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[Logo]
ANNUAL REPORT
OCTOBER 31, 1995
[ ] WARBURG PINCUS MANAGED BOND TRUST --
WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED BOND FUND
A prospectus containing more complete information, including management fees and
expenses, may be obtained by calling 1-800-257-5614 or by writing to Warburg
Pincus Funds, P.O. Box 9030, Boston, MA 02205-9030. Investors should read the
prospectus carefully before investing.
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WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED BOND FUND
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Dear Shareholder: December 8, 1995
The primary investment objective of Warburg Pincus Managed Bond
Trust -- Warburg Pincus Short-Term Tax-Advantaged Bond Fund (the 'Fund') is
maximum income after the effects of federal income taxes, with capital
appreciation as a secondary objective. The Fund pursues its objectives by
investing primarily in taxable and tax-exempt debt instruments.
For the 12 months ended October 31, 1995, the Fund's Institutional Shares
gained 4.75%, vs. gains of 6.01% in the Lehman Brothers 1 Year Municipal Bond
Index. The Fund's 30-day annualized SEC yield as of October 31, 1995 was 4.68%.
Its total net assets were $25,205,808.
The Fund was created to provide corporate treasury managers and other
institutional investors in high federal tax brackets with potentially greater
after-tax total returns than would otherwise be available from a portfolio
consisting solely of taxable or tax-exempt securities.
At the close of the reporting period, the Fund held the bulk of its
portfolio (90.6%) in a diversified selection of municipal issues, with the
remainder in liquid assets.
The average maturity of the Fund will not exceed three years, and no single
security held in the portfolio will have a remaining maturity of greater than
five years. Although longer-term securities often provide higher yields, they
are subject to greater volatility in price and more risk of capital loss than
shorter-term securities.
The Fund will vary the portion of its assets invested in taxable and
tax-exempt securities so that it may seek out and take advantage of the higher
after-tax yields available on taxable issues at certain times.
<TABLE>
<S> <C>
Sharon B. Parente M. Anthony E. van Daalen
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
2
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WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED BOND FUND
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GROWTH OF $10,000 INVESTED IN SHARES OF WARBURG PINCUS MANAGED BOND
TRUST -- WARBURG PINCUS
SHORT-TERM TAX-ADVANTAGED BOND FUND SINCE INCEPTION AS OF OCTOBER 31, 1995
The graph below illustrates the hypothetical investment of $10,000 in each
of the Institutional and Gamma Shares of Warburg Pincus Managed Bond
Trust -- Warburg Pincus Short-Term Tax-Advantaged Bond Fund (the 'Fund') from
September 30, 1994 (inception) to October 31, 1995, assuming the reinvestment of
dividends and capital gains at net asset value, compared to the Lehman Brothers
1 Year Municipal Bond Index ('Lehman')* for the same time period.
Performance of the Gamma Shares of the Fund will be less than the line
shown because of the shareholder servicing and distribution fees paid by Gamma
Shareholders.
[PERFORMANCE GRAPH]
Average Annual Total
Returns for periods
ending 10/31/95
----------------------
1 year
----------------------
Institutional Gamma
Institutional Lehman Gamma Shares Shares
9/30/94......... 10000.0 10000.0 10000.0 4.75% 4.38%
10/31/94......... 10015.0 10002.0 10031.0
10/31/95......... 10491.0 10603.0 10471.0 Since Inception
(09/30/94)
---------------------
4.50% 4.31%
<TABLE>
<CAPTION>
INSTITUTIONAL GAMMA
SHARES SHARES
------------- -----
<S> <C> <C>
1 Year Total Return (9/30/94-9/30/95)................................................ 4.53% 4.24%
</TABLE>
All figures cited here represent past performance and do not guarantee
future results. Investment return and principal value of an investment will
fluctuate so that an investor's shares upon redemption may be worth more or less
than original cost. Without waivers or reimbursements of Fund expenses, average
annual total returns for the periods ending 9/30/95, 10/31/95 and since
inception, would have been 2.95%, 3.20%, and 2.85%, respectively, for the
Institutional Shares, and 2.73%, 2.86% and 2.72%, respectively, for the Gamma
Shares.
- ------------
* The Lehman Brothers 1 Year Municipal Bond Index ('Lehman') is a total return
performance benchmark for the investment grade tax-exempt bond market. The
index is comprised of approximately 25,000 Municipal Bonds.
3
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WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED BOND FUND
STATEMENT OF NET ASSETS
October 31, 1995
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<TABLE>
<CAPTION>
RATINGS'D'
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE VALUE
- ---------- --------------------------------------------- --------- --------- ------ -----------
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS (70.6%)
Arizona (4.2%)
$1,000,000 Salt River Project Arizona Agriculture
Improvement & Power Distribution Electricity
Systems Series A [Pre-refunded 01/01/97 @
$102] RB (Aaa/AAA) 01/01/97 7.500% $ 1,058,750
-----------
Colorado (3.4%)
800,000 City & County of Denver, Colorado
[Pre-refunded 09/01/97 @ $101] RB (Aaa/AAA) 09/01/97 8.300 866,000
-----------
Delaware (4.1%)
1,000,000 New Castle County, Delaware GO (Aa/AA) 10/15/97 5.900 1,033,750
-----------
Florida (4.1%)
1,000,000 Florida State Board of Education Capital
Outlay Public Education -- Series C GO (Aa/AA) 06/01/97 5.400 1,022,500
-----------
Georgia (3.5%)
800,000 Savannah, Georgia Water & Sewer [Pre-refunded
12/01/97 @ $102] RB (Aaa/AAA) 12/01/97 7.500 869,000
-----------
Hawaii (4.0%)
1,000,000 Honolulu, Hawaii City & County Series One
(FGIC Insured) GO (Aaa/AAA) 06/01/97 5.000 1,013,750
-----------
Illinois (8.1%)
2,000,000 Illinois State Toll Highway Authority
[Pre-refunded 01/01/96 @ $102] RB (Aaa/A+) 01/01/96 7.375 2,051,060
-----------
Massachusetts (3.7%)
900,000 Massachusetts State Series-A GO (A1/A+) 07/01/99 5.500 936,000
-----------
Michigan (4.2%)
1,000,000 Detroit Michigan Sewage Disposal
[Pre-refunded 07/01/97 @ $102] RB (Nr/AAA) 07/01/97 6.750 1,062,500
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
4
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WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED BOND FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1995
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<TABLE>
<CAPTION>
RATINGS'D'
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE VALUE
- ---------- --------------------------------------------- --------- --------- ------ -----------
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS (cont'd)
New York (10.2%)
$1,000,000 New York State Medical Care Facilities
Finance Agency Insured Mortgage -- Mt. Sinai
Hospital [Pre-refunded 01/15/96 @ $102] RB (Aaa/AAA) 01/15/96 8.875% $ 1,029,970
500,000 New York State Power Authority Revenue &
General Purpose Bond Series T [Pre-refunded
01/01/96 @ $102] RB (Aaa/AA-) 01/01/96 7.375 512,850
1,000,000 New York State Urban Development Correctional
Facilities Series B [Pre-refunded 01/01/96 @
$102] RB (Aaa/BBB) 01/01/96 8.000 1,026,640
-----------
2,569,460
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Pennsylvania (5.0%)
1,250,000 Pennsylvania State Project Refunding Bonds
2nd Series GO (A1/AA-) 06/15/97 4.750 1,262,500
-----------
Puerto Rico (4.1%)
1,000,000 Puerto Rico Commonwealth Public Improvement
GO (Baa1/A) 07/01/97 6.600 1,041,250
-----------
South Carolina (12.0%)
1,145,000 Columbia, South Carolina Waterworks & Sewer
Systems RB (Aaa/AA) 01/01/96 6.400 1,149,832
800,000 Piedmont, South Carolina Municipal Power
Agency Electric [Pre-refunded 01/01/96 @
$103] RB (Aaa/AAA) 01/01/96 9.700 831,344
1,000,000 South Carolina State Capital Improvement
Series B GO (Aaa/AA+) 08/01/97 5.750 1,030,000
-----------
3,011,176
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TOTAL MUNICIPAL BONDS (Cost $17,761,723) 17,797,696
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MUNICIPAL NOTES (20.0%)
Florida (4.0%)
1,000,000 Palm Beach County, Florida School District,
TANS (Nr/SP1+) 09/27/96 4.500 1,006,870
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
5
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WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED BOND FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1995
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<TABLE>
<CAPTION>
RATINGS'D'
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE VALUE
- ---------- --------------------------------------------- --------- --------- ------ -----------
<S> <C> <C> <C> <C> <C>
MUNICIPAL NOTES (cont'd)
New York (4.0%)
$1,000,000 Nassau County, New York Series B TANS (Nr/SP1+) 04/15/96 4.500% $ 1,003,710
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Texas (12.0%)
3,000,000 Texas State Series A TRANS (Mig1/SP1+) 08/30/96 4.750 3,024,270
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TOTAL MUNICIPAL NOTES (Cost $5,024,579) 5,034,850
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ZERO COUPON BONDS (3.9%)
1,000,000 Federal Home Loan Bank Discount Corp. (Cost
$996,910) (Aaa/AAA) 11/21/95 -- 996,716
-----------
</TABLE>
<TABLE>
<S> <C>
SHORT-TERM INVESTMENTS (7.7%)
$1,933,000 Repurchase agreement with State Street Bank & Trust Co.
dated 10/31/95 at 5.83% to be repurchased at $1,933,313
on 11/01/95. (Collateralized by $1,885,000 U.S. Treasury
Note 7.25%, due 11/30/96, with a market value of
$1,972,760.) (Cost $1,933,000) 1,933,000
-----------
TOTAL INVESTMENTS AT VALUE (102.2%) (Cost $25,716,212*) 25,762,262
LIABILITIES IN EXCESS OF OTHER ASSETS (2.2%) (556,454)
-----------
NET ASSETS (100.0%) (applicable to 2,360,787 Institutional Shares and 157,343 Gamma
Shares) $25,205,808
-----------
-----------
NET ASSET VALUE, offering and redemption price per Institutional Share
($23,629,787[div]2,360,787) $10.01
------
------
NET ASSET VALUE, offering and redemption price per Gamma Share
($1,576,021[div]157,343) $10.02
------
------
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<S> <C>
FGIC = Financial Guaranty Insurance Company
GO = General Obligation Bond
RB = Revenue Bond
TANS = Tax Anticipation Note
TRANS = Tax and Revenue Anticipation Note
</TABLE>
'D' Credit ratings given by Moody's Investors Service, Inc. and Standard &
Poor's Ratings Group are unaudited.
* Also cost for Federal income tax purposes.
See Accompanying Notes to Financial Statements.
6
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WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED BOND FUND
STATEMENT OF OPERATIONS
For the Year Ended October 31, 1995
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<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $1,126,690
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EXPENSES:
Investment advisory 130,279
Administrative services 73,687
Audit 14,500
Custodian 9,483
Distribution 3,314
Insurance 2,525
Legal 68,362
Organizational 38,470
Printing 13,733
Registration 40,812
Transfer agent 37,293
Trustees 16,750
Miscellaneous 10,432
----------
459,640
Less fees waived and expenses reimbursed (361,575)
----------
Total expenses 98,065
----------
Net investment income 1,028,625
----------
NET REALIZED AND UNREALIZED GAIN FROM INVESTMENTS:
Net realized gain from security transactions 14,531
Net change in unrealized depreciation from investments 77,767
----------
Net realized and unrealized gain from investments 92,298
----------
Net increase in net assets resulting from operations $1,120,923
----------
----------
</TABLE>
See Accompanying Notes to Financial Statements.
7
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WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
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<TABLE>
<CAPTION>
For the Period
For the September 30, 1994
Year Ended (Commencement of Operations)
October 31, 1995 through October 31, 1994
---------------- ----------------------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 1,028,625 $ 46,514
Net realized gain from security transactions 14,531 0
Net change in unrealized appreciation (depreciation) from
investments 77,767 (31,717)
------------ ------------
Net increase in net assets resulting from operations 1,120,923 14,797
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FROM DISTRIBUTIONS:
Dividends from net investment income:
Institutional Shares (974,339) (45,742)
Gamma Shares (54,286) (772)
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Net decrease from distributions (1,028,625) (46,514)
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FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 28,990,869 24,203,350
Reinvested dividends 985,507 45,766
Net asset value of shares redeemed (25,681,265) (3,500,000)
------------ ------------
Net increase in net assets from capital share
transactions 4,295,111 20,749,116
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Net increase in net assets 4,387,409 20,717,399
NET ASSETS:
Beginning of period 20,818,399 101,000
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End of period $ 25,205,808 $ 20,818,399
------------ ------------
------------ ------------
</TABLE>
See Accompanying Notes to Financial Statements.
8
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WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED BOND FUND
FINANCIAL HIGHLIGHTS
(For a Share of the Fund Outstanding Throughout Each Period)
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<TABLE>
<CAPTION>
Institutional Shares Gamma Shares
-------------------------------------- --------------------------------------
September 30, 1994 September 30, 1994
(Commencement (Commencement
For the of Operations) For the of Operations)
Year Ended through Year Ended through
October 31, 1995 October 31, 1994 October 31, 1995 October 31, 1994
---------------- ------------------ ---------------- ------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.98 $10.00 $10.00 $10.00
------ ------ ------ ------
Income From Investment Operations:
Net Investment Income .43 .03 .41 .03
Net Gain (Loss) on Securities
(both realized and
unrealized) .03 (.02) .02 .00
------ ------ ------ ------
Total from Investment
Operations .46 .01 .43 .03
------ ------ ------ ------
Less Distributions:
Dividends from Net Investment
Income (.43) (.03) (.41) (.03)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.01 $ 9.98 $10.02 $10.00
------ ------ ------ ------
------ ------ ------ ------
Total Return 4.75% 1.72%* 4.38% 3.62%*
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $23,630 $20,614 $1,576 $205
Ratios to average daily net assets:
Operating expenses .40% .40%* .65% .55%*
Net investment income 4.35% 5.15%* 4.10% 3.99%*
Decrease reflected in above
operating expense ratios due
to waivers/reimbursements 1.53% 3.49%* 1.53% 4.74%*
Portfolio Turnover Rate 270.06% 235.11%* 270.06% 235.11%*
</TABLE>
* Annualized
See Accompanying Notes to Financial Statements.
TAX STATUS OF 1995 DIVIDENDS (Unaudited)
Dividends paid by the Fund taxable as ordinary income amounted to $.12 per share
for both the Institutional and Gamma Shares.
Because the Fund's fiscal year is not the calendar year, amounts to be used by
calendar year taxpayers on their Federal return will be reflected on Form
1099-DIV and will be mailed in January 1996.
9
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WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED BOND FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1995
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1. SIGNIFICANT ACCOUNTING POLICIES
Warburg Pincus Managed Bond Trust (the 'Trust') currently offers one
investment fund, the Warburg Pincus Short-Term Tax-Advantaged Bond Fund (the
'Fund') which commenced operations on September 30, 1994. The Fund is registered
under the Investment Company Act of 1940, as amended, as a non-diversified,
open-end management investment company. The Fund's portfolio is designed to
generate maximum income after the effect of Federal income taxes as a primary
investment objective and capital appreciation as a secondary objective.
The net asset value of the Fund is determined daily as of the close of
regular trading on the New York Stock Exchange. The Fund's investments are
valued at market value, which is currently determined using the last reported
sales price. If no sales are reported, investments are generally valued at the
last reported bid price. In the absence of market quotations, investments are
generally valued at fair value as determined by or under the direction of the
Fund's Board of Trustees. Short-term investments that mature in 60 days or less
are valued on the basis of amortized cost, which approximates market value.
Security transactions are accounted for on trade date. Interest income is
recorded on the accrual basis. Income, expenses (excluding class-specific
expenses) and realized/unrealized gains/losses are allocated proportionately to
each class of shares based upon the relative net asset value of outstanding
shares. The cost of investments sold is determined by use of the specific
identification method for both financial reporting and income tax purposes.
Dividends from net investment income are declared daily and paid monthly.
Distributions of net realized capital gains, if any, are declared and paid
annually. However, to the extent that a net realized capital gain can be reduced
by a capital loss carryover, such gain will not be distributed. Income and
capital gain distributions are determined in accordance with Federal income tax
regulations which may differ from generally accepted accounting principles.
No provision is made for Federal taxes as it is the Fund's intention to
continue to qualify for and elect the tax treatment applicable to regulated
investment companies under the Internal Revenue Code and make the requisite
distributions to its shareholders which will be sufficient to relieve it from
Federal income and excise taxes.
Costs incurred by the Fund in connection with its organization have been
deferred and are being amortized over a period of five years from the date the
Fund commenced its operations.
The Fund may enter into repurchase agreement transactions. Under the terms
of a typical repurchase agreement, the Fund acquires an underlying security
subject to an obligation of the seller to repurchase. The value of the
underlying security collateral will be maintained at an amount at least equal to
the amount of the purchase obligation, including interest. The collateral is in
the Fund's possession.
10
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WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
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2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Warburg, Pincus Counsellors, Inc. ('Warburg'), a wholly owned subsidiary of
Warburg, Pincus Counsellors G.P. ('Counsellors G.P.'), serves as the Fund's
investment adviser. The Fund pays Warburg an investment advisory fee calculated
at an annual rate of .55% of the Fund's average daily net assets. For the year
ended October 31, 1995, Warburg earned and voluntarily waived $130,279 in
advisory fees and reimbursed the Fund for $206,296 in expenses.
Counsellors Funds Service, Inc. ('CFSI'), a wholly owned subsidiary of
Warburg, and PFPC Inc. ('PFPC'), an indirect, wholly owned subsidiary of PNC
Bank Corp. ('PNC'), serve as the Fund's co-administrators. For their
administrative services, CFSI and PFPC each receive a fee calculated at an
annual rate of .10% of the Fund's average daily net assets. For the year ended
October 31, 1995, CFSI earned $23,687 in administrative services fees. For the
year ended October 31, 1995, PFPC voluntarily waived $25,000 of its minimum
annual fee of $50,000.
Counsellors Securities Inc. ('CSI'), also a wholly owned subsidiary of
Warburg, acts as distributor of the Fund's shares. For distribution services
with respect to the Gamma Shares, the Fund pays CSI a fee calculated at an
annual rate of .25% of the Gamma Shares' average daily net assets; no
compensation is paid to CSI with respect to distribution of the Institutional
Shares. For the year ended October 31, 1995, CSI earned $3,314 in distribution
fees.
3. INVESTMENT IN SECURITIES
The Fund's purchases and sales of investment securities for the year ended
October 31, 1995 (excluding short-term investments and U.S. government
obligations) were $50,712,883 and $45,572,365, respectively. Purchases and sales
of U.S. government obligations were $8,026,406 and $9,004,375, respectively.
At October 31, 1995, the net unrealized appreciation from investments of
$46,050 was comprised of appreciation of $50,543 for those securities having an
excess of value over cost, and depreciation of $4,493 for those securities
having an excess of cost over value (based on cost for Federal income tax
purposes).
4. CAPITAL SHARE TRANSACTIONS
The Trust is authorized to issue an unlimited number of full and fractional
shares of beneficial interest, par value of $.001 per share. Currently, one
series of shares has been authorized for sale to the public, which has two
classes, Institutional Shares and Gamma Shares. The Trustees of the Fund may
classify or reclassify any unissued shares into one or more additional classes.
These shares are identical in all respects except that Gamma Shares bear the
expense of payments made pursuant to a shareholder servicing and distribution
plan adopted by the Fund in an amount not to exceed .25 of 1.00% (on an
annualized basis) of the average daily net assets of the Gamma Shares.
11
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WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
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Transactions in shares of the Fund were as follows:
<TABLE>
<CAPTION>
Institutional Shares Gamma Shares
------------------------------------- -------------------------------------
For the Period For the Period
September 30, 1994 September 30, 1994
(Commencement of (Commencement of
For the Year Operations) For the Year Operations)
Ended through Ended through
October 31, 1995 October 31, 1994 October 31, 1995 October 31, 1994
---------------- ------------------ ---------------- ------------------
<S> <C> <C> <C> <C>
Shares sold 2,409,267 2,051,518 494,466 370,320
Shares issued to shareholders on
reinvestment of dividends 95,189 4,545 3,531 40
Shares redeemed (2,209,732) 0 (361,114) (350,000)
------------ ------------ ---------- ----------
Net increase in shares outstanding 294,724 2,056,063 136,883 20,360
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
Proceeds from sale of shares $ 24,057,556 $ 20,500,150 $4,933,313 $3,703,200
Reinvested dividends 950,259 45,361 35,248 405
Net asset value of shares redeemed (22,081,533) 0 (3,599,732) (3,500,000)
------------ ------------ ---------- ----------
Net increase from capital share
transactions $ 2,926,282 $ 20,545,511 $1,368,829 $ 203,605
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
</TABLE>
5. NET ASSETS
Net assets at October 31, 1995, consisted of the following:
<TABLE>
<S> <C>
Capital contributed, net $25,145,227
Accumulated net realized gain from security
transactions 14,531
Net unrealized appreciation from investments 46,050
-----------
$25,205,808
-----------
-----------
</TABLE>
12
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WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED BOND FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
WARBURG PINCUS MANAGED BOND TRUST -- WARBURG PINCUS SHORT-TERM TAX-ADVANTAGED
BOND FUND:
We have audited the accompanying statement of net assets of Warburg, Pincus
Managed Bond Trust -- Warburg Pincus Short-Term Tax-Advantaged Bond Fund as of
October 31, 1995, and the related statement of operations for the year then
ended, the statement of changes in net assets and the financial highlights for
each of the two years (or period) in the period then ended. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of October 31, 1995, by
correspondence with the custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Warburg Pincus Managed Bond Trust -- Warburg Pincus Short-Term Tax-Advantaged
Bond Fund as of October 31, 1995, and the results of its operations, for the
year then ended and the changes in its net assets, and its financial highlights
for the two years (or period) in the period then ended, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
December 14, 1995
13
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INVESTMENT ADVISER TRANSFER AGENT
Warburg, Pincus Counsellors, Inc State Street Bank and Trust Company
466 Lexington Avenue 225 Franklin Street
New York, New York 10017-3147 Boston, Massachusetts 02110
DISTRIBUTOR
Counsellors Securities Inc.
466 Lexington Avenue
New York, New York 10017-3147
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WARBURG PINCUS FUNDS
P.O. BOX 9030
BOSTON, MASSACHUSETTS 02205-9030
SHAREHOLDER SERVICES
1-800-888-6878
PROSPECTUSES
1-800-257-5614
[LOGO]
ANNUAL REPORT
OCTOBER 31, 1995
[ ] WARBURG PINCUS MANAGED
BOND TRUST --
WARBURG PINCUS SHORT-TERM
TAX-ADVANTAGED BOND FUND
WPMGD-2-1095
STATEMENT OF DIFFERENCES
The dagger symbol shall be expressed as 'D'
The division sign shall be expressed as [div]
