NEUBERGER BERMAN
EQUITY ASSETS
SUPPLEMENT TO THE PROSPECTUS DATED DECEMBER 30, 1998
NEUBERGER BERMAN GENESIS, MANHATTAN AND PARTNERS ASSETS: the following
disclosure is added to the sidebars entitled "Other Risks" on pages 10, 22 and
28 of the Prospectus:
In using certain derivatives to gain stock market exposure for excess cash
holdings, the fund increases its risk of loss.
This Supplement is dated May 26, 1999.
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NEUBERGER BERMAN
EQUITY ASSETS
SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 30, 1998
I. The final paragraph in the section "Investment Information - Investment
Policies and Limitations" is revised to read as follows:
Although the Portfolios do not have policies limiting their investment in
warrants, no Portfolio currently intends to invest in warrants unless acquired
in units or attached to securities.
II. The following additional changes apply to the Statement of Additional
Information:
Effective April 28, 1999, each Portfolio may purchase and sell stock index
futures contracts, and purchase and sell put and call options thereon, for
purposes of managing cash flow. The managers may use such futures and options to
increase each Portfolio's exposure to the performance of a recognized securities
index, such as the S&P 500 Index. Therefore, the disclosure regarding such
futures and options in the sections "Futures Contracts and Options Thereon,"
"Put and Call Options on Securities Indices," "General Information about
Securities Options" and "Regulatory Limitations on Using Hedging Instruments"
under the heading "Futures, Options on Futures, Options on Securities and
Indices, Forward Contracts, and Options on Foreign Currencies (collectively,
`Hedging Instruments')" applies to all of the Portfolios.
In addition, each Portfolio now may invest, at times, in instruments
structured as investment companies to gain exposure to the performance of a
recognized securities index, such as the S&P 500 Index, or another appropriate
index. Therefore, the disclosure regarding such investments in the section
"Other Investment Companies" applies to all the Portfolios.
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III. The following discussion is added to the Statement of Additional
Information:
AS THE FOLLOWING CHART SHOWS, MARKETS HAVE TENDED TO MOVE IN CYCLES AND
EXTREMES, WHETHER IT'S BETWEEN ASSET CLASSES, CAPITALIZATION RANGES OR EQUITY
STYLES. RECENT EVIDENCE SUGGESTS THAT VALUE STOCKS, PARTICULARLY IN THE MID- AND
SMALL-CAP SECTORS, ARE ATTRACTIVELY PRICED. WHILE IT'S IMPOSSIBLE TO PREDICT
WHEN MARKET CYCLES WILL CHANGE, IN NEUBERGER BERMAN'S OPINION, THESE SECURITIES
NOW PRESENT GOOD BUYING OPPORTUNITIES.
HISTORICAL PERFORMANCE CYCLES CHART A:
Russell Mid-Cap Value Index vs. S&P 500 Index 1986-1998
x-axis: Year
y-axis: Performance Spread
Russell Midcap S&P 500 Difference
Value
1986 17.87 18.21 -0.34
1987 -2.19 5.17 -7.36
1988 24.61 16.50 8.11
1989 22.70 31.43 -8.73
1990 -16.08 -3.19 -12.89
1991 37.92 30.55 7.37
1992 21.68 7.68 14.00
1993 15.62 10.00 5.62
1994 -2.12 1.33 -3.45
1995 34.93 37.50 -2.57
1996 20.26 23.25 -2.99
1997 34.41 33.38 1.03
1998 5.08 28.76 -23.68
Cumulative Returns
S&P 500 RussMCV
3 years ending 1988 45.64 43.66
2 years ending 1990 27.60 2.97
3 years ending 1993 54.56 94.03
5 years ending 1998 193.92 124.32
Source: Frank Russell, Investment Technologies, Callan Assoc., Neuberger Berman,
LLC Dec. 31, 1985 is the inception date of the Russell Mid-Cap Value Index.
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Footnotes:
*The Russell MidcapTM Value Index measures the performance of those Russell
Midcap(TM) Index companies with lower price-to-book ratios and lower forecasted
growth values. The Russell Midcap Index measures the performance of the 800
smallest companies in the Russell 1000(R) Index, which represents approximately
35% of the total market capitalization of the Russell 1000 Index (which, in
turn, consists of the 1,000 largest U.S. companies, based on market
capitalization). The S&P 500 Index is an unmanaged index generally considered
representative of stock market activity. Please note that indices do not take
into account any fees and expenses of investing in the individual securities
that they track and that individuals cannot invest directly in any index. Data
about the performance of these indices are prepared or obtained by Neuberger
Berman Management Inc. and include reinvestment of all dividends and capital
gain distributions.
Performance data quoted represents past performance, which is no guarantee of
future results.
HISTORICAL PERFORMANCE CYCLES CHART B:
Russell 2000 Index vs. S&P 500 Index 1979-1998
x-axis: Year
y-axis: Performance Spread
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Russell 2000 S&P 500 Difference
------------ ------- ----------
1979 43.09 18.44 24.65
1980 38.58 32.42 6.16
1981 2.03 -4.91 6.94
1982 24.95 21.58 3.36
1983 29.13 22.43 6.71
1984 -7.30 6.10 -13.41
1985 31.05 31.57 -0.52
1986 5.68 18.21 -12.53
1987 -8.77 5.17 -13.94
1988 24.89 16.50 8.39
1989 16.24 31.43 -15.19
1990 -19.51 -3.19 -16.31
1991 46.05 30.55 15.50
1992 18.41 7.68 10.73
1993 18.91 10.00 8.91
1994 -1.82 1.33 -3.15
1995 28.44 37.50 -9.06
1996 16.49 23.25 -6.75
1997 22.36 33.38 -11.01
1998 -2.55 28.76 -31.30
Cumulative
Returns
S&P 500 R2000
------- -----
5 years ending 1983 122.58 226.44
7 years ending 1990 160.15 36.88
3 years ending 1993 54.56 105.63
5 years ending 1998 193.92 75.23
Source: Frank Russell, Investment Technologies, Callan Assoc., Neuberger Berman,
LLC Dec. 31, 1978 is the inception date of the Russell 2000 Index.
Footnotes:
*The Russell 2000(R) Index is an unmanaged index consisting of the securities of
the 2,000 issuers having the smallest capitalization in the Russell 3000(R)
Index, representing approximately 11% of the Russell 3000 total market
capitalization. The smallest company's market capitalization is roughly $222
million. The Russell 3000(R) Index measures the performance of the 3,000 largest
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U.S. companies based on total market capitalization. The S&P 500 Index is an
unmanaged index generally considered representative of stock market activity.
Please note that indices do not take into account any fees and expenses of
investing in the individual securities that they track and that individuals
cannot invest directly in any index. Data about the performance of these indices
are prepared or obtained by Neuberger Berman Management Inc. and include
reinvestment of all dividends and capital gain distributions.
Performance data quoted represents past performance, which is no guarantee of
future results.
This Supplement is dated May 26, 1999.
