Berman.
54
<PAGE>
During the fiscal year ended August 31, 1996, Neuberger & Berman
GENESIS Portfolio paid brokerage commissions of $206,150, of which $95,999 was
paid to Neuberger & Berman. Transactions in which that Portfolio used Neuberger
& Berman as broker comprised 47.65% of the aggregate dollar amount of
transactions involving the payment of commissions, and 46.57% of the aggregate
brokerage commissions paid by the Portfolio, during the fiscal year ended August
31, 1996. 85.22% of the $110,151 paid to other brokers by that Portfolio during
that fiscal year (representing commissions on transactions involving
approximately $32,575,132) was directed to those brokers because of research
services they provided. During the fiscal year ended August 31, 1996, that
Portfolio acquired securities of the following of its Regular B/Ds: Exxon Credit
Corp., General Electric Capital Corp., and State Street Bank and Trust Company,
N.A.; at that date, that Portfolio held the securities of its Regular B/Ds with
an aggregate value as follows: General Electric Capital Corp., $2,200,000.
During the fiscal year ended August 31, 1994, Neuberger & Berman FOCUS
Portfolio paid brokerage commissions of $719,994, of which $567,972 was paid to
Neuberger & Berman. During the fiscal year ended August 31, 1995, that Portfolio
paid brokerage commissions of $1,031,245, of which $617,957 was paid to
Neuberger & Berman.
During the fiscal year ended August 31, 1996, Neuberger & Berman FOCUS
Portfolio paid brokerage commissions of $1,165,851, of which $583,212 was paid
to Neuberger & Berman. Transactions in which that Portfolio used Neuberger &
Berman as broker comprised 56.27% of the aggregate dollar amount of transactions
involving the payment of commissions, and 50.02% of the aggregate brokerage
commissions paid by the Portfolio, during the fiscal year ended August 31, 1996.
89.49% of the $582,639 paid to other brokers by that Portfolio during that
fiscal year (representing commissions on transactions involving approximately
$257,981,759) was directed to those brokers because of research services they
provided. During the fiscal year ended August 31, 1996, that Portfolio acquired
securities of the following of its Regular B/Ds: Exxon Credit Corp., General
Electric Capital Corp., and State Street Bank and Trust Company, N.A.; at that
date, that Portfolio held the securities of its Regular B/Ds with an aggregate
value as follows: Merrill Lynch, Pierce, Fenner & Smith, Inc., $15,312,000 and
General Electric Capital Corp., $29,400,000.
During the fiscal year ended August 31, 1994, Neuberger & Berman
GUARDIAN Portfolio paid brokerage commissions of $2,207,401, of which $1,647,807
was paid to Neuberger & Berman. During the fiscal year ended August 31, 1995,
that Portfolio paid brokerage commissions of $3,751,206, of which $2,521,523 was
paid to Neuberger & Berman.
55
<PAGE>
During the fiscal year ended August 31, 1996, Neuberger & Berman
GUARDIAN Portfolio paid brokerage commissions of $6,886,590, of which $3,542,127
was paid to Neuberger & Berman. Transactions in which that Portfolio used
Neuberger & Berman as broker comprised 54.13% of the aggregate dollar amount of
transactions involving the payment of commissions, and 51.44% of the aggregate
brokerage commissions paid by the Portfolio, during the fiscal year ended August
31, 1996. 83.78% of the $3,344,463 paid to other brokers by that Portfolio
during that fiscal year (representing commissions on transactions involving
approximately $1,568,004,886) was directed to those brokers because of research
services they provided. During the fiscal year ended August 31, 1996, that
Portfolio acquired securities of the following of its Regular B/Ds: General
Electric Capital Corp., Merrill Lynch, Pierce, Fenner & Smith, Inc., and State
Street Bank and Trust Company, N.A.; at that date, that Portfolio held the
securities of its Regular B/Ds with an aggregate value as follows: Merrill
Lynch, Pierce, Fenner & Smith, Inc., $76,562,500.
During the fiscal year ended August 31, 1994, Neuberger & Berman
PARTNERS Portfolio paid brokerage commissions of $2,994,540, of which $2,031,570
was paid to Neuberger & Berman. During the fiscal year ended August 31, 1995,
that Portfolio paid brokerage commissions of $4,608,156, of which $3,092,789 was
paid to Neuberger & Berman.
During the fiscal year ended August 31, 1996, Neuberger & Berman
PARTNERS Portfolio paid brokerage commissions of $4,697,854, of which $2,741,666
was paid to Neuberger & Berman. Transactions in which that Portfolio used
Neuberger & Berman as broker comprised 61.16% of the aggregate dollar amount of
transactions involving the payment of commissions, and 58.36% of the aggregate
brokerage commissions paid by the Portfolio, during the fiscal year ended August
31, 1996. 93.84% of the $1,956,188 paid to other brokers by that Portfolio
during that fiscal year (representing commissions on transactions involving
approximately $1,078,447,908) was directed to those brokers because of research
services they provided. During the fiscal year ended August 31, 1996, that
Portfolio acquired securities of the following of its Regular B/Ds: Exxon Credit
Corp., General Electric Capital Corp., and State Street Bank and Trust Company,
N.A.; at that date, that Portfolio held the securities of its Regular B/Ds with
an aggregate value as follows: General Electric Capital Corp., $30,000,000.
Insofar as portfolio transactions of Neuberger & Berman PARTNERS
Portfolio result from active management of equity securities, and insofar as
portfolio transactions of Neuberger & Berman MANHATTAN Portfolio result from
seeking capital appreciation by selling securities whenever sales are deemed
advisable without regard to the length of time the securities may have been
held, it may be expected that the aggregate brokerage commissions paid by those
Portfolios to brokers (including Neuberger & Berman where it acts in that
capacity) may be greater than if securities were selected solely on a long-term
basis.
56
<PAGE>
Portfolio securities are, from time to time, loaned by a Portfolio to
Neuberger & Berman in accordance with the terms and conditions of an order
issued by the SEC. The order exempts such transactions from provisions of the
1940 Act that would otherwise prohibit such transactions, subject to certain
conditions. In accordance with the order, securities loans made by a Portfolio
to Neuberger & Berman are fully secured by cash collateral. The portion of the
income on the cash collateral which may be shared with Neuberger & Berman is to
be determined by reference to concurrent arrangements between Neuberger & Berman
and non-affiliated lenders with which it engages in similar transactions. In
addition, where Neuberger & Berman borrows securities from a Portfolio in order
to re-lend them to others, Neuberger & Berman may be required to pay that
Portfolio, on a quarterly basis, certain of the earnings that Neuberger & Berman
otherwise has derived from the re-lending of the borrowed securities. When
Neuberger & Berman desires to borrow a security that a Portfolio has indicated a
willingness to lend, Neuberger & Berman must borrow such security from that
Portfolio, rather than from an unaffiliated lender, unless the unaffiliated
lender is willing to lend such security on more favorable terms (as specified in
the order) than that Portfolio. If in any month a Portfolio's expenses exceed
its income in any securities loan transaction with Neuberger & Berman, Neuberger
& Berman must reimburse that Portfolio for such loss.
During the fiscal years ended August 31, 1996, 1995 and 1994, the
Portfolios earned the following amounts of interest income from the
collateralization of securities loans, from which Neuberger & Berman was paid
the indicated amounts:
<TABLE>
<CAPTION>
Neuberger & Berman
-----------------------------------------------------------------
GUARDIAN FOCUS PARTNERS GENESIS MANHATTAN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
1994
Interest $ 147,103 $ 38,627 $ 16,085 $0 $ 0
Payment to N&B $ 119,620 $ 33,225 $ 13,880 $0 $ 0
1995
Interest $1,430,672 $ 327,447 $ 52,410 $0 $ 507,239
Payment to N&B $1,252,190 $ 291,207 $ 48,736 $0 $ 270,594
1996
Interest $2,427,096 $ 368,663 $ 173,908 $0 $ 301,788
Payment to N&B $2,129,341 $ 330,001 $ 118,041 $0 $ 186,163
</TABLE>
57
<PAGE>
Each Portfolio may also lend securities to unaffiliated entities,
including banks, brokerage firms, and other institutional investors judged
creditworthy by N&B Management, provided that cash or equivalent collateral,
equal to at least 100% of the market value of the loaned securities, is
continuously maintained by the borrower with the Portfolio. The Portfolio may
invest the cash collateral and earn income, or it may receive an agreed upon
amount of interest income from a borrower who has delivered equivalent
collateral. During the time securities are on loan, the borrower will pay the
Portfolio an amount equivalent to any dividends or interest paid on such
securities. These loans are subject to termination at the option of the
Portfolio or the borrower. The Portfolio may pay reasonable administrative and
custodial fees in connection with a loan and may pay a negotiated portion of the
interest earned on the cash or equivalent collateral to the borrower or placing
broker. The Portfolio does not have the right to vote securities on loan, but
would terminate the loan and regain the right to vote if that were considered
important with respect to the investment.
A committee of Independent Portfolio Trustees from time to time
reviews, among other things, information relating to securities loans by the
Portfolios.
In effecting securities transactions, each Portfolio generally seeks to
obtain the best price and execution of orders. Commission rates, being a
component of price, are considered along with other relevant factors. Each
Portfolio plans to continue to use Neuberger & Berman as its principal broker
where, in the judgment of N&B Management (the Portfolio's investment manager and
an affiliate of Neuberger & Berman), that firm is able to obtain a price and
execution at least as favorable as other qualified brokers. To the Portfolios'
knowledge, no affiliate of any Portfolio receives give-ups or reciprocal
business in connection with their securities transactions.
The use of Neuberger & Berman as a broker for each Portfolio is subject
to the requirements of Section 11(a) of the Securities Exchange Act of 1934.
Section 11(a) prohibits members of national securities exchanges from retaining
compensation for executing exchange transactions for accounts which they or
their affiliates manage, except where they have the authorization of the persons
authorized to transact business for the account and comply with certain annual
reporting requirements. Managers Trust and N&B Management have expressly
authorized Neuberger & Berman to retain such compensation, and Neuberger &
Berman has agreed to comply with the reporting requirements of Section 11(a).
58
<PAGE>
Under the 1940 Act, commissions paid by a Portfolio to Neuberger &
Berman in connection with a purchase or sale of securities on a securities
exchange may not exceed the usual and customary broker's commission.
Accordingly, it is each Portfolio's policy that the commissions paid to
Neuberger & Berman must, in N&B Management's judgment, be (1) at least as
favorable as those charged by other brokers having comparable execution
capability and (2) at least as favorable as commissions contemporaneously
charged by Neuberger & Berman on comparable transactions for its most favored
unaffiliated customers, except for accounts for which Neuberger & Berman acts as
a clearing broker for another brokerage firm and customers of Neuberger & Berman
considered by a majority of the Independent Portfolio Trustees not to be
comparable to the Portfolio. The Portfolios do not deem it practicable and in
their best interests to solicit competitive bids for commissions on each
transaction effected by Neuberger & Berman. However, consideration regularly is
given to information concerning the prevailing level of commissions charged by
other brokers on comparable transactions during comparable periods of time. The
1940 Act generally prohibits Neuberger & Berman from acting as principal in the
purchase of portfolio securities from, or the sale of portfolio securities to, a
Portfolio unless an appropriate exemption is available.
A committee of Independent Portfolio Trustees from time to time
reviews, among other things, information relating to the commissions charged by
Neuberger & Berman to the Portfolios and to its other customers and information
concerning the prevailing level of commissions charged by other brokers having
comparable execution capability. In addition, the procedures pursuant to which
Neuberger & Berman effects brokerage transactions for the Portfolios must be
reviewed and approved no less often than annually by a majority of the
Independent Portfolio Trustees.
To ensure that accounts of all investment clients, including a
Portfolio, are treated fairly in the event that Neuberger & Berman receives
transaction instructions regarding a security for more than one investment
account at or about the same time, Neuberger & Berman may combine orders placed
on behalf of clients, including advisory accounts in which affiliated persons
have an investment interest, for the purpose of negotiating brokerage
commissions or obtaining a more favorable price. Where appropriate, securities
purchased or sold may be allocated, in terms of amount, to a client according to
the proportion that the size of the order placed by that account bears to the
aggregate size of orders simultaneously placed by the other accounts, subject to
de minimis exceptions. All participating accounts will pay or receive the same
price.
59
<PAGE>
Each Portfolio expects that it will continue to execute a portion of
its transactions through brokers other than Neuberger & Berman. In selecting
those brokers, N&B Management considers the quality and reliability of brokerage
services, including execution capability, performance, and financial
responsibility, and may consider research and other investment information
provided by, and sale of Fund shares effected through, those brokers.
A committee comprised of officers of N&B Management and principals of
Neuberger & Berman who are portfolio managers of some of the Portfolios and
Other N&B Funds (collectively, "N&B Funds") and some of Neuberger & Berman's
managed accounts ("Managed Accounts") evaluates semi-annually the nature and
quality of the brokerage and research services provided by other brokers. Based
on this evaluation, the committee establishes a list and projected rankings of
preferred brokers for use in determining the relative amounts of commissions to
be allocated to those brokers. Ordinarily, the brokers on the list effect a
large portion of the brokerage transactions for the N&B Funds and the Managed
Accounts that are not effected by Neuberger & Berman. However, in any
semi-annual period, brokers not on the list may be used, and the relative
amounts of brokerage commissions paid to the brokers on the list may vary
substantially from the projected rankings. These variations reflect the
following factors, among others: (1) brokers not on the list or ranking below
other brokers on the list may be selected for particular transactions because
they provide better price and/or execution, which is the primary consideration
in allocating brokerage; (2) adjustments may be required because of periodic
changes in the execution capabilities of or research provided by particular
brokers or in the execution or research needs of the N&B Funds and/or the
Managed Accounts; and (3) the aggregate amount of brokerage commissions
generated by transactions for the N&B Funds and the Managed Accounts may change
substantially from one semi-annual period to the next.
The commissions paid to a broker other than Neuberger & Berman may be
higher than the amount another firm might charge if N&B Management determines in
good faith that the amount of those commissions is reasonable in relation to the
value of the brokerage and research services provided by the broker. N&B
Management believes that those research services benefit the Portfolios by
supplementing the information otherwise available to N&B Management. That
research may be used by N&B Management in servicing Other N&B Funds and, in some
cases, by Neuberger & Berman in servicing the Managed Accounts. On the other
hand, research received by N&B Management from brokers effecting portfolio
transactions on behalf of the Other N&B Funds and by Neuberger & Berman from
brokers effecting portfolio transactions on behalf of the Managed Accounts may
be used for the Portfolios' benefit.
60
<PAGE>
Mark R. Goldstein; Judith M. Vale; Kent C. Simons and Kevin L. Risen;
and Michael M. Kassen and Robert I. Gendelman, each of whom is a Vice President
of N&B Management (except for Mr. Risen and Mr. Gendelman, who are Assistant
Vice Presidents) and a principal of Neuberger & Berman, are the persons
primarily responsible for making decisions as to specific action to be taken
with respect to the investment portfolios of Neuberger & Berman MANHATTAN,
Neuberger & Berman GENESIS, Neuberger & Berman FOCUS and Neuberger & Berman
GUARDIAN, and Neuberger & Berman PARTNERS Portfolios, respectively. Each of them
has full authority to take action with respect to portfolio transactions and may
or may not consult with other personnel of N&B Management prior to taking such
action. If Mr. Goldstein is unavailable to perform his responsibilities, Susan
Switzer, who is an Assistant Vice President of N&B Management, will assume
responsibility for the portfolio of Neuberger & Berman MANHATTAN Portfolio.
PORTFOLIO TURNOVER
- ------------------
A Portfolio's portfolio turnover rate is calculated by dividing (1) the
lesser of the cost of the securities purchased or proceeds from the securities
sold by the Portfolio during the fiscal year (other than securities, including
options, whose maturity or expiration date at the time of acquisition was one
year or less) by (2) the month-end average of the value of such securities owned
by the Portfolio during the fiscal year.
The portfolio turnover rates for each Portfolio were as follows:
Year Ended August 31,
1996 1995
- -----------------------------------------------------------------------------
Neuberger & Berman FOCUS Portfolio 39% 36%
Neuberger & Berman GENESIS Portfolio 21% 37%
Neuberger & Berman GUARDIAN Portfolio 37% 26%
Neuberger & Berman MANHATTAN Portfolio 53% 44%
Neuberger & Berman PARTNERS Portfolio 96% 98%
61
<PAGE>
The average commission rates paid by each Portfolio were as follows:
Year Ended
August 31, 1996
- ---------------------------------------------------------------------------
Neuberger & Berman FOCUS Portfolio $0.0578
Neuberger & Berman GENESIS Portfolio $0.0576
Neuberger & Berman GUARDIAN Portfolio $0.0580
Neuberger & Berman MANHATTAN Portfolio $0.0373
Neuberger & Berman PARTNERS Portfolio $0.0494
REPORTS TO SHAREHOLDERS
Shareholders of each Fund receive unaudited semi-annual financial
statements, as well as year-end financial statements audited by the independent
auditors or independent accountants for the Fund and its corresponding
Portfolio. Each Fund's statements show the investments owned by its
corresponding Portfolio and the market values thereof and provide other
information about the Fund and its operations, including the Fund's beneficial
interest in its corresponding Portfolio.
ORGANIZATION
Prior to January 1, 1995, the name of Neuberger & Berman FOCUS
Portfolio was Neuberger & Berman Selected Sectors Portfolio.
CUSTODIAN AND TRANSFER AGENT
Each Fund and Portfolio has selected State Street Bank and Trust
Company ("State Street"), 225 Franklin Street, Boston, MA 02110, as custodian
for its securities and cash. State Street also serves as each Fund's transfer
agent, administering purchases, redemptions, and transfers of Fund shares with
respect to Institutions and the payment of dividends and other distributions to
Institutions. All correspondence should be mailed to Neuberger & Berman Funds,
Institutional Services, 605 Third Avenue, 2nd Floor, New York, NY 10158-0180. In
addition, State Street serves as transfer agent for each Portfolio.
INDEPENDENT AUDITORS/ACCOUNTANTS
Each Fund and Portfolio (other than Neuberger & Berman MANHATTAN Assets
and Portfolio) has selected Ernst & Young LLP, 200 Clarendon Street, Boston, MA
02116, as the independent auditors who will audit its financial statements.
Neuberger & Berman MANHATTAN Assets and Portfolio have selected Coopers &
Lybrand L.L.P., One Post Office Square, Boston, MA 02109, as the independent
accountants who will audit their financial statements.
62
<PAGE>
LEGAL COUNSEL
Each Fund and Portfolio has selected Kirkpatrick & Lockhart LLP, 1800
Massachusetts Avenue, N.W., 2nd Floor, Washington, D.C. 20036-1800, as its legal
counsel.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
The following table sets forth the name, address, and percentage of
ownership of each person who was known by each Fund to own beneficially or of
record 5% or more of that Fund's outstanding shares at March 10, 1997.
PERCENTAGE OF
OWNERSHIP AT
NAME AND ADDRESS MARCH 10,1997
---------------- --------------
Neuberger & Berman Neuberger & Berman Management Inc. 100%
MANHATTAN Assets 605 Third Avenue
2nd Floor
New York, NY 10158-0180
Neuberger & Berman Neuberger & Berman Management Inc. 100%
FOCUS Assets 605 Third Avenue
2nd Floor
New York, NY 10158-0180
Neuberger & Berman Travelers Insurance Co. 53.17%
GUARDIAN Assets 5MS - One Tower Square
Hartford, CT 06183-0001
First Citizens Bank & Trust - 40.66%
W.P. Hickman
401(k) Profit Sharing Plan
2917 Highwoods Blvd.
Raleigh, NC 27604-1021
Neuberger & Berman Management Inc. 6.17%
605 Third Avenue
2nd Floor
New York, NY 10158-0180
Neuberger & Berman Travelers Insurance Co. 83.19%
PARTNERS Assets 5MS - One Tower Square Hartford, CT
06183-0001
63
<PAGE>
PERCENTAGE OF
OWNERSHIP AT
NAME AND ADDRESS MARCH 10,1997
---------------- --------------
Neuberger & Berman Management Inc. 16.81%
605 Third Avenue
2nd Floor
New York, NY 10158-0180
REGISTRATION STATEMENT
This SAI and the Prospectus do not contain all the information included
in the Trust's registration statement filed with the SEC under the 1933 Act with
respect to the securities offered by the Prospectus. The registration statement,
including the exhibits filed therewith, may be examined at the SEC's offices in
Washington, D.C.
Statements contained in this SAI and in the Prospectus as to the
contents of any contract or other document referred to are not necessarily
complete. In each instance where reference is made to the copy of any contract
or other document filed as an exhibit to the registration statement, each such
statement is qualified in all respects by such reference.
FINANCIAL STATEMENTS
The following financial statements and related documents are
incorporated herein by reference from the Annual Report to Shareholders of
Neuberger & Berman PARTNERS Assets for the fiscal period ended August 31, 1996:
The audited financial statements of the Fund and the
Portfolio and notes thereto for the fiscal period ended
August 31, 1996, and the report of Ernst & Young LLP,
independent auditors, with respect to such audited financial
statements of Neuberger & Berman PARTNERS Assets and
Portfolio.
64
<PAGE>
The following financial statements and related documents are
incorporated herein by reference from the Annual Report to Shareholders of
Neuberger & Berman Equity Trust for the fiscal year ended August 31, 1996:
The audited financial statements of the Portfolios and notes
thereto for the fiscal year ended August 31, 1996, and the
reports of Ernst & Young LLP, independent auditors, with
respect to such audited financial statements of Neuberger &
Berman Focus Portfolio, Neuberger & Berman GENESIS Portfolio
and Neuberger & Berman GUARDIAN Portfolio, and the report of
Coopers & Lybrand L.L.P., independent accountants, with
respect to such audited financial statements of Neuberger &
Berman MANHATTAN Portfolio.
The following financial statements and related documents are
incorporated herein by reference from the Semi-Annual Report to Shareholders of
Neuberger & Berman Equity Assets for the period ended February 28, 1997:
The unaudited financial statements of the Funds and
Portfolios (except for Neuberger & Berman GENESIS Fund and
Portfolio) and notes thereto for the period ended February
28, 1997.
65
<PAGE>
Appendix A
RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER
S&P CORPORATE BOND RATINGS:
--------------------------
AAA - Bonds rated AAA have the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely strong.
AA - Bonds rated AA have a very strong capacity to pay interest
and repay principal and differ from the higher rated issues only in small
degree.
A - Bonds rated A have a strong capacity to pay interest and
repay principal, although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than bonds in higher
rated categories.
BBB - Bonds rated BBB are regarded as having an adequate
capacity to pay principal and interest. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay principal and interest for
bonds in this category than for bonds in higher rated categories.
BB, B, CCC, CC, C - Bonds rated BB, B, CCC, CC, and C are
regarded, on balance, as predominantly speculative with respect to capacity to
pay interest and repay principal in accordance with the terms of the obligation.
BB indicates the lowest degree of speculation and C the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
CI - The rating CI is reserved for income bonds on which no
interest is being paid.
D - Bonds rated D are in default, and payment of interest and/or
repayment of principal is in arrears.
PLUS (+) OR MINUS (-) - The ratings above may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
66
<PAGE>
MOODY'S CORPORATE BOND RATINGS:
------------------------------
AAA - Bonds rated AAA are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or an exceptionally
stable margin, and principal is secure. Although the various protective elements
are likely to change, the changes that can be visualized are most unlikely to
impair the fundamentally strong position of the issuer.
AA - Bonds rated AA are judged to be of high quality by all
standards. Together with the AAA group, they comprise what are generally known
as "high-grade bonds." They are rated lower than the best bonds because margins
of protection may not be as large as in AAA-rated securities, fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present that make the long-term risks appear somewhat larger than in AAA-rated
securities.
A - Bonds rated A possess many favorable investment attributes
and are to be considered as upper-medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present that suggest a susceptibility to impairment sometime in the future.
BAA - Bonds which are rated BAA are considered as medium-grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present, but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. These bonds lack outstanding
investment characteristics and in fact have speculative characteristics as well.
BA - Bonds rated BA are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B - Bonds rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
CAA - Bonds rated CAA are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
67
<PAGE>
CA - Bonds rated CA represent obligations that are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C - Bonds rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
MODIFIERS--Moody's may apply numerical modifiers 1, 2, and 3 in each generic
rating classification described above. The modifier 1 indicates that the
security ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the issuer
ranks in the lower end of its generic rating.
S&P COMMERCIAL PAPER RATINGS:
----------------------------
A-1 - This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus sign (+).
MOODY'S COMMERCIAL PAPER RATINGS
--------------------------------
Issuers rated PRIME-1 (or related supporting institutions), also
known as P-1, have a superior capacity for repayment of short-term promissory
obligations. PRIME-1 repayment capacity will normally be evidenced by the
following characteristics:
- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structures with moderate reliance
on debt and ample asset protection.
- Broad margins in earnings coverage of fixed financial charges
and high internal cash generation.
- Well-established access to a range of financial markets and
assured sources of alternate liquidity.
68
<PAGE>
Appendix B
THE ART OF INVESTMENT:
A CONVERSATION WITH ROY NEUBERGER
"I firmly believe that if you want to manage your own
money, you must be a student of the market. If you
are unwilling or unable to do that, find someone else
to manage your money for you."
NEUBERGER & BERMAN
<PAGE>
[THIS PAGE IS BLANK - IT IS AN INSIDE PAGE OF THIS BROCHURE]
B-2
<PAGE>
[PICTURE OF ROY NEUBERGER]
During my more than sixty-five years of buying and selling
securities, I've been asked many questions about my approach to
investing. On the pages that follow are a variety of my thoughts,
ideas and investment principles which have served me well over the
years. If you gain useful knowledge in the pursuit of profit as well
as enjoyment from these comments, I shall be more than content.
\s\ Roy R. Neuberger
B-3
<PAGE>
YOU'VE BEEN ABLE TO CONDENSE SOME OF THE
CHARACTERISTICS OF SUCCESSFUL INVESTING INTO
FIVE "RULES." WHAT ARE THEY?
Rule #1: Be flexible. My philosophy has
necessarily changed from time to time because
of events and because of mistakes. My views
change as economic, political, and
technological changes occur both on and
sometimes off our planet. It is imperative
that you be willing to change your thoughts
to meet new conditions.
Rule #2: Take your temperament into account.
Recognize whether you are by nature very
speculative or just the opposite -- fearful,
timid of taking risks. But in any event --
Diversify your investments, Rule #3: Be broad-gauged. Diversify your make sure
that some of your investments, make sure that some of your principal is kept
safe, and principal is kept safe, and try to increase try to increase your
income your income as well as your capital. as well as your capital.
[PICTURE OF ROY NEUBERGER]
Rule #4: Always remember there are many ways
to skin a cat! Ben Graham and David Dodd did
it by understanding basic values. Warren
Buffet invested his portfolio in a handful of
long-term holdings, while staying involved
with the companies' managements. Peter Lynch
chose to understand, first-hand, the products
of many hundreds of the companies he invested
in. George Soros showed his genius as a hedge
fund investor who could decipher world
currency trends. Each has been successful in
his own way. But to be successful, remember
to-
B-4
<PAGE>
Rule #5: Be skeptical. To repeat a few well-
worn useful phrases:
A. Dig for yourself.
B. Be from Missouri.
C. If it sounds too good to be true, it
probably is.
IN YOUR 65 YEARS OF INVESTING ARE THERE ANY
GENERAL PATTERNS YOU'VE OBSERVED AS TO HOW
THE MARKET BEHAVES?
Every decade that I've been involved with
Wall Street has a nuance of its own, an
economic and social climate that influences
investors. But generally, bull markets tend
to be longer than bear markets, and stock
prices tend to go up more slowly and
erratically than they go down. Bear markets
tend to be shorter and of greater intensity.
The market rarely rises or declines
concurrently with business cycles longer than
six months.
AS A LEGENDARY "VALUE INVESTOR," HOW DO YOU
DEFINE VALUE INVESTING?
Value investing means finding the best values
- - either absolute or relative. Absolute
means a stock has a low market price relative
to its own fundamentals. Relative value means
the price is attractive relative to the
market as a whole.
COULD YOU DESCRIBE A STOCK WITH "GOOD VALUE"?
A classic example is a company that has a low
price to earnings ratio, a low price to book
ratio, free cash flow, a strong balance
sheet, undervalued corporate assets,
unrecognized earnings turnaround and is
selling at a discount to private market
value.
These characteristics usually lead to
companies that are under-researched and have
a high degree of inside ownership and
entrepreneurial management.
B-5
<PAGE>
One of my colleagues at Neuberger & Berman
says he finds his value stocks either "under
a cloud" or "under a rock." "Under a cloud"
stocks are those Wall Street in general
doesn't like, because an entire industry is
out of favor and even the good stocks are
being dropped. "Under a rock" stocks are
those Wall Street is ignoring, so you have to
uncover them on your own.
ARE THERE OTHER KEY CRITERIA YOU USE TO JUDGE
STOCKS?
I'm more interested in longer-term trends in
earnings than short-term trends. Earnings
gains should be the product of long-term
strategies, superior management, taking
advantage of business opportunities and so
on. If these factors are in their proper
place, short-term earnings should not be of
major concern. Dividends are an important
extra because, if they're stable, they help
support the price of the stock.
WHAT ABOUT SELLING STOCKS?
Most individual investors should invest for
the long term but not mindlessly. A sell
discipline, often neglected by investors, is
vitally important.
"One should fall in love One should fall in love with ideas, with
with ideas, with people or people, or with idealism. But in my book, the
with idealism. But in my last thing to fall in love with is a
book, the last thing to particular security. It is after all just a
fall in love with is a sheet of paper indicating a part ownership in
particular security." a corporation and its use is purely
mercenary. If you must love a security, stay
in love with it until it gets overvalued;
then let somebody else fall in love.
[PICTURE OF ROY NEUBERGER]
B-6
<PAGE>
ANY OTHER ADVICE FOR INVESTORS?
I firmly believe that if you want to manage
your own money, you must be a student of the
market. If you're unwilling or unable to do
that, find someone else to manage your money
for you. Two options are a well-managed
no-load mutual fund or, if you have enough
assets for separate account management, a
money manager you trust with a good record.
HOW WOULD YOU DESCRIBE YOUR PERSONAL
INVESTING STYLE?
Every stock I buy is bought to be sold. The
market is a daily event, and I continually
review my holdings looking for selling
opportunities. I take a profit occasionally
on something that has gone up in price over
what was expected and simultaneously take
losses whenever misjudgment seems evident.
This creates a reservoir of buying power that
can be used to make fresh judgments on what
are the best values in the market at that
time. My active investing style has worked
well for me over the years, but for most
investors I recommend a longer-term approach.
I tend not to worry very must about the day
to day swings of the market, which are very
hard to comprehend. Instead, I try to be
rather clever in diagnosing values and trying
to win 70 to 80 percent of the time.
YOU BEGAN INVESTING IN 1929. WHAT WAS YOUR
EXPERIENCE WITH THE "GREAT CRASH"?
B-7
<PAGE>
The only money I managed in the Panic of 1929
was my own. My portfolio was down about 12
percent, and I had an uneasy feeling about
the market and conditions in general. Those
were the days of 10 percent margin. I studied
the lists carefully for a stock that was
overvalued in my opinion and which I could
sell short as a hedge. I came across RCA at
about $100 per share. It had recently split 5
for 1 and appeared overvalued. There were no
dividends, little income, a low net worth and
a weak financial position. I sold RCA short
in the amount equal to the dollar value of my
long portfolio. It proved to be a timely and
profitable move.
HOW DID THE CRASH OF 1929 AFFECT YOUR
INVESTING STYLE?
I am prematurely bearish when the market goes
up for a long time and everybody is happy
because they are richer. I am very bullish
when the market has gone down perceptibly and
I feel it has discounted any troubles we are
going to have.
HOW IMPORTANT ARE PSYCHOLOGICAL FACTORS TO
MARKET BEHAVIOR?
There are many factors in addition to
economic statistics or security analysis in a
buy or sell decision. I believe psychology
plays an important role in the Market. Some
people follow the crowd in hopes they'll be
swept along in the right direction, but if
the crowd is late in acting, this can be a
bad move.
I like to be contrary. When things look bad,
I become optimistic. When everything looks
rosy, and the crowd is optimistic, I like to
be a seller. Sometimes I'm too early, but I
generally profit.
AS A RENOWNED ART COLLECTOR, DO YOU FIND
SIMILARITIES BETWEEN SELECTING STOCKS AND
SELECTING WORKS OF ART?
B-8
<PAGE>
Both are an art, although picking stocks is a
minor art compared with painting, sculpture
"When things look bad, I or literature. I started buying art in the
become optimistic. When 30s, and in the 40s it was a daily, almost
everything looks rosy, and hourly occurrence. My inclination to buy the
the crowd is optimistic, I works of living artists comes from Van Gogh,
like to be a seller." who sold only one painting during his
lifetime. He died in poverty, only then to
become a legend and have his work sold for
millions of dollars.
[PICTURE OF ROY NEUBERGER]
There are more variables to consider now in
both buying art and picking stocks. In the
modern stock markets, the heavy use of
futures and options has changed the nature of
the investment world. In past times, the
stock market was much less complicated, as
was the art world.
Artists rose and fell on their own merits
without a lot of publicity and attention. As
more and more dealers are involved with
artists, the price of their work becomes
inflated. So I almost always buy works of
unknown, relatively undiscovered artists,
which, I suppose is similar to value
investing.
But the big difference in my view of art and
stocks is that I buy a stock to sell it and
make money. I never bought paintings or
sculptures for investment in my life. The
objective is to enjoy their beauty.
B-9
<PAGE>
WHAT DO YOU CONSIDER THE BUSINESS MILESTONES
IN YOUR LIFE?
Being a founder of Neuberger & Berman and
creating one of the first no-load mutual
funds. I started on Wall Street in 1929, and
during the depression I managed my own money
and that of my clientele. We all prospered,
but I wanted to have my own firm. In 1939 I
became a founder of Neuberger & Berman, and
for about 10 years we managed money for
individuals with substantial financial
assets. But I also wanted to offer the
smaller investor the benefits of professional
money management, so in 1950 I created the
Guardian Mutual Fund (now known as the
Neuberger & Berman Guardian Fund). The Fund
was kind of an innovation in its time because
it didn't charge a sales commission. I
thought the public was being overcharged for
mutual funds, so I wanted to create a fund
that would be offered directly to the public
without a sales charge. Now of course the
"no-load" fund business is a huge industry. I
managed the Fund myself for over 28 years.
[PICTURE OF ROY NEUBERGER]
YOU'RE IN YOUR NINETIES AND STILL YOU GO INTO
THE OFFICE EVERY DAY TO MANAGE YOUR
INVESTMENTS. WHY?
I like the fun of being nimble in the stock
market, and I'm addicted to the market's
fascinations.
WHAT CLOSING WORDS OF ADVICE DO YOU HAVE
ABOUT INVESTING?
Realize that there are opportunities at all
times for the adventuresome investor. And
stay in good physical condition. It's a
strange thing. You do not dissipate your
energies by using them. Exercise your body
and your brain every day, and you'll do
better in investments and in life.
B-10
<PAGE>
ROY NEUBERGER: A BRIEF BIOGRAPHY
Roy Neuberger is a founder of the investment
management firm Neuberger & Berman, and a
renowned value investor. He is also a
recognized collector of contemporary American
art, much of which he has given away to
museums and colleges across the country.
During the 1920s, Roy studied art in
Paris. When he realized he didn't possess the
talent to become an artist, he decided to
collect art, and to support this passion, Roy
turned to investing -- a pursuit for which
his talents have proven more than adequate.
A TALENT FOR INVESTING
Roy began his investment career by
joining a brokerage firm in 1929, seven
months before the "Great Crash." Just weeks
before "Black Monday," he shorted the stock
of RCA, thinking it was overvalued. He
profited from the falling market and gained a
reputation for market prescience and stock
selection that has lasted his entire career.
NEUBERGER & BERMAN'S FOUNDING
Roy's investing acumen attracted many
people who wished to have him manage their
money. In 1939, at the age of 36, after
purchasing a seat on the New York Stock
Exchange, Roy founded Neuberger & Berman to
provide money management services to people
who lacked the time, interest or expertise to
manage their own assets.
B-11
<PAGE>
NEUBERGER & BERMAN -- OVER FIVE DECADES OF
GROWTH
Neuberger & Berman has grown through
the years and now manages approximately $30
billion of equity and fixed income assets,
both domestic and international, for
individuals, institutions, and its family of
no-load mutual funds. Today, as when the firm
was founded, Neuberger & Berman follows a
value approach to investing, designed to
enable clients to advance in good markets and
minimize losses when conditions are less
favorable.
For more complete information about the
Neuberger & Berman Guardian Fund,
including fees and expenses, call
Neuberger & Berman Management at
800-877- 9700 for a free prospectus.
Please read it carefully, before you
invest or send money.
B-12
<PAGE>
Neuberger & Berman Management
Inc.[SERVICE MARK]
605 Third Avenue, 2nd Floor
New York, NY 10158-0006
Shareholder Services
(800) 877-9700
[COPYRIGHT SYMBOL]1995
Neuberger & Berman
PRINTED ON RECYCLED PAPER
WITH SOY BASED INKS
B-13
<PAGE>
NEUBERGER & BERMAN EQUITY ASSETS
POST-EFFECTIVE AMENDMENT NO. 8 ON FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
The audited financial statements contained in the Annual Report to
Shareholders of Neuberger & Berman Partners Assets for the fiscal
period ended August 31, 1996, with respect to Neuberger & Berman
Partners Assets and Portfolio (series of Neuberger & Berman Equity
Assets and Equity Managers Trust, respectively); the audited
financial statements contained in the Annual Report to Shareholders
of Neuberger & Berman Equity Trust for the fiscal year ended August
31, 1996, with respect to Neuberger & Berman Focus Portfolio,
Neuberger & Berman Genesis Portfolio, Neuberger & Berman Guardian
Portfolio, and Neuberger & Berman Manhattan Portfolio (each a series
of Equity Managers Trust); and the unaudited financial statements
contained in the Semi-Annual Report to Shareholders of Registrant
for the six-month period ended February 28, 1997, with respect to
Neuberger & Berman Focus Assets, Neuberger & Berman Guardian Assets,
Neuberger & Berman Manhattan Assets, and Neuberger & Berman Partners
Assets (each a series of Neuberger & Berman Equity Assets) and
Neuberger & Berman Focus Portfolio, Neuberger & Berman Guardian
Portfolio, Neuberger & Berman Manhattan Portfolio, and Neuberger &
Berman Partners Portfolio (each a series of Equity Managers Trust)
are incorporated into the Statement of Additional Information by
reference.
Included in Part A of this Post-Effective Amendment:
FINANCIAL HIGHLIGHTS for Neuberger & Berman Focus Assets, Neuberger
& Berman Guardian Assets, Neuberger & Berman Manhattan Assets, and
Neuberger & Berman Partners Assets for the period indicated therein.
C-1
<PAGE>
(b) Exhibits:
Exhibit
NUMBER DESCRIPTION
------- -------------------
(1) (a) Certificate of Trust. Incorporated by Reference to
Post-Effective Amendment No. 1 to Registrant's
Registration Statement, File Nos. 33-82568 and
811-8106, EDGAR Accession No. 0000898432-95-000393.
(b) Trust Instrument of Neuberger & Berman Equity Assets.
Incorporated by Reference to Post-Effective Amendment
No. 1 to Registrant's Registration Statement, File
Nos. 33-82568 and 811-8106, EDGAR Accession No.
0000898432-95-000393.
(c) Schedule A - Current Series of Neuberger & Berman
Equity Assets. Filed Herewith.
(2) By-Laws of Neuberger & Berman Equity Assets.
Incorporated by Reference to Post-Effective Amendment
No. 1 to Registrant's Registration Statement, File
Nos. 33-82568 and 811-8106, EDGAR Accession No.
0000898432-95-000393.
(3) Voting Trust Agreement. None.
(4) (a) Trust Instrument of Neuberger & Berman Equity Assets,
Articles IV, V, and VI. Incorporated by Reference to
Post-Effective Amendment No. 1 to Registrant's
Registration Statement, File Nos. 33-82568 and
811-8106, EDGAR Accession No. 0000898432-95-000393.
(b) By-Laws of Neuberger & Berman Equity Assets, Articles
V, VI, and VIII. Incorporated by Reference to
Post-Effective Amendment No. 1 to Registrant's
Registration Statement, File Nos. 33-82568 and
811-8106, EDGAR Accession No. 0000898432-95-000393.
(5) (a) (i) Management Agreement Between Equity Managers
Trust and Neuberger & Berman Management
Incorporated. Incorporated by Reference to
Post-Effective Amendment No. 70 to Registration
Statement of Neuberger & Berman Equity Funds,
File Nos. 2-11357 and 811-582, EDGAR Accession
No. 0000898432-95-000314.
C-2
<PAGE>
(ii) Schedule A - Series of Neuberger & Berman
Equity Managers Trust Currently Subject to the
Management Agreement. Incorporated by
Reference to Post-Effective Amendment No. 70 to
Registration Statement of Neuberger & Berman
Equity Funds, File Nos. 2-11357 and 811-582,
EDGAR Accession No. 0000898432-95-000314.
(iii) Schedule B - Schedule of Compensation Under the
Management Agreement. Incorporated by
Reference to Post-Effective Amendment No. 70 to
Registration Statement of Neuberger & Berman
Equity Funds, File Nos. 2-11357 and 811-582,
EDGAR Accession No. 0000898432-95-000314.
(b) (i) Sub-Advisory Agreement Between Neuberger &
Berman Management Incorporated and Neuberger &
Berman with Respect to Equity Managers Trust.
Incorporated by Reference to Post-Effective
Amendment No. 70 to Registration Statement of
Neuberger & Berman Equity Funds, File Nos.
2-11357 and 811-582, EDGAR Accession No.
0000898432-95-000314.
(ii) Schedule A - Series of Equity Managers Trust
Currently Subject to the Sub-Advisory
Agreement. Incorporated by Reference to
Post-Effective Amendment No. 70 to Registration
Statement of Neuberger & Berman Equity Funds,
File Nos. 2-11357 and 811-582, EDGAR Accession
No. 0000898432-95-000314.
(iii) Substitution Agreement Among Neuberger & Berman
Management Incorporated, Equity Managers Trust,
Neuberger & Berman, L.P., and Neuberger &
Berman, LLC. Incorporated by Reference to
Amendment No. 7 to Registration Statement of
Equity Managers Trust, File No. 811-7910, Edgar
Accession No. 0000898432-96-000557.
(6) (a) (i) Distribution Agreement Between Neuberger &
Berman Equity Assets and Neuberger & Berman
Management Incorporated with Respect to
Neuberger & Berman Socially Responsive Trust.
Incorporated by Reference to Post-Effective
Amendment No. 1 to Registrant's Registration
Statement, File Nos. 33-82568 and 811-8106,
EDGAR Accession No. 0000898432-95-000393.
C-3
<PAGE>
(ii) Schedule A - Series of Neuberger & Berman
Equity Assets Currently Subject to the
Distribution Agreement. Incorporated by
Reference to Post-Effective Amendment No. 1 to
Registrant's Registration Statement, File Nos.
33-82568 and 811-8106, EDGAR Accession No.
0000898432-95-000393.
(b) (i) Distribution and Services Agreement Between
Neuberger & Berman Equity Assets and Neuberger
& Berman Management Incorporated with Respect
to Other Series. Incorporated by Reference to
Post-Effective Amendment No. 5 to Registrant's
Registration Statement, File Nos. 33-82568 and
811-8106, Edgar Accession No.
0000898432-96-000576.
(ii) Schedule A - Series of Neuberger & Berman
Equity Assets Currently Subject to Distribution
and Services Agreement. Filed Herewith.
(7) Bonus, Profit Sharing or Pension Plans. None.
(8) (a) Custodian Contract Between Neuberger & Berman Equity
Assets and State Street Bank and Trust Company.
Incorporated by Reference to Post-Effective Amendment
No. 3 to Registrant's Registration Statement, File
Nos. 33-82568 and 811-8106, Edgar Accession
No. 0000898432-96-000048.
(b) Schedule A - Approved Foreign Banking Institutions
and Securities Depositories Under the Custodian
Contract. Incorporated by Reference to Post-Effective
Amendment No. 3 to Registrant's Registration
Statement, File Nos. 33-82568 and 811-8106, Edgar
Accession No. 0000898432-96-000048.
(c) Schedule of Compensation under the Custodian
Contract. Incorporated by Reference to Post-Effective
Amendment No. 4 to Registrant's Registration
Statement, File Nos. 33-82568 and 811-8106, Edgar
Accession No. 0000898432-96-000558.
C-4
<PAGE>
(d) Agreement Between Neuberger & Berman Equity Assets and
State Street Bank and Trust Company Adding Neuberger &
Berman Focus Assets, Neuberger & Berman Guardian Assets,
Neuberger & Berman Manhattan Assets and Neuberger &
Berman Partners Assets as Portfolios Governed by the
Custodian Contract. Filed Herewith.
(e) Form of Agreement Between Neuberger & Berman Equity
Assets and State Street Bank and Trust Company Adding
Neuberger & Berman Genesis Assets as a Portfolio
Governed by the Custodian Contract. Filed Herewith.
(9) (a) (i) Transfer Agency Agreement Between Neuberger &
Berman Equity Assets and State Street Bank and
Trust Company. Incorporated by Reference to
Post-Effective Amendment No. 3 to Registrant's
Registration Statement, File Nos. 33-82568 and
811-8106, Edgar Accession
No. 0000898432-96-000048.
(ii) Schedule of Compensation under the Transfer
Agency Agreement. Incorporated by Reference to
Post-Effective Amendment No. 4 to Registrant's
Registration Statement, File Nos. 33-82568 and
811-8106, Edgar Accession
No. 0000898432-96-000558.
(iii) Agreement Between Neuberger & Berman Equity
Assets and State Street Bank and Trust Company
Adding Neuberger & Berman Focus Assets,
Neuberger & Berman Guardian Assets, Neuberger &
Berman Manhattan Assets and Neuberger & Berman
Partners Assets as Portfolios Governed by the
Transfer Agency Agreement. Filed Herewith
(iv) Form of Agreement Between Neuberger & Berman
Equity Assets and State Street Bank and Trust
Company Adding Neuberger & Berman Genesis
Assets as a Portfolio Governed by the Transfer
Agency Agreement. Filed Herewith.
C-5
<PAGE>
(b) (i) Administration Agreement Between Neuberger &
Berman Equity Assets and Neuberger & Berman
Management Incorporated. Incorporated by
Reference to Post-Effective Amendment No. 3 to
Registrant's Registration Statement, File
Nos. 33-82568 and 811-8106, Edgar Accession
No. 0000898432-96-000048.
(ii) Schedule A - Series of Neuberger & Berman
Equity Assets Currently Subject to the
Administration Agreement. Filed Herewith.
(iii) Schedule B - Schedule of Compensation Under the
Administration Agreement. Incorporated by
Reference to Post-Effective Amendment No. 3 to
Registrant's Registration Statement, File
Nos. 33-82568 and 811-8106, Edgar Accession
No. 0000898432-96-000048.
(10) Opinion and Consent of Kirkpatrick & Lockhart LLP on
Securities Matters. Incorporated by Reference to
Registrant's Rule 24f-2 Notice for the Fiscal Year
Ended August 31, 1996, File Nos. 33-82568 and
811-8106, Edgar Accession No. 0000898432-96-000463.
(11) (a) Consent of Ernst & Young LLP, Independent Auditors.
Filed Herewith.
(b) Consent of Coopers & Lybrand L.L.P., Independent
Accountants. Filed Herewith.
(12) Financial Statements Omitted from Prospectus. None.
(13) Letter of Investment Intent. None.
(14) Prototype Retirement Plan. None.
(15) (a) Plan Pursuant to Rule 12b-1. Incorporated by Reference
to Post-Effective Amendment No. 5 to Registrant's
Registration Statement, File Nos. 33-82568 and 811-
8106, Edgar Accession No. 0000898432-96-000576.
(b) Schedule A - Series of Neuberger & Berman Equity
Assets Currently Subject to Plan Pursuant to Rule
12b-1. Filed Herewith.
C-6
<PAGE>
(16) Schedule of Computation of Performance Quotations.
None.
(17) Financial Data Schedule. Filed Herewith.
(18) Plan Pursuant to Rule 18f-3. None.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
- ------- -------------------------------------------------------------
No person is controlled by or under common control with the
Registrant.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
- ------- -------------------------------
The following information is given as of March 10, 1997:
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
-------------- --------------
Shares of beneficial
interest, $0.001 par value, of:
Neuberger & Berman Focus Assets 1
Neuberger & Berman Genesis Assets 0
Neuberger & Berman Guardian Assets 3
Neuberger & Berman Manhattan Assets 1
Neuberger & Berman Partners Assets 2
Neuberger & Berman Socially Responsive Trust 1
ITEM 27. INDEMNIFICATION.
- ------- ---------------
A Delaware business trust may provide in its governing instrument
for indemnification of its officers and trustees from and against any and all
claims and demands whatsoever. Article IX, Section 2 of the Trust Instrument
provides that the Registrant shall indemnify any present or former trustee,
officer, employee or agent of the Registrant ("Covered Person") to the fullest
extent permitted by law against liability and all expenses reasonably incurred
C-7
<PAGE>
or paid by him or her in connection with any claim, action, suit or proceeding
("Action") in which he or she becomes involved as a party or otherwise by virtue
of his or her being or having been a Covered Person and against amounts paid or
incurred by him or her in settlement thereof. Indemnification will not be
provided to a person adjudged by a court or other body to be liable to the
Registrant or its shareholders by reason of "willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his or her office" ("Disabling Conduct"), or not to have acted in good faith in
the reasonable belief that his or her action was in the best interest of the
Registrant. In the event of a settlement, no indemnification may be provided
unless there has been a determination that the officer or trustee did not engage
in Disabling Conduct (i) by the court or other body approving the settlement;
(ii) by at least a majority of those trustees who are neither interested
persons, as that term is defined in the Investment Company Act of 1940 ("1940
Act"), of the Registrant ("Independent Trustees"), nor are parties to the matter
based upon a review of readily available facts; or (iii) by written opinion of
independent legal counsel based upon a review of readily available facts.
Pursuant to Article IX, Section 3 of the Trust Instrument, if any
present or former shareholder of any series ("Series") of the Registrant shall
be held personally liable solely by reason of his or her being or having been a
shareholder and not because of his or her acts or omissions or for some other
reason, the present or former shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of any entity, its
general successor) shall be entitled out of the assets belonging to the
applicable Series to be held harmless from and indemnified against all loss and
expense arising from such liability. The Registrant, on behalf of the affected
Series, shall, upon request by such shareholder, assume the defense of any claim
made against such shareholder for any act or obligation of the Series and
satisfy any judgment thereon from the assets of the Series.
Section 9 of the Management Agreement between Equity Managers Trust
("Managers Trust") and Neuberger & Berman Management Inc. ("N&B Management")
provides that neither N&B Management nor any director, officer or employee of
N&B Management performing services for the series of Managers Trust at the
direction or request of N&B Management in connection with N&B Management's
discharge of its obligations under the Agreement shall be liable for any error
C-8
<PAGE>
of judgment or mistake of law or for any loss suffered by a series in connection
with any matter to which the Agreement relates; provided, that nothing in the
Agreement shall be construed (i) to protect N&B Management against any liability
to Managers Trust or any series thereof or its interest holders to which N&B
Management would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of N&B Management's duties, or by
reason of N&B Management's reckless disregard of its obligations and duties
under the Agreement, or (ii) to protect any director, officer or employee of N&B
Management who is or was a trustee or officer of Managers Trust against any
liability to Managers Trust or any series thereof or its interest holders to
which such person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of such person's office with Managers Trust.
Section 1 of the Sub-Advisory Agreement between N&B Management and
Neuberger & Berman, LLC ("Neuberger & Berman") with respect to Managers Trust
provides that in the absence of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or of reckless disregard of its
duties and obligations under the Agreement, Neuberger & Berman will not be
subject to liability for any act or omission or any loss suffered by any series
of Managers Trust or its interest holders in connection with the matters to
which the Agreement relates.
Section 8 of the Administration Agreement between the Registrant
and N&B Management provides that N&B Management shall look only to the assets of
each Series for performance of the Agreement by the Registrant on behalf of such
Series, and neither the Shareholders of the Registrant, its Trustees nor any of
the Registrant's officers, employees or agents, whether past, present or future
shall be personally liable therefor. Section 9 of the Agreement provides that
each Series shall indemnify N&B Management and hold it harmless from and against
any and all losses, damages and expenses, including reasonable attorneys' fees
and expenses, incurred by N&B Management that result from: (i) any claim,
action, suit or proceeding in connection with N&B Management's entry into or
performance of the Agreement with respect to such Series; or (ii) any action
taken or omission to act committed by N&B Management in the performance of its
obligations under the Agreement with respect to such Series; or (iii) any action
of N&B Management upon instructions believed in good faith by it to have been
executed by a duly authorized officer or representative of the Registrant with
respect to such Series; provided, that N&B Management shall not be entitled to
such indemnification in respect of actions or omissions constituting negligence
or misconduct on the part of N&B Management, or its employees, agents or
contractors. Section 10 of the Agreement provides that N&B Management shall
indemnify each Series and hold it harmless from and against any and all losses,
damages and expenses, including reasonable attorneys' fees and expenses,
C-9
<PAGE>
incurred by such Series which result from: (i) N&B Management's failure to
comply with the terms of the Agreement with respect to such Series; or (ii) N&B
Management's lack of good faith in performing its obligations under the
Agreement with respect to such Series; or (iii) the negligence or misconduct of
N&B Management, or its employees, agents or contractors in connection with the
Agreement with respect to such Series. A Series shall not be entitled to such
indemnification in respect of actions or omissions constituting negligence or
misconduct on the part of that Series or its employees, agents or contractors
other than N&B Management, unless such negligence or misconduct results from or
is accompanied by negligence or misconduct on the part of N&B Management, any
affiliated person of N&B Management, or any affiliated person of an affiliated
person of N&B Management.
Section 11 of the Distribution Agreement between the Registrant and
N&B Management provides that N&B Management shall look only to the assets of a
Series for the Registrant's performance of the Agreement by the Registrant on
behalf of such Series, and neither the Shareholders, the Trustees nor any of the
Registrant's officers, employees or agents, whether past, present or future,
shall be personally liable therefor.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 ("1933 Act") may be permitted to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the 1933 Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF ADVISER AND SUB-ADVISER.
- ------- ---------------------------------------------------------
There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
director or officer of N&B Management and each principal of Neuberger & Berman
is, or at any time during the past two years has been, engaged for his or her
own account or in the capacity of director, officer, employee, partner or
trustee.
C-10
<PAGE>
NAME BUSINESS AND OTHER CONNECTIONS
- ---- -------------------------------
Claudia A. Brandon Secretary, Neuberger & Berman Advisers
Vice President, Management Trust (Delaware business trust);
N&B Management Secretary, Advisers Managers Trust;
Secretary, Neuberger & Berman Advisers
Management Trust (Massachusetts business
trust) (1); Secretary, Neuberger & Berman
Income Funds; Secretary, Neuberger & Berman
Income Trust; Secretary, Neuberger & Berman
Equity Funds; Secretary, Neuberger & Berman
Equity Trust; Secretary, Income Managers
Trust; Secretary, Equity Managers Trust;
Secretary, Global Managers Trust; Secretary
Neuberger & Berman Equity Assets.
Stacy Cooper-Shugrue Assistant Secretary, Neuberger & Berman
Assistant Vice President, Advisers Management Trust (Delaware business
N&B Management trust); Assistant Secretary, Advisers
Managers Trust; Assistant Secretary,
Neuberger & Berman Advisers Management Trust
(Massachusetts business trust) (1); Assistant
Secretary, Neuberger & Berman Income Funds;
Assistant Secretary, Neuberger & Berman
Income Trust; Assistant Secretary, Neuberger
& Berman Equity Funds; Assistant Secretary,
Neuberger & Berman Equity Trust; Assistant
Secretary, Income Managers Trust; Assistant
Secretary, Equity Managers Trust; Assistant
Secretary, Global Managers Trust; Assistant
Secretary, Neuberger & Berman Equity Assets.
Barbara DiGiorgio, Assistant Treasurer, Neuberger & Berman
Assistant Vice President, Advisers Management Trust (Delaware business
N&B Management trust); Assistant Treasurer, Advisers
Managers Trust; Assistant Treasurer,
Neuberger & Berman Income Funds; Assistant
Treasurer, Neuberger & Berman Income Trust;
Assistant Treasurer, Neuberger & Berman
Equity Funds; Assistant Treasurer, Neuberger
& Berman Equity Trust; Assistant Treasurer,
Income Managers Trust; Assistant Treasurer,
Equity Managers Trust; Assistant Treasurer,
Global Managers Trust; Assistant Treasurer,
Neuberger & Berman Equity Assets.
C-11
<PAGE>
Stanley Egener Chairman of the Board and Trustee, Neuberger
President and Director, & Berman Advisers Management Trust (Delaware
N&B Management; Principal, business trust); Chairman of the Board and
Neuberger & Berman Trustee, Advisers Managers Trust; Chairman of
the Board and Trustee, Neuberger & Berman
Advisers Management Trust (Massachusetts
business trust) (1); Chairman of the Board
and Trustee, Neuberger & Berman Income Funds;
Chairman of the Board and Trustee, Neuberger
& Berman Income Trust; Chairman of the Board
and Trustee, Neuberger & Berman Equity Funds;
Chairman of the Board and Trustee, Neuberger
& Berman Equity Trust; Chairman of the Board
and Trustee, Income Managers Trust; Chairman
of the Board and Trustee, Equity Managers
Trust; Chairman of the Board and Trustee,
Global Managers Trust; Chairman of the Board
and Trustee, Neuberger & Berman Equity
Assets.
Theodore P. Giuliano President and Trustee, Neuberger & Berman
Vice President and Director, Income Funds; President and Trustee,
N&B Management; Principal, Neuberger & Berman Income Trust; President
Neuberger & Berman and Trustee, Income Managers Trust.
C. Carl Randolph Assistant Secretary, Neuberger & Berman
Principal, Advisers Management Trust (Delaware business
Neuberger & Berman trust); Assistant Secretary, Advisers
Managers Trust; Assistant Secretary,
Neuberger & Berman Advisers Management Trust
(Massachusetts business trust) (1); Assistant
Secretary, Neuberger & Berman Income Funds;
Assistant Secretary, Neuberger & Berman
Income Trust; Assistant Secretary, Neuberger
& Berman Equity Funds; Assistant Secretary,
Neuberger & Berman Equity Trust; Assistant
Secretary, Income Managers Trust; Assistant
Secretary, Equity Managers Trust; Assistant
Secretary, Global Managers Trust; Assistant
Secretary, Neuberger & Berman Equity Assets.
Felix Rovelli Senior Vice President-Senior Equity Portfolio
Vice President, Manager, BNP-N&B Global Asset Management L.P.
N&B Management (joint venture of Neuberger & Berman and
Banque Nationale de Paris) (2).
C-12
<PAGE>
Richard Russell Treasurer, Neuberger & Berman Advisers
Vice President, Management Trust (Delaware business trust);
N&B Management Treasurer, Advisers Managers Trust;
Treasurer, Neuberger & Berman Advisers
Management Trust (Massachusetts business
trust) (1); Treasurer, Neuberger & Berman
Income Funds; Treasurer, Neuberger & Berman
Income Trust; Treasurer, Neuberger & Berman
Equity Funds; Treasurer, Neuberger & Berman
Equity Trust; Treasurer, Income Managers
Trust; Treasurer, Equity Managers Trust;
Treasurer, Global Managers Trust; Treasurer,
Neuberger & Berman Equity Assets.
Daniel J. Sullivan Vice President, Neuberger & Berman Advisers
Senior Vice President, Management Trust (Delaware business trust);
N&B Management Vice President, Advisers Managers Trust; Vice
President, Neuberger & Berman Advisers
Management Trust (Massachusetts business
trust) (1); Vice President, Neuberger &
Berman Income Funds; Vice President,
Neuberger & Berman Income Trust; Vice
President, Neuberger & Berman Equity Funds;
Vice President, Neuberger & Berman Equity
Trust; Vice President, Income Managers Trust;
Vice President, Equity Managers Trust; Vice
President, Global Managers Trust; Vice
President, Neuberger & Berman Equity Assets.
Michael J. Weiner Vice President, Neuberger & Berman Advisers
Senior Vice President, Management Trust (Delaware business trust);
N&B Management Vice President, Advisers Managers Trust; Vice
President, Neuberger & Berman Advisers
Management Trust (Massachusetts business
trust) (1); Vice President, Neuberger &
Berman Income Funds; Vice President,
Neuberger & Berman Income Trust; Vice
President, Neuberger & Berman Equity Funds;
Vice President, Neuberger & Berman Equity
Trust; Vice President, Income Managers Trust;
Vice President, Equity Managers Trust; Vice
President, Global Managers Trust; Vice
President, Neuberger & Berman Equity Assets.
C-13
<PAGE>
Celeste Wischerth, Assistant Treasurer, Neuberger & Berman
Assistant Vice President, Advisers Management Trust (Delaware business
N&B Management trust); Assistant Treasurer, Advisers
Managers Trust; Assistant Treasurer,
Neuberger & Berman Income Funds; Assistant
Treasurer, Neuberger & Berman Income Trust;
Assistant Treasurer, Neuberger & Berman
Equity Funds; Assistant Treasurer, Neuberger
& Berman Equity Trust; Assistant Treasurer,
Income Managers Trust; Assistant Treasurer,
Equity Managers Trust; Assistant Treasurer,
Global Managers Trust; Assistant Treasurer,
Neuberger & Berman Equity Assets.
Lawrence Zicklin President and Trustee, Neuberger & Berman
Director, N&B Management; Advisers Management Trust (Delaware business
Principal, Neuberger & Berman trust); President and Trustee, Advisers
Managers Trust; President and Trustee,
Neuberger & Berman Advisers Management Trust
(Massachusetts business trust) (1); President
and Trustee, Neuberger & Berman Equity Funds;
President and Trustee, Neuberger & Berman
Equity Trust; President and Trustee, Equity
Managers Trust; President, Global Managers
Trust; President and Trustee, Neuberger &
Berman Equity Assets.
The principal address of N&B Management, Neuberger & Berman, LLC,
and of each of the investment companies named above, is 605 Third Avenue, New
York, New York 10158.
- --------------------------
(1) Until April 30, 1995.
(2) Until October 31, 1995.
C-14
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) N&B Management, the principal underwriter distributing securities of
the Registrant, is also the principal underwriter and distributor for each of
the following investment companies:
Neuberger & Berman Advisers Management Trust
Neuberger & Berman Equity Funds
Neuberger & Berman Equity Trust
Neuberger & Berman Income Funds
Neuberger & Berman Income Trust
N&B Management is also the investment manager to the master funds in
which the above-named investment companies invest.
(b) Set forth below is information concerning the directors and officers
of the Registrant's principal underwriter. The principal business address of
each of the persons listed is 605 Third Avenue, New York, New York 10158-0180,
which is also the address of the Registrant's principal underwriter.
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ---- --------------------- ---------------------
Claudia A. Brandon Vice President Secretary
Patrick T. Byrne Vice President None
Richard A. Cantor Chairman of the Board and None
Director
Robert Conti Treasurer None
Stacy Cooper-Shugrue Assistant Vice President Assistant Secretary
William Cunningham Vice President None
Clara Del Villar Vice President None
Barbara DiGiorgio Assistant Vice President Assistant Treasurer
Roberta D'Orio Assistant Vice President None
C-15
<PAGE>
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ---- --------------------- ---------------------
Stanley Egener President and Director Chairman of the Board,
Chief Executive Officer,
and Trustee
Joseph G. Galli Assistant Vice President None
Robert I. Gendelman Assistant Vice President None
Mark R. Goldstein Vice President None
Theodore P. Giuliano Vice President and None
Director
Leslie Holliday-Soto Assistant Vice President None
Jody L. Irwin Assistant Vice President None
Michael M. Kassen Vice President and None
Director
Irwin Lainoff Director None
Michael Lamberti Vice President None
Josephine Mahaney Vice President None
Carmen G. Martinez Assistant Vice President None
Ellen Metzger Vice President and None
Secretary
Paul Metzger Vice President None
Loraine Olavarria Assistant Secretary None
Janet W. Prindle Vice President None
Joseph S. Quirk Assistant Vice President None
Kevin L. Risen Assistant Vice President None
Felix Rovelli Vice President None
Richard Russell Vice President Treasurer and Principal
Accounting Officer
C-16
<PAGE>
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ---- --------------------- ---------------------
Kent C. Simons Vice President None
Frederick B. Soule Vice President None
Daniel J. Sullivan Senior Vice President Vice President
Peter E. Sundman Senior Vice President None
Susan Switzer Assistant Vice President None
Andrea Trachtenberg Vice President of None
Marketing
Judith M. Vale Vice President None
Susan Walsh Vice President None
Michael J. Weiner Senior Vice President Vice President and
Principal Financial
Officer
Celeste Wischerth Assistant Vice President Assistant Treasurer
Thomas Wolfe Vice President None
KimMarie Zamot Assistant Vice President None
Lawrence Zicklin Director Trustee and President
(c) No commissions or other compensation were received directly or
indirectly from the Registrant by any principal underwriter who was not an
affiliated person of the Registrant.
C-17
<PAGE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act, as amended, and the rules promulgated thereunder
with respect to the Registrant are maintained at the offices of State Street
Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110, except
for the Registrant's Trust Instrument and By-Laws, minutes of meetings of the
Registrant's Trustees and shareholders and the Registrant's policies and
contracts, which are maintained at the offices of the Registrant, 605 Third
Avenue, New York, New York 10158.
ITEM 31. MANAGEMENT SERVICES
Other than as set forth in Parts A and B of this Post-Effective
Amendment, the Registrant is not a party to any management-related service
contract.
ITEM 32. UNDERTAKINGS
Registrant hereby undertakes to file a Post-Effective Amendment to
its Registration Statement, containing financial statements with respect to
Neuberger & Berman Genesis Assets, which need not be certified, within four to
six months from the date of that Fund's commencement of operations.
Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of Registrant's latest annual report to shareholders of
Neuberger & Berman Partners Assets, upon request and without charge.
C-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, NEUBERGER & BERMAN EQUITY ASSETS
certifies that it meets all of the requirements for effectiveness of this
Post-Effective Amendment No. 8 to its Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City and State of New York on the
27th day of March, 1997.
NEUBERGER & BERMAN EQUITY ASSETS
By:/s/ Lawrence Zicklin
-------------------------------
Lawrence Zicklin*
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 8 has been signed below by the following persons in
the capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Faith Colish Trustee March 27, 1997
- ---------------------------
Faith Colish*
/s/ Donald M. Cox Trustee March 27, 1997
- ---------------------------
Donald M. Cox*
/s/ Stanley Egener Chairman of the Board March 27, 1997
- --------------------------- and Trustee (Chief
Stanley Egener* Executive Officer)
/s/ Howard A. Mileaf Trustee March 27, 1997
- ---------------------------
Howard A. Mileaf*
(Signatures continued on next page)
<PAGE>
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Edward I. O'Brien Trustee March 27, 1997
- ---------------------------
Edward I. O'Brien*
/s/ John T. Patterson, Jr. Trustee March 27, 1997
- ---------------------------
John T. Patterson, Jr.*
/s/ John P. Rosenthal Trustee March 27, 1997
- ---------------------------
John P. Rosenthal*
/s/ Cornelius T. Ryan Tustee March 27, 1997
- ---------------------------
Cornelius T. Ryan*
/s/ Gustave H. Shubert Trustee March 27, 1997
- ---------------------------
Gustave H. Shubert*
/s/ Alan R. Gruber
- --------------------------- Trustee March 27, 1997
Alan R. Gruber*
/s/ Lawrence Zicklin President and Trustee March 27, 1997
- ---------------------------
Lawrence Zicklin*
/s/ Michael J. Weiner Vice President (Principal March 27, 1997
- --------------------------- Financial Officer)
Michael J. Weiner*
/s/ Richard Russell Treasurer (Principal March 27, 1997
- --------------------------- Financial Officer
Richard Russell*
* Signatures affixed by Beth A. Stekler pursuant to a Power of Attorney
dated October 24, 1996, and filed herewith.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, EQUITY MANAGERS TRUST certifies that it meets
all of the requirements for effectiveness of the Post-Effective Amendment No. 8
to the Registration Statement pursuant to Rule 485(b) under the Securities Act
of 1933 and has duly caused this Post-Effective Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City and State of New York on the 27th day of March, 1997.
EQUITY MANAGERS TRUST
By: /s/ Lawrence Zicklin
------------------------
Lawrence Zicklin*
President
Pursuant to the requirements of the Securities Act of 1933, the
Post-Effective Amendment No. 8 has been signed below by the following persons in
the capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Faith Colish
- -------------------- Trustee March 27, 1997
Faith Colish*
/s/ Donald M. Cox
- -------------------- Trustee March 27, 1997
Donald M. Cox*
/s/ Stanley Egener Chairman of the Board March 27, 1997
- -------------------- and Trustee (Chief
Stanley Egener* Executive Officer)
/s/ Howard A. Mileaf
- -------------------- Trustee March 27, 1997
Howard A. Mileaf*
/s/ Edward I. O'Brien
- -------------------- Trustee March 27, 1997
Edward I. O'Brien*
(signatures continued on next page)
<PAGE>
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ John T. Patterson Trustee March 27, 1997
- -----------------------
John T. Patterson, Jr.*
/s/ John P. Rosenthal Trustee March 27, 1997
- ----------------------
John P. Rosenthal*
/s/ Cornelius T. Ryan Trustee March 27, 1997
- ----------------------
Cornelius T. Ryan*
/s/ Gustave H. Shubert Trustee March 27, 1997
- ----------------------
Gustave H. Shubert*
/s/ Alan R. Gruber Trustee March 27, 1997
- ----------------------
Alan R. Gruber*
/s/ Lawrence Zicklin President and Trustee March 27, 1997
- --------------------
Lawrence Zicklin*
/s/ Michael J. Weiner Vice President (Principal March 27, 1997
- --------------------- Financial Officer
Michael J. Weiner*
/s/ Richard Russell Treasurer (Principal March 27, 1997
- -------------------- Accounting Officer)
Richard Russell*
* Signatures affixed by Beth A. Stekler pursuant to a Power of Attorney
dated October 24, 1996, and filed herewith.
<PAGE>
POWER OF ATTORNEY
NEUBERGER & BERMAN EQUITY ASSETS, a Delaware business trust ("Trust"),
and each of its undersigned officers and trustees hereby nominates, constitutes
and appoints Lawrence Zicklin, Michael J. Weiner, Richard M. Phillips, Arthur C.
Delibert, Dana L. Platt, Susan M. Casey and Beth A. Stekler (with full power to
each of them to act alone) its/his/her true and lawful attorney-in-fact and
agent, for it/him/her and on its/his/her behalf and in its/his/her name, place
and stead in any and all capacities, to make, execute and sign the Trust's
Registration Statement on Form N-1A under the Securities Act of 1933 and/or the
Investment Company Act of 1940, any registration statements on Form N-14, and
any and all amendments to such registration statements on Form N-1A or Form
N-14, and to file with the Securities and Exchange Commission, and any other
regulatory authority having jurisdiction over the offer and sale of shares of
the Beneficial Interest of the Trust, any such registration statement or
amendment, and any and all supplements thereto or to any prospectus or statement
of additional information forming a part thereof, and any and all exhibits and
other documents requisite in connection therewith, granting unto said attorneys,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises as fully
to all intents and purposes as the Trust and the undersigned officers and
trustees itself/themselves might or could do.
IN WITNESS WHEREOF, NEUBERGER & BERMAN EQUITY ASSETS has caused this
power of attorney to be executed in its name by its President, and attested by
its Secretary, and the undersigned officers and trustees have hereunto set their
hands and seals this 24th day of October, 1996.
NEUBERGER & BERMAN EQUITY ASSETS
/s/ Lawrence Zicklin
By: ---------------------------
Lawrence Zicklin, President
[SEAL]
ATTEST:
/s/ Claudia A. Brandon
- ------------------------------
Claudia A. Brandon,
Secretary
<PAGE>
Signature Title
--------- -----
/s/ Stanley Egener
- ---------------------------- Chairman of the Board, Chief Executive
Stanley Egener Officer, and Trustee
/s/ Lawrence Zicklin
- ---------------------------- President and Trustee
Lawrence Zicklin
/s/ Michael J. Weiner
- ---------------------------- Vice President and Principal Financial
Michael J. Weiner Officer
/s/ Richard Russell
- ---------------------------- Treasurer and Principal Accounting Officer
Richard Russell
/s/ Faith Colish
- ---------------------------- Trustee
Faith Colish
/s/ Donald M. Cox
- ---------------------------- Trustee
Donald M. Cox
/s/ Alan R. Gruber
- ---------------------------- Trustee
Alan R. Gruber
/s/ Howard A. Mileaf
- ---------------------------- Trustee
Howard A. Mileaf
/s/ Edward I. O'Brien
- ---------------------------- Trustee
Edward I. O'Brien
<PAGE>
Signature Title
--------- -----
/s/ John T. Patterson, Jr.
- ---------------------------- Trustee
John T. Patterson, Jr.
/s/ John P. Rosenthal
- ---------------------------- Trustee
John P. Rosenthal
/s/ Cornelius T. Ryan
- ---------------------------- Trustee
Cornelius T. Ryan
/s/ Gustave H. Shubert
- ---------------------------- Trustee
Gustave H. Shubert
<PAGE>
POWER OF ATTORNEY
EQUITY MANAGERS TRUST, a New York trust (the "Trust"), and each of its
undersigned officers and trustees hereby nominates, constitutes and appoints
Lawrence Zicklin, Michael J. Weiner, Richard M. Phillips, Arthur C. Delibert,
Susan M. Casey, Dana L. Platt and Beth A. Stekler (with full power to each of
them to act alone) its/his/her true and lawful attorney-in-fact and agent, for
it/him/her and on its/his/her behalf and in its/his/her name, place and stead in
any and all capacities, to make, execute and sign any feeder fund Registration
Statements on Form N-1A under the Securities Act of 1933 and/or the Investment
Company Act of 1940 and any amendments thereto, any amendments to the Trust's
Registration Statement on Form N-1A under the Investment Company Act of 1940,
any registration statements on Form N-14 and any amendments thereto, and to file
with the Securities and Exchange Commission, and any other regulatory authority
having jurisdiction over the offer and sale of shares of such feeder fund, any
such registration statement or amendments, and any and all supplements thereto
or to any prospectus or statement of additional information forming a part
thereof, and any and all exhibits and other documents requisite in connection
therewith, granting unto said attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises as fully to all intents and purposes as the
Trust and the undersigned officers and trustees itself/themselves might or could
do.
IN WITNESS WHEREOF, EQUITY MANAGERS TRUST has caused this power of
attorney to be executed in its name by its President, and attested by its
Secretary, and the undersigned officers and trustees have hereunto set their
hands this 24th day of October, 1996.
EQUITY MANAGERS TRUST
/s/ Lawrence Zicklin
By: ---------------------------
Lawrence Zicklin, President
[SEAL]
ATTEST:
/s/ Claudia A. Brandon
- ------------------------------
Claudia A. Brandon,
Secretary
[Signatures Continued on Next Page]
<PAGE>
Signature Title
--------- -----
/s/ Stanley Egener
- ---------------------------- Chairman of the Board, Chief Executive
Stanley Egener Officer, and Trustee
/s/ Lawrence Zicklin
- ---------------------------- President and Trustee
Lawrence Zicklin
/s/ Michael J. Weiner
- ---------------------------- Vice President and Principal Financial
Michael J. Weiner Officer
/s/ Richard Russell
- ---------------------------- Treasurer and Principal Accounting Officer
Richard Russell
/s/ Faith Colish
- ---------------------------- Trustee
Faith Colish
/s/ Donald M. Cox
- ---------------------------- Trustee
Donald M. Cox
/s/ Alan R. Gruber
- ---------------------------- Trustee
Alan R. Gruber
/s/ Howard A. Mileaf
- ---------------------------- Trustee
Howard A. Mileaf
/s/ Edward I. O'Brien
- ---------------------------- Trustee
Edward I. O'Brien
<PAGE>
Signature Title
--------- -----
/s/ John T. Patterson, Jr.
- ---------------------------- Trustee
John T. Patterson, Jr.
/s/ John P. Rosenthal
- ---------------------------- Trustee
John P. Rosenthal
/s/ Cornelius T. Ryan
- ---------------------------- Trustee
Cornelius T. Ryan
/s/ Gustave H. Shubert
- ---------------------------- Trustee
Gustave H. Shubert
<PAGE>
NEUBERGER & BERMAN EQUITY ASSETS
POST-EFFECTIVE AMENDMENT NO. 8 ON FORM N-1A
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Description Page
- -------- -------------------------------------------------- ------------
(1) (a) Certificate of Trust. Incorporated by N.A.
Reference to Post-Effective Amendment No. 1
to Registrant's Registration Statement, File
Nos. 33-82568 and 811-8106, EDGAR Accession
No. 0000898432-95-000393.
(b) Trust Instrument of Neuberger & Berman N.A.
Equity Assets. Incorporated by Reference to
Post-Effective Amendment No. 1 to
Registrant's Registration Statement, File
Nos. 33-82568 and 811-8106, EDGAR Accession
No. 0000898432-95-000393.
(c) Schedule A - Current Series of Neuberger & N.A.
Berman Equity Assets. Filed Herewith.
(2) By-Laws of Neuberger & Berman Equity Assets. N.A.
Incorporated by Reference to Post-Effective
Amendment No. 1 to Registrant's Registration
Statement, File Nos. 33-82568 and 811-8106, EDGAR
Accession No. 0000898432-95-000393.
(3) Voting Trust Agreement. None. N.A.
(4) (a) Trust Instrument of Neuberger & Berman
Equity Assets, Articles IV, V, and VI.
Incorporated by Reference to Post-Effective
Amendment No. 1 to Registrant's Registration
Statement, File Nos. 33-82568 and 811-8106,
EDGAR Accession No. 0000898432-95-000393.
<PAGE>
Sequentially
Exhibit Numbered
Number Description Page
- -------- -------------------------------------------------- ------------
(b) By-Laws of Neuberger & Berman Equity Assets,
Articles V, VI, and VIII. Incorporated by
Reference to Post-Effective Amendment No. 1
to Registrant's Registration Statement, File
Nos. 33-82568 and 811-8106, EDGAR Accession
No. 0000898432-95-000393.
(5) (a) (i) Management Agreement Between Equity N.A.
Managers Trust and Neuberger & Berman
Management Incorporated.
Incorporated by Reference to
Post-Effective Amendment No. 70 to
Registration Statement of Neuberger &
Berman Equity Funds, File Nos. N.A.
2-11357 and 811-582, EDGAR Accession
No. 0000898432-95-000314.
(ii) Schedule A - Series of Neuberger &
Berman Equity Managers Trust
Currently Subject to the Management
Agreement. Incorporated by Reference
to Post-Effective Amendment No. 70 to
Registration Statement of Neuberger &
Berman Equity Funds, File Nos.
2-11357 and 811-582, EDGAR Accession
No. 0000898432-95-000314.
(iii) Schedule B - Schedule of Compensation N.A.
Under the Management Agreement.
Incorporated by Reference to
Post-Effective Amendment No. 70 to
Registration Statement of Neuberger &
Berman Equity Funds, File Nos.
2-11357 and 811-582, EDGAR Accession
No. 0000898432-95-000314.
(b) (i) Sub-Advisory Agreement Between N.A.
Neuberger & Berman Management
Incorporated and Neuberger & Berman
with respect to Equity Managers
Trust. Incorporated by Reference to
Post-Effective Amendment No. 70 to
Registration Statement of Neuberger &
Berman Equity Funds, File Nos.
2-11357 and 811-582, EDGAR Accession
No. 0000898432-95-000314.
<PAGE>
(ii) Schedule A - Series of Equity N.A.
Managers Trust Currently Subject to
the Sub-Advisory Agreement.
Incorporated by Reference to
Post-Effective Amendment No. 70 to
Registration Statement of Neuberger &
Berman Equity Funds, File Nos.
2-11357 and 811-582, EDGAR Accession
No. 0000898432-95-000314.
(iii) Substitution Agreement Among
Neuberger & Berman Management
Incorporated, Equity Managers Trust,
Neuberger & Berman, L.P., and
Neuberger & Berman, LLC.
Incorporated by Reference to
Amendment No. 7 to Registration
Statement of Equity Managers Trust,
File No. 811-7910, Edgar Accession
No. 0000898432-96-000557.
(6) (a) (i) Distribution Agreement Between N.A.
Neuberger & Berman Equity Assets and
Neuberger & Berman Management
Incorporated with Respect to
Neuberger & Berman Socially
Responsive Trust. Incorporated by
Reference to Post-Effective Amendment
No. 1 to Registrant's Registration
Statement, File Nos. 33-82568 and
811-8106, EDGAR Accession No.
0000898432-95-000393.
(ii) Schedule A - Series of Neuberger & N.A.
Berman Equity Assets Currently
Subject to the Distribution
Agreement. Incorporated by Reference
to Post-Effective Amendment No. 1 to
Registrant's Registration Statement,
File Nos. 33-82568 and 811-8106,
EDGAR Accession No. 0000898432-95-000393.
<PAGE>
Sequentially
Exhibit Numbered
Number Description Page
- -------- -------------------------------------------------- ------------
(b) (i) Distribution and Services Agreement N.A.
Between Neuberger & Berman Equity
Assets and Neuberger & Berman
Management Incorporated With Respect
to Other Series. Incorporated by
Reference to Post-Effective Amendment
No. 5 to Registrant's Registration
Statement, File Nos. 33-82568 and
811-8106, Edgar Accession No.
0000898432-96-000576.
(ii) Schedule A - Series of Neuberger & N.A.
Berman Equity Assets Currently
Subject to Distribution and Services
Agreement. Filed Herewith.
(7) Bonus, Profit Sharing or Pension Plans. None. N.A.
(8) (a) Custodian Contract Between Neuberger & N.A.
Berman Equity Assets and State Street Bank
and Trust Company. Incorporated by
Reference to Post-Effective Amendment No. 3
to Registrant's Registration Statement, File
Nos. 33-82568 and 811-8106, Edgar Accession
No. 0000898432-96-000048.
(b) Schedule A - Approved Foreign Banking N.A.
Institutions and Securities Depositories
Under the Custodian Contract. Incorporated
by Reference to Post-Effective Amendment No.
3 to Registrant's Registration Statement,
File Nos. 33-82568 and 811-8106, Edgar
Accession No. 0000898432-96-000048.
(c) Schedule of Compensation under the Custodian
Contract. Incorporated by Reference to
Post-Effective Amendment No. 4 to Registrant's
Registration Statement, File Nos. 33-82568 and
811-8106, Edgar Accession No.0000898432-96-000558.
<PAGE>
Sequentially
Exhibit Numbered
Number Description Page
- -------- -------------------------------------------------- ------------
(d) Agreement Between Neuberger & Berman Equity
Assets and State Street Bank and Trust
Company Adding Neuberger & Berman Focus
Assets, Neuberger & Berman Guardian Assets,
Neuberger & Berman Manhattan Assets and
Neuberger & Berman Partners Assets as
Portfolios Governed by the Custodian
Contract. Filed Herewith.
(e) Form of Agreement Between Neuberger & Berman
Equity Assets and State Street Bank and
Trust Company Adding Neuberger & Berman
Genesis Assets as a Portfolio Governed by
the Custodian Contract. Filed Herewith.
(9) (a) (i) Transfer Agency Agreement Between N.A.
Neuberger & Berman Equity Assets and
State Street Bank and Trust Company.
Incorporated by Reference to
Post-Effective Amendment No. 3 to
Registrant's Registration Statement,
File Nos. 33-82568 and 811-8106, Edgar
Accession No. 0000898432-96-000048.
(ii) Schedule of Compensation under the
Transfer Agency Agreement.
Incorporated by Reference to
Post-Effective Amendment No. 4 to
Registrant's Registration Statement,
File Nos. 33-82568 and 811-8106, Edgar
Accession No. 0000898432-96-000558.
(iii) Agreement Between Neuberger & Berman
Equity Assets and State Street Bank
and Trust Company Adding Neuberger &
Berman Focus Assets, Neuberger &
Berman Guardian Assets, Neuberger &
Berman Manhattan Assets and Neuberger
& Berman Partners Assets as
Portfolios Governed by the Transfer
Agency Agreement. Filed Herewith.
<PAGE>
Sequentially
Exhibit Numbered
Number Description Page
- -------- -------------------------------------------------- ------------
(iv) Form of Agreement Between Neuberger &
Berman Equity Assets and State Street
Bank and Trust Company Adding
Neuberger & Berman Genesis Assets as
a Portfolio Governed by the Transfer
Agency Agreement. Filed Herewith.
(b) (i) Administration Agreement Between N.A.
Neuberger & Berman Equity Assets and
Neuberger & Berman Management
Incorporated. Incorporated by
Reference to Post-Effective Amendment
No. 3 to Registrant's Registration
Statement, File Nos. 33-82568 and
811-8106, Edgar Accession
No. 0000898432-96-000048.
(ii) Schedule A - Series of Neuberger & N.A.
Berman Equity Assets Currently
Subject to the Administration
Agreement. Filed Herewith.
(iii) Schedule B - Schedule of Compensation N.A.
Under the Administration Agreement.
Incorporated by Reference to
Post-Effective Amendment No. 3 to
Registrant's Registration Statement,
File Nos. 33-82568 and 811-8106,
Edgar Accession
No. 0000898432-96-000048.
(10) Opinion and Consent of Kirkpatrick & Lockhart LLP ____
on Securities Matters. Incorporated by Reference
to Registrant's Rule 24f-2 Notice for the Fiscal
Year Ended August 31, 1996, File Nos. 33-82568 and
811-8106, Edgar Accession No. 0000898432-96-000463.
<PAGE>
(11) (a) Consent of Ernst & Young LLP, Independent ____
Auditors. Filed Herewith.
(b) Consent of Coopers & Lybrand L.L.P., ____
Independent Accountants. Filed Herewith.
(12) Financial Statements Omitted from Prospectus. N.A.
None.
(13) Letter of Investment Intent. None. N.A.
(14) Prototype Retirement Plan. None. N.A.
(15) (a) Plan Pursuant to Rule 12b-1. Incorporated by N.A.
Reference to Post-Effective Amendment No. 5
to Registrant's Registration Statement,
File Nos. 33-82568 and 811-8106, Edgar
Accession No. 0000898432-96-000576.
(b) Schedule A - Series of Neuberger & Berman
Equity Assets Currently Subject to Plan
Pursuant to Rule 12b-1. Filed Herewith.
(16) Schedule of Computation of Performance Quotations. N.A.
None.
(17) Financial Data Schedule. Filed Herewith. ____
(18) Plan Pursuant to Rule 18f-3. None. N.A.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
NEUBERGER&BERMAN FOCUS ASSETS SEMI ANNUAL REPORT AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH DOCUMENT.
</LEGEND>
<SERIES>
<NUMBER> 01
<NAME> NEUBERGER&BERMAN FOCUS ASSETS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> FEB-28-1997
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 122
<RECEIVABLES> 57
<ASSETS-OTHER> 54
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 233
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 111
<TOTAL-LIABILITIES> 111
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 100
<SHARES-COMMON-STOCK> 10
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 19
<NET-ASSETS> 122
<DIVIDEND-INCOME> 1
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (1)
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 3
<APPREC-INCREASE-CURRENT> 19
<NET-CHANGE-FROM-OPS> 22
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 122
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 58
<AVERAGE-NET-ASSETS> 113
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.03)
<PER-SHARE-GAIN-APPREC> 2.21
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.18
<EXPENSE-RATIO> 1.50<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Annualized.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
NEUBERGER&BERMAN GUARDIAN ASSETS SEMI ANNUAL REPORT AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH DOCUMENT.
</LEGEND>
<SERIES>
<NUMBER> 03
<NAME> NEUBERGER&BERMAN GUARDIAN ASSETS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> FEB-28-1997
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 1,675
<RECEIVABLES> 62
<ASSETS-OTHER> 54
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,791
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 114
<TOTAL-LIABILITIES> 114
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,604
<SHARES-COMMON-STOCK> 140
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 19
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 54
<NET-ASSETS> 1,677
<DIVIDEND-INCOME> 3
<INTEREST-INCOME> 1
<OTHER-INCOME> 0
<EXPENSES-NET> (4)
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 19
<APPREC-INCREASE-CURRENT> 54
<NET-CHANGE-FROM-OPS> 73
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 140
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,677
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 62
<AVERAGE-NET-ASSETS> 531
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 2.01
<PER-SHARE-DIVIDEND> (.01)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.00
<EXPENSE-RATIO> 1.50<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Annualized.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
NEUBERGER&BERMAN MANHATTAN ASSETS SEMI ANNUAL REPORT AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH DOCUMENT.
</LEGEND>
<SERIES>
<NUMBER> 02
<NAME> NEUBERGER&BERMAN MANHATTAN ASSETS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> FEB-28-1997
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 121
<RECEIVABLES> 57
<ASSETS-OTHER> 53
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 231
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 110
<TOTAL-LIABILITIES> 110
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 101
<SHARES-COMMON-STOCK> 10
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 15
<NET-ASSETS> 121
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (1)
<NET-INVESTMENT-INCOME> (1)
<REALIZED-GAINS-CURRENT> 7
<APPREC-INCREASE-CURRENT> 15
<NET-CHANGE-FROM-OPS> 21
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 100
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 121
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 58
<AVERAGE-NET-ASSETS> 112
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.05)
<PER-SHARE-GAIN-APPREC> 2.13
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.11)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.97
<EXPENSE-RATIO> 1.50<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Annualized.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
NEUBERGER&BERMAN PARTNERS ASSETS SEMI ANNUAL REPORT AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH DOCUMENT.
</LEGEND>
<SERIES>
<NUMBER> 05
<NAME> NEUBERGER&BERMAN PARTNERS ASSETS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> FEB-28-1997
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 611
<RECEIVABLES> 77
<ASSETS-OTHER> 52
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 740
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 128
<TOTAL-LIABILITIES> 128
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 585
<SHARES-COMMON-STOCK> 50
<SHARES-COMMON-PRIOR> 10
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 23
<NET-ASSETS> 612
<DIVIDEND-INCOME> 2
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (2)
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 5
<APPREC-INCREASE-CURRENT> 24
<NET-CHANGE-FROM-OPS> 29
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 42
<NUMBER-OF-SHARES-REDEEMED> (2)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 508
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 63
<AVERAGE-NET-ASSETS> 197
<PER-SHARE-NAV-BEGIN> 9.91
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 2.28
<PER-SHARE-DIVIDEND> (.01)
<PER-SHARE-DISTRIBUTIONS> (.05)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.14
<EXPENSE-RATIO> 1.50<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Annualized.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
NEUBERGER&BERMAN FOCUS PORTFOLIO SEMI ANNUAL REPORT AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH DOCUMENT.
</LEGEND>
<SERIES>
<NUMBER> 01
<NAME> NEUBERGER&BERMAN FOCUS PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> FEB-28-1997
<INVESTMENTS-AT-COST> 966,473
<INVESTMENTS-AT-VALUE> 1,383,855
<RECEIVABLES> 10,700
<ASSETS-OTHER> 35
<OTHER-ITEMS-ASSETS> 3,050
<TOTAL-ASSETS> 1,397,640
<PAYABLE-FOR-SECURITIES> 19,736
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 38,622
<TOTAL-LIABILITIES> 58,358
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 640,203
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 30,077
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 251,517
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 417,485
<NET-ASSETS> 1,339,282
<DIVIDEND-INCOME> 6,241
<INTEREST-INCOME> 611
<OTHER-INCOME> 0
<EXPENSES-NET> (3,304)
<NET-INVESTMENT-INCOME> 3,548
<REALIZED-GAINS-CURRENT> 111,507
<APPREC-INCREASE-CURRENT> 131,395
<NET-CHANGE-FROM-OPS> 246,450
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 216,911
<ACCUMULATED-NII-PRIOR> 26,529
<ACCUMULATED-GAINS-PRIOR> 140,010
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,096
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,304
<AVERAGE-NET-ASSETS> 1,248,585
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .53<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Annualized.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
NEUBERGER&BERMAN GUARDIAN PORTFOLIO SEMI ANNUAL REPORT AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH DOCUMENT.
</LEGEND>
<SERIES>
<NUMBER> 01
<NAME> NEUBERGER&BERMAN GUARDIAN PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> FEB-28-1997
<INVESTMENTS-AT-COST> 5,781,435
<INVESTMENTS-AT-VALUE> 7,825,239
<RECEIVABLES> 38,107
<ASSETS-OTHER> 152
<OTHER-ITEMS-ASSETS> 42
<TOTAL-ASSETS> 7,863,540
<PAYABLE-FOR-SECURITIES> 111,780
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 204,861
<TOTAL-LIABILITIES> 316,641
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,599,460
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 221,182
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 682,586
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,043,671
<NET-ASSETS> 7,546,899
<DIVIDEND-INCOME> 39,640
<INTEREST-INCOME> 7,768
<OTHER-INCOME> 0
<EXPENSES-NET> (15,885)
<NET-INVESTMENT-INCOME> 31,523
<REALIZED-GAINS-CURRENT> 227,553
<APPREC-INCREASE-CURRENT> 1,018,651
<NET-CHANGE-FROM-OPS> 1,277,727
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,314,357
<ACCUMULATED-NII-PRIOR> 189,659
<ACCUMULATED-GAINS-PRIOR> 455,033
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 15,220
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 15,885
<AVERAGE-NET-ASSETS> 6,986,209
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .46<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Annualized.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
NEUBERGER&BERMAN MANHATTAN PORTFOLIO SEMI ANNUAL REPORT AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH DOCUMENT.
</LEGEND>
<SERIES>
<NUMBER> 02
<NAME> NEUBERGER&BERMAN MANHATTAN PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> FEB-28-1997
<INVESTMENTS-AT-COST> 472,395
<INVESTMENTS-AT-VALUE> 600,572
<RECEIVABLES> 3,185
<ASSETS-OTHER> 29
<OTHER-ITEMS-ASSETS> 2,497
<TOTAL-ASSETS> 606,283
<PAYABLE-FOR-SECURITIES> 3,485
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 21,694
<TOTAL-LIABILITIES> 25,179
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 246,744
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 6,064
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 200,119
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 128,177
<NET-ASSETS> 581,104
<DIVIDEND-INCOME> 1,563
<INTEREST-INCOME> 191
<OTHER-INCOME> 0
<EXPENSES-NET> (1,709)
<NET-INVESTMENT-INCOME> 45
<REALIZED-GAINS-CURRENT> 64,034
<APPREC-INCREASE-CURRENT> 45,541
<NET-CHANGE-FROM-OPS> 109,575
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 13,678
<ACCUMULATED-NII-PRIOR> 6,019
<ACCUMULATED-GAINS-PRIOR> 136,085
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,536
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,709
<AVERAGE-NET-ASSETS> 581,837
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .59<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Annualized.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
NEUBERGER&BERMAN PARTNERS PORTFOLIO SEMI ANNUAL REPORT AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH DOCUMENT.
</LEGEND>
<SERIES>
<NUMBER> 05
<NAME> NEUBERGER&BERMAN PARTNERS PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> FEB-28-1997
<INVESTMENTS-AT-COST> 2,174,689
<INVESTMENTS-AT-VALUE> 2,722,389
<RECEIVABLES> 14,473
<ASSETS-OTHER> 76
<OTHER-ITEMS-ASSETS> 1
<TOTAL-ASSETS> 2,736,939
<PAYABLE-FOR-SECURITIES> 47,593
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7,953
<TOTAL-LIABILITIES> 55,546
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,411,126
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 60,864
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 661,703
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 547,700
<NET-ASSETS> 2,681,393
<DIVIDEND-INCOME> 14,586
<INTEREST-INCOME> 2,544
<OTHER-INCOME> 0
<EXPENSES-NET> (5,704)
<NET-INVESTMENT-INCOME> 11,426
<REALIZED-GAINS-CURRENT> 151,459
<APPREC-INCREASE-CURRENT> 319,744
<NET-CHANGE-FROM-OPS> 482,629
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 681,790
<ACCUMULATED-NII-PRIOR> 49,438
<ACCUMULATED-GAINS-PRIOR> 510,244
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,424
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,704
<AVERAGE-NET-ASSETS> 2,338,521
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .49<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Annualized.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Partners Assets Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<NAME> NEUBERGER&BERMAN EQUITY ASSETS
<SERIES>
<NUMBER> 05
<NAME> NEUBERGER&BERMAN PARTNERS ASSETS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 104
<RECEIVABLES> 14
<ASSETS-OTHER> 59
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 177
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 73
<TOTAL-LIABILITIES> 73
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 105
<SHARES-COMMON-STOCK> 10
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1)
<NET-ASSETS> 104
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (1)
<NET-CHANGE-FROM-OPS> (1)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 104
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14
<AVERAGE-NET-ASSETS> 3,326
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (.09)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.91
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Focus Portfolio Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<NAME> EQUITY MANAGERS TRUST
<SERIES>
<NUMBER> 04
<NAME> NEUBERGER&BERMAN FOCUS PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
<INVESTMENTS-AT-COST> 838,502
<INVESTMENTS-AT-VALUE> 1,124,592
<RECEIVABLES> 2,059
<ASSETS-OTHER> 52
<OTHER-ITEMS-ASSETS> 95
<TOTAL-ASSETS> 1,126,798
<PAYABLE-FOR-SECURITIES> 3,863
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 564
<TOTAL-LIABILITIES> 4,427
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 669,742
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 26,529
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 140,010
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 286,090
<NET-ASSETS> 1,122,371
<DIVIDEND-INCOME> 15,705
<INTEREST-INCOME> 1,599
<OTHER-INCOME> 0
<EXPENSES-NET> (5,914)
<NET-INVESTMENT-INCOME> 11,390
<REALIZED-GAINS-CURRENT> 51,701
<APPREC-INCREASE-CURRENT> (21,728)
<NET-CHANGE-FROM-OPS> 41,363
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 153,198
<ACCUMULATED-NII-PRIOR> 15,139
<ACCUMULATED-GAINS-PRIOR> 88,309
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,565
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,914
<AVERAGE-NET-ASSETS> 1,097,714
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .54
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Genesis Portfolio Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<SERIES>
<NUMBER> 03
<NAME> NEUBERGER&BERMAN GENESIS PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
<INVESTMENTS-AT-COST> 199,197
<INVESTMENTS-AT-VALUE> 260,418
<RECEIVABLES> 904
<ASSETS-OTHER> 13
<OTHER-ITEMS-ASSETS> 50
<TOTAL-ASSETS> 261,385
<PAYABLE-FOR-SECURITIES> 1,319
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 202
<TOTAL-LIABILITIES> 1,521
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 179,304
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 1,072
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 18,267
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 61,221
<NET-ASSETS> 259,864
<DIVIDEND-INCOME> 1,711
<INTEREST-INCOME> 263
<OTHER-INCOME> 0
<EXPENSES-NET> (1,503)
<NET-INVESTMENT-INCOME> 471
<REALIZED-GAINS-CURRENT> 5,660
<APPREC-INCREASE-CURRENT> 27,635
<NET-CHANGE-FROM-OPS> 33,766
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 117,704
<ACCUMULATED-NII-PRIOR> 601
<ACCUMULATED-GAINS-PRIOR> 12,607
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,506
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,680
<AVERAGE-NET-ASSETS> 177,201
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Guardian Portfolio Annual Report and is qualified in
its entirety by reference to such document.
</LEGEND>
<NAME> EQUITY MANAGERS TRUST
<SERIES>
<NUMBER> 01
<NAME> NEUBERGER&BERMAN GUARDIAN PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
<INVESTMENTS-AT-COST> 5,252,479
<INVESTMENTS-AT-VALUE> 6,277,499
<RECEIVABLES> 10,961
<ASSETS-OTHER> 229
<OTHER-ITEMS-ASSETS> 69
<TOTAL-ASSETS> 6,288,758
<PAYABLE-FOR-SECURITIES> 18,006
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 38,210
<TOTAL-LIABILITIES> 56,216
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,562,830
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 189,659
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 455,033
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,025,020
<NET-ASSETS> 6,232,542
<DIVIDEND-INCOME> 83,718
<INTEREST-INCOME> 40,556
<OTHER-INCOME> 0
<EXPENSES-NET> (26,340)
<NET-INVESTMENT-INCOME> 97,934
<REALIZED-GAINS-CURRENT> 307,410
<APPREC-INCREASE-CURRENT> (111,192)
<NET-CHANGE-FROM-OPS> 294,152
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,619,347
<ACCUMULATED-NII-PRIOR> 91,725
<ACCUMULATED-GAINS-PRIOR> 147,623
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 25,172
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 26,340
<AVERAGE-NET-ASSETS> 5,687,441
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .46
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Manhattan Portfolio Annual Report and is qualified in
its entirety by reference to such document.
</LEGEND>
<NAME> EQUITY MANAGERS TRUST
<SERIES>
<NUMBER> 02
<NAME> NEUBERGER&BERMAN MANHATTAN PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
<INVESTMENTS-AT-COST> 497,389
<INVESTMENTS-AT-VALUE> 580,025
<RECEIVABLES> 133
<ASSETS-OTHER> 41
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 580,199
<PAYABLE-FOR-SECURITIES> 1,618
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 365
<TOTAL-LIABILITIES> 10,790
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 342,686
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 6,019
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 136,085
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 82,636
<NET-ASSETS> 567,426
<DIVIDEND-INCOME> 4,288
<INTEREST-INCOME> 246
<OTHER-INCOME> 0
<EXPENSES-NET> (3,705)
<NET-INVESTMENT-INCOME> 829
<REALIZED-GAINS-CURRENT> 59,509
<APPREC-INCREASE-CURRENT> (74,167)
<NET-CHANGE-FROM-OPS> (13,829)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (77,980)
<ACCUMULATED-NII-PRIOR> 5,190
<ACCUMULATED-GAINS-PRIOR> 76,576
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,402
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,705
<AVERAGE-NET-ASSETS> 642,838
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .58
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Partners Portfolio Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<NAME> EQUITY MANAGERS TRUST
<SERIES>
<NUMBER> 05
<NAME> NEUBERGER&BERMAN PARTNERS PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
<INVESTMENTS-AT-COST> 1,776,910
<INVESTMENTS-AT-VALUE> 2,004,866
<RECEIVABLES> 5,471
<ASSETS-OTHER> 107
<OTHER-ITEMS-ASSETS> 49
<TOTAL-ASSETS> 2,010,493
<PAYABLE-FOR-SECURITIES> 9,975
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 915
<TOTAL-LIABILITIES> 10,890
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,211,965
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 49,438
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 510,244
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 227,956
<NET-ASSETS> 1,999,603
<DIVIDEND-INCOME> 29,211
<INTEREST-INCOME> 3,659
<OTHER-INCOME> 0
<EXPENSES-NET> (9,376)
<NET-INVESTMENT-INCOME> 23,394
<REALIZED-GAINS-CURRENT> 240,765
<APPREC-INCREASE-CURRENT> (30,217)
<NET-CHANGE-FROM-OPS> 233,942
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 376,077
<ACCUMULATED-NII-PRIOR> 26,044
<ACCUMULATED-GAINS-PRIOR> 269,479
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8,868
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9,376
<AVERAGE-NET-ASSETS> 1,851,251
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
SCHEDULE A
INITIAL SERIES
Neuberger & Berman Socially Responsive Trust
ADDITIONAL SERIES
Neuberger & Berman Focus Assets
Neuberger & Berman Genesis Assets
Neuberger & Berman Guardian Assets
Neuberger & Berman Manhattan Assets
Neuberger & Berman Partners Trust
Date: March 31, 1997
DISTRIBUTION AND SERVICES AGREEMENT
SCHEDULE A
Series Date Made Party To Agreement
- ------ -----------------------------
Neuberger & Berman Focus Assets February 12, 1996
Neuberger & Berman Guardian Assets February 12, 1996
Neuberger & Berman Manhattan Assets February 12, 1996
Neuberger & Berman Partners Assets February 12, 1996
Neuberger & Berman Genesis Assets March 31, 1997
VIA FEDERAL EXPRESS
- -------------------
Sharon Baker Morin, Esq.
State Street Bank and Trust Company
1776 Heritage Drive
Mail Stop A4N
North Quincy, Massachusetts 02171-2197
Dear Ms. Morin:
Pursuant to section 17 of the custody contract between State Street Bank
and Trust Company ("State Street") and Neuberger & Berman Equity Assets dated as
of August 19, 1994, we request that Neuberger & Berman Focus Assets, Neuberger &
Berman Guardian Assets, Neuberger & Berman Manhattan Assets, and Neuberger &
Berman Partners Assets be added as Portfolios governed by that custody contract.
The addition of these series is effective as of February 13, 1996. Please
indicate State Street's acceptance of this request by having a duly authorized
officer of State Street sign in the space indicated below.
Sincerely,
/s/ Michael J. Weiner
--------------------------------
Name: Michael J. Weiner
Title: Vice President
Neuberger & Berman Equity Assets
Accepted by State Street
Bank and Trust Company
/s/ Ronald E. Logue
- ---------------------------------
Name: Ronald E. Logue
Title: Executive Vice President
VIA FEDERAL EXPRESS
- -------------------
Sharon Baker Morin, Esq.
State Street Bank and Trust Company
1776 Heritage Drive
Mail Stop A4N
North Quincy, Massachusetts 02171-2197
Dear Ms. Morin,
Pursuant to section 17 of the custody contract between State Street Bank
& Trust Company ("State Street") and Neuberger & Berman Equity Assets dated as
of August 19, 1994, we request that Neuberger & Berman Genesis Assets be added
as a Portfolio governed by that custody contract. The addition of this series is
effective as of March 31, 1997. Please indicate State Street's acceptance of
this request by having a duly authorized officer of State Street sign in the
space indicated below.
Sincerely,
-------------------------------
Name: Michael J. Weiner
Title: Vice President
Neuberger & Berman Equity Assets
Accepted by State Street
Bank and Trust Company
- ----------------------------
Name:
Title:
VIA FEDERAL EXPRESS
- -------------------
Sharon Baker Morin, Esq.
State Street Bank and Trust Company
1776 Heritage Drive
Mail Stop A4N
North Quincy, Massachusetts 02171-2197
Dear Ms. Morin:
Pursuant to section 9 of the transfer agency contract between State Street
Bank and Trust Company ("State Street") and Neuberger & Berman Equity Assets
dated as of August 19, 1994, we request that Neuberger & Berman Focus Assets,
Neuberger & Berman Guardian Assets, Neuberger & Berman Manhattan Assets, and
Neuberger & Berman Partners Assets be added as Portfolios governed by that
transfer agency contract. The addition of these series is effective as of
February 13, 1996. Please indicate State Street's acceptance of this request by
having a duly authorized officer of State Street sign in the space indicated
below.
Sincerely,
/s/ Michael J. Weiner
----------------------------------
Name: Michael J. Weiner
Title: Vice President
Neuberger & Berman Equity Assets
Accepted by State Street
Bank and Trust Company
/s/ Ronald E. Logue
- ---------------------------------
Name: Ronald E. Logue
Title: Executive Vice President
VIA FEDERAL EXPRESS
- -------------------
Sharon Baker Morin, Esq.
State Street Bank and Trust Company
1776 Heritage Drive
Mail Stop A4N
North Quincy, Massachusetts 02171-2197
Dear Ms. Morin,
Pursuant to section 9 of the transfer agency and service contract between
State Street Bank & Trust Company ("State Street") and Neuberger & Berman Equity
Assets dated as of __________, 1994, we request that Neuberger & Berman Genesis
Assets be added as a Portfolio governed by that contract. The addition of this
series is effective as of March 31, 1997. Please indicate State Street's
acceptance of this request by having a duly authorized officer of State Street
sign in the space indicated below.
Sincerely,
----------------------------
Name: Michael J. Weiner
Title: Vice President
Neuberger & Berman Equity Assets
Accepted by State Street
Bank and Trust Company
- --------------------------------
Name:
Title:
cc: Paul Alfama, BFDS
NEUBERGER & BERMAN EQUITY ASSETS
ADMINISTRATION AGREEMENT
SCHEDULE A
Series Date Made A Party To Agreement
- ------ ------------------------------
Neuberger & Berman Socially November 1, 1994
Responsive Trust
Neuberger & Berman Focus Assets February 12, 1996
Neuberger & Berman Guardian Assets February 12, 1996
Neuberger & Berman Manhattan Assets February 12, 1996
Neuberger & Berman Partners Assets February 12, 1996
Neuberger & Berman Genesis Assets March 31, 1997
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectus and "Reports to Shareholders", "Independent
Auditors/Accountants" and "Financial Statements" in the Statement of Additional
Information in Post- Effective Amendment Number 8 to the Registration Statement
(Form N- 1A No. 33-82568) of Neuberger & Berman Equity Assets, and to the
incorporation by reference to our reports dated October 3, 1996 on Neuberger &
Berman Partners Assets, one of the series comprising Neuberger & Berman Equity
Assets, and on Neuberger & Berman Focus Portfolio, Neuberger & Berman Genesis
Portfolio, Neuberger & Berman Guardian Portfolio and Neuberger & Berman Partners
Portfolio, four of the series comprising Equity Managers Trust, included in the
1996 Annual Reports to Shareholders of Neuberger & Berman Partners Assets and
Neuberger & Berman Equity Trust.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Boston, Massachusetts
March 26, 1997
CONSENT OF INDEPENDENT ACCOUNTANTS
--------------------
To the Board of Trustees of
Neuberger & Berman Equity Assets
We consent to the incorporation by reference in Part B. Statement of
Additional Information in Post-Effective Amendment No. 8 to the Registration
Statement on Form N-1A of Neuberger & Berman Equity Assets (File #33-82568)
(811-8106) of our report dated October 4, 1996, on our audit of the financial
statements and financial highlights of Neuberger & Berman Manhattan Portfolio,
which report is included in the Annual Report to Shareholders of Neuberger &
Berman Equity Trust for the fiscal year ended August 31, 1996.
We also consent to the reference to our Firm with respect to Neuberger
& Berman Manhattan Assets and Portfolio under the captions "Independent
Auditors/Accountants" and "Financial Statements" in Part B of the Registration
Statement.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
March 28, 1997
NEUBERGER & BERMAN EQUITY ASSETS
PLAN PURSUANT TO RULE 12B-1
SCHEDULE A
Date Made a
FEE (as a percentage of Party
SERIES Average Daily Net Assets) to Plan
- ------ ------------------------- ---------------
Neuberger & Berman Focus Assets 0.25% April 1, 1996
Neuberger & Berman Guardian Assets 0.25% April 1, 1996
Neuberger & Berman Manhattan Assets 0.25% April 1, 1996
Neuberger & Berman Partners Assets 0.25% April 1, 1996
Neuberger & Berman Genesis Assets 0.25% March 31, 1997
