-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JCcihkzPvEM1zRDDtxng4i77VBm1EMZVLXqijz+qlxsyE6PGhlfYP/l1PFBKVBgU ua02vJ2b5uQ/reBXhYdDsw== 0000898432-09-001333.txt : 20091105 0000898432-09-001333.hdr.sgml : 20091105 20091105163108 ACCESSION NUMBER: 0000898432-09-001333 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 62 CONFORMED PERIOD OF REPORT: 20090831 FILED AS OF DATE: 20091105 DATE AS OF CHANGE: 20091105 EFFECTIVENESS DATE: 20091105 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEUBERGER BERMAN EQUITY FUNDS CENTRAL INDEX KEY: 0000044402 IRS NUMBER: 136068441 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-00582 FILM NUMBER: 091161555 BUSINESS ADDRESS: STREET 1: 605 THIRD AVENUE STREET 2: 2ND FLOOR CITY: NEW YORK STATE: NY ZIP: 10158-0006 BUSINESS PHONE: 2124768800 MAIL ADDRESS: STREET 1: 605 THIRD AVENUE STREET 2: 2ND FLOOR CITY: NEW YORK STATE: NY ZIP: 10158-0006 FORMER COMPANY: FORMER CONFORMED NAME: NEUBERGER & BERMAN EQUITY FUNDS DATE OF NAME CHANGE: 19931103 FORMER COMPANY: FORMER CONFORMED NAME: NEUBERGER & BERMAN GUARDIAN FUND INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: GUARDIAN MUTUAL FUND INC DATE OF NAME CHANGE: 19890625 0000044402 S000007838 Neuberger Berman Large Cap Disciplined Growth Fund C000021329 Investor Class NBCIX C000075635 Class A C000075636 Class C C000075637 Institutional Class C000077148 Class R3 0000044402 S000007839 Neuberger Berman Small Cap Growth Fund C000021330 Investor Class NBMIX C000021331 Trust Class NBMOX C000021332 Advisor Class NBMVX C000027734 Institutional Class C000077149 Class A C000077150 Class C C000077152 Class R3 0000044402 S000007840 Neuberger Berman Partners Fund C000021333 Investor Class NPRTX C000021334 Trust Class NBPTX C000021335 Advisor Class NBPBX C000027735 Institutional Class NBPIX 0000044402 S000007841 Neuberger Berman Genesis Fund C000021336 Investor Class NBGNX C000021337 Trust Class NBGEX C000021338 Advisor Class NBGAX C000021339 Institutional Class NBGIX 0000044402 S000007842 Neuberger Berman International Institutional Fund C000021340 Institutional Class NBIIX 0000044402 S000007843 Neuberger Berman Real Estate Fund C000021341 Institutional Class NBRIX C000021342 Trust Class NBRFX 0000044402 S000007845 Neuberger Berman International Fund C000021345 Investor Class NBISX C000021346 Trust Class NBITX 0000044402 S000007846 Neuberger Berman Regency Fund C000021347 Investor Class NBRVX C000021348 Trust Class NBREX 0000044402 S000007847 Neuberger Berman Socially Responsive Fund C000021349 Investor Class NBSRX C000021350 Trust Class NBSTX C000027738 Institutional Class C000077153 Class C C000077155 Class R3 C000077156 Class A 0000044402 S000007848 Neuberger Berman Focus Fund C000021351 Investor Class NBSSX C000021352 Trust Class NBFCX C000021353 Advisor Class NBFAX 0000044402 S000007849 Neuberger Berman Guardian Fund C000021354 Investor Class NGUAX C000021355 Trust Class NBGTX C000021356 Advisor Class NBGUX C000027740 Institutional Class C000077157 Class A C000077158 Class C C000077160 Class R3 0000044402 S000007850 Neuberger Berman Mid Cap Growth Fund C000021357 Investor Class NMANX C000021358 Trust Class NBMTX C000021359 Advisor Class NBMBX C000027741 Institutional Class NBMLX C000077161 Class A C000077162 Class C C000077164 Class R3 0000044402 S000012721 Neuberger Berman International Large Cap Fund C000034262 Trust Class NILTX C000035184 Institutional NILIX C000057306 Class A C000057307 Class C C000077166 Class R3 0000044402 S000013239 Neuberger Berman Small and Mid Cap Growth Fund C000035586 Trust Class NBATX 0000044402 S000013715 Neuberger Berman Large Cap Value Fund C000037675 Trust Class 0000044402 S000013716 Neuberger Berman Equity Income Fund C000063559 Class A C000063560 Class C C000063561 Institutional Class 0000044402 S000013718 Neuberger Berman Research Opportunities Fund C000037678 Trust Class 0000044402 S000020014 Neuberger Berman Select Equities Fund C000056123 Class A C000056124 Class C C000056125 Institutional Class 0000044402 S000021742 Neuberger Berman Climate Change Fund C000062356 Class A C000062357 Class C C000062358 Institutional Class 0000044402 S000023609 Neuberger Berman Emerging Markets Equity Fund C000069470 Class A C000069471 Class C C000069472 Institutional Class N-CSR 1 nb-ncsr.htm
As filed with the Securities and Exchange Commission on November 5, 2009

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-00582

NEUBERGER BERMAN EQUITY FUNDS
(Exact Name of the Registrant as Specified in Charter)

605 Third Avenue, 2nd Floor
New York, New York 10158-0180
(Address of Principal Executive Offices – Zip Code)

Registrant's telephone number, including area code: (212) 476-8800

Robert Conti
Chief Executive Officer and President
Neuberger Berman Equity Funds
605 Third Avenue, 2nd Floor
New York, New York 10158-0180

Arthur Delibert, Esq.
K&L Gates LLP

1601 K Street, N.W.
Washington, D.C. 20006-1600

(Names and Addresses of agents for service)

Date of fiscal year end: August 31, 2009
 
Date of reporting period: August 31, 2009
 

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Reports to Shareholders.
 

Neuberger Berman
Equity Funds

Investor Class Shares
Trust Class Shares
Advisor Class Shares
Institutional Class Shares

Class A Shares
Class C Shares
Class R3 Shares

Climate Change Fund

Emerging Markets Equity Fund

Equity Income Fund

Focus Fund

Genesis Fund

Guardian Fund

International Fund

International Institutional Fund

International Large Cap Fund

Large Cap Disciplined Growth Fund

Mid Cap Growth Fund

Partners Fund

Real Estate Fund

Regency Fund

Select Equities Fund

Small and Mid Cap Growth Fund

Small Cap Growth Fund

Socially Responsive Fund

Annual Report

August 31, 2009


Contents

THE FUNDS

President's Letter     1    
PORTFOLIO COMMENTARY  
Climate Change Fund     2    
Emerging Markets Equity Fund     6    
Equity Income Fund     10    
Focus Fund     14    
Genesis Fund     17    
Guardian Fund     20    
International Fund     24    
International Institutional Fund     27    
International Large Cap Fund     30    
Large Cap Disciplined Growth Fund     34    
Mid Cap Growth Fund     38    
Partners Fund     42    
Real Estate Fund     45    
Regency Fund     48    
Select Equities Fund     51    
Small and Mid Cap Growth Fund     55    
Small Cap Growth Fund     58    
Socially Responsive Fund     62    
FUND EXPENSE INFORMATION     70    
SCHEDULE OF INVESTMENTS/TOP TEN EQUITY HOLDINGS  
Climate Change Fund     73    
Emerging Markets Equity Fund     75    
Equity Income Fund     78    
Focus Fund     80    
Genesis Fund     81    
Guardian Fund     83    
International Fund     84    
International Institutional Fund     87    

 


International Large Cap Fund     90    
Large Cap Disciplined Growth Fund     93    
Mid Cap Growth Fund     95    
Partners Fund     97    
Real Estate Fund     99    
Regency Fund     100    
Select Equities Fund     102    
Small and Mid Cap Growth Fund     103    
Small Cap Growth Fund     105    
Socially Responsive Fund     107    
FINANCIAL STATEMENTS     117    
FINANCIAL HIGHLIGHTS (ALL CLASSES) PER SHARE DATA  
Climate Change Fund     173    
Emerging Markets Equity Fund     173    
Equity Income Fund     173    
Focus Fund     175    
Genesis Fund     175    
Guardian Fund     177    
International Fund     179    
International Institutional Fund     181    
International Large Cap Fund     181    
Large Cap Disciplined Growth Fund     183    
Mid Cap Growth Fund     183    
Partners Fund     185    
Real Estate Fund     187    
Regency Fund     187    
Select Equities Fund     189    
Small and Mid Cap Growth Fund     189    
Small Cap Growth Fund     189    
Socially Responsive Fund     191    
Reports of Independent Registered Public Accounting Firms     199    
Directory     202    
Trustees and Officers     203    

Proxy Voting Policies and Procedures     213    
Quarterly Portfolio Schedule     213    
Notice to Shareholders     214    
Report of Votes of Shareholders     215    

 

"Neuberger Berman" and the Neuberger Berman logo are service marks of Neuberger Berman LLC. "Neuberger Berman Management LLC" and the individual fund names in this shareholder report are either service marks or registered service marks of Neuberger Berman Management LLC, formerly Neuberger Berman Management Inc. ©2009 Neuberger Berman Management LLC. All rights reserved.


President's Letter

Dear Fellow Shareholder,

The fiscal year ended August 31, 2009 was one of remarkable extremes, involving a series of unprecedented events affecting the financial markets and global economy as well as drastic shifts in the performance patterns of the capital markets. During the period, the S&P 500 Index closed down by roughly 18%, which included both the worst six-month market decline and the strongest six-month rally for the index since the early 1930s.

The equity market was under pressure even before the start of the reporting period, as the damaged housing market, rising unemployment, constrained consumer spending and difficult credit conditions helped undermine the economy and investor confidence. With September 2008's financial crisis, however, the situation became markedly worse. Credit markets virtually froze, stocks dropped precipitously across the globe, and investors became increasingly concerned not just about recession, but the possibility of a 1930s-style depression.

In the midst of these problems, governments worldwide took unprecedented measures to shore up liquidity and stimulate their economies, providing massive bailouts to individual financial institutions and seeking ways to support balance sheets and reduce the impact of toxic debt on the credit markets. Despite these efforts, economic news continued to be dismal for months. However, by March, signs of marginal improvement in housing and the banking sector, as well as moderating declines in other areas triggered new optimism that worst-case economic scenarios could be avoided, and led to a sharp rebound in stocks that continued, with some breaks, through the end of the reporting period.

Looking forward, we believe there continue to be risks. Although the economy appears to be improving, its long-term strength is in question: domestic consumers face many challenges including high unemployment and a relatively conservative credit environment, and corporations may become less eager to spend once depleted inventory levels are restored. Still, governments worldwide remain very serious about economic stimulus, and prospects for consumers in the emerging markets are currently considerably brighter than for their U.S. counterparts, potentially providing some support for well positioned globally oriented companies.

Even with recent gains, the past fiscal year has been enormously painful for investors. For portfolio managers who focus on fundamentals, this period has carried some unique challenges, as a largely indiscriminate equity sell-off has been followed by a period in which many low-quality stocks, which had declined precipitously, enjoyed some of the market's best returns on the upside. Still, for practitioners of long-term investing, one benefit of the steep correction was to depress the stock prices of many good companies—allowing such investors viable entry points in what they believe could be exceptional opportunities.

As always, the portfolio managers at Neuberger Berman are approaching this environment thoughtfully and with great precision. Although they do not profess to be market prognosticators, they remain highly attentive to current macroeconomic trends, as well as the development of new regulation in this era of heightened government activism. Most importantly, they remain true to their investment disciplines, looking at individual company fundamentals as well as key measures of quality, value and risk to create portfolios that they believe will serve their shareholders well over the long term. This expertise and focus on individual stock selection, I believe, will be highly valuable in the current market and economic environment.

Thank you for your continued confidence in Neuberger Berman. We look forward to serving your investment needs in the year to come.

Sincerely,

Robert Conti
President and CEO
Neuberger Berman Mutual Funds


1


Climate Change Fund Commentary

For the fiscal year ended August 31, 2009, Neuberger Berman Climate Change Fund trailed its benchmark, the MSCI World Index, as both the Fund and the index declined as a result of an unprecedented equity market environment. While the Fund was outdistanced by the more comparable HSBC Global Climate Change Index during the period, the Fund outperformed many "pure play" alternative and clean energy investment vehicles. Although extreme market volatility created a challenging environment at times during the 12-month reporting period, we are greatly encouraged by the Fund's strong performance in calendar year 2009 and are more energized than ever about the Fund's investment approach, especially given the many positive climate-change related government, industry and company-specific policies and initiatives that are developing on an ongoing basis.

Government policy momentum has been extraordinary this calendar year, with the Obama Administration and Congress introducing numerous climate-related initiatives. The American Reinvestment and Recovery Act, passed in February, provides for more than $100 billion in spending on low-carbon growth initiatives. Recently, federal agencies have begun deploying these funds in myriad ways—for example, through clean energy cash grants and loan guarantees, advanced battery/electric vehicle grants, renewable energy manufacturing tax credits, smart grid grants and cleaner transportation programs (such as "cash-for-clunkers" and natural gas vehicle incentives). On a global basis, governments are targeting "green" stimulus initiatives in the hope, not only to improve energy security and environmental benefits, but also to drive job creation; we estimate that hundreds of billions of dollars have been directed worldwide to address these issues so far. We believe that an upcoming global climate change summit in Copenhagen could stimulate even more interest in climate change issues—and by extension support opportunities in climate change-related investing.

The Climate Change Fund invests within three broad market segments—Cleaner Energy, Energy Efficiency and Climate Adaptation—carving out investment sub-themes within these areas. During the fiscal year, a number of factors supported Fund results, including relatively defensive holdings (e.g., natural gas utilities, water metering companies) with strong management teams and stocks within our alternative energy and energy storage sub-themes (within our Cleaner Energy and Energy Efficiency categories). We believe the energy storage/battery industry is poised to enter a significant expansion phase driven by higher energy costs, technological breakthroughs and domestic and international policy support; for example, the global lithium ion battery market for automotive applications alone is expected to grow exponentially over the coming decade. In alternative energy, the geothermal industry appears promising to us. Not only is it a clean, dependable and cost-effective energy solution, but it appears to have strong regulatory support (in the form of renewable electricity standards) and a seemingly abundant, although largely untapped, source of supply.

Several factors impeded Fund performance during the fiscal year, including lingering questions about commodity prices and economy-wide concerns over the availability of capital. For instance, even with continued progress toward grid parity, our solar sub-theme underperformed as the fragile credit market and softening demand gave rise to oversupply, pricing pressures, and short-term profitability concerns. The wind industry also succumbed to the weak credit market as marginal wind farms struggled to access project finance and some utilities pared back capital expenditures, which triggered concerns about turbine overcapacity. Importantly, these sectors have rebounded strongly in calendar year 2009 and we continue to believe that the long-term investment appeal of both wind and solar remains intact, with the two industries likely, in our view, to be among the top beneficiaries of government stimulus in 2010.

Although economic and credit-related fears appear to be tapering off, we believe that the Fund's diversification—by segment, geography, market capitalization and sector—remains a key advantage. The Fund continues to be overweighted in U.S. securities—largely due to policy catalysts and signs of economic stabilization—but our international exposure has continued to rise in recent months. At the close of the fiscal year, our allocation among the three investment components was as follows: 40% Cleaner Energy, 34% Energy Efficiency and 22% Climate Adaptation. Our holdings currently span market capitalizations and represent eight of 10 industrial sectors, with our largest overweights in smart grid, water service, natural gas and wind power. Cash levels are currently low as we continue to find what we consider exceptional opportunities with attractive long-term reward/risk profiles.


2


In closing, we believe that climate change-related companies could benefit from the economic recovery, especially given the potential impact of climate-related stimulus next year and ongoing political support for policy initiatives. In our view, the Fund is well positioned to capitalize on these potential short-term developments and the ongoing, long-term evolution of the world to a new "carbon constrained" reality.

Sincerely,

Ronald B. Silvestri
Portfolio Manager

Climate change-related companies may be particularly susceptible to such factors as environmental protection regulatory actions, changes in government standards and subsidy levels, changes in taxation, and other domestic and international, political, regulatory and economic developments. Such companies may also be significantly affected by the level or pace of technological change in industries focusing on energy, pollution and environmental control. Because society's focus on climate change issues is relatively new, there could be significant changes of emphasis and direction, and rapid technological change, rendering even new approaches and products obsolete. The risks associated with these investments are set forth in the prospectus and statement of additional information.

Investing in foreign securities involves greater risks than investing in securities of U.S. issuers, including currency fluctuations, changes in local economic and political conditions, and the need to operate in less regulated financial markets.

To the extent that the Fund emphasizes small-, mid- or large-cap stocks, it takes on the associated risks. At times, large-cap stocks may lag other types of stocks in performance, which could cause a fund holding those stocks to perform worse than certain other funds. Small- or mid-cap stocks may fluctuate more widely in price than the market as a whole; underperform other types of stocks or be difficult to sell when the economy is not robust or during market downturns; be more affected than other types of stocks by the underperformance of a sector emphasized by the Fund. In addition, smaller companies in which the Fund may invest are often more volatile and less liquid than the stocks of larger companies; and these companies: may have a shorter history of operations than larger companies; may not have as great an ability to raise additional capital; and may have a less diversified product line, making them more susceptible to market pressure.

The composition, industries and holdings of the Fund are subject to change. Climate Change Fund is invested in a wide array of stocks and no single holding makes up a significant portion of the Fund's total assets.


3


Climate Change Fund

TICKER SYMBOLS

Institutional Class   NBCLX  
Class A   NBCAX  
Class C   NBCCX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     4.1 %  
Consumer Staples     0.5    
Energy     9.1    
Financials     2.2    
Industrials     37.7    
Information Technology     10.2    
Materials     6.8    
Utilities     28.5    
Other     0.9    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3,10

    Inception
Date		   1 Year   Life of
Fund		  
At NAV  
Institutional Class   05/01/2008     (26.55 %)     (27.05 %)  
Class A   05/01/2008     (26.77 %)     (27.22 %)  
Class C   05/01/2008     (27.22 %)     (27.73 %)  
With Sales Charge  
Class A         (30.95 %)     (30.37 %)  
Class C         (27.92 %)     (27.73 %)  
Index  
MSCI World Index2,19          (16.64 %)     (19.29 %)  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2012 for Institutional Class, Class A and Class C shares. The net expense ratios were 1.03%, 1.28% and 2.03% for Institutional Class, Class A and C shares, respectively. As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 25.07%, 16.86% and 28.63% for Institutional Class, Class A and Class C shares, respectively (prior to any fee waivers or expense reimbursements).

Total Returns shown with a sales charge reflect the deduction of the current maximum initial sales charge of 5.75% for Class A shares and the applicable contingent deferred sales charge (CDSC) for Class C shares. The maximum CDSC for Class C shares is 1% which is reduced to 0% after 1 year. The performance of the Fund's share classes will differ primarily due to different sales charge structures and class expenses. Please see the prospectus for more information about sales charge structures, if any, and class expenses for your share class.


4


Climate Change Fund

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Institutional Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart on previous page). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


5


Emerging Markets Equity Fund Commentary

We are pleased to report that, for the period from its October 8, 2008 inception through fiscal year-end on August 31, 2009, Neuberger Berman Emerging Markets Equity Fund posted a strong positive return and outperformed its benchmark, the MSCI Emerging Markets (MSCI EM) Index.

The emerging markets, as measured by the MSCI EM Index, bottomed in October. They were extremely volatile from that point until early March, when the U.S. and developed international markets began to see improvement on the back of government stimulus plans and early indications of economic improvement. From March through the end of this reporting period, the index was up substantially, with numerous underlying countries posting high double-digit or low triple-digit returns.

During the October-August reporting period, all sectors of the index were positive, with Materials stocks performing best, up over 70%. The weakest index sector was Telecommunications, but even that closed up by 26%. China, Brazil and India contributed strongly to the index on a country basis, while Eastern European nations were relatively weak.

Beginning as it did in the midst of a tremendous worldwide equity market correction, the portfolio was well positioned from the start to employ some of the key tenets of its strategy—seeking opportunities from mispricings, and identifying quality companies selling at a discount to their underlying values.

Within the portfolio, stock selection in the Information Technology sector was excellent, and made a significant contribution to our outperformance. Wasion, a Chinese power meter firm, was a top performer for the period. Having completed an extensive build-out in generating capacity, China is now focusing spending on its electricity grid, benefiting companies like Wasion. ZTE, a Chinese telecom equipment manufacturer, was another positive contributor, on news that the company is gaining market share overseas and is likely to be a major beneficiary of increased mobile capital expenditures in China.

Stock selection in Energy also contributed to results. The Brazilian oil and gas firm Petrobras saw shares rise as prospects in Brazil's offshore oil segment improved. Addax Petroleum, a Canadian energy company with assets in West Africa and Kurdistan, was another strong performer. Addax was purchased by Chinese energy company Sinopec at a premium.

An overweight in Consumer Staples, along with solid stock selection, was also additive. Hengan International, a Chinese disposable paper hygiene products company, performed very well, although Central European Distribution, the largest producer and distributor of vodka in Poland and Russia, was among our weakest holdings, declining on concerns about Eastern European exposure and euro- and dollar-denominated debt.

Materials holdings were the largest detriment on a relative basis. Being underweight in the benchmark's top-performing sector, along with several individual disappointments, hurt relative results. Uralkali, a CIS-based potash producer, declined steeply. Potash prices had risen significantly in the first half of 2008, and fertilizer stocks throughout the world rallied. However, in what appeared to be punishment for charging market prices, the Russian government levied a large fine on the firm, damaging its prospects. Evraz was another disappointment. The Russian steel maker had become highly leveraged after several acquisitions, so when credit conditions became largely frozen early in the reporting period, the stock fell to near-bankruptcy levels. We purchased the stock well into its correction, but the severity of the economic downturn took a further toll on the share price. We recovered part of our losses before selling, but Evraz was still one of our poorest performers. Cash holdings within the portfolio, while not significant, were another slight negative in a sharply rallying market.

Looking ahead, we remain fairly cautious on the global economy. However, we expect better growth from the emerging markets than from developed nations. While there are rather large disparities among developing countries, the economic fundamentals of many emerging markets appear, in our opinion, to be strong, and, in many cases, more attractive than their developed counterparts. We think countries like China, India and Indonesia, with low public and private debt-to-GDP levels, banking systems with lower loan-to-deposit ratios, and strong potential from domestic


6


demand growth driven by large populations, offer attractive opportunities. Conversely, the indebted, export-driven economies of Taiwan, Korea and Eastern Europe are, in our opinion, less appealing.

In terms of individual stocks, the portfolio remains overweight in smaller domestic-market driven names, which we believe will continue to show secular growth despite global economic weakness. Sector overweights include Consumer Staples, Health Care, Information Technology and Industrials, and underweights include Energy and Financials.

In the face of a market that has rallied sharply since the Fund's inception, we continue to seek companies with strong fundamentals and attractive valuations across markets, using bottom-up stock selection to identify the opportunities we believe are best positioned for the longer term.

Sincerely,

Conrad Saldanha
Portfolio Manager

The risks involved in seeking capital appreciation from investments primarily in companies based outside the United States are set forth in the prospectus and statement of additional information.

Investing in foreign securities involves greater risks than investing in securities of U.S. issuers, including currency fluctuations, changes in local economic and political conditions, and the need to operate in less regulated financial markets. These risks are typically heightened for investments in emerging markets.

Investing in the stocks of even the largest companies involves all the risks of stock market investing, including the risk that they may lose value due to overall market or economic conditions.

The composition, industries and holdings of the Fund are subject to change. In an attempt to reduce overall volatility, Emerging Markets Equity Fund diversifies the portfolio holdings over a wide array of countries and individual stocks.


7


Emerging Markets Equity Fund

TICKER SYMBOLS

Institutional Class   NEMIX  
Class A   NEMAX  
Class C   NEMCX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     5.6 %  
Consumer Staples     7.4    
Energy     12.6    
Financials     19.7    
Health Care     3.7    
Industrials     13.5    
Information Technology     16.0    
Materials     11.6    
Telecommunication Services     8.9    
Utilities     1.0    
Total     100.0 %  

 

CUMULATIVE TOTAL RETURN1,3,10

    Inception
Date		   Cumulative Total
Return Ended 8/31/09
Life of Fund		  
At NAV  
Institutional Class   10/08/2008     44.66 %  
Class A   10/08/2008     44.38 %  
Class C   10/08/2008     43.42 %  
With Sales Charge  
Class A         36.08 %  
Class C         42.42 %  
Index  
MSCI Emerging Markets Index2,19          30.66 %  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2012 for Institutional Class, Class A and Class C shares. The net expense ratios were 1.25%, 1.50% and 2.25% for Institutional Class, Class A and Class C shares, respectively. As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 2.09%, 2.45% and 3.20% for Institutional Class, Class A and Class C shares, respectively (prior to any fee waivers or expense reimbursements).

Total Returns shown with a sales charge reflect the deduction of current maximum initial sales charge of 5.75% for Class A shares and the applicable contingent deferred sales charges (CDSC) for Class C shares. The maximum CDSC for Class C shares is 1%, which is reduced to 0% after 1 year. The performance of the Fund's share classes will differ primarily due to different sales charge structures and class expenses. Please see the prospectus for more information about sales charge structures, if any, and class expenses for your share class.


8


Emerging Markets Equity Fund

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Institutional Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Cumulative Total Return chart on previous page). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


9


Equity Income Fund Commentary

We are pleased to report that for the fiscal year ended August 31, 2009, Neuberger Berman Equity Income Fund outperformed its benchmark, the S&P 500 Index. In light of the investment environment, however, returns for both the Fund and the index were negative.

The past 12 months encompassed some of the most difficult economic and market conditions in memory. The S&P 500 closed down over 18% for the fiscal year, but that figure belies the quarter-by-quarter turbulence beneath it. Beginning with the Lehman bankruptcy and economic crisis that ensued, we saw enormous upheaval in financial markets. By March 2009, the market had bottomed. A bank bailout proposal and other mildly positive news supported equities in a rally that continued through August. For the full fiscal year, however, every sector of the S&P 500 closed down.

Equity Income Fund has defensive features that seek to provide value in difficult environments. The sectors we emphasize—Real Estate Investment Trusts (REITs), Utilities, Convertible Bonds and higher yielding stocks—contribute to a portfolio designed for high income and capital appreciation potential, with less volatility than the market. This strategy, along with an opportunistic cash position and successful option writing strategies, led to our outperformance for the fiscal year.

Heading into this period, we had taken profits in Energy holdings, resulting in a significant cash position. With concerns about the slowdown already underway and the potential for damage to come, we kept approximately 20% of assets in cash and cash equivalents, which helped limit the impact of ongoing upheaval. We also purchased floating rate notes, which are cash equivalents whose income advantage helped us meet yield goals.

At an average of 14%, the portfolio's Utilities holdings were at a significant overweight versus the index. This sector has defensive characteristics and attractive, often growing dividends. Although Utilities underperformed the broader index, our stock selection enhanced relative performance.

In REITs, approximately 15% of assets, we sought companies with ample cash, attractive dividends and the potential to grow their businesses and withstand economic setbacks. We generally avoided traditional commercial and industrial REITs, finding what we consider compelling opportunities elsewhere. Digital Realty, a digital storage REIT, was a top performer. The aptly named Health Care REIT, as well as GZI, a Chinese REIT, and American Campus Communities, an off-campus housing firm, were beneficial to results. Timber REIT holdings also helped relative returns. Among traditional REITs, Weingarten Realty Investors and Equity Residential disappointed.

In Convertible Bonds, the portfolio's weighting was as high as 30% recently, up from around 18% last year. From September through November, the sector came under pressure as hedge funds began deleveraging quickly, dumping securities inventory at what we consider an exceptional discount to par. In December, we sifted through the carnage and built exposure as price declines drove yields to 10-15%. Even after the market improved, we believe the yield-to-maturity and yield-to-puts of our portfolio holdings remain impressive relative to the five-year U.S. Treasury. By August, we sold certain convertible bonds after dramatic appreciation and redeployed proceeds into other bonds with, in our opinion, attractive yields, strong balance sheets and good cash flows. The portfolio's allocation was approximately 22% by the period's close.

The Fund also benefited from option writing throughout the year. We sold call options as stocks in the portfolio approached our target sell prices, allowing us the potential to enhance the income from stocks as they neared our exit prices. When possible, we also sold puts on companies we wished to own at a particular price. This also served to increase income.

The most negative impact on the portfolio this period came from an overweight in Energy, where many holdings underperformed as oil prices declined from approximately $140 per barrel to $40 within seven months. We also owned energy-related Canadian Income Trusts. Holdings such as Hugoton Royalty Trust, Canadian Oil Sands Trust and Cathedral Energy suffered doubly as the Canadian dollar weakened toward year-end.


10


The Fund was significantly underweighted in Consumer Discretionary and Staples stocks versus the S&P 500, on concerns about high unemployment, declining home prices, limited access to credit, and a slowdown in U.S. consumer spending. Although REITs fall under the category of Financials, the portfolio was underweighted in traditional bank stocks versus the index. This hurt relative performance during the rally, but benefited the portfolio for the full year. For a brief time, the Fund owned JPMorgan Chase and Bank of America but sold these positions when we became uncertain about earnings as government intervention continued.

Going forward, our approach is optimistic but relatively cautious. We believe the Fund is well positioned to take advantage of improvements in the broader market, while limiting exposure to volatility and providing a competitive yield. The portfolio's cash position is down. In Energy, we expect benefits as oil prices rise on diminished production and increasing demand. The portfolio is overweighted in Materials, with holdings including Freeport-McMoRan Copper & Gold and Royal Gold serving as a hedge against a potentially weaker U.S. dollar. We expect to continue to find opportunity in Convertibles and select non-traditional REITs. Finally, the Fund remains underweighted in companies dependent on the U.S. consumer, instead looking to overweight those we believe have great assets, sustainable business models and an ability to continuously grow in a capital-constrained world.

Sincerely,

Richard S. Levine, Tony Gleason and Sandy Pomeroy
Portfolio Co-Managers

The risks involved in seeking capital appreciation from investments in a wide array of stocks are set forth in the prospectus and statement of additional information.

Small- and mid-capitalization stocks are more vulnerable to financial risks and other risks than stocks of larger companies. They also trade less frequently and in lower volume than larger company stocks, so their market prices tend to be more volatile.

Investing in the stocks of even the largest companies involves all the risks of stock market investing, including the risk that they may lose value due to overall market or economic conditions.

The composition, industries and holdings of the Fund are subject to change. Equity Income Fund is invested in a wide array of stocks and no single holding makes up a significant portion of the Fund's total assets.


11


Equity Income Fund

TICKER SYMBOLS

Institutional Class   NBHIX  
Class A   NBHAX  
Class C   NBHCX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     2.0 %  
Consumer Staples     6.8    
Energy     14.5    
Financials     22.5    
Health Care     1.7    
Industrials     2.1    
Information Technology     1.8    
Materials     3.7    
Telecommunication Services     1.7    
Utilities     14.1    
Other     29.1    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3

    Inception
Date		   1 Year   Life of
Fund		  
At NAV  
Institutional Class   06/09/2008     (15.54 %)     (0.94 %)  
Class A17    06/09/2008     (16.01 %)     (1.13 %)  
Class C17    06/09/2008     (16.60 %)     (1.44 %)  
With Sales Charge  
Class A17          (20.81 %)     (3.18 %)  
Class C17          (17.42 %)     (1.44 %)  
Index  
S&P 500 Index2,19          (18.25 %)     (7.76 %)  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

During the period from November 2, 2006 through June 9, 2008, the Fund's Trust Class had only one investor, which could have impacted Fund performance. The inception date for the Fund's Institutional Class, Class A and Class C shares was June 9, 2008. Performance shown for the Institutional Class, Class A and Class C shares prior to that date is that of the Trust Class, which had an inception date of November 2, 2006 and converted into Institutional Class shares and ceased operations on June 9, 2008.

Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2012 for Institutional Class, Class A and Class C shares. The net expense ratios were 0.85%, 1.23% and 1.98% for Institutional Class, Class A and Class C shares, respectively. As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 3.41%, 5.73% and 7.00% for Institutional Class, Class A and Class C shares, respectively (prior to any fee waivers or expense reimbursements).

Total Returns shown with a sales charge reflect the deduction of current maximum initial sales charge of 5.75% for Class A shares and the applicable contingent deferred sales charges (CDSC) for Class C shares. The maximum CDSC for Class C shares is 1%, which is reduced to 0% after 1 year. The performance of the Fund's share classes will differ primarily due to different sales charge structures and class expenses. Please see the prospectus for more information about sales charge structures, if any, and class expenses for your share class.


12


Equity Income Fund

COMPARISON OF A $10,000 INVESTMENT (WITH SALES CHARGE)

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Class A shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart on previous page). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


13


Focus Fund Commentary

The fiscal year ended August 31, 2009 was a period of unprecedented market volatility as fallout from the credit crisis triggered a substantial decline, which was followed by a rally as governments responded worldwide. Although Neuberger Berman Focus Fund was able to regain a substantial amount of lost ground and roughly match the performance of its S&P 500 benchmark in the second half of the fiscal year, it recorded a loss and trailed the index for the full period.

Health Care investments had the most negative effect on performance relative to the benchmark. Two disappointing holdings in this sector were joint replacement manufacturer Zimmer Holdings and biotechnology company Genzyme. In the case of Zimmer, management's failure to quickly and effectively address issues regarding payments to doctors resulted in a loss of business momentum in a highly competitive market. We eliminated the position, but not before sustaining a substantial loss. Genzyme shares fell when one of its major plants failed an FDA inspection and then encountered manufacturing issues at the plant, causing an extended shut-down. We expect the plant to be fully functional by late November, which we consider a big first step in Genzyme's potential road to recovery.

Financials sector investments also underperformed, with Bank of America and Citigroup detracting from results. Citigroup had been a long-standing portfolio holding. We held onto the position throughout much of the credit crisis with the belief that the company would be able to weather the turmoil and ultimately emerge as a stronger entity. However, as the economy grew increasingly dire in the fourth quarter of calendar year 2008 and the stock market experienced a precipitous decline, in our view it became a real possibility that Citigroup might not survive. So, we gradually sold the position and took steep losses, albeit at much higher price levels than where Citigroup bottomed a few months later. We purchased Bank of America after the stock dropped 30% off its recent high because we felt that the risk/reward looked compelling. Yet when the federal government stepped in a few months later to inject capital into the company, we believed the risk to common shareholders became too severe. We therefore exited the position, again at a sharp loss, but several weeks before the stock reached its bottom. The Fund maintains exposure to the higher quality, better capitalized Financials that have and, we believe, should continue to benefit as the market stabilizes.

Consumer Discretionary sector investments posted a solid gain versus a loss for the corresponding S&P 500 sector component. Helped by particularly strong sales in its Olive Garden division, casual dining company Darden Restaurants enjoyed a gain for the period (although we then sold the position at an overall loss). Off-price retailer TJX was one of the few retailers to record sales growth over the last 12 months. The company's ability to access better brands (a result of the weak sales for full-price retailers) helped boost sales.

Although our Energy sector investments recorded a substantial loss, they outperformed the benchmark sector component by a sizable margin. Our focus on exploration and production companies with the lowest finding and development costs, which make them less leveraged to energy prices, helped limit the damage in this, the S&P 500's second worst performing sector. Range Resources, was the Fund's best Energy sector performer.

Reluctantly putting on our economic forecasting hat, we remain cautiously optimistic. We think the doomsday "Great Depression II" scenario is now highly unlikely. However, we question whether the V-shaped recovery equities investors appear to be anticipating will materialize. The economy has come a long way in the last six months, but this may be more a function of the replenishment of severely depleted inventories and government programs temporarily stimulating consumer spending than an indication of more normalized demand-driven growth.

Over the last six months, we believe investor confidence in a strong economic recovery and appetite for risk have increased significantly as evidenced by the superior performance of economically sensitive sectors such as Financials, Industrials, Materials and Energy and big moves in what we consider lower quality, more speculative issues. If economic growth fails to meet what may be optimistic expectations, we believe that today's market leaders are probably vulnerable. We think that focusing on undervalued companies that can sustain respectable cash flow and earnings growth even in a less vibrant economy could be a relatively satisfactory approach in the year ahead.


14


Sincerely,

David Levine
Portfolio Manager

Because the Fund is concentrated in a small number of stocks, it will be substantially overweighted or underweighted in certain economic sectors at any given time. Therefore its performance is likely to be disproportionately affected by the factors influencing those sectors and may suffer if certain economic sectors it emphasizes do not perform as expected. The risks associated with these investments are set forth in the prospectus and statement of additional information.

Small- and mid-capitalization stocks are more vulnerable to financial risks and other risks than stocks of larger companies. They also trade less frequently and in lower volume than larger company stocks, so their market prices tend to be more volatile. Large-cap stocks are subject to all the risks of stock market investing, including the risk that they may lose value.

The composition, industries and holdings of the Fund are subject to change.


15


Focus Fund

TICKER SYMBOLS

Investor Class   NBSSX  
Trust Class   NBFCX  
Advisor Class   NBFAX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     8.7 %  
Consumer Staples     12.6    
Energy     14.4    
Financials     12.7    
Health Care     16.6    
Industrials     11.1    
Information Technology     20.5    
Utilities     3.4    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3,9

    Inception
Date		   1 Year   5 Years   10 Years   Life of
Fund		  
Investor Class   10/19/1955     (21.06 %)     0.27 %     2.02 %     10.21 %  
Trust Class   08/30/1993     (21.21 %)     0.06 %     1.82 %     10.22 %  
Advisor Class   09/03/1996     (21.45 %)     (0.17 %)     1.58 %     10.17 %  
S&P 500 Index2,19        (18.25 %)     0.49 %     (0.79 %)     9.61 %  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 0.90%, 1.12% and 1.35% for Investor Class, Trust Class and Advisor Class shares, respectively.

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Investor Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart above). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


16


Genesis Fund Commentary

U.S. stocks mounted a sustained rally following the early March market bottom. However, this advance failed to compensate for the sharp sell-off during the first half of the fiscal year ended August 31, 2009. For the full 12-month period, all 10 Russell 2000® Index sectors declined, with four finishing down 20% or more. Neuberger Berman Genesis Fund recorded strongly positive returns in the second half of the period but finished in negative territory, lagging its Russell 2000 benchmark.

The disappointing relative returns of Health Care and Consumer Discretionary sector investments were largely responsible for the Fund's underperformance versus the benchmark. We made some mistakes, most notably ArthroCare and K-V Pharmaceutical Company, both of which suffered company-specific problems and were eliminated from the portfolio. Contract research companies Pharmaceutical Product Development and ICON PLC also performed poorly as large pharmaceuticals responded to potential changes in the health care system by reducing research and development spending. We believe this is a temporary phenomenon and that once "big pharma" increases R&D spending, these two well-positioned companies will rebound. Radio rating services company Arbitron and casket and headstone manufacturer Matthews International were the poorest performing Consumer Discretionary investments. Arbitron's struggles are tied to the pressures facing its primary customers—radio operators which have been experiencing a severe advertising slump. We have meaningfully reduced our position in Arbitron. As for Matthews, this is a classic "Steady Eddie" company with strong competitive positions in stable end markets. Due largely to the severe recession and a decline in the nation's death rate for 2009, Matthews is on track to have modestly down earnings for the year—a disappointing performance for investors who had become accustomed to consistently increasing earnings during the past several years. As a result, the stock was not able to keep pace with the overall Consumer Discretionary segment during the fiscal year.

Although the portfolio was overweighted in Energy—the Russell 2000's worst performing sector—and our holdings declined sharply, they outpaced sector counterparts and made a positive contribution to relative performance. Our bias toward exploration and production companies such as Southwestern Energy and Concho Resources, which have solid balance sheets and have been steadily increasing production and reserves on an economic basis, was the primary reason our holdings outperformed the corresponding benchmark component by a wide margin. Financials holdings also outperformed. The portfolio was significantly underweighted in Financials and our avoidance of the most credit-sensitive financial businesses helped us escape much of the damage in this hard-hit sector.

Over the last six months we have witnessed a sea change in investor sentiment. Investors have gone from asking, "How bad will it get?" to "How good is it going to be?" We believe that investor confidence in a strong global economic recovery is reflected in their renewed appetite for risk. To wit, from the Russell 2000 bottom on March 9, 2009 through August 31, 2009, lower quality, more speculative stocks—as measured by return on equity, price/projected earnings, market capitalization range and stock price (stocks trading under $5 per share)—have outperformed by a wide margin. Historically, Genesis has lagged its benchmark during such periods due to our focus on owning high quality businesses.

Moreover, we are not so confident that the current economic rebound is sustainable. We believe that recent improvement in the U.S. economy is primarily the result of rebuilding inventories that were decimated when the "economic sky was falling." In addition, government programs may have temporarily reinvigorated consumer spending. Once inventories are brought in line with still relatively weak domestic demand and government incentives for consumer spending are reduced or eliminated, we believe the economy may lose momentum.

Our long-held approach of seeking a diversified portfolio of high quality, financially strong companies selling at average to below-average prices remains intact. We have overlaid this approach with several macroeconomic themes. Consequently, we continue to underweight sectors such as Consumer Discretionary and Financials (specifically, credit-sensitive businesses such as banking, consumer credit companies and real estate investment trusts) that are highly dependent on the still overleveraged American consumer. Also, we continue to overweight sectors such as Energy, select Materials and agriculture-related Industrials, which we believe should continue to benefit from increasing emerging market demand. We also remain committed to less economically sensitive businesses, such as "Steady Eddies" and Health Care. We believe


17


these strategies could lead to superior relative performance if our reservations regarding the durability of a vibrant economic recovery prove justified. If economic growth exceeds our expectations, we believe the portfolio's overweights in Energy, Materials and select Industrials should help Genesis participate in any extended stock-market advance.

Sincerely,

  

Judith M. Vale and Robert D'Alelio
Portfolio Co-Managers

The risks involved in seeking capital appreciation from investments primarily in companies with small market capitalization are set forth in the prospectus and statement of additional information.

Small- and mid-capitalization stocks are more vulnerable to financial risks and other risks than stocks of larger companies. They also trade less frequently and in lower volume than larger company stocks, so their market prices tend to be more volatile.

The composition, industries and holdings of the Fund are subject to change. Genesis Fund is invested in a wide array of stocks and no single holding makes up a significant portion of the Fund's total assets.


18


Genesis Fund

TICKER SYMBOLS

Investor Class   NBGNX  
Trust Class   NBGEX  
Advisor Class   NBGAX  
Institutional Class   NBGIX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     4.9 %  
Consumer Staples     8.1    
Energy     14.6    
Financials     10.3    
Health Care     18.7    
Industrials     25.0    
Information Technology     10.5    
Materials     6.7    
Utilities     1.2    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3

    Inception
Date		   1 Year   5 Years   10 Years   Life of
Fund		  
Investor Class   09/27/1988     (25.72 %)     5.52 %     10.48 %     11.84 %  
Trust Class   08/26/1993     (25.73 %)     5.48 %     10.44 %     11.84 %  
Advisor Class   04/02/1997     (25.95 %)     5.20 %     10.15 %     11.65 %  
Institutional Class7    07/01/1999     (25.55 %)     5.74 %     10.74 %     11.97 %  
Russell 2000® Index2,19        (21.29 %)     2.21 %     4.30 %     8.29 %  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 1.04%, 1.11%, 1.37% and 0.86% for Investor Class, Trust Class, Advisor Class and Institutional Class shares, respectively. Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2019 for Institutional Class shares.

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Investor Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart above). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


19


Guardian Fund Commentary

For the fiscal year ended August 31, 2009, Neuberger Berman Guardian Fund underperformed its benchmark, the S&P 500 Index. Within an overwhelmingly down market, performance for both the Fund and the index was negative.

In September 2008, the macroeconomic environment appeared dire, and markets sold off indiscriminately. Credit was constrained, business and consumer spending collapsed, and capacity utilization plummeted as businesses aggressively liquidated inventory. By early calendar year 2009, evidence suggested to us that this unprecedented global inventory destocking was ending, shifting toward a replenishment cycle.

Subsequent to the March equity market low, we have seen a significant rebound in global industrial production as businesses position to restock inventory. Over this period, the global economy has also benefited from various stimulus packages, reopened credit markets, low interest rates, and generally healthy corporate balance sheets. Together these factors added to optimism, and the markets rallied strongly. While the economy is clearly enjoying a vigorous near-term bounce, we believe consumers need to deleverage, and that the government's serious fiscal problems must also be addressed to remove long-term headwinds for economic growth. We are also concerned about pockets of excess industrial capacity in light of lower demand, and are cautious about growth rates and fundamentals when the inventory boost ends.

As long-term investors, we made few changes to the types of companies we own, except for selective repositioning for the "post-Lehman bankruptcy" environment. Turnover remains relatively low, and our adjustments have been thoughtful, careful and aligned with our longer-term strategy. We continue focusing on businesses whose growth, we believe, is less dependent on a vibrant global economy. In our opinion, most holdings either have recession-resistant businesses, or some strategic advantage that should allow them to gain market share to offset cyclical pressure presented by a weak economy.

We used last year's volatility to add to and introduce such names at attractive valuations. For example, while the newspaper business is weak, we own Washington Post Company for its high-growth Kaplan education business—Kaplan is enjoying extraordinary growth as American workers return to school to add credentials and improve their employment prospects.

Intuit, a top performer, is another example. Intuit provides individual and business productivity software and services including TurboTax, Quicken and QuickBooks. Through marketing initiatives, Intuit has grown its business and acquired new small- and medium-sized business customers during a period of economic weakness. For instance, the company has introduced a free version of the QuickBooks general ledger accounting system. This version demonstrates the software's value proposition—low cost and compelling benefits—and from there, Intuit can offer a full suite of paid services, such as payroll and payment systems, and web hosting.

We are currently limiting exposure to credit-sensitive Financials, as credit losses are rising, and the business models and earnings potential of the post-2008 world are still unclear. Within the Consumer Discretionary sector, we are avoiding retailers, expecting that consumer spending will be more measured. Finally, we are avoiding deep cyclicals; these include many Materials-related businesses and Industrial sector companies that depend on high capacity utilization rates for growth. All of these areas have enjoyed strong rallies off of the March lows.

Within a wildly divergent market—down following the Lehman bankruptcy then sharply higher—individual stock performance over this reporting period had more to do with the timing of specific purchases and sales. For instance, our top performer was IntercontinentalExchange, whose volume growth, we believe, should continue with increased regulation of securities markets. We added Praxair, a resilient, well-run business, during the valuation opportunity in 2008. Yahoo is in a turnaround, with a solid balance sheet, no debt, a low price-to-cash flow ratio and strong positioning for an ad-spending recovery, and Markel is one of the largest participants in the fragmented specialty insurance sector. We bought it at a meaningful discount, and believe it is positioned to grow. All of these holdings were new to the portfolio and were initially purchased prior to the rally from the March lows.

Among poor performers, we continue to own cable and component distributor Anixter. While disappointing for the August reporting period, it has been a strong performer in calendar year 2009. We eliminated Weingarten Realty Investors


20


and American Express last fall on concerns about credit markets. We sold Liberty Global but held Comcast, a resilient business that has enjoyed improved share price performance recently. We also sold Petroleo Brasiliero and added to our position in BG Group. While Petroleo Brasiliero needed additional leverage to finance growth, BG Group has an immaculate balance sheet, and has been an opportunistic buyer of energy properties.

True to our successful long-term strategy, we continue to manage the portfolio with a three- to five-year view, looking for businesses with advantaged growth. After performing better than the index during much of calendar year 2009, we lost ground in August as investors favored the "cyclical bounce" stocks we consider risky. We are encouraged by the prospects for our companies and think the portfolio is well positioned for growth within the more challenging environment we foresee. As always, we look forward to continuing to serve your investment needs.

Sincerely,

Arthur Moretti
Portfolio Manager

The risks involved in seeking capital appreciation from investments primarily in mid- to large-cap stocks are set forth in the prospectus and statement of additional information.

Mid-capitalization stocks are more vulnerable to financial risks and other risks than larger stocks. They are generally less liquid than larger stocks, so their market prices tend to be more volatile. Large-cap stocks are subject to all the risks of stock market investing, including the risk that they may lose value.

The composition, industries and holdings of the Fund are subject to change. Guardian Fund is invested in a wide array of stocks and no single holding makes up a significant portion of the Fund's total assets.


21


Guardian Fund

TICKER SYMBOLS

Investor Class   NGUAX  
Trust Class   NBGTX  
Advisor Class   NBGUX  
Institutional Class   NGDLX  
Class A   NGDAX  
Class C   NGDCX  
Class R3   NGDRX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     16.6 %  
Energy     12.9    
Financials     14.1    
Health Care     7.8    
Industrials     18.8    
Information Technology     23.9    
Materials     3.2    
Utilities     2.7    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3,8,15

    Inception
Date		   1 Year   5 Years   10 Years   Life of
Fund		  
At NAV  
Investor Class   06/01/1950     (22.65 %)     1.74 %     1.28 %     10.81 %  
Trust Class   08/03/1993     (22.74 %)     1.59 %     1.15 %     10.78 %  
Advisor Class   09/03/1996     (23.05 %)     1.13 %     0.74 %     10.67 %  
Institutional Class22    05/27/2009     (22.58 %)     1.76 %     1.29 %     10.81 %  
Class A21    05/27/2009     (22.61 %)     1.75 %     1.29 %     10.81 %  
Class C21    05/27/2009     (22.83 %)     1.70 %     1.26 %     10.80 %  
Class R321    05/27/2009     (22.68 %)     1.74 %     1.28 %     10.80 %  
With Sales Charge  
Class A21          (27.06 %)     0.56 %     0.69 %     10.70 %  
Class C21          (23.50 %)     1.70 %     1.26 %     10.80 %  
Index  
S&P 500 Index2,19          (18.25 %)     0.49 %     (0.79 %)     10.75 %  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2019 for Advisor Class shares, through August 31, 2012 for Institutional Class shares and through August 31, 2013 for Class A, Class C and Class R3 shares. The net expense ratios were 1.51%, 0.76%, 1.11%, 1.86% and 1.36% for Advisor Class, Institutional Class, Class A, Class C and Class R3 shares, respectively. As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 0.90%, 1.07%, 3.44%, 0.78%, 1.21%, 1.96% and 1.41% for Investor Class, Trust Class, Advisor Class, Institutional Class, Class A, Class C and Class R3 shares, respectively (prior to any fee waivers or expense reimbursements).

Total Returns shown with a sales charge reflect the deduction of current maximum initial sales charge of 5.75% for Class A shares and the applicable contingent deferred sales charges (CDSC) for Class C shares. The maximum CDSC for Class C shares is 1%, which is reduced to 0% after 1 year. The performance of the Fund's share classes will differ primarily due to different sales charge structures and class expenses. Please see the prospectus for more information about sales charge structures, if any, and class expenses for your share class.


22


Guardian Fund

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Investor Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart on previous page). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


23


International Fund Commentary

For the fiscal year ended August 31, 2009, Neuberger Berman International Fund underperformed its benchmark, the MSCI EAFE® Index. While both the Fund and the index posted double-digit positive returns in calendar year 2009, returns for the full period were negative.

This was a tremendously difficult time for world's economies and equity markets, with steep declines in the EAFE Index from the beginning of the reporting period through early March 2009. Although markets rallied subsequently, the extremely bearish environment that endured through much of the period overwhelmed more recent improvements. For the full fiscal year, all sectors within the EAFE were down, with Consumer Staples performing best on a relative basis, and Materials declining most. Every country in the index declined except Spain, which was up less than 1%.

Because this report covers two distinctly different market environments—one in which defensive positioning was beneficial, and one in which cyclical companies outperformed—overall themes are not readily apparent. Taking the period as a whole, the market sectors that fared best included Consumer Staples, Telecommunications, Health Care and Consumer Discretionary. Materials, Information Technology, Financials, Utilities, Industrials and Energy were relatively weak. Throughout the period, our holdings reflected our commitment to our QuaRP (quality at a reasonable price) philosophy.

During the fiscal year, the Fund benefited on a relative basis from a lack of exposure to the weak Utilities sector, which, although usually defensive, underperformed. Given that we are QuaRP investors, Utilities companies rarely meet our requirements, tending to be lower growth, highly capital intensive, and highly regulated businesses. Stock selection within Telecommunications was also additive, and stock selection was beneficial within Materials as well. Initiated at a favorable time, our position in French chemical company Arkema was among the portfolio's top performers. However, Wacker Chemie, a German chemical company, lagged and was eliminated from the portfolio. While its solar business remains strong, Wacker's more cyclical chemical business has recently hampered company results. Finally, in a decidedly negative market, the Fund's somewhat higher-than-average level of cash and cash equivalents was another benefit.

In terms of detractors, the performance of some of the portfolio's Industrial holdings was disappointing. Vallourec, a French maker of seamless steel tubing and connectors used in deepwater drilling for natural gas, was our poorest performer. The stock was hurt by a soft U.S. gas market, and was sold. Health Care was another area of weakness. Within Energy, Addax Petroleum, a Canadian company with assets in West Africa and Kurdistan, was the Fund's top contributor. The company was taken over by Chinese energy company Sinopec during the period and was sold. Cameco, a Canadian uranium company, was also among our strongest performers. As governments worldwide look for ways to increase energy production with a lower carbon footprint, Cameco has benefited. However, Fund holdings underperformed the benchmark sector component, with disappointments including Paladin, a smaller-cap, lower-production Australian uranium company which has been eliminated from the portfolio. Canadian Natural Resources, a higher cost oil producer that was disproportionately impacted as commodity prices declined, also underperformed. We sold the stock early in the period. In Information Technology, an overweight and stock selection worked against us. While Canadian data specialist MacDonald Dettwiler was one of our best holdings, British electronics firm Laird PLC was one of the weakest and was sold. Our slight underweight and stock selection in Consumer Discretionary stocks were a headwind in this environment.

Within the troubled Financials sector, portfolio holdings had mixed results. On the positive side, Deutsche Boerse, operator of the Frankfurt stock exchange and an electronic and derivatives exchange, saw earnings exceed expectations, and performed very well. We believe the company should benefit further as new regulations move over-the-counter financial instruments to exchanges. Norwegian commercial bank DnB NOR returned to favor, as investors appeared to have considered its risks and opportunities more rationally. However, Swiss Re, an insurer of primary insurance companies, was sold from the portfolio after experiencing losses greater than we had anticipated. Piraeus, a Greek bank, declined on economic concerns and was eliminated from the portfolio. And French insurance company, Euler Hermes, was another significant disappointment that was sold. Overall, Fund holdings underperformed the benchmark in the sector.


24


Looking ahead, we continue to be fairly cautious on the global economy, expecting a protracted and muted recovery. While remaining somewhat defensive, we are adding cyclical names on a stock-by-stock basis where we find valuations compelling after lowered assumptions for revenue growth and margin expansion. In these markets, we continue to remain focused on our QuaRP discipline, seeking high quality, financially strong companies with good organic growth opportunities—an approach that we believe can deliver superior returns over the long run.

Sincerely,

Benjamin Segal
Portfolio Manager

The Fund is currently closed to new investors.

The risks involved in seeking capital appreciation from investments primarily in companies based outside the United States are set forth in the prospectus and statement of additional information.

Investing in foreign securities involves greater risks than investing in securities of U.S. issuers, including currency fluctuations, changes in local economic and political conditions, and the need to operate in less regulated financial markets. These risks are typically heightened for investments in emerging markets.

The composition, industries and holdings of the Fund are subject to change. In an attempt to reduce overall volatility, International Fund diversifies the portfolio holdings over a wide array of countries and individual stocks.


25


International Fund

TICKER SYMBOLS

Investor Class   NBISX  
Trust Class   NBITX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     8.9 %  
Consumer Staples     14.0    
Energy     9.4    
Financials     18.3    
Health Care     10.6    
Industrials     13.9    
Information Technology     7.7    
Materials     9.3    
Telecommunication Services     7.9    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3,8,16

    Inception
Date		   1 Year   5 Years   10 Years   Life of
Fund		  
Investor Class   06/15/1994     (20.42 %)     4.98 %     4.70 %     6.75 %  
Trust Class5    06/29/1998     (20.48 %)     4.88 %     4.95 %     6.98 %  
MSCI EAFE® Index2,19          (14.47 %)     6.32 %     2.68 %     4.85 %  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 1.28% and 1.38% for Investor Class and Trust Class shares, respectively.Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2012 for Investor Class shares and August 31, 2019 for Trust Class shares.

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Investor Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart above). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


26


International Institutional Fund Commentary

For the fiscal year ended August 31, 2009, Neuberger Berman International Institutional Fund underperformed its benchmark, the MSCI EAFE® Index. While both the Fund and the index posted double-digit positive returns in calendar year 2009, returns for the full period were negative.

This was a tremendously difficult time for world's economies and equity markets, with steep declines in the EAFE Index from the beginning of the reporting period through early March 2009. Although markets rallied subsequently, the extremely bearish environment that endured through much of the period overwhelmed more recent improvements. For the full fiscal year, all sectors within the EAFE were down, with Consumer Staples performing best on a relative basis, and Materials declining most. Every country in the index declined except Spain, which was up less than 1%.

Because this report covers two distinctly different market environments—one in which defensive positioning was beneficial, and one in which cyclical companies outperformed—overall themes are not readily apparent. Taking the period as a whole, the market sectors that fared best included Consumer Staples, Telecommunications, Health Care and Consumer Discretionary. Materials, Information Technology, Financials, Utilities, Industrials and Energy were relatively weak. Throughout the period, our holdings reflected our commitment to our QuaRP (quality at a reasonable price) philosophy.

During the fiscal year, the Fund benefited on a relative basis from a lack of exposure to the weak Utilities sector, which, although usually defensive, underperformed. Given that we are QuaRP investors, Utilities companies rarely meet our requirements, tending to be lower growth, highly capital intensive, and highly regulated businesses. Stock selection within Telecommunications was also additive, and stock selection was beneficial within Materials as well. Initiated at a favorable time, our position in French chemical company Arkema was among the portfolio's top performers. However, Wacker Chemie, a German chemical company, lagged and was eliminated from the portfolio. While its solar business remains strong, Wacker's more cyclical chemical business has recently hampered company results. Finally, in a decidedly negative market, the Fund's somewhat higher-than-average level of cash and cash equivalents was another benefit.

In terms of detractors, the performance of some of the portfolio's Industrial holdings was disappointing. Vallourec, a French maker of seamless steel tubing and connectors used in deepwater drilling for natural gas, was our poorest performer. The stock was hurt by a soft U.S. gas market, and was sold. Health Care was another area of weakness. Within Energy, Addax Petroleum, a Canadian company with assets in West Africa and Kurdistan, was the Fund's top contributor. The company was taken over by Chinese energy company Sinopec during the period and was sold. Cameco, a Canadian uranium company, was also among our strongest performers. As governments worldwide look for ways to increase energy production with a lower carbon footprint, Cameco has benefited. However, Fund holdings underperformed the benchmark sector component, with disappointments including Paladin, a smaller-cap, lower-production Australian uranium company which has been eliminated from the portfolio. Canadian Natural Resources, a higher cost oil producer that was disproportionately impacted as commodity prices declined, also underperformed. We sold the stock early in the period. In Information Technology, an overweight and stock selection worked against us. While Canadian data specialist MacDonald Dettwiler was one of our best holdings, British electronics firm Laird PLC was one of the weakest and was sold. Our slight underweight and stock selection in Consumer Discretionary stocks were a headwind in this environment.

Within the troubled Financials sector, portfolio holdings had mixed results. On the positive side, Deutsche Boerse, operator of the Frankfurt stock exchange and an electronic and derivatives exchange, saw earnings exceed expectations, and performed very well. We believe the company should benefit further as new regulations move over-the-counter financial instruments to exchanges. Norwegian commercial bank DnB NOR returned to favor, as investors appeared to have considered its risks and opportunities more rationally. However, Swiss Re, an insurer of primary insurance companies, was sold from the portfolio after experiencing losses greater than we had anticipated. Piraeus, a Greek bank, declined on economic concerns and was eliminated from the portfolio. And French insurance company, Euler Hermes, was another significant disappointment that was sold. Overall, Fund holdings underperformed the benchmark in the sector.


27


Looking ahead, we continue to be fairly cautious on the global economy, expecting a protracted and muted recovery. While remaining somewhat defensive, we are adding cyclical names on a stock-by-stock basis where we find valuations compelling after lowered assumptions for revenue growth and margin expansion. In these markets, we continue to remain focused on our QuaRP discipline, seeking high quality, financially strong companies with good organic growth opportunities—an approach that we believe can deliver superior returns over the long run.

Sincerely,

Benjamin Segal
Portfolio Manager

The Fund is currently closed to new investors.

The risks involved in seeking capital appreciation from investments primarily in companies based outside the United States are set forth in the prospectus and statement of additional information.

Investing in foreign securities involves greater risks than investing in securities of U.S. issuers, including currency fluctuations, changes in local economic and political conditions, and the need to operate in less regulated financial markets. These risks are typically heightened for investments in emerging markets.

The composition, industries and holdings of the Fund are subject to change. In an attempt to reduce overall volatility, International Institutional Fund diversifies the portfolio holdings over a wide array of countries and individual stocks.


28


International Institutional Fund

TICKER SYMBOLS

Institutional Class   NBIIX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     9.0 %  
Consumer Staples     14.1    
Energy     9.4    
Financials     18.1    
Health Care     10.6    
Industrials     13.9    
Information Technology     7.7    
Materials     9.4    
Telecommunication Services     7.8    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3,8

    Inception
Date		   1 Year   Life of
Fund		  
Institutional Class     06/17/2005       (19.92 %)     0.07 %  
MSCI EAFE® Index2,19              (14.47 %)     3.60 %  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

As stated in the Fund's most recent prospectus, the total annual fund operating expense ratio for fiscal year 2008 was 1.13% for Institutional Class shares (prior to any fee waivers or expense reimbursements). The net expense ratio was 0.87%. Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2019 for Institutional Class shares.

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Institutional Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart above). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


29


International Large Cap Fund Commentary

For the fiscal year ended August 31, 2009, Neuberger Berman International Large Cap Fund underperformed its benchmark, the MSCI EAFE® Index. While both the portfolio and the index posted double-digit positive returns in calendar 2009, returns for the full reporting period were negative.

This was a tremendously difficult time for the world's economies and equity markets, with steep declines in the EAFE Index from the beginning of the reporting period through early March 2009. Although markets rallied subsequently, the extremely bearish first half overwhelmed more recent improvements. For the full fiscal year, all sectors within the EAFE were down, with Consumer Staples performing best on a relative basis, and Materials declining most. Every country in the index declined except Spain, which was up less than 1%.

Because this report covers two distinctly different market phases—one in which defensive positioning was beneficial, and one in which cyclical companies outperformed—overall themes are not readily apparent. Taking the period as a whole, the sectors that fared best included Consumer Staples, Telecommunications, Health Care and Consumer Discretionary stocks. Materials, Information Technology, Financials, Utilities, Industrials and Energy were weaker. Throughout the period, our holdings reflected our commitment to our QuaRP (quality at a reasonable price) philosophy.

During the fiscal year, the Fund benefited on a relative basis from Consumer Staples, with both an overweight and strong stock selection, including a gain by Hengan International, a Chinese disposable paper hygiene company which was sold during the period. Another positive was our lack of exposure to the Utilities sector, which, while typically defensive, underperformed during the period. Given that we are QuaRP investors, Utilities companies rarely meet our requirements, tending to be lower growth, highly capital intensive, and highly regulated businesses. Stock selection within Telecommunications was additive as well. Finally, in a decidedly negative market, a somewhat higher-than-average level of cash was another benefit.

The performance of some of the Fund's Industrials holdings was disappointing. Vallourec, a French maker of seamless steel tubing and connectors used in deepwater drilling for natural gas, was our poorest performer. The stock was hurt by a weak U.S. gas market, and was sold. Health Care was another negative, where although Novo Nordisk was a benefit, stock performance in the sector was weaker than expected. In Energy, though our holdings underperformed overall, stock selection was beneficial. Canadian firm Addax Petroleum was our top performer, benefiting from a takeover by Chinese energy company Sinopec during the period. Canadian Natural Resources, a higher cost oil producer that was disproportionately impacted as commodity prices declined, underperformed. We sold the stock early in the period. Australian firms Paladin, a uranium producer, and Woodside Petroleum also disappointed and were sold.

Within the troubled Financials sector, Fund holdings had mixed performance. On the positive side, Deutsche Boerse, operator of the Frankfurt stock exchange and an electronic and derivatives exchange, saw earnings exceed expectations, and performed very well. We believe the company should benefit further as new regulations move over-the-counter financial instruments to exchanges. Bank of China remained strong and UBS performed well (both were sold), and Norwegian commercial bank DnB NOR returned to favor. However, Swiss Re, an insurer of primary insurance companies, was sold after experiencing losses greater than we had anticipated. Piraeus, a Greek bank, declined on economic concerns and was eliminated from the portfolio. And French insurance company Euler Hermes was another significant disappointment that was sold. Overall, our holdings underperformed the benchmark sector component.

In Information Technology, an overweight and stock performance worked against the Fund, as did the performance of some Materials holdings. Three of the best portfolio performers are in the Materials sector—Sociedad Quimica y Minera de Chile, a leader in specialty plant nutrition, iodine and lithium, BHP Billiton, a Australian metals and mining firm, and Linde, a German industrial gas manufacturer. However, Wacker Chemie, a German chemical company we sold as its chemical business suffered, and Vale (also sold), a Brazilian metals and mining firm, both posted large declines.

Looking ahead, we continue to be fairly cautious on the global economy, expecting a protracted and muted recovery. While remaining somewhat defensive, we are adding cyclical names on a stock-by-stock basis, where we find valuations


30


compelling after lowered assumptions for revenue growth and margin expansion. In these markets, we continue to remain focused on our QuaRP discipline, seeking high quality, financially strong companies with good organic growth opportunities—an approach that we believe can deliver superior returns over the long run.

Sincerely,

Benjamin Segal
Portfolio Manager

The risks involved in seeking capital appreciation from investments primarily in companies based outside the United States and from investments in large-cap stocks are set forth in the prospectus and statement of additional information.

Investing in foreign securities involves greater risks than investing in securities of U.S. issuers, including currency fluctuations, changes in local economic and political conditions, and the need to operate in less regulated financial markets. These risks are typically heightened for investments in emerging markets.

Investing in the stocks of even the largest companies involves all the risks of stock market investing, including the risk that they may lose value due to overall market or economic conditions.

The composition, industries and holdings of the Fund are subject to change. In an attempt to reduce overall volatility, International Large Cap Fund diversifies the portfolio holdings over a wide array of countries and individual stocks.


31


International Large Cap Fund

TICKER SYMBOLS

Trust Class   NILTX  
Institutional Class   NILIX  
Class A   NBNAX  
Class C   NBNCX  
Class R3   NBNRX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     10.3 %  
Consumer Staples     11.3    
Energy     9.2    
Financials     21.5    
Health Care     11.3    
Industrials     10.7    
Information Technology     6.8    
Materials     10.1    
Telecommunication Services     8.8    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3,8

    Inception
Date		   1 Year   Life of
Fund		  
At NAV  
Trust Class   08/01/2006     (18.84 %)     (4.47 %)  
Institutional Class7    10/06/2006     (18.57 %)     (4.16 %)  
Class A18    12/20/2007     (18.83 %)     (4.47 %)  
Class C18    12/20/2007     (19.34 %)     (4.84 %)  
Class R318    05/27/2009     (18.92 %)     (4.50 %)  
With Sales Charge  
Class A18          (23.52 %)     (6.28 %)  
Class C18          (20.12 %)     (4.84 %)  
Index  
MSCI EAFE® Index2,19          (14.47 %)     (3.30 %)  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2012 for Trust Class, Institutional Class, Class A and Class C shares and through August 31, 2013 for Class R3 shares. The net expense ratios were 1.30%, 0.95%, 1.37%, 2.07% and 1.53% for Trust Class, Institutional Class, Class A, Class C and Class R3 shares, respectively. As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 1.39%, 1.00%, 1.72%, 4.12% and 2.00% for Trust Class, Institutional Class, Class A, Class C and Class R3 shares, respectively (prior to any fee waivers or expense reimbursements).

Total Returns shown with a sales charge reflect the deduction of current maximum initial sales charge of 5.75% for Class A shares and the applicable contingent deferred sales charges (CDSC) for Class C shares. The maximum CDSC for Class C shares is 1%, which is reduced to 0% after 1 year. The performance of the Fund's share classes will differ primarily due to different sales charge structures and class expenses. Please see the prospectus for more information about sales charge structures, if any, and class expenses for your share class.


32


International Large Cap Fund

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Trust Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart on previous page). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


33


Large Cap Disciplined Growth Fund Commentary

For the fiscal year ended August 31, 2009, Neuberger Berman Large Cap Disciplined Growth Fund underperformed its benchmark, the Russell 1000® Growth Index. During an extremely difficult year for equity investors, returns for both the Fund and the index were negative.

Fifteen days into this reporting period, Lehman Brothers declared bankruptcy. While the economy was already in a downturn cycle, this triggered a tailspin as credit evaporated. The fourth quarter of calendar year 2008 saw a tremendous drop in retail activity, and signs of improvement would not be apparent until late in the first quarter of calendar year 2009, as the first of various economic stimulus programs began to have an influence.

By March, we saw two catalysts for improvement. First, Citigroup announced strong earnings and the apparent likelihood that they could earn their way through their capital issues had widespread implications. At the same time, analysts began to understand the impact that a stimulus package by the Chinese government—a very targeted package focused on infrastructure spending—could have on various economic sectors.

Since March, the market has rallied in fits and starts, with early leadership coming from lower quality names—those with weaker balance sheets, smaller market caps, low liquidity and share price, and higher economic sensitivity. From April through August, the rally became more broadly based.

During this fiscal year, stock selection within areas including Industrials, Health Care, Information Technology and Financials hurt the portfolio versus the index, since our high quality bias kept us out of the stocks that performed best. For example, within Financials, the Fund owned quality holdings such as JP Morgan Chase and Goldman Sachs, and both stocks performed well. They did not, however, see the bounce that weaker players we avoided—like Citigroup and AIG—enjoyed. Being underweighted in Information Technology as it rebounded also limited relative performance.

Decisions that benefited the portfolio on a relative basis included excellent stock selection within Consumer Discretionary stocks. However, our underweight in the sector offset some of the benefit. Very strong stock selection in Materials, Telecommunications and Utilities also helped.

One of the top holdings in the portfolio for the year was Apple. Strong results from the iPhone within a difficult environment surprised the marketplace when expectations were relatively low. We felt more positive and, in fact, Apple has sold 30 million units to date. Apple has also begun to profit from iPhone applications, continues to release newer generations of other high-demand devices, and has expanded globally, most notably in China and Israel.

With demand for copper increasing tremendously as a result of the Chinese stimulus package, Freeport-McMoRan Copper & Gold was another strong performer. The firm benefited from Chinese infrastructure projects like railroads, bridges, airports, and power generation and transmission. Located in Asia, Freeport's biggest mine is well positioned to serve China.

Amazon was another huge contributor. Amazon revamped its distribution network prior to the economic downturn, which reduced delivery costs, and in turn improved price competitiveness on both goods and shipping. Amazon also gained significant share from eBay, which was having operating difficulties, especially in sales of new items.

Disappointments included Lockheed Martin, which we sold after the close of the fiscal year. Lockheed was a defensive holding in calendar year 2008, but in calendar year 2009, a change in administration caused budget and defense spending questions to loom, and later in the year, the market rotated into more volatile, economically sensitive stocks.

Research in Motion (RIMM) was another disappointment. We bought RIMM in calendar year 2008 believing the firm would gain new consumer share alongside its business and enterprise domination. With the collapse of U.S. consumer demand, it became obvious that this thesis was not going to play out, and we eliminated the stock from the portfolio.

We also sold Schlumberger, another negative performer for the portfolio. New oil production often comes from costly, technologically complicated procedures, such as underwater, shale or horizontal drilling. This is Schlumberger's specialty.


34


However, as the price of crude declined dramatically, such projects were the first to be shuttered, and Schlumberger traded down in sympathy.

Within the past six months, we shifted from a very defensive posture to a much more economically sensitive stance, decreasing Health Care, Consumer Staples, Utilities and Telecom in favor of Materials, Industrials, Financials and Technology. We think the work required to close the huge gap between low inventories and increasing demand will continue to benefit these types of firms, as well as to potentially re-start a "virtuous" cycle—in which demand drives manufacturing and employment increases, which promotes confidence and spending, and eventually, economic improvement. We are focused on companies that have cut expenses and beaten earnings estimates. If revenues increase for lean companies like these, we believe it should impact the bottom line quickly. Within this outlook, while we are conservatively positioned for recovery, we have room to become more aggressive if our thesis becomes evident even faster.

Sincerely,

  

  

Daniel D. Rosenblatt, John J. Barker, Daniel J. Fletcher and Lawrence K. Fisher
Portfolio Co-Managers

The risks involved in seeking capital appreciation from investments primarily in companies with large capitalizations are set forth in the prospectus and statement of additional information.

Investing in the stocks of even the largest companies involves all the risks of stock market investing, including the risk that they may lose value due to overall market or economic conditions.

The composition, industries and holdings of the Fund are subject to change. Large Cap Disciplined Growth Fund is invested in a wide array of stocks and no single holding makes up a significant portion of the Fund's total assets.


35


Large Cap Disciplined Growth Fund

TICKER SYMBOLS

Investor Class   NBCIX  
Institutional Class   NLDLX  
Class A   NLDAX  
Class C   NLDCX  
Class R3   NLDRX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     9.1 %  
Consumer Staples     11.5    
Energy     8.0    
Financials     5.4    
Health Care     12.1    
Industrials     10.1    
Information Technology     35.3    
Materials     7.3    
Telecommunication Services     1.2    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3,14

    Inception
Date		   1 Year   5 Years   Life of
Fund		  
At NAV  
Investor Class   12/06/1999     (18.27 %)     1.76 %     (5.03 %)  
Institutional Class20    04/06/2009     (18.13 %)     1.80 %     (5.02 %)  
Class A20    04/06/2009     (18.27 %)     1.76 %     (5.03 %)  
Class C20    04/06/2009     (18.54 %)     1.70 %     (5.06 %)  
Class R320    05/27/2009     (18.25 %)     1.77 %     (5.03 %)  
With Sales Charge  
Class A20          (22.97 %)     0.56 %     (5.61 %)  
Class C20          (19.35 %)     1.70 %     (5.06 %)  
Index  
Russell 1000® Growth Index2,19          (16.76 %)     1.21 %     (4.68 %)  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2019 for Investor Class and through August 31, 2013 for Institutional Class, Class A and Class C and Class R3 shares. The net expense ratios were 1.52%, 0.76%, 1.12%, 1.87% and 1.37% for Investor Class, Institutional Class, Class A and Class C and Class R3 shares, respectively. As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 2.55%, 2.80%, 1.90%, 2.75% and 1.78% for Investor Class, Institutional Class, Class A and Class C and Class R3 shares, respectively (prior to any fee waivers or expense reimbursements).

Total Returns shown with a sales charge reflect the deduction of current maximum initial sales charge of 5.75% for Class A shares and the applicable contingent deferred sales charges (CDSC) for Class C shares. The maximum CDSC for Class C shares is 1%, which is reduced to 0% after 1 year. The performance of the Fund's share classes will differ primarily due to different sales charge structures and class expenses. Please see the prospectus for more information about sales charge structures, if any, and class expenses for your share class.


36


Large Cap Disciplined Growth Fund

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Investor Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart on previous page). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


37


Mid Cap Growth Fund Commentary

For the fiscal year ended August 31, 2009—a turbulent period for equities—both Neuberger Berman Mid Cap Growth Fund and its benchmark, the Russell Midcap® Growth Index, posted negative returns. Fund performance trailed that of the index.

All sectors of the index finished the fiscal year in double-digit negative territory. Within the benchmark, Telecommunications was the weakest sector, off by nearly 40%. Energy was next, down roughly 37%. Consumer Discretionary stocks performed best, declining approximately 10%. The large Information Technology (IT) sector was whipsawed over the year, initially showing extreme weakness, but turning in middling results overall due to strong performance in recent months.

Early in the fiscal year, more defensive, lower growth stocks outperformed on a relative basis while the markets were declining dramatically. After the March low, nearly the opposite was true—with lower quality (e.g., little or no earnings, low return on equity), smallest and least expensive stocks in the lead. This shift is not surprising to us—in markets following a period of sustained weakness, such as in 2003, lower quality stocks have often led early on. The Fund trailed the benchmark during the market recovery, given that such stocks do not meet our fundamental requirements. We believe the "junk rally" may be waning now, however, and that the Fund can benefit when the market pauses to weigh price appreciation against the underlying fundamental value of securities.

Within the Fund, Energy holdings outperformed in the difficult Energy sector due to excellent security selection. An overweight position (versus the benchmark) in oil and gas firm Concho Resources was a benefit, as were Range Resources and Noble. The Fund remains overweighted in the weak Telecommunications sector, where we enjoyed good stock selection. Millicom International, an emerging markets prepaid cellular company, and SBA Communications, a tower company, were beneficial. NII Holdings was sold on earnings disappointments, as its Latin American business declined. In Materials, Freeport-McMoRan Copper & Gold, the large copper supplier, was among our best performers. The company benefited from rising prices and increasing demand, especially in China.

Areas that were most detrimental to relative Fund performance this fiscal year were IT and Health Care. In IT, Fund holdings did not keep pace with rebounding lower quality stocks. Silicon Laboratories and Marvell Technology Group were among our top performers but our higher quality semiconductor and equipment holdings underperformed. Software holdings also lagged, with Trimble Navigation and Activision Blizzard disappointing. VistaPrint, a lower cost business stationery provider, was a bright spot, particularly in the latter half of the period.

In Health Care, the Fund's services and equipment holdings disappointed. Services companies, which we have reduced as a proportion of the portfolio, were held back by "political" risk—the unknowns surrounding health care reform—and equipment firms underperformed on lower hospital spending. We sold disappointments including Intuitive Surgical, Psychiatric Solutions, Perrigo and Myriad Genetics. Our biotech holdings were stronger, as this area proved to be more resilient in the face of political risk.

Consumer Discretionary holdings were slightly negative on a relative basis. In retrospect, we held our education theme too long after last year's strong performance. We have since consolidated the overall position and are less defensive in the sector, reflected in our building a longer-term position in retail, including positive contributors Ross Stores and Nordstrom. Gaming companies WMS and Penn National were also very strong.

The Fund underperformed in Financials. We think the sector remains somewhat risky, so the Fund remains slightly underweighted relative to the index. We continue to favor asset management firms, and capital-sensitive names. In Industrials, our prison outsourcing theme is on hold, as states are unable to outsource prison services in light of worsening deficits. Corrections Corp. of America declined, and was sold. We continue to emphasize higher quality, good earnings visibility Industrials, such as Precision Castparts, Stericycle and Jacobs Engineering.


38


Looking ahead, while not expecting a rapid recovery, we are becoming more constructive on the market and find mid-cap valuations very attractive. As the market begins to price in 2010 results, we expect to add to areas including Health Care (pending reform details), Consumer Discretionary and IT. Across sectors, the companies that meet our fundamental criteria generally have strong balance sheets, good cash flow characteristics and low leverage, which should benefit them on a competitive basis as we move through this economic downturn and what we consider a transitional market.

As experienced at inflection points in the past, we believe the recent strong performance of lower-quality stocks is not sustainable. Instead, we continue to believe that, longer term, fundamental stock selection is the key to performance, and that, over time, the market will reward companies that possess the strong fundamentals and quality growth characteristics that we seek.

Sincerely,

Kenneth J. Turek
Portfolio Manager

The risks involved in seeking capital appreciation from investments primarily in companies with mid-market capitalization are set forth in the prospectus and statement of additional information.

Mid-capitalization stocks are more vulnerable to financial risks and other risks than stocks of larger companies. They also trade less frequently and in lower volume than larger company stocks, so their market prices tend to be more volatile.

The composition, industries and holdings of the Fund are subject to change. Mid Cap Growth Fund is invested in a wide array of stocks and no single holding makes up a significant portion of the Fund's total assets.


39


Mid Cap Growth Fund

TICKER SYMBOLS

Investor Class   NMANX  
Trust Class   NBMTX  
Advisor Class   NBMBX  
Institutional Class   NBMLX  
Class A   NMGAX  
Class C   NMGCX  
Class R3   NMGRX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     20.9 %  
Consumer Staples     5.2    
Energy     7.5    
Financials     8.1    
Health Care     12.0    
Industrials     15.4    
Information Technology     23.0    
Materials     3.8    
Telecommunication Services     4.1    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3,8,11

    Inception
Date		   1 Year   5 Years   10 Years   Life of
Fund		  
At NAV  
Investor Class   03/01/19794      (22.04 %)     4.86 %     0.37 %     11.14 %  
Trust Class   08/30/1993     (22.21 %)     4.58 %     0.22 %     11.05 %  
Advisor Class   09/03/1996     (22.36 %)     4.35 %     (0.17 %)     10.88 %  
Institutional Class 7    04/19/2007     (21.63 %)     5.06 %     0.46 %     11.17 %  
Class A21    05/27/2009     (22.07 %)     4.85 %     0.37 %     11.14 %  
Class C21    05/27/2009     (22.19 %)     4.82 %     0.35 %     11.13 %  
Class R321    05/27/2009     (22.12 %)     4.84 %     0.36 %     11.14 %  
With Sales Charge  
Class A21        (26.55 %)     3.62 %     (0.23 %)     10.92 %  
Class C21        (22.97 %)     4.82 %     0.35 %     11.13 %  
Index  
Russell Midcap® Growth Index2,19          (20.21 %)     3.35 %     1.52 %     N/A    
Russell Midcap® Index2,19          (19.92 %)     3.40 %     5.09 %     12.90 %  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2019 for Advisor Class shares, through August 31, 2012 for Institutional Class shares and through August 31, 2013 for Class A, Class C and Class R3 shares. The net expense ratios were 1.52%, 0.77%, 1.12%, 1.87% and 1.37% for Advisor Class, Institutional Class, Class A, Class C and Class R3 shares, respectively. As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 1.03%, 1.27%, 2.40%, 0.80%, 1.27%, 2.02% and 1.52% for Investor Class, Trust Class, Advisor Class, Institutional Class, Class A, Class C and Class R3 shares, respectively (prior to any fee waivers or expense reimbursements).

Total Returns shown with a sales charge reflect the deduction of current maximum initial sales charge of 5.75% for Class A shares and the applicable contingent deferred sales charges (CDSC) for Class C shares. The maximum CDSC for Class C shares is 1%, which is reduced to 0% after 1 year. The performance of the Fund's share classes will differ primarily due to different sales charge structures and class expenses. Please see the prospectus for more information about sales charge structures, if any, and class expenses for your share class.


40


Mid Cap Growth Fund

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Investor Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart on previous page). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


41


Partners Fund Commentary

Despite the strong performance of stocks following the early March market lows, all 10 sectors in the Russell 1000® Value Index and the S&P 500 Index posted declines in the fiscal year ended August 31, 2009. Neuberger Berman Partners Fund regained lost ground and materially outperformed these benchmarks in the second half of the period. However, due to the severity of its first-half market decline, the Fund posted a negative return and trailed the Russell 1000 Value Index and S&P 500 Index for the full fiscal year.

The Fund's cyclical bias, which penalized performance relative to the Russell benchmark as the market plunged during the first half of the reporting period, benefited relative performance in the second half as stocks in many economically sensitive sectors led the market rebound.

Investments in the Health Care sector had the most negative impact on relative performance this fiscal year. The portfolio was underweighted in Health Care, the Russell benchmark's second best performing sector, but due in part to the disappointing performance of HMOs such as Aetna (affected by concern regarding health care reform), our holdings lagged the Russell benchmark sector component. Utilities sector investors penalized relative returns, primarily due to the disappointing performance of merchant power producers such as NRG, which suffered from depressed demand and power prices, as well as a leveraged balance sheet. An underweight in Consumer Staples, the Russell's best performing sector, and a sizable decline in beverage distributor Constellation Brands (which was sold) were a drag on relative returns.

Although recording a negative return, Financials sector investments had the most favorable impact on relative performance. The portfolio was underweighted in Financials, the Russell's second worst performing sector, and the strong second half gains recorded by JP Morgan Chase, Wells Fargo, and State Street helped our holdings outperform by a substantial margin. Collectively, Information Technology sector holdings posted a modest decline compared to a double-digit percentage loss for the benchmark sector component. Gains in banking back-office software company Fidelity National Information Services and mortgage processing and settlement services provider Lender Processing Services buoyed returns. The strong performance of motorcycle manufacturer Harley-Davidson helped the Fund's Consumer Discretionary holdings post favorable relative returns.

We (along with most everyone in the money management business) did not anticipate that issues in the U.S. residential mortgage market would result in a near collapse of the U.S. and global financial system, systemic risk aversion, and subsequently, a sharp and swift exodus from equities. However, what we consider the largely indiscriminate sell-off in stocks made valuations of many excellent companies even more compelling. We took the opportunity to upgrade the quality of the portfolio by adding to positions in what we view as "best of breed" companies and reducing or eliminating positions in companies that we did not think were as financially strong or as well positioned in their businesses. We believed that once investors began looking past the recession, the highest quality companies in their respective businesses would excel. We took particular advantage of evolving opportunities in the beaten down Financials sector, where we believed investors had failed to adequately acknowledge improving outlooks. As evidenced by the Fund's outperformance versus the benchmark in the second half of the fiscal year, these strategies appear to be working.

Looking ahead, the economic outlook remains cloudy, with some economists forecasting a slow U-shaped recovery and others expecting a more rapid V-shaped rebound. Regardless of which of these scenarios unfolds, our focus remains on identifying companies that are selling at a significant discount to normalized earnings power. We believe that when the economy does fully regain its footing, these stocks are likely to excel.

In closing, in recent years, investor patience and courage have been tested by one of the most severe bear markets in history. We believe the worst is over and are pleased with the Partners Fund's strong absolute and relative performance in the second half of fiscal 2009. We believe that the Partners Fund is well positioned to reward our shareholders over the next several years.


42


Sincerely,

S. Basu Mullick
Portfolio Manager

The risks involved in seeking capital appreciation from investments primarily in mid- to large-cap stocks are set forth in the prospectus and statement of additional information.

Mid-capitalization stocks are more vulnerable to financial risks and other risks than larger stocks. They are generally less liquid than larger stocks, so their market prices tend to be more volatile. Large-cap stocks are subject to all the risks of stock market investing, including the risk that they may lose value.

The composition, industries and holdings of the Fund are subject to change. Partners Fund is invested in a wide array of stocks and no single holding makes up a significant portion of the Fund's total assets.


43


Partners Fund

TICKER SYMBOLS

Investor Class   NPRTX  
Trust Class   NBPTX  
Advisor Class   NBPBX  
Institutional Class   NBPIX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     9.7 %  
Consumer Staples     7.1    
Energy     16.4    
Financials     23.8    
Health Care     8.3    
Industrials     14.5    
Information Technology     9.8    
Materials     7.3    
Telecommunication Services     1.4    
Utilities     1.7    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3,8

    Inception
Date		   1 Year   5 Years   10 Years   Life of
Fund		  
Investor Class   01/20/19754      (23.27 %)     3.23 %     2.07 %     12.91 %  
Trust Class   08/30/1993     (23.38 %)     3.04 %     1.91 %     12.85 %  
Advisor Class   08/16/1996     (23.47 %)     2.88 %     1.68 %     12.73 %  
Institutional Class7    06/07/2006     (23.10 %)     3.34 %     2.13 %     12.93 %  
Russell 1000® Value Index2,19          (20.27 %)     0.45 %     1.84 %     N/A    
S&P 500 Index2,19          (18.25 %)     0.49 %     (0.79 %)     11.45 %  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 0.81%, 1.00%, 1.15% and 0.66% for Investor Class, Trust Class, Advisor Class and Institutional Class shares, respectively.

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Investor Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart above). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


44


Real Estate Fund Commentary

The real estate investment trust (REIT) market was extremely volatile during the 12 months ended August 31, 2009, falling sharply in the first half of the period and then rallying during the second half. Neuberger Berman Real Estate Fund suffered a steep decline but significantly outperformed its benchmark, the FTSE NAREIT Equity REITs Index.

Looking back, the REIT index fell 60% in the first six months of the fiscal year. The severe credit crunch, a weakening global economy, turmoil in the financial markets and extreme risk aversion conspired to drag down the equity market, and REITs were hit particularly hard. REITs typically use leverage to fund their operation and the largely frozen credit and capital markets led to fears of markedly higher bankruptcies in the sector.

The same factors that caused REITs to perform poorly during the first half of the reporting period were instrumental in their subsequent rally. During the second half, massive government intervention improved credit conditions and helped to restore order to the financial markets. There were also signs that the economy was bottoming and that investor risk aversion was abating. In addition, various REITs proved successful in accessing the capital markets, as they raised more than $16 billion in equity capital during the first eight months of calendar year 2009 alone. In addition, with improving credit markets, REITs were able to better access the unsecured bond market. This lifted the dark cloud that had hung over the REIT market, helping the benchmark index gain 68% during the final six months of the reporting period.

Over the course of the fiscal year, we made various adjustments to the portfolio that contributed to outperformance. At the start of the period, the Fund was defensively positioned, given signs that the economy might experience a more severe recession than had previously been expected. In particular, we emphasized REIT sectors such as Heath Care, Self Storage and Specialty REITs (including data storage center and timber REITs), that historically have held up relatively well during economic contractions. We also favored those less defensive REITs with relatively strong balance sheets. This positioning was rewarded during the first half of the fiscal year.

Toward the end of calendar year 2008, we began to opportunistically adjust the portfolio to be somewhat less defensive. This shift was driven by less dire economic news and in anticipation of improving conditions in the REIT market. As time passed, we reduced some of our defensive sector overweights, turning our attention to the roughly 50 REITs that had successfully issued equity capital. Using our extensive research capabilities, we selectively purchased REITs that had been severely punished by investors during the first half of the fiscal year and whose balance sheets had improved through the infusion of new capital. We also identified several REITs that previously had relatively solid balance sheets, believing that, with new capital in their coffers, they now had the potential to acquire assets from weaker, overleveraged counterparts. Overall, these adjustments were rewarded during the second half of the fiscal year.

On the downside, in addition to the negative impact of the overall decline of the REIT market, several of our strategies detracted from Fund performance during the fiscal year. For example, reducing our overweight in the defensive Health Care sector at the end of calendar year 2008 proved to be premature, as REIT prices fell sharply in January and February of 2009. In addition, the Fund's modest cash position was a drag on performance when the REIT market rallied during the second half of the period.

Looking ahead, we remain positive on the long-term prospects for REITs. We believe their ability to, once again, access capital has removed a major roadblock for the sector. In addition, while challenges remain, it appears to us that the overall economy may have bottomed. A return to positive economic growth would be favorable for commercial real estate occupancy and rental rates.

In conclusion, we would like to address the outlook for REIT dividends. During the credit crisis, REIT dividends were often affected by the sale of stock. We believe this cycle has largely ended and we expect to see a return to more stable income levels for REITs going forward, with a shift back to all-cash dividends. Additionally, we believe there is the potential for rising dividend levels down the road should we see further improvements on the economic front.


45


Sincerely,

  

Steve S. Shigekawa and Brian Jones
Portfolio Co-Managers

The risks involved in seeking capital appreciation and income from investments primarily in companies with small- and mid-market capitalization are set forth in the prospectus and statement of additional information.

Small- and mid-capitalization stocks are more vulnerable to financial risks and other risks than stocks of larger companies. They also trade less frequently and in lower volume than larger company stocks, so their market prices tend to be more volatile.

The portfolio's concentration in real estate investments makes it subject to greater potential risks and volatility than a more diversified portfolio, and the value of its shares may decline due to events affecting the real estate industry.

The composition, industries and holdings of the Fund are subject to change. Real Estate Fund is invested in a wide array of stocks and no single holding makes up a significant portion of the Fund's total assets.


46


Real Estate Fund

TICKER SYMBOLS

Trust Class   NBRFX  
Institutional Class   NBRIX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Office     15.8 %  
Apartments     14.0    
Health Care     12.5    
Regional Malls     10.3    
Shopping Centers     10.2    
Specialty     10.0    
Self Storage     7.2    
Industrial     6.0    
Lodging/Resorts     5.4    
Diversified     3.9    
Mixed     2.8    
Mortgage Home Financing     1.9    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3,8

    Inception
Date		   1 Year   5 Years   Life of
Fund		  
Trust Class   05/01/2002     (23.69 %)     3.27 %     8.74 %  
Institutional Class7    06/04/2008     (23.46 %)     3.35 %     8.80 %  
FTSE NAREIT Equity REITs Index2,19          (32.83 %)     0.14 %     5.68 %  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

As stated in the Fund's most recent prospectus, the total annual fund operating expense ratio for fiscal year 2008 were 1.86% and 1.79% for Trust Class and Institutional Class shares, respectively (prior to any fee waivers or expense reimbursements). The net expense ratios were 1.51% and 0.88% for Trust Class and Institutional Class shares, respectively. Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2019 for Trust Class and Institutional Class shares.

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Trust Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart above). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


47


Regency Fund Commentary

The stock market's strong performance coming off early-March lows was not enough to compensate for its steep decline in the first half of the fiscal year ended August 31, 2009. For the full 12-month period, all 10 sectors in the Russell Midcap® Value Index were in negative territory, with four of 10 dropping by 20% or more. Although Neuberger Berman Regency Fund posted strongly positive returns and materially outperformed its benchmark in the second half, it had a negative return and trailed its benchmark for the fiscal year overall.

Our bias toward leading companies in more economically sensitive sectors, which penalized relative performance in the first half, enhanced relative returns in the second half of the reporting period as data, indicating that the global economy was stabilizing, prompted investors to move into the shares of quality cyclical companies.

During the reporting period, Industrial sector investments had the most negative effect on performance relative to the Russell benchmark. The portfolio was overweighted in Industrials, the index's second worst performing sector, and the disappointing performance of holdings such as Eagle Bulk Shipping (which was sold) and heavy equipment manufacturer Terex weighed on returns. Health Care investments lagged the benchmark sector component by a wide margin, primarily due to the poor performance of HMOs such as Aetna, CIGNA, and Conventry, which declined in response to uncertainty caused by potential changes in the health care system. Due in part to a big decline in merchant power producer Dynegy, which suffered from excess leverage and reduced industrial demand for power (and was sold), our Utilities holdings also underperformed.

Our investments in the hard-hit Financials sector held up relatively well, posting a negative return but materially outperforming the benchmark sector component. Gains in real estate investment trusts Macerich Company and Annaly Capital Management, and regional bank First Horizon National contributed substantially to performance. Although posting a significant decline, Energy sector holdings, primarily oil-oriented exploration and production companies, held up relatively well compared to the poorly performing benchmark sector overall. Helped by a big gain in Cablevision Systems, Consumer Discretionary sector investments also enhanced relative returns.

Last year's largely indiscriminate stock market plunge allowed us to further improve the quality of the portfolio by adding to positions in what we believed were the financially strongest and best positioned companies in their respective businesses and by reducing or eliminating positions in companies whose long-term prospects we believed were not quite as bright. We believed that the severely beaten down but still "best of breed" companies would excel once the market began anticipating an economic recovery. In addition, we began increasing our allocation to Financials, most notably well-capitalized regional banks, where we saw incredible bargains based on longer-term earnings power. As evidenced by the Fund's favorable relative performance in the second half of 2009, these strategies appear to be paying off.

Looking ahead, the economic outlook remains somewhat murky, with some forecasters expecting a more gradual U-shaped recovery and others anticipating a rapid V-shaped rebound. We can't be sure which of these economic scenarios will unfold. We do note that the economy appears to have improved considerably in the second quarter of calendar year 2009 and we believe we could see better-than-generally-expected GDP growth in the third quarter. Regardless of how long it takes the economy to fully regain its footing, however, our focus remains on identifying companies that are selling at a significant discount to normalized earnings power. We believe that, when the economy is solidly back on a growth path, these stocks will excel.

In closing, in recent years, investors have suffered through one of the most severe bear markets in history. Their patience and fortitude have been sorely tested. We believe the worst is over and are beginning to see some light at the end of the tunnel. We are pleased with the Regency Fund's strong absolute and relative performance in the second half of the fiscal year and believe we are well positioned to serve our shareholders in the years to come.


48


Sincerely,

S. Basu Mullick
Portfolio Manager

The risks involved in seeking capital appreciation from investments primarily in mid-cap stocks are set forth in the prospectus and statement of additional information.

Mid-capitalization stocks are more vulnerable to financial risks and other risks than stocks of larger companies. They also trade less frequently and in lower volume than larger company stocks, so their market prices tend to be more volatile.

The composition, industries and holdings of the Fund are subject to change. Regency Fund is invested in a wide array of stocks and no single holding makes up a significant portion of the Fund's total assets.


49


Regency Fund

TICKER SYMBOLS

Investor Class   NBRVX  
Trust Class   NBREX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     13.9 %  
Consumer Staples     7.6    
Energy     11.9    
Financials     25.3    
Health Care     8.7    
Industrials     11.8    
Information Technology     6.9    
Materials     5.5    
Utilities     8.4    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3,8

    Inception
Date		   1 Year   5 Years   10 Years   Life of
Fund		  
Investor Class   06/01/1999     (21.04 %)     1.55 %     6.79 %     6.43 %  
Trust Class5    06/10/1999     (20.96 %)     1.45 %     6.73 %     6.38 %  
Russell Midcap® Value Index2,19          (20.00 %)     3.00 %     6.29 %     5.62 %  
Russell Midcap® Index2,19          (19.92 %)     3.40 %     5.09 %     4.76 %  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 1.13% and 1.38% for Investor Class and Trust Class shares, respectively (prior to any fee waivers or expense reimbursements). The net expense ratio was 1.26% for Trust Class shares. Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2019 for Trust Class shares.

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Investor Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart above). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


50


Select Equities Fund Commentary

For the fiscal year ended August 31, 2009, Neuberger Berman Select Equities Fund materially outperformed its benchmark, the S&P 500 Index. During a period of extreme distress and volatility for the equity markets, absolute returns for both the Fund and the index were negative.

As the fiscal year began, we had significant concerns about the condition of the economy and prospects for the markets. As a result, our portfolio was positioned in what we thought was a conservative fashion, with an historically high cash balance and overweightings in traditionally defensive areas such as Utilities. During the 12-month period, our worst fears were borne out—the economy suffered dramatically due to such factors as soft consumer spending, the weak housing market and rising unemployment. The credit crisis locked consumers and businesses out of financing options, and then, following the bankruptcy of Lehman Brothers on September 15, 2008, significant financial turmoil began in earnest. Given this extraordinary confluence of events, our main goal during the period was to preserve capital.

Positioning that started out as conservative and evolved to become extremely conservative was a significant benefit, with the most notable contributor to the Fund's relative outperformance this period being a large cash and cash equivalent position from September 2008 through February 2009. As noted above, the portfolio had been holding cash going into this period (about 20%), and as the dramatic downturn in the financial markets began to unfold, we raised and held very large amounts of cash. By October 2008, in fact, our cash position averaged roughly 60%, the highest it has ever been.

Stock selection and positioning helped as well. While every sector within the S&P 500 was down for the reporting period, some fared worse than others. The portfolio benefited on a relative basis from having underweighted (relative to the benchmark) some of the sectors that were weakest—especially in the fall—such as Financials and Industrials. In areas such as these, the portfolio's commitments (if any) declined far less than those of the market. In addition to cash, Health Care investments, such as Alcon, were beneficial on an absolute basis. Although the portfolio was underweighted versus the index in Health Care, with strong stock selection, our holdings closed the period up 15%, well ahead of the Health Care segment of the index, which was down 11%.

Timing of purchases and sales was another strength for the Select Equities Fund during this fiscal year—a period that contained both an extreme downturn and a subsequent rally from early March through August. From roughly September to the end of April, when the market was weakest, we created a "shopping list" of the companies we hoped to buy when we thought valuations and timing were right. By March, as we saw valuations come down to levels that were attractive to us from a risk perspective, and then signs from leading economic indicators that business was stabilizing and possibly improving, we became more positive on equities. During the spring, we were ready to reallocate to equities and were already focused on our targets.

Thus, we began building positions in a number of what we consider world-class companies, many of which exhibited the same characteristics as the few companies we kept throughout the fall—companies that we believed had the ability to grow organically regardless of the economic environment, with fortress-like balance sheets, that did not need access to the capital markets to grow their businesses. Our research led us to a number of the larger capitalized companies that have done very well for the portfolio this period, including Hewlett-Packard, BHP Billiton and Goldman Sachs.

The companies that had the most detrimental effect on performance over the period include some that we sold into the weak 2008 market as we were raising cash. We eliminated those holdings that we thought were least likely to weather the financial and economic crisis—either from a financing needs or business perspective. During the period, companies including Crown Castle and Brookfield Asset Management were sold from the portfolio at a loss to raise cash.

Looking ahead, we believe the financial crisis ended this past spring, but that the economy, while clearly improving, has a long way to go before full recovery. In our opinion, the economic recovery will unfold more slowly and less sharply than many prognosticators expect. With consumer spending likely to be weak for some time, and with banks now more


51


stringent in their consumer and business lending policies, we see far more moderate growth going forward. We are positioning the portfolio accordingly. We believe that if we are too conservative in our outlook, and the markets and economy are stronger than we anticipate, then the companies we are investing in will exceed our expectations.

We thank you for your support during what has been a most challenging period in the financial markets and world. We are excited about the year ahead.

Sincerely,

Gerald Kaminsky, Michael Kaminsky and Richard Werman
Portfolio Co-Managers

The risks involved in seeking capital appreciation from investments primarily in companies of large capitalization are set forth in the prospectus and statement of additional information.

Investing in the stocks of even the largest companies involves all the risks of stock market investing, including the risk that they may lose value due to overall market or economic conditions.

The composition, industries and holdings of the Fund are subject to change. Select Equities Fund is invested in a wide array of stocks and no single holding makes up a significant portion of the Fund's total assets.


52


Select Equities Fund

TICKER SYMBOLS

Institutional Class   NBEIX  
Class A   NBEAX  
Class C   NBECX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Staples     10.3 %  
Energy     15.3    
Financials     17.5    
Health Care     9.2    
Industrials     11.5    
Information Technology     15.8    
Materials     9.0    
Telecommunication Services     5.4    
Utilities     6.0    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3

    Inception
Date		   1 Year   Life of
Fund		  
At NAV  
Institutional Class   12/20/2007     (12.03 %)     (11.69 %)  
Class A   12/20/2007     (11.95 %)     (11.76 %)  
Class C   12/20/2007     (12.58 %)     (12.47 %)  
With Sales Charge  
Class A         (17.01 %)     (14.78 %)  
Class C         (13.45 %)     (12.47 %)  
Index  
S&P 500 Index2,19          (18.25 %)     (16.72 %)  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 13.98%, 4.06% and 7.28% for Institutional Class, Class A and Class C shares, respectively (prior to any fee waivers or expense reimbursements). The net expense ratios were 0.85%, 1.33% and 2.07% for Institutional Class, Class A and Class C shares, respectively. Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2012 for Class A, Class C and Institutional Class shares.

Total Returns shown with a sales charge reflect the deduction of current maximum initial sales charge of 5.75% for Class A shares and the applicable contingent deferred sales charges (CDSC) for Class C shares. The maximum CDSC for Class C shares is 1%, which is reduced to 0% after 1 year. The performance of the Fund's share classes will differ primarily due to different sales charge structures and class expenses. Please see the prospectus for more information about sales charge structures, if any, and class expenses for your share class.


53


Select Equities Fund

COMPARISON OF A $10,000 INVESTMENT (WITH SALES CHARGE)

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Class A shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart on previous page). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


54


Small and Mid Cap Growth Fund Commentary

For the fiscal year ended August 31, 2009—a turbulent period for equities—Neuberger Berman Small and Mid Cap Growth Fund and its benchmark, the Russell 2500TM Growth Index, posted negative returns. Fund performance was behind that of the index.

Nearly every sector of the index finished this period in double-digit negative territory. Within the benchmark, Energy was the weakest sector, off by roughly 50%. Industrials were down more than 30%. Consumer Staples turned in the least negative results, declining approximately 10%. The largest index sectors—Information Technology and Health Care stocks—were whipsawed over the course of the fiscal year, initially performing very poorly but turning in middling results overall due to strong performance in the latter six months of the period.

Early in the fiscal year, more defensive and lower growth stocks outperformed on a relative basis while the markets were declining dramatically. After the March low, nearly the opposite was true—with lower quality (e.g., little or no earnings, low return on equity), smallest and least expensive stocks in the lead. This shift is not surprising—historically, in a transitional market following a period of sustained weakness, such as in 2003, lower quality stocks often have led early on. The Fund trailed the benchmark slightly through August, given that the low quality stocks leading the rally did not meet our quality growth and fundamental requirements. We believe the "junk rally" is waning now, however, and that the Fund can benefit when the market pauses to weigh price appreciation against the underlying fundamental value of securities.

Within the Fund, holdings in the difficult Energy sector markedly outperformed benchmark counterparts due to excellent security selection. An overweight position (versus the index) in Concho Resources, a high quality oil and gas company with good earnings visibility, was a benefit, as was Southwestern Energy.

Industrials holdings were also positive for the Fund versus the benchmark. Stocks that contributed to relative outperformance included shipping and logistics firms Old Dominion Freight and C.H. Robinson Worldwide, and Allegiant Travel, a low cost air-travel firm that has been gaining share in smaller travel markets.

The Fund slightly underperformed the index in Consumer Discretionary stocks, although stock selection within the sector was strong. After benefiting from our defensive secondary education theme in calendar year 2008, and to a lesser extent so far in calendar year 2009, we reduced the theme somewhat in favor of less defensive gaming and leisure firms. Ameristar Casinos, restaurant operator Brinker International and luxury hotel chain Orient Express were among our top performers for the period. Specialty retailer Bed Bath and Beyond was another strong performer within the sector.

The areas that were most detrimental to the Fund for the fiscal year were Information Technology (IT) and Health Care. In the key IT sector, Fund holdings did not keep pace with rebounding lower quality stocks. While the Fund outperformed the benchmark in the semiconductor and equipment area, with companies including Silicon Laboratories, Varian, Marvell and NetLogic among the top performers, the Fund strongly underperformed in Software. Trimble Navigation, a high quality software company, is a good example. Activision was among our weakest performers, and Advent also underperformed.

In Health Care, the Fund was underweighted relative to the benchmark and underperformed, as our services and equipment companies disappointed. Services companies were held back by "political" risk—the unknowns surrounding health care reform—and equipment firms lagged as hospitals reduced capital expenditures. Performance within Health Care was hampered by companies such as Intuitive Surgical and Illumina, both of which were sold.

Within Consumer Staples, we sold the Fund's weakest performer for the period, Central European Distribution. The liquor company's stock suffered due to changes in exchange rates and exposure to weakened emerging markets such as Russia and Poland.

We are approaching the coming year with positioning that is for the most part sector-neutral. The Fund is slightly overweighted in the Energy, Consumer Discretionary and Telecommunications sectors, and significantly underweighted in Health Care, but roughly market-weighted in Financials, Industrials, Technology, Materials and Consumer Staples.


55


As always, the companies that meet our fundamental criteria generally have strong balance sheets, good cash flow characteristics and low leverage, which should benefit them on a competitive basis as we move through this economic downturn and what we believe is a transitional market. Despite the strong performance of lower quality stocks, we continue to believe that, longer term, fundamental stock selection is the key to long-term performance, and that, over time, the market will reward companies that possess the strong fundamentals and quality growth characteristics that we seek.

Sincerely,

David H. Burshtan, Kenneth J. Turek and Kristina Kalebcih
Portfolio Co-Managers

The risks involved in seeking capital appreciation from investments primarily in companies with small- to mid-cap capitalization are set forth in the prospectus and statement of additional information.

Mid-capitalization stocks are more vulnerable to financial risks and other risks than larger stocks. They are generally less liquid than larger stocks, so their market prices tend to be more volatile.

The composition, industries and holdings of the Fund are subject to change. Small and Mid Cap Growth Fund is invested in a wide array of stocks and no single holding makes up a significant portion of the Fund's total assets.


56


Small and Mid Cap Growth Fund

TICKER SYMBOL

Trust Class   NBATX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     19.5 %  
Consumer Staples     5.2    
Energy     7.0    
Financials     9.1    
Health Care     11.0    
Industrials     17.5    
Information Technology     26.6    
Materials     1.8    
Telecommunication Services     2.3    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3,10,13

    Inception
Date		   1 Year   Life of
Fund		  
Trust Class     09/05/2006       (23.21 %)     (4.37 %)  
Russell 2500TM Growth Index2,19            (21.08 %)     (4.05 %)  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

As stated in the Fund's most recent prospectus, the total annual fund operating expense ratio for fiscal year 2008 was 2.96% for Trust Class shares (prior to any fee waivers or expense reimbursements). The net expense ratio was 1.13%. Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2012 for Trust Class shares.

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Trust Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart above). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


57


Small Cap Growth Fund Commentary

For the fiscal year ended August 31, 2009—a turbulent period for equities—both Neuberger Berman Small Cap Growth Fund and its benchmark, the Russell 2000® Growth Index, posted negative returns. Fund performance was behind that of the index.

Nearly every sector of the Russell 2000 Growth Index finished this period in double-digit negative territory. Within the benchmark, Energy was the weakest sector, off by more than 50%. Industrials were down roughly 36%. At negative 1.7%, the tiny Consumer Staples sector turned in the strongest results.

Early in the fiscal year, more defensive and lower growth stocks outperformed on a relative basis while the markets were declining dramatically. After the March low and into the current rally, nearly the opposite was true—with the lower quality (e.g., little or no earnings, low return on equity), smallest, and least expensive stocks in the lead. In our view, this shift is not surprising—in a transitional market following a period of sustained weakness, such as in 2003, lower quality stocks have, in the past, often led early on. Such stocks do not meet our quality growth and fundamental requirements, accounting for the Fund's modest underperformance. However, we believe the "junk rally" may be waning now, and that our portfolio can benefit each time the market pauses to weigh price appreciation against underlying fundamental value.

The largest index sectors—Information Technology (IT), Health Care and Consumer Discretionary—were whipsawed during the fiscal year, initially performing very poorly, but turning in middling results overall due to strong performance in the second half. Within the Fund, holdings in the difficult Energy sector outperformed index counterparts thanks to excellent security selection. An overweight position (versus the benchmark) in Concho Resources, a high quality oil and gas firm with good earnings visibility, was a significant benefit.

Industrials holdings were also positive for the Fund versus the benchmark. Stocks that contributed to relative outperformance include Allegiant Travel, the Fund's top performer this period. Allegiant is a cost-effective secondary markets travel company that is gaining share from traditional carriers. Textron was another positive. Textron provides cost-efficient aircraft, industrial and financial solutions to the military and industry.

Our Consumer Discretionary holdings were also slightly positive on a relative basis. Our defensive secondary education theme performed very well on a relative basis through the end of calendar year 2008, although this trend has reversed so far in calendar year 2009. For the full fiscal year, the theme was a benefit, with the majority of our holdings contributing to returns.

The areas that were most detrimental to the Fund over the year were IT and Health Care. In IT, our holdings did not keep pace with rebounding lower quality stocks. While Silicon Laboratories and Varian Semiconductor Equipment were among our top performers, we tend not to invest heavily in semiconductor and equipment stocks, which led this market. Software, which we emphasized, underperformed the sector. Trimble Navigation, a high quality software company, is a good example. VistaPrint, a niche technology holding that sells lower cost business stationery, was a standout performer, particularly in the latter half of the fiscal year.

In Health Care, our services and equipment holdings underperformed. Services companies were hurt by "political risk"—the unknowns surrounding health care reform—and equipment firms underperformed as hospitals reduced spending. Disappointments included Kensey Nash, Wright Medical and Masimo, all of which were sold. Less susceptible to political risk, our biotech holdings performed relatively well this period. We added select exposure where we believe product pipelines are fairly predictable.

Last fall, the Fund was overweighted in Consumer Staples, a defensive move. As of fiscal year-end, the sector is at less than half the benchmark's weighting. We sold our weakest performer, Central European Distribution, this year. The liquor stock suffered on currency exposure and exposure to weakened Eastern European markets. On a positive note, we also sold Whole Foods, our second best performer.

We are approaching the coming year with roughly sector-neutral positioning. The Fund is overweighted in Consumer Discretionary, and is now less defensive in the sector, as we have reduced secondary education in favor of leisure and gaming companies such as Orient Express, Royal Caribbean Cruises and WMS Industries. We have eliminated our Telecommunications exposure.


58


As always, the companies that meet our fundamental criteria generally have strong balance sheets, good cash flow characteristics and low leverage, which should benefit them on a competitive basis as we move through this economic downturn and what we consider a transitional market. Despite the runs in performance that we have seen in lower quality stocks, we continue to believe that, longer term, fundamental stock selection is the key to long-term performance, and that the market will reward companies that possess the strong fundamentals and quality growth characteristics we seek over time.

Sincerely,

David H. Burshtan
Portfolio Manager

The risks involved in seeking capital appreciation from investments primarily in companies with small-market capitalization are set forth in the prospectus and statement of additional information.

Small-capitalization stocks are more vulnerable to financial risks and other risks than larger stocks. They are generally less liquid than larger stocks, so their market prices tend to be more volatile.

The composition, industries and holdings of the Fund are subject to change. Small Cap Growth Fund is invested in a wide array of stocks and no single holding makes up a significant portion of the Fund's total assets.


59


Small Cap Growth Fund

TICKER SYMBOLS

Investor Class   NBMIX  
Trust Class   NBMOX  
Advisor Class   NBMVX  
Institutional Class   NBSMX  
Class A   NSNAX  
Class C   NSNCX  
Class R3   NSNRX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     18.5 %  
Consumer Staples     1.5    
Energy     3.1    
Financials     5.8    
Health Care     25.7    
Industrials     15.1    
Information Technology     27.7    
Materials     2.6    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3,8,12

    Inception
Date		   1 Year   5 Years   10 Years   Life of
Fund		  
At NAV  
Investor Class   10/20/1998     (26.62 %)     4.19 %     (0.68 %)     5.66 %  
Trust Class5    11/03/1998     (26.64 %)     4.12 %     (0.77 %)     5.58 %  
Advisor Class6    05/03/2002     (26.81 %)     3.94 %     (0.80 %)     5.54 %  
Institutional Class7    04/01/2008     (26.30 %)     4.32 %     (0.62 %)     5.71 %  
Class A21    05/27/2009     (26.61 %)     4.19 %     (0.68 %)     5.66 %  
Class C21    05/27/2009     (26.73 %)     4.16 %     (0.70 %)     5.64 %  
Class R321    05/27/2009     (26.66 %)     4.18 %     (0.69 %)     5.65 %  
With Sales Charge  
Class A21        (30.83 %)     2.97 %     (1.27 %)     5.08 %  
Class C21        (27.47 %)     4.16 %     (0.70 %)     5.64 %  
Index  
Russell 2000® Growth Index2,19           (22.02 %)     2.71 %     0.65 %     3.37 %  
Russell 2000® Index2,19        (21.29 %)     2.21 %     4.30 %     5.92 %  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2019 for Investor Class, Trust Class and Advisor Class shares, through August 31, 2012 for Institutional Class shares and through August 31, 2013 for Class A, Class C and Class R3 shares. The net expense ratios were 1.32%, 1.42%, 1.62%, 0.91%, 1.26%, 2.01% and 1.51% for Investor Class, Trust Class, Advisor Class, Institutional Class, Class A, Class C and Class R3 shares, respectively. As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 1.45%, 1.67%, 1.99%, 1.11%, 1.60%, 2.35% and 1.85% for Investor Class, Trust Class, Advisor Class, Institutional Class, Class A, Class C and Class R3 shares, respectively (prior to any fee waivers or expense reimbursements).

Total Returns shown with a sales charge reflect the deduction of current maximum initial sales charge of 5.75% for Class A shares and the applicable contingent deferred sales charges (CDSC) for Class C shares. The maximum CDSC for Class C shares is 1%, which is reduced to 0% after 1 year. The performance of the Fund's share classes will differ primarily due to different sales charge structures and class expenses. Please see the prospectus for more information about sales charge structures, if any, and class expenses for your share class.


60


Small Cap Growth Fund

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Investor Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart on previous page). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


61


Socially Responsive Fund Commentary

For the fiscal year ended August 31, 2009, Neuberger Berman Socially Responsive Fund underperformed its benchmark, the S&P 500 Index. In an overwhelmingly down market, performance for both the Fund and the index was negative.

In September 2008, the macroeconomic environment appeared dire, and markets sold off indiscriminately. Credit was constrained, business and consumer spending collapsed, and capacity utilization plummeted as businesses aggressively liquidated inventory. By early calendar year 2009, evidence suggested to us that this unprecedented global inventory destocking was ending, shifting toward a replenishment cycle.

Following the March 2009 equity market low, we have seen a significant rebound in global industrial production as businesses position to restock inventory. Over the same period, the global economy has also benefited from various stimulus packages, reopened credit markets, low interest rates, and generally healthy corporate balance sheets. Together theses factors added to optimism, and the markets rallied strongly. While the economy is clearly enjoying a vigorous near-term bounce, we believe the indebtedness of consumers and imbalances in government finances represent a long-term headwind for economic growth. We are also concerned about pockets of excess industrial capacity in light of lower demand, and are cautious about growth rates and fundamentals when the inventory boost ends.

As long-term investors, we made few changes to the types of companies we own, except for selective repositioning for the "post-Lehman bankruptcy" environment. Turnover remains relatively low, and our adjustments have been thoughtful, careful, and aligned with our longer-term strategy. We continue to focus on companies with strong, sustainable business models that are managed responsibly for the benefit of all stakeholders. The prospective growth in such businesses, we believe, is less dependent on a vibrant global economy. We believe most holdings have recession-resistant businesses and/or strategic advantages that should allow them to gain share to offset cyclical pressure presented by a weak economy.

We used last year's volatility to add to and introduce such names at attractive valuations. For example, while the newspaper business is weak, we own Washington Post for its high growth Kaplan education business—Kaplan is a beneficiary as American workers pursue higher education for a more secure future within a difficult labor market. The company has been recognized for its commitment to workplace diversity and recycling initiatives.

A top performer, Intuit is another example. One of Fortune's 100 Best Companies to Work For, Intuit sells software including TurboTax, Quicken and QuickBooks. Intuit has grown its business and acquired new small- and medium-sized business customers in a period of economic weakness, through a free version of the QuickBooks general ledger accounting system. This version demonstrates the software's value proposition—low cost and compelling benefits—and from there, Intuit can offer a full suite of paid services, such as payroll and payment systems, and web hosting.

We are currently avoiding credit-sensitive Financials, as we believe credit losses are rising, and the business models and earnings potential of the post-2008 world are still unclear. Within the Consumer Discretionary sector, we are avoiding retailers and consumer non-durables names, expecting that consumer spending will be more measured. Finally, we are avoiding deep cyclicals—these include many Materials-related businesses and Industrial sector companies that depend on high capacity utilization rates for growth. All of these areas have enjoyed strong rallies off of the March lows.

Within a wildly divergent market—down following the Lehman failure then sharply higher—individual stock performance was as much about the timing of purchases and sales as a commentary on its value. Our top performer was IntercontinentalExchange, whose volume growth we believe should continue with increased regulation of securities markets. We added Praxair, a resilient, well-run business, during the valuation opportunity in calendar year 2008. Many of Praxair's products are aimed at improving efficiency and reducing potential pollutants. Long-term holding Novo Nordisk, a leader in treatment of the growing global diabetes epidemic, and on social and environmental issues, also performed well. Yahoo is in a turnaround, with a solid balance sheet, no debt, a low price-to-cash flow ratio, and strong positioning for an ad spending recovery. Markel is one of the largest participants in a fragmented specialty insurance sector. We bought it at a meaningful discount, and believe it is positioned to grow.


62


Among the poor performers, we continue to own cable and component distributor Anixter. While disappointing for the reporting period, it has been a top performer in calendar year 2009. We eliminated Weingarten Realty Investors and American Express last fall on concerns about credit markets. We sold Liberty Global but held Comcast, a resilient business that has enjoyed improved share price performance recently.

True to our successful long-term strategy, we continue to manage the portfolio with a three- to five-year view, looking for socially responsive businesses with advantaged growth. After performing better than the index during much of calendar year 2009 so far, we lost ground in August as investors favored the "cyclical bounce" stocks we consider risky. We are encouraged by the prospects for our companies and think the portfolio is well positioned for growth within the more challenging environment we foresee. As always, we look forward to continuing to serve your investment needs.

Sincerely,

  

Arthur Moretti and Ingrid S. Dyott
Portfolio Co-Managers

The risks involved in seeking capital appreciation from investments in mid- to large-cap stocks that meet the Fund's financial criteria and social policy are set forth in the prospectus and statement of additional information.

Mid-capitalization stocks are more vulnerable to financial risks and other risks than larger stocks. They are generally less liquid than larger stocks, so their market prices tend to be more volatile. Large-cap stocks are subject to all the risks of stock market investing, including the risk that they may lose value.

The Fund's social policy could cause it to underperform similar funds that do not have a social policy. The composition, industries and holdings of the Fund are subject to change. Socially Responsive Fund is invested in a wide array of stocks and no single holding makes up a significant portion of the Fund's total assets.


63


Socially Responsive Fund

TICKER SYMBOLS

Investor Class   NBSRX  
Trust Class   NBSTX  
Institutional Class   NBSLX  
Class A   NRAAX  
Class C   NRACX  
Class R3   NRARX  

 

SECTOR ALLOCATION

(% of Equity Market Value)  
Consumer Discretionary     16.4 %  
Energy     12.9    
Financials     14.1    
Health Care     12.0    
Industrials     13.8    
Information Technology     23.7    
Materials     4.4    
Utilities     2.7    
Total     100.0 %  

 

AVERAGE ANNUAL TOTAL RETURN1,3,8

    Inception
Date		   1 Year   5 Years   10 Years   Life of
Fund		  
At NAV  
Investor Class   03/16/1994     (21.83 %)     1.86 %     1.93 %     7.21 %  
Trust Class   03/03/1997     (22.01 %)     1.67 %     1.71 %     7.04 %  
Institutional Class7    11/28/2007     (21.71 %)     1.91 %     1.96 %     7.23 %  
Class A21    05/27/2009     (21.87 %)     1.85 %     1.93 %     7.20 %  
Class C21    05/27/2009     (22.00 %)     1.82 %     1.91 %     7.19 %  
Class R321    05/27/2009     (21.93 %)     1.84 %     1.92 %     7.20 %  
With Sales Charge  
Class A21        (26.37 %)     0.65 %     1.33 %     6.79 %  
Class C21        (22.76 %)     1.82 %     1.91 %     7.19 %  
Index  
S&P 500 Index2,19        (18.25 %)     0.49 %     (0.79 %)     7.17 %  

 

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all dividends and capital gain distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, visit www.nb.com/performance.

Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through August 31, 2012 for Institutional Class shares and through August 31, 2013 for Class A, Class C and Class R3 shares. The net expense ratios were 0.75%, 1.11%, 1.86% and 1.36% for Institutional Class, Class A, Class C and Class R3 shares. As stated in the Fund's most recent prospectus, the total annual fund operating expense ratios for fiscal year 2008 were 0.90%, 1.09%, 0.77%, 1.21%, 1.96% and 1.41% for Investor Class, Trust Class, Institutional Class, Class A, Class C and Class R3 shares, respectively (prior to any fee waivers or expense reimbursements).

Total Returns shown with a sales charge reflect the deduction of current maximum initial sales charge of 5.75% for Class A shares and the applicable contingent deferred sales charges (CDSC) for Class C shares. The maximum CDSC for Class C shares is 1%, which is reduced to 0% after 1 year. The performance of the Fund's share classes will differ primarily due to different sales charge structures and class expenses. Please see the prospectus for more information about sales charge structures, if any, and class expenses for your share class.


64


Socially Responsive Fund

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception if it has not operated for 10 years. The graph is based on the Investor Class shares only; performance of other classes will vary due to differences in fee structures and any applicable sales charges (see Average Annual Total Return chart on previous page). The result is compared with benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indexes have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of dividends and capital gain distributions. Neither the Fund's returns nor the market indexes shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.


65


Endnotes

1  "Total Return" includes reinvestment of all income dividends and capital gain distributions. Results represent past performance and do not indicate future results. The value of an investment in the Fund and the return on the investment both will fluctuate, and redemption proceeds may be higher or lower than an investor's original cost.

2  Please see "Glossary of Indices" starting on page 68 for a description of indices. Please note that indices do not take into account any fees and expenses or tax consequences 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 LLC ("Management") and include reinvestment of all dividends and capital gain distributions. The Fund may invest in securities not included in the described indices or may not invest in all securities included in the described indices.

3  Expense Caps or Waivers: Absent these arrangements, which are subject to change, the total returns for these periods may have been less due to Management reimbursing and/or waiving certain operating expenses. Please see the notes to the financial statements for specific information regarding which funds and which classes currently have a portion of their operating expenses reimbursed and/or waived by Management.

4  This date reflects when Management first became investment advisor to the Fund.

5  Performance shown for the Trust Class prior to June 1998 for International Fund, November 1998 for Small Cap Growth Fund, and June 1999 for Regency Fund is that of the Investor Class, which has lower expenses and typically higher returns than the Trust Class.

6  Performance shown for the Advisor Class prior to May 2002 for Small Cap Growth Fund is that of the Investor Class, which has lower expenses and typically higher returns than the Advisor Class.

7  Performance shown prior to July 1999 for the Institutional Class of Genesis Fund, prior to June 2006 for the Institutional Class of Partners Fund, prior to April 2007 for the Institutional Class of Mid Cap Growth Fund, prior to November 2007 for the Institutional Class of Socially Responsive Fund and prior to April 2008 for the Institutional Class of Small Cap Growth Fund is that of the Investor Class. Performance shown prior to October 2006 for the Institutional Class of International Large Cap Fund and prior to June 2008 for the Institutional Class of Real Estate Fund is that of the Trust Class. The Investor Class and Trust Class have higher expenses and typically lower returns than the Institutional Class.

8  The investments for the Fund are managed by the same portfolio manager(s) who manage one or more other mutual funds that have similar names, investment objectives, and investment styles as the Fund. You should be aware that the Fund is likely to differ from the other mutual funds in size, cash flow pattern and tax matters. Accordingly, the holdings and performance can be expected to vary from those of the other mutual funds.

9  The Fund had a policy of investing mainly in large-cap stocks prior to September 1998 and investing 90% of its assets in no more than six economic sectors prior to December 17, 2007. As of April 2, 2001, the Fund changed its investment policy to become "non-diversified" under the Investment Company Act of 1940. Performance prior to these changes might have been different if current policies had been in effect. As a result of becoming "nondiversified", the Fund can invest a greater percentage of assets in any single security. This practice could increase the risk of investing in the Fund because it may own fewer securities. While the Fund's value-oriented approach is intended to limit risks, the Fund, with its concentration in a limited number of securities, may be more affected by any single economic, political or regulatory development than a more diversified mutual fund.

10  The Fund was relatively small during the period shown. The same techniques used to produce returns in a small fund may not work to produce similar returns in a larger fund.

11  Prior to December 17, 2007 Mid Cap Growth Fund was known as the Manhattan Fund.

12  Prior to December 17, 2007 Small Cap Growth Fund was known as the Millennium Fund.

13  Prior to December 17, 2007 Small and Mid Cap Growth Fund was known as All Cap Growth Fund and invested a significant portion of its assets in large cap securities. Performance after that date reflects the current small- and mid-cap strategy.


66


Endnotes (cont'd)

14  As of December 17, 2007, the Fund changed its investment policy to become "non-diversified" under the Investment Company Act of 1940. Performance prior to this change might have been different if current policies had been in effect. As a result of becoming "non-diversified," the Fund can invest a greater percentage of assets in any single security. This practice could increase the risk of investing in the Fund because it may own fewer securities. Although the Fund has a policy that allows it to operate as a non-diversified investment company, on December 5, 2008, the Board adopted a policy, which cannot be changed without a shareholder vote, that the Fund will invest its portfolio so as to meet the standards of a diversified investment company.

15  Because the Fund had a policy of investing mainly in large-cap stocks prior to December 2002, its performance during that time might have been different if current policies had been in effect.

16  Because the Fund had a policy of investing primarily in mid- and large-cap stocks prior to September 1998, its performance during that time might have been different if current policies had been in effect.

17  Performance from the beginning of the measurement period to June 9, 2008 for Class A and Class C of Neuberger Berman Equity Income Fund is that of the Trust Class. The performance information of the Trust Class has been adjusted to reflect the appropriate sales charge applicable to Class A and Class C shares, but has not been adjusted to take into account differences in class specific operating expenses (such as Rule 12b-1 fees). The Trust Class had lower expenses and typically higher returns than Class A or Class C.

18  Performance shown prior to December 20, 2007 for Class A and Class C, and prior to May 27, 2009 for Class R3, of Neuberger Berman International Large Cap Fund is that of the Trust Class. The performance information of the Trust Class has been adjusted to reflect the appropriate sales charge applicable to Class A and Class C shares, but has not been adjusted to take into account differences in class specific operating expenses (such as Rule 12b-1 fees). The Trust Class has lower expenses and typically higher returns than Class A, Class C or Class R3.

19  The date used to calculate Life of Fund performance for the index is the inception date of the oldest share class.

20  Prior to April 9, 2009, Neuberger Berman Large Cap Disciplined Growth Fund was known as Neuberger Berman Century Fund. From April 6, 2009 through April 8, 2009, Large Cap Disciplined Growth Fund Class A, Class C and Institutional Class were known as Century Fund Class A, Class C and Institutional Class. The inception dates for Large Cap Disciplined Growth Fund Class A, Class C and Institutional Class are April 6, 2009 and May 27, 2009 for Class R3. Performance shown prior to May 27, 2009 for Class R3, and prior to April 6, 2009 for Institutional Class, Class A and Class C of Neuberger Berman Large Cap Disciplined Growth Fund is that of Neuberger Berman Century Fund Investor Class. The performance information of the Investor Class has been adjusted to reflect the appropriate sales charge applicable to Class A and Class C shares, but has not been adjusted to take into account differences in class specific operating expenses (such as Rule 12b-1 fees). The Investor Class has lower expenses and typically higher returns than Class A, Class C or Class R3. The Institutional Class has lower expenses and typically higher returns than Investor Class.

21  Performance shown prior to May 27, 2009 for Class A, Class C and Class R3 of Neuberger Berman Guardian Fund, Neuberger Berman Mid Cap Growth Fund, Neuberger Berman Small Cap Growth Fund and Neuberger Berman Socially Responsive Fund is that of the Investor Class. The performance information of the Investor Class has been adjusted to reflect the appropriate sales charge applicable to Class A and Class C shares, but has not been adjusted to take into account differences in class specific operating expenses (such as Rule 12b-1 fees). The Investor Class has lower expenses and typically higher returns than Class A, Class C or Class R3

22  Performance shown prior to May 27, 2009 for Institutional Class of Neuberger Berman Guardian Fund is that of the Investor Class. The performance information of Institutional Class has not been adjusted to take into account differences in class specific operating expenses (such as Rule 12b-1 fees). Institutional Class has lower expenses and typically higher returns than Investor Class.

For more complete information on any of the Neuberger Berman Equity Funds, call Neuberger Berman Management LLC at (800) 877-9700, or visit our website at www.nb.com.


67


Glossary of Indices

S&P 500 Index:   The S&P 500 Index is widely regarded as the standard for measuring the performance of large-cap stocks traded on U.S. markets and includes a representative sample of leading companies in leading industries.  
Russell 1000®Index:   Measures the performance of the 1,000 largest companies in the Russell 3000® Index (which measures the performance of the 3,000 largest U.S. companies based on total market capitalization). The Russell 1000 Index represents approximately 92% of the U.S. market.  
Russell 1000®Value Index:   Measures the performance of those Russell 1000® Index companies with lower price-to-book ratios and lower forecasted growth rates.  
Russell 1000®Growth Index:   Measures the performance of those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth rates.  
Russell 2000®Index:   An unmanaged index consisting of securities of the 2,000 issuers having the smallest capitalization in the Russell 3000® Index, representing approximately 8% of the Russell 3000 Index total market capitalization. As of the latest reconstitution, the smallest company's market capitalization was approximately $78 million.  
Russell 2000®Growth Index:   Measures the performance of those Russell 2000® Index companies with higher price-to-book ratios and higher forecasted growth rates.  
Russell 2500TMGrowth Index:   Measures the performance of those Russell 2500TM Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2500 Index measures the performance of the 2,500 smallest companies in the Russell 3000®, which represents approximately 18% of the total market capitalization of the Russell 3000 Index. As of the latest reconstitution, the weighted average market capitalization was approximately $1.7 billion; the median market capitalization was approximately $425 million. The largest company in the index had an approximate market capitalization of $3.9 billion.  
Russell Midcap®Index:   Measures the performance of the 800 smallest companies in the Russell 1000® Index.  
Russell Midcap®Growth Index:   An unmanaged index that measures the performance of those Russell Midcap® Index companies (the 800 smallest companies in the Russell 1000® Index) with higher price-to-book ratios and higher forecasted growth rates.  
Russell Midcap®Value Index:   An unmanaged index that measures the performance of those Russell Midcap® Index companies (the 800 smallest companies in the Russell 1000® Index) with lower price-to-book ratios and lower forecasted growth rates.  
FTSE NAREIT Equity REITs Index:   The FTSE NAREIT Equity REITs Index tracks the performance of all Equity REITs currently listed on the New York Stock Exchange, the NASDAQ National Market System and the American Stock Exchange. REITs are classified as Equity if 75% or more or their gross invested Book assets are invested directly or indirectly in equity of commercial properties.  
MSCI EAFE®Index:   Also known as the Morgan Stanley Capital International Europe, Australasia, Far East Index. An unmanaged index of over 1,000 foreign stock prices. The index is translated into U.S. dollars.  
MSCI Emerging Markets Index:   A free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. As of June 2009 the MSCI Emerging Markets Index consisted of the following 22 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico, Morocco, Peru, Philippines,Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.  

 


68


Glossary of Indices (cont'd)

MSCI World Index:   A free float-adjusted market capitalization index that is designed to measure global developed market equity performance. As of June 2006 the MSCI World Index consisted of the following 23 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States.  
HSBC Global Climate Change Index:   The index is rule-based and uses a modified market capitalization approach that takes into account free float and revenues associated with climate change-related businesses. Recognizing that there is also a growing number of integrated players exposed to this theme, individual companies are weighted in the index according to their exposure to climate change. Exposure is defined as the percentage of overall revenues that are attributable to reducing emissions, reacting to the effects of climate change or adapting to climate change. The revenue data are based on HSBC's analysis of publicly available information and data from an external consultant specializing in renewable energy, low carbon technology and the carbon markets. Once a company has been ascribed an exposure factor and it forms part of the selection universe, HSBC monitors and modifies its climate change-related revenues, if necessary, on an annual basis.  

 

Please note that indices do not take into account any fees and expenses or any tax consequences 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 LLC and include reinvestment of all dividends and capital gain distributions. The Funds may invest in securities not included in the above-described indices.


69


Information About Your Fund's Expenses

These tables are designed to provide information regarding costs related to your investments. All mutual funds incur operating expenses, which include management fees, fees for administrative services and costs of shareholder reports, among others. The following examples are based on an investment of $1,000 made at the beginning of the six month period ended August 31, 2009 and held for the entire period. The tables illustrate the fund's costs in two ways:

Actual Expenses and Performance:   The first section of the table provides information about actual account values and actual expenses in dollars, based on the fund's actual performance during the period. You may use the information in this line, together with the amount you invested, to estimate the expenses you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section of the table under the heading entitled "Expenses Paid During the Period" to estimate the expenses you paid over the period.  
Hypothetical Example for
Comparison Purposes:		   The second section of the table provides information about hypothetical account values and hypothetical expenses based on the fund's actual expense ratio and an assumed rate of return at 5% per year before expenses. This return is not the fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in these funds versus other funds. To do so, compare the expenses shown in this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.  

 

Please note that the expenses in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees. Therefore, the information under the heading "Hypothetical (5% annual return before expenses)" is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.


70


Expense Information as of 8/31/09 (Unaudited)

Neuberger Berman Equity Funds  
    ACTUAL   HYPOTHETICAL (5% ANNUAL RETURN BEFORE EXPENSES)(4)   
    Beginning
Account
Value
3/1/09		   Ending
Account
Value
8/31/09		   Expenses Paid
During the
Period(1)
3/1/09 - 8/31/09		   Expense
Ratio		   Beginning
Account
Value
3/1/09		   Ending
Account
Value
8/31/09		   Expenses Paid
During the
Period(1)
3/1/09 - 8/31/09		   Expense
Ratio		  
Climate Change Fund  
Institutional Class   $ 1,000.00     $ 1,361.50     $ 5.83       .98 %   $ 1,000.00     $ 1,020.27     $ 4.99       .98 %  
Class A   $ 1,000.00     $ 1,360.10     $ 7.32       1.23 %   $ 1,000.00     $ 1,019.00     $ 6.26       1.23 %  
Class C   $ 1,000.00     $ 1,355.90     $ 11.76       1.98 %   $ 1,000.00     $ 1,015.22     $ 10.06       1.98 %  
Emerging Markets Equity Fund  
Institutional Class   $ 1,000.00     $ 1,703.00     $ 8.72       1.28 %   $ 1,000.00     $ 1,018.75     $ 6.51       1.28 %  
Class A   $ 1,000.00     $ 1,701.50     $ 10.42       1.53 %   $ 1,000.00     $ 1,017.49     $ 7.78       1.53 %  
Class C   $ 1,000.00     $ 1,696.20     $ 15.49       2.28 %   $ 1,000.00     $ 1,013.71     $ 11.57       2.28 %  
Equity Income Fund  
Institutional Class   $ 1,000.00     $ 1,298.00     $ 4.63       .80 %   $ 1,000.00     $ 1,021.17     $ 4.08       .80 %  
Class A   $ 1,000.00     $ 1,296.70     $ 6.72       1.16 %   $ 1,000.00     $ 1,019.36     $ 5.90       1.16 %  
Class C   $ 1,000.00     $ 1,292.30     $ 11.04       1.91 %   $ 1,000.00     $ 1,015.58     $ 9.70       1.91 %  
Focus Fund  
Investor Class   $ 1,000.00     $ 1,413.10     $ 6.14       1.01 %   $ 1,000.00     $ 1,020.11     $ 5.14       1.01 %  
Trust Class   $ 1,000.00     $ 1,411.60     $ 7.60       1.25 %   $ 1,000.00     $ 1,018.90     $ 6.36       1.25 %  
Advisor Class   $ 1,000.00     $ 1,409.40     $ 9.11       1.50 %   $ 1,000.00     $ 1,017.64     $ 7.63       1.50 %  
Genesis Fund  
Investor Class   $ 1,000.00     $ 1,324.80     $ 6.33       1.08 %   $ 1,000.00     $ 1,019.76     $ 5.50       1.08 %  
Trust Class   $ 1,000.00     $ 1,324.30     $ 6.56       1.12 %   $ 1,000.00     $ 1,019.56     $ 5.70       1.12 %  
Advisor Class   $ 1,000.00     $ 1,322.30     $ 8.08       1.38 %   $ 1,000.00     $ 1,018.25     $ 7.02       1.38 %  
Institutional Class   $ 1,000.00     $ 1,326.00     $ 4.98       .85 %   $ 1,000.00     $ 1,020.92     $ 4.33       .85 %  
Guardian Fund  
Investor Class   $ 1,000.00     $ 1,338.50     $ 5.78       .98 %   $ 1,000.00     $ 1,020.27     $ 4.99       .98 %  
Trust Class   $ 1,000.00     $ 1,337.90     $ 6.78       1.15 %   $ 1,000.00     $ 1,019.41     $ 5.85       1.15 %  
Advisor Class   $ 1,000.00     $ 1,335.60     $ 8.83       1.50 %   $ 1,000.00     $ 1,017.64     $ 7.63       1.50 %  
Institutional Class(3)    $ 1,000.00     $ 1,074.10     $ 2.07       .75 %   $ 1,000.00     $ 1,011.29     $ 2.00       .75 %  
Class A(3)    $ 1,000.00     $ 1,073.60     $ 3.06       1.11 %   $ 1,000.00     $ 1,010.34     $ 2.97       1.11 %  
Class C(3)    $ 1,000.00     $ 1,070.60     $ 5.12       1.86 %   $ 1,000.00     $ 1,008.34     $ 4.96       1.86 %  
Class R3(3)    $ 1,000.00     $ 1,072.70     $ 3.75       1.36 %   $ 1,000.00     $ 1,009.67     $ 3.63       1.36 %  
International Fund  
Investor Class   $ 1,000.00     $ 1,432.50     $ 8.58       1.40 %   $ 1,000.00     $ 1,018.15     $ 7.12       1.40 %  
Trust Class   $ 1,000.00     $ 1,431.40     $ 9.25       1.51 %   $ 1,000.00     $ 1,017.59     $ 7.68       1.51 %  
International Institutional Fund  
Institutional Class   $ 1,000.00     $ 1,450.90     $ 4.94       .80 %   $ 1,000.00     $ 1,021.17     $ 4.08       .80 %  
International Large Cap Fund  
Trust Class   $ 1,000.00     $ 1,426.30     $ 7.71       1.26 %   $ 1,000.00     $ 1,018.85     $ 6.41       1.26 %  
Institutional Class   $ 1,000.00     $ 1,426.30     $ 5.57       .91 %   $ 1,000.00     $ 1,020.62     $ 4.63       .91 %  
Class A   $ 1,000.00     $ 1,426.00     $ 7.77       1.27 %   $ 1,000.00     $ 1,018.80     $ 6.46       1.27 %  
Class C   $ 1,000.00     $ 1,420.60     $ 12.26       2.01 %   $ 1,000.00     $ 1,015.07     $ 10.21       2.01 %  
Class R3(3)    $ 1,000.00     $ 1,112.70     $ 4.27       1.52 %   $ 1,000.00     $ 1,009.25     $ 4.06       1.52 %  
Large Cap Disciplined Growth Fund  
Investor Class   $ 1,000.00     $ 1,296.10     $ 6.89       1.19 %   $ 1,000.00     $ 1,019.21     $ 6.06       1.19 %  
Institutional Class(2)    $ 1,000.00     $ 1,145.80     $ 3.26       .75 %   $ 1,000.00     $ 1,017.23     $ 3.07       .75 %  
Class A(2)    $ 1,000.00     $ 1,143.90     $ 4.82       1.11 %   $ 1,000.00     $ 1,015.77     $ 4.54       1.11 %  
Class C(2)    $ 1,000.00     $ 1,140.20     $ 8.07       1.86 %   $ 1,000.00     $ 1,012.73     $ 7.59       1.86 %  
Class R3(3)    $ 1,000.00     $ 1,102.40     $ 3.80       1.36 %   $ 1,000.00     $ 1,009.67     $ 3.63       1.36 %  

 


71


Expense Information as of 8/31/09 cont'd (Unaudited)

    ACTUAL   HYPOTHETICAL (5% ANNUAL RETURN BEFORE EXPENSES)(4)   
    Beginning
Account
Value
3/1/09		   Ending
Account
Value
8/31/09		   Expenses Paid
During the
Period(1)
3/1/09 - 8/31/09		   Expense
Ratio		   Beginning
Account
Value
3/1/09		   Ending
Account
Value
8/31/09		   Expenses Paid
During the
Period(1)
3/1/09 - 8/31/09		   Expense
Ratio		  
Mid Cap Growth Fund  
Investor Class   $ 1,000.00     $ 1,296.70     $ 6.60       1.14 %   $ 1,000.00     $ 1,019.46     $ 5.80       1.14 %  
Trust Class   $ 1,000.00     $ 1,295.50     $ 7.06       1.22 %   $ 1,000.00     $ 1,019.06     $ 6.21       1.22 %  
Advisor Class   $ 1,000.00     $ 1,293.70     $ 8.67       1.50 %   $ 1,000.00     $ 1,017.64     $ 7.63       1.50 %  
Institutional Class   $ 1,000.00     $ 1,299.80     $ 4.35       .75 %   $ 1,000.00     $ 1,021.42     $ 3.82       .75 %  
Class A(3)    $ 1,000.00     $ 1,093.80     $ 3.09       1.11 %   $ 1,000.00     $ 1,010.34     $ 2.97       1.11 %  
Class C(3)    $ 1,000.00     $ 1,092.10     $ 5.17       1.86 %   $ 1,000.00     $ 1,008.34     $ 4.96       1.86 %  
Class R3(3)    $ 1,000.00     $ 1,093.00     $ 3.78       1.36 %   $ 1,000.00     $ 1,009.67     $ 3.63       1.36 %  
Partners Fund  
Investor Class   $ 1,000.00     $ 1,647.90     $ 5.87       .88 %   $ 1,000.00     $ 1,020.77     $ 4.48       .88 %  
Trust Class   $ 1,000.00     $ 1,645.60     $ 6.94       1.04 %   $ 1,000.00     $ 1,019.96     $ 5.30       1.04 %  
Advisor Class   $ 1,000.00     $ 1,646.10     $ 7.94       1.19 %   $ 1,000.00     $ 1,019.21     $ 6.06       1.19 %  
Institutional Class   $ 1,000.00     $ 1,649.50     $ 4.67       .70 %   $ 1,000.00     $ 1,021.68     $ 3.57       .70 %  
Real Estate Fund  
Trust Class   $ 1,000.00     $ 1,704.70     $ 6.75       .99 %   $ 1,000.00     $ 1,020.21     $ 5.04       .99 %  
Institutional Class   $ 1,000.00     $ 1,706.50     $ 5.80       .85 %   $ 1,000.00     $ 1,020.92     $ 4.33       .85 %  
Regency Fund  
Investor Class   $ 1,000.00     $ 1,623.20     $ 8.73       1.32 %   $ 1,000.00     $ 1,018.55     $ 6.72       1.32 %  
Trust Class   $ 1,000.00     $ 1,623.50     $ 8.33       1.26 %   $ 1,000.00     $ 1,018.85     $ 6.41       1.26 %  
Select Equities Fund  
Institutional Class   $ 1,000.00     $ 1,215.70     $ 4.19       .75 %   $ 1,000.00     $ 1,021.42     $ 3.82       .75 %  
Class A   $ 1,000.00     $ 1,212.30     $ 6.69       1.20 %   $ 1,000.00     $ 1,019.16     $ 6.11       1.20 %  
Class C   $ 1,000.00     $ 1,206.70     $ 10.85       1.95 %   $ 1,000.00     $ 1,015.38     $ 9.91       1.95 %  
Small and Mid Cap Growth Fund  
Trust Class   $ 1,000.00     $ 1,287.10     $ 6.40       1.11 %   $ 1,000.00     $ 1,019.61     $ 5.65       1.11 %  
Small Cap Growth Fund  
Investor Class   $ 1,000.00     $ 1,350.10     $ 7.70       1.30 %   $ 1,000.00     $ 1,018.65     $ 6.61       1.30 %  
Trust Class   $ 1,000.00     $ 1,349.90     $ 8.29       1.40 %   $ 1,000.00     $ 1,018.15     $ 7.12       1.40 %  
Advisor Class   $ 1,000.00     $ 1,347.80     $ 9.47       1.60 %   $ 1,000.00     $ 1,017.14     $ 8.13       1.60 %  
Institutional Class   $ 1,000.00     $ 1,352.80     $ 5.34       .90 %   $ 1,000.00     $ 1,020.67     $ 4.58       .90 %  
Class A(3)    $ 1,000.00     $ 1,111.70     $ 3.54       1.26 %   $ 1,000.00     $ 1,009.94     $ 3.37       1.26 %  
Class C(3)    $ 1,000.00     $ 1,109.80     $ 5.63       2.01 %   $ 1,000.00     $ 1,007.95     $ 5.36       2.01 %  
Class R3(3)    $ 1,000.00     $ 1,111.00     $ 4.26       1.52 %   $ 1,000.00     $ 1,009.25     $ 4.06       1.52 %  
Socially Responsive Fund  
Investor Class   $ 1,000.00     $ 1,347.20     $ 5.50       .93 %   $ 1,000.00     $ 1,020.52     $ 4.74       .93 %  
Trust Class   $ 1,000.00     $ 1,345.90     $ 6.62       1.12 %   $ 1,000.00     $ 1,019.56     $ 5.70       1.12 %  
Institutional Class   $ 1,000.00     $ 1,348.00     $ 4.44       .75 %   $ 1,000.00     $ 1,021.42     $ 3.82       .75 %  
Class A(3)    $ 1,000.00     $ 1,073.30     $ 3.06       1.11 %   $ 1,000.00     $ 1,010.34     $ 2.97       1.11 %  
Class C(3)    $ 1,000.00     $ 1,071.70     $ 5.12       1.86 %   $ 1,000.00     $ 1,008.34     $ 4.96       1.86 %  
Class R3(3)    $ 1,000.00     $ 1,072.50     $ 3.75       1.36 %   $ 1,000.00     $ 1,009.67     $ 3.63       1.36 %  

 

(1)  For each class of the fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown), unless otherwise indicated.

(2)  For each class of the fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 148/365 (to reflect the period shown of April 6, 2009 to August 31, 2009).

(3)  For each class of the fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 97/365 (to reflect the period shown of May 27, 2009 to August 31, 2009).

(4)  Hypothetical 5% annual return before expenses is calculated by multiplying the number of days in the most recent period divided by 365.


72


Schedule of Investments Climate Change Fund

TOP TEN EQUITY HOLDINGS

      Country   Industry    
  1     Itron, Inc.   United States   Electronic Equipment & Instruments     3.1 %  
  2     ITC Holdings   United States   Electric Utilities     2.6 %  
  3     FPL Group   United States   Electric Utilities     2.4 %  
  4     The Williams Companies   United States   Oil & Gas Storage & Transportation     2.4 %  
  5     MYR Group   United States   Construction & Engineering     2.2 %  
  6     Northeast Utilities   United States   Electric Utilities     2.1 %  
  7     Gamesa Corporacion Tecnologica   Spain   Heavy Electrical Equipment     2.0 %  
  8     First Solar   United States   Electrical Components & Equipment     2.0 %  
  9     Covanta Holding   United States   Environmental & Facilities Services     1.8 %  
  10     Shaw Group   United States   Construction & Engineering     1.7 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (99.0%)  
Application Software (0.5%)  
SAP AG     300     $ 15    
Auto Parts & Equipment (4.0%)  
BorgWarner, Inc.     415       12    
Fuel Systems
Solutions*		     1,100       37    
Johnson Controls     900       22    
Westport
Innovations*		     5,000       50    
      121    
Coal & Consumable Fuels (0.5%)  
Cameco Corp.     600       16    
Commodity Chemicals (1.1%)  
Calgon Carbon*     2,300       33    
Communications Equipment (1.7%)  
Tandberg ASA     2,400       50    
Computer Hardware (0.8%)  
IBM     200       24    
Construction & Engineering (6.8%)  
Foster Wheeler*     600       17    
Jacobs Engineering
Group*		     300       13    
Layne Christensen*     700       18    
MYR Group*     3,200       66    
Quanta Services*     1,800       40    
Shaw Group*     1,800       53    
      207    
Construction & Farm Machinery (0.6%)  
Deere & Co.     400       17    
Diversified Support Services (1.5%)  
EnerNOC, Inc.*     1,700       46    
Electric Utilities (10.4%)  
Entergy Corp.     515       40    
Exelon Corp.     575       29    
FirstEnergy Corp.     706       32    
FPL Group     1,295       73    
ITC Holdings     1,670       78    
Northeast Utilities     2,700       64    
      316    

 

    Number
of Shares		   Value†
 (000's)		  
Electrical Components & Equipment (12.1%)  
American
Superconductor*		     500     $ 16    
Cooper Industries
Class A		     404       13    
Emerson Electric     400       15    
Ener1, Inc.*     4,700       30    
EnerSys*     2,000       40    
First Solar*     500       61    
FuelCell Energy*     3,600       13    
General Cable*     400       14    
Q Cells*     1,135       17    
Roper Industries     605       29    
Sunpower Corp
Class A*		     1,200       30    
Suntech Power
Holdings*		     2,400       34    
Trina Solar*     600       16    
Yingli Green Energy*     3,600       39    
      367    
Electronic Equipment & Instruments (3.9%)  
Itron, Inc.*     1,718       94    
Wasion Group
Holdings		     25,000       23    
      117    
Electronic Manufacturing Services (1.1%)  
Echelon Corp.*     1,000       11    
Maxwell
Technologies*		     1,600       22    
      33    
Environmental & Facilities Services (4.8%)  
China Everbright
International		     90,000       33    
Covanta Holding*     3,075       55    
EnergySolutions Inc.     1,600       14    
Tetra Tech*     1,500       45    
      147    

 

    Number
of Shares		   Value†
 (000's)		  
Fertilizers & Agricultural Chemicals (1.5%)  
Monsanto Co.     189     $ 16    
Syngenta AG ADR     600       28    
      44    
Forest Products (0.5%)  
Weyerhaeuser Co.     400       15    
Gas Utilities (3.7%)  
EQT Corp.     700       28    
New Jersey Resources     400       15    
ONEOK, Inc.     1,100       37    
Questar Corp.     413       14    
South Jersey
Industries		     500       17    
      111    
Heavy Electrical Equipment (4.4%)  
ABB Ltd.     838       16    
Alstom S.A.     400       28    
Gamesa Corporacion
Tecnologica		     2,800       61    
Vestas Wind Systems*     400       29    
      134    
Hypermarkets & Super Centers (0.5%)  
Wal-Mart Stores     300       15    
Independent Power Producers & Energy Traders (7.5%)  
AES Corp.*     1,100       15    
Calpine Corp.*     2,988       35    
Constellation Energy
Group		     800       25    
EDP Renovaveis*     3,400       34    
Iberdrola Renovables     9,700       44    
Magma Energy*     16,000       28    
Ormat Technologies     1,300       47    
      228    
Industrial Conglomerates (1.1%)  
McDermott
International*		     650       16    
Siemens AG     200       17    
      33    

 


See Notes to Schedule of Investments

73


    Number
of Shares		   Value†
 (000's)		  
Industrial Gases (0.5%)  
Praxair, Inc.     200     $ 15    
Industrial Machinery (5.5%)  
Badger Meter     800       29    
Danaher Corp.     300       18    
Energy Recovery*     5,000       26    
ESCO Technologies*     800       30    
Kaydon Corp.     395       13    
SPX Corp.     600       33    
Valmont Industries     200       17    
      166    
IT Consulting & Other Services (0.6%)  
Telvent GIT     700       19    
Multi-Utilities (4.5%)  
Gdf Suez     700       30    
National Grid ADR     370       18    
PG&E Corp.     400       16    
Suez Environnement
SA ADR		     1,900       19    
Veolia Environnement
ADR		     1,500       52    
      135    
Oil & Gas Exploration & Production (4.0%)  
Denbury Resources*     1,400       21    
EOG Resources     200       15    
Range Resources     850       41    
Southwestern Energy*     700       26    
XTO Energy     500       19    
      122    
Oil & Gas Refining & Marketing (1.1%)  
Clean Energy Fuels*     2,600       33    
Oil & Gas Storage & Transportation (3.4%)  
Enbridge Inc.     400       15    
Spectra Energy     800       15    
The Williams
Companies		     4,400       72    
      102    
Railroads (0.5%)  
Norfolk Southern     300       14    
Semiconductor Equipment (0.4%)  
MEMC Electronic
Materials*		     800       13    
Semiconductors (0.6%)  
Cree, Inc.*     500       19    
Specialized Finance (1.7%)  
Climate Exchange*     2,200       33    
IntercontinentalExchange
Inc.*		     200       19    
      52    

 

    Number
of Shares		   Value†
 (000's)		  
Specialized REITS (0.5%)  
Plum Creek Timber
Company		     500     $ 15    
Specialty Chemicals (2.1%)  
Nalco Holding     1,000       18    
Rockwood Holdings*     2,331       47    
      65    
Steel (1.0%)  
Allegheny
Technologies		     1,000       30    
Systems Software (0.6%)  
VMware Inc.*     500       18    
Water Utilities (3.0%)  
American Water
Works		     1,800       36    
Aqua America     1,700       29    
Companhia de Saneamento
Basico do Estado de Sao
Paulo		     700       25    
      90    
Total Common Stocks
(Cost $2,588)		             2,997    
Short-Term Investments (2.0%)  
State Street
Institutional
Liquid Reserves
Fund Institutional
Class
(Cost $62)		     62,467       62    
Total Investments##(101.0%)
(Cost $2,650)		             3,059    
Liabilities, less cash,
receivables and
other assets [(1.0%)]		             (30 )  
Total Net Assets (100.0%)           $ 3,029    

 


See Notes to Schedule of Investments

74


Schedule of Investments Emerging Markets Equity Fund

TOP TEN EQUITY HOLDINGS

      Country   Industry    
  1     Petroleo Brasileiro ADR   Brazil   Oil, Gas & Consumable Fuels     3.5 %  
  2     China Mobile   China   Wireless Telecommunication Services     2.4 %  
  3     Samsung Electronics  
Korea		   Equipment     2.0 %  
  4     Vale SA ADR   Brazil   Metals & Mining     2.0 %  
  5     America Movil ADR   Mexico   Wireless Telecommunication Services     1.8 %  
              Semiconductors & Semiconductor        
  6     Taiwan Semiconductor Manufacturing ADR   Taiwan, Province Of China   Equipment     1.8 %  
  7     Bank of China, H Shares   China   Commercial Banks     1.7 %  
  8     MTN Group   South Africa   Wireless Telecommunication Services     1.6 %  
  9     Industrial & Commercial Bank of
China, H Shares		  
China		  
Commercial Banks		     1.6 %  
  10     Elbit Systems   Israel   Aerospace & Defense     1.6 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (79.6%)  
Brazil (3.9%)  
Cia Brasileira de Meios de
Pagamento		     4,830     $ 42    
Diagnosticos da
America*		     2,675       60    
Multiplan Empreendimentos
Imobiliarios		     5,500       75    
PDG Realty
Empreendimentos
E Participacoes		     4,305       63    
      240    
Chile (1.1%)  
Sociedad Quimica
y Minera de Chile
ADR, B Shares		     1,870       65    
China (16.5%)  
Bank of China,
H Shares		     214,400       104    
China Mobile     14,750       143    
China Oilfield Services,
H Shares		     68,000       59    
China South Locomotive &
Rolling Stock,
H Shares		     78,600       47    
China Vanke,
B Shares		     39,800       46    
Chongqing Machinery &
Electric, H Shares*		     244,600       45    
CNOOC Ltd.     35,000       46    
GOME Electrical Appliances
Holdings*		     123,654       33    
Industrial & Commercial
Bank of China,
H Shares		     142,400       97    
Inspur International     272,900       41    
Maanshan Iron & Steel,
H Shares*		     108,900       67    
NetEase.com, Inc.
ADR*		     700       29    

 

    Number
of Shares		   Value†
 (000's)		  
Travelsky Technology,
H Shares		     61,200     $ 40    
Want Want China
Holdings		     72,300       38    
Wasion Group
Holdings		     68,200       62    
Zhaojin Mining
Industry, H Shares		     21,000       30    
Zijin Mining Group,
H Shares		     48,400       41    
ZTE Corp., H Shares     8,600       40    
      1,008    
Czech Republic (0.5%)  
Telefonica O2 Czech
Republic		     1,090       30    
Egypt (0.5%)  
Eastern Tobacco     1,350       33    
India (2.6%)  
State Bank of India
GDR		     960       71    
Sterlite Industries (India)
ADR*		     6,400       86    
      157    
Indonesia (2.0%)  
PT Astra Agro Lestari
Tbk		     16,500       35    
PT United Tractors
Tbk		     65,235       87    
      122    
Israel (5.3%)  
Elbit Systems     1,460       95    
Israel Chemicals     5,320       59    
Makhteshim-Agan
Industries		     6,390       29    
Mizrahi Tefahot
Bank*		     7,060       54    
Teva Pharmaceutical
Industries ADR		     1,650       85    
      322    

 

    Number
of Shares		   Value†
 (000's)		  
Korea (10.7%)  
Dongbu Insurance     1,490     $ 45    
Doosan Heavy Industries &
Construction		     1,285       65    
HNK Machine Tool*     1,065       40    
Hyundai Mobis     715       76    
KB Financial Group*     1,485       61    
LG Electronics     330       38    
NHN Corp.*     285       39    
Samsung Electronics     200       124    
Samsung SDI     365       43    
Taewoong Co.     830       54    
Woongjin Thinkbig     4,170       67    
      652    
Malaysia (1.1%)  
Top Glove     34,400       68    
Mexico (3.7%)  
America Movil ADR     2,450       111    
Empresas ICA SAB
de C.V.*		     31,400       66    
Fomento Economico
Mexicano ADR,
B Shares		     1,340       49    
      226    
Nigeria (1.0%)  
Guaranty Trust
Bank		     166,595       15    
Guaranty Trust Bank
GDR		     9,280       46    
      61    
Philippines (2.1%)  
Energy
Development		     651,200       60    
International Container
Terminal Services		     158,000       70    
      130    
Poland (1.0%)  
PBG SA*     755       59    

 


See Notes to Schedule of Investments

75


    Number
of Shares		   Value†
 (000's)		  
Russia (4.0%)  
Gazprom ADR     4,265     $ 91    
Magnit GDR     4,310       49    
Mobile TeleSystems
ADR		     980       43    
Rosneft Oil GDR*     9,035       58    
      241    
South Africa (6.2%)  
ABSA Group     2,895       47    
AngloGold Ashanti     980       37    
BHP Billiton     3,010       77    
Discovery Holdings     9,810       35    
MTN Group     5,960       98    
Raubex Group     12,425       41    
Tiger Brands     2,230       45    
      380    
Sweden (1.0%)  
Oriflame Cosmetics
SDR		     1,245       60    
Taiwan, Province Of China (10.0%)  
Chroma Ate     33,358       45    
Chunghwa Telecom
ADR		     2,300       39    
Hung Poo Real Estate
Development		     58,100       67    
Powertech
Technology		     26,764       73    
Simplo Technology     9,620       44    
Taiwan Semiconductor
Manufacturing
ADR		     60,238       108    
TXC Corp.     42,945       52    
Wistron Corp.     28,599       56    
WPG Holdings     58,360       75    
Yuanta Financial
Holding		     87,015       54    
      613    
Thailand (3.0%)  
Banpu Public     4,500       53    
Kasikornbank PCL     31,300       68    
Thanachart Capital
PCL		     138,700       60    
      181    
Turkey (2.5%)  
BIM Birlesik
Magazalar		     1,570       59    
Turkcell Iletisim Hizmetleri
ADR		     2,700       43    
Turkiye Garanti
Bankasi*		     14,410       53    
      155    
United Kingdom (0.9%)  
Tullow Oil     3,060       54    
Total Common Stocks
(Cost $3,724)		             4,857    

 

    Number
of Shares		   Value†
 (000's)		  
Preferred Stocks (9.2%)  
Brazil (9.2%)  
Banco Do Estado do Rio
Grande do Sul		     16,900     $ 93    
Companhia de Bebidas
das Americas ADR		     710       53    
Petroleo Brasileiro
ADR		     6,340       211    
Refinaria de Petroleo
Ipiranga*^^ 		     173       0    
Ultrapar Participacoes
ADR		     2,070       76    
Vale SA ADR     7,125       123    
Total Preferred Stocks
(Cost $409)		             556    
Participatory Notes (5.2%)  
India (5.2%)  
Bharat Heavy Electricals
(issuer JP Morgan Int'l
Derivatives), Expiration
Date 4/29/2013*µµ 		     1,005       48    
Cairn India (issuer
JP Morgan Int'l
Derivatives), Expiration
Date 1/15/2013*µµ 		     14,495       78    
Grasim Industry (issuer
JP Morgan Int'l
Derivatives), Expiration
Date 3/10/2014*µµ 		     905       50    
Hero Honda Motors
(issuer JP Morgan Int'l
Derivatives), Expiration
Date 11/13/2014*µµ 		     1,340       41    
Punjab National Bank
(issuer JP Morgan Chase
Int'l Derivatives),
Expiration Date
10/17/2013*µµ 		     3,156       44    
Unitech Ltd. (issuer
JP Morgan Int'l
Derivatives), Expiration
Date 9/9/2018*µµ 		     28,525       58    
Total Participatory Notes
(Cost $234)		             319    
    Principal
Amount		      
Convertible Bonds (0.1%)  
Brazil (0.1%)  
PDG Realty
Empreendimentos
E Participacoes,
Floating Rate
Guaranteed Notes,
1.00% due
10/15/09µ^^
(Cost $5)		   $ 10,000       8    

 

    Number
of Shares		   Value†
 (000's)		  
Short-Term Investments (2.6%)  
State Street
Institutional
Liquid Reserves
Fund Institutional
Class
(Cost $161)		     161,305     $ 161    
Total Investments##(96.7%)
(Cost $4,533)		         5,901    
Cash, receivables
and other assets,
less liabilities (3.3%)		         204    
Total Net Assets (100.0%)       $ 6,105    

 


See Notes to Schedule of Investments

76


SUMMARY SCHEDULE OF INVESTMENTS BY INDUSTRY EMERGING MARKETS EQUITY FUND

Industry   Investments at
Value†
(000's omitted)		   Percentage of
Net Assets		  
Commercial Banks   $ 709       11.6 %  
Oil, Gas & Consumable Fuels     535       8.8 %  
Metals & Mining     461       7.6 %  
Wireless Telecommunication Services     438       7.2 %  
Diversified Financial Services     373       6.1 %  
Electronic Equipment, Instruments & Components     318       5.2 %  
Semiconductors & Semiconductor Equipment     305       5.0 %  
Construction & Engineering     231       3.8 %  
Machinery     228       3.7 %  
Real Estate Management & Development     188       3.1 %  
Chemicals     153       2.5 %  
Food Products     118       1.9 %  
Household Durables     109       1.8 %  
Food & Staples Retailing     108       1.8 %  
Beverages     102       1.7 %  
Computers & Peripherals     100       1.6 %  
Aerospace & Defense     95       1.6 %  
Pharmaceuticals     85       1.4 %  
IT Services     82       1.3 %  
Insurance     80       1.3 %  
Auto Components     76       1.2 %  
Transportation Infrastructure     70       1.1 %  
Diversified Telecommunication Services     69       1.1 %  
Internet Software & Services     68       1.1 %  
Health Care Equipment & Supplies     68       1.1 %  
Media     67       1.1 %  
Personal Products     60       1.0 %  
Health Care Providers & Services     60       1.0 %  
Independent Power Producers & Energy Traders     60       1.0 %  
Consumer Finance     60       1.0 %  
Energy Equipment & Services     59       1.0 %  
Integrated Oil & Gas     54       0.9 %  
Industrial Conglomerates     45       0.7 %  
Communications Equipment     40       0.7 %  
Specialty Retail     33       0.5 %  
Tobacco     33       0.5 %  
Other Assets—Net     365       6.0 %  
    $ 6,105       100.0 %  

 


See Notes to Schedule of Investments

77


Schedule of Investments Equity Income Fund

TOP TEN EQUITY HOLDINGS

  1     Marsh & McLennan     2.2 %  
  2     Diageo PLC ADR     2.1 %  
  3     AvalonBay Communities     2.0 %  
  4     Total SA ADR     1.9 %  
  5     Potlatch Corp.     1.9 %  
  6     AMB Property     1.9 %  
  7     Norfolk Southern     1.9 %  
  8     FPL Group     1.9 %  
  9     Penn West Energy Trust     1.9 %  
  10     TECO Energy     1.9 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (62.7%)  
Beverages (2.1%)  
Diageo PLC ADR‡‡      22,200     $ 1,377    
Capital Markets (1.3%)  
Apollo Investment     90,000       833    
Electric Utilities (7.4%)  
Duke EnergyØØ      19,800       307    
Exelon Corp.‡‡ØØ      24,000       1,200    
FPL Group‡‡      22,000       1,236    
Northeast Utilities     46,600       1,109    
Progress Energy     27,000       1,067    
      4,919    
Energy Equipment & Services (1.0%)  
Cathedral Energy Services
Income Trust		     231,200       691    
Food & Staples Retailing (1.0%)  
Safeway Inc.‡‡      33,400       636    
Food Products (1.1%)  
Unilever NV     26,400       737    
Insurance (2.2%)  
Marsh &
McLennan‡‡ 		     60,600       1,427    
Media (1.8%)  
World Wrestling
Entertainment		     82,200       1,172    
Metals & Mining (2.3%)  
Franco-Nevada
Corp.		     25,800       664    
Royal Gold, Inc.‡‡      22,500       893    
      1,557    
Multi-Utilities (4.7%)  
NSTAR     34,000       1,076    
TECO Energy     92,000       1,225    
Xcel EnergyØØ      42,000       830    
      3,131    
Mutual Funds (1.2%)  
iShares iBoxx High
Yield Corporate
Bond Fund		     9,850       811    
Oil, Gas & Consumable Fuels (11.6%)  
ARC Energy Trust     75,000       1,183    
Canadian Oil Sands     2,000       50    
Canadian Oil Sands
Trust		     46,000       1,157    

 

    Number
of Shares		   Value†
 (000's)		  
Enbridge Energy
Management*		     24,713     $ 1,041    
Kinder Morgan
Management*		     13,500       639    
Penn West Energy
Trust		     96,100       1,233    
Spectra Energy‡‡ØØ      58,100       1,093    
Total SA ADR     22,400       1,283    
      7,679    
Pharmaceuticals (1.5%)  
Johnson &
Johnson‡‡ 		     16,000       967    
Real Estate Investment Trusts (15.2%)  
AMB Property     55,000       1,256    
American Campus
Communities‡‡ 		     45,800       1,191    
AvalonBay
Communities‡‡ 		     20,400       1,314    
Digital Realty
Trust‡‡ 		     17,000       741    
GZI REIT     2,862,000       1,015    
Health Care REIT‡‡      13,500       577    
Potlatch Corp.     44,000       1,280    
Rayonier Inc.     14,500       623    
Realty Income‡‡      42,900       1,096    
Ventas, Inc.‡‡      25,500       1,000    
      10,093    
Road & Rail (1.9%)  
Norfolk Southern‡‡      27,000       1,239    
Semiconductors & Semiconductor
Equipment (1.6%)		  
Microchip
Technology		     40,000       1,062    
Thrifts & Mortgage Finance (1.2%)  
New York Community
Bancorp		     75,100       799    
Tobacco (1.8%)  
Philip Morris
International‡‡ 		     26,400       1,207    
Water Utilities (0.2%)  
California Water Service
Group		     3,000       112    
Wireless Telecommunication Services
(1.6%)		  
China Mobile ADR     21,000       1,034    
Total Common Stocks
(Cost $40,077)		             41,483    

 

    Number
of Shares		   Value†
 (000's)		  
Convertible Preferred Stocks (4.3%)  
Bunge Ltd.     13,200     $ 1,181    
Freeport-McMoRan
Copper & Gold		     6,300       602    
Vale Capital II     18,000       1,071    
Total Convertible Preferred Stocks
(Cost $2,685)		             2,854    
    Principal
Amount		      
Convertible Bonds (21.7%)  
Allied Waste
Industries, Inc.,
Senior
Subordinated
Debentures,
4.25%, due
4/15/34		   $ 1,405,000       1,405    
Bill Barrett Corp.,
Senior
Unsecured
Notes, 5.00%,
due 3/15/28		     850,000       785    
Carnival Corp.,
Guaranteed
Notes, 0.50%,
due 10/29/09		     1,000,000       658    
Covanta Holding
Corp., Senior
Unsecured
Notes, 1.00%,
due 2/1/27		     1,000,000       895    
Goldcorp, Inc.,
Senior Notes,
2.00%, due
8/1/14ñ 		     500,000       523    
Iconix Brand
Group, Inc.,
Senior
Subordinated
Notes, 1.88%,
due 6/30/12		     1,000,000       915    
Integra
Lifesciences
Holdings Corp.,
Guaranteed
Notes,
2.38%, due
6/1/12ñ 		     500,000       441    

 


See Notes to Schedule of Investments

78


   
Principal
Amount		   Value†
 (000's)		  
International
Game
Technology,
Senior
Unsecured
Notes, 2.60%,
due 12/15/36		   $ 825,000     $ 825    
Kinross Gold
Corp., Senior
Unsecured
Notes, 1.75%,
due 3/15/28		     750,000       756    
Pacific Rubiales
Energy Corp.,
Subordinated
Debentures,
8.00%, due
8/29/13		     600,000       660    
Patriot Coal
Corp., Senior
Unsecured
Notes, 3.25%,
due 5/31/13ñ 		     1,000,000       755    
Rayonier TRS
Holdings, Inc.,
Guaranteed
Notes, 3.75%,
due 10/15/12		     500,000       524    
Rayonier TRS
Holdings, Inc.,
Guaranteed
Notes, 4.50%,
due 8/15/15ñ 		     250,000       271    
Sino-Forest Corp.,
Guaranteed
Notes, 5.00%,
due 8/1/13ñ 		     750,000       731    
St. Mary Land &
Exploration Co.,
Senior
Unsecured
Notes, 3.50%,
due 4/1/27		     1,095,000       1,024    
SunPower Corp.,
Senior
Unsecured
Debentures,
0.75%, due
8/1/27		     700,000       658    
Trinidad Energy
Services Income
Trust, Unsecured
Subordinated
Debentures,
7.75%, due
7/31/12		     650,000       572    
Verisign, Inc.,
Junior
Subordinated
Debentures,
3.25%, due
8/15/37		     1,150,000       949    

 

   
Principal
Amount		   Value†
 (000's)		  
Vornado Realty
Trust,
Guaranteed
Notes, 3.63%,
due 11/15/26		   $ 1,100,000     $ 1,046    
Total Convertible Bonds
(Cost $13,669)		             14,393    
Corporate Debt Securities (0.4%)  
Martin Marietta
Materials, Inc.,
Floating Rate
Senior
Unsecured
Notes, 0.64%
due 10/30/09µ
(Cost $242)		     250,000       248    
    Number
of Shares		      
Short-Term Investments (8.7%)  
State Street
Institutional
Liquid Reserves
Fund Institutional
Class
(Cost $5,780)		     5,780,444       5,780    
Total Investments##(97.8%)
(Cost $62,453)		             64,758    
Cash, receivables
and other assets,
less liabilities‡‡(2.2%)		             1,414    
Total Net Assets (100.0%)           $ 66,172    

 


See Notes to Schedule of Investments

79


Schedule of Investments Focus Fund

TOP TEN EQUITY HOLDINGS

  1     J.P. Morgan Chase     5.5 %  
  2     Occidental Petroleum     5.2 %  
  3     XTO Energy     5.0 %  
  4     The Bank of New York Mellon     4.7 %  
  5     Covidien PLC     4.4 %  
  6     Rockwell Automation     4.1 %  
  7     Intel Corp.     3.9 %  
  8     Microsoft Corp.     3.8 %  
  9     Ingersoll-Rand PLC     3.8 %  
  10     Hewlett-Packard     3.7 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (96.6%)  
Beverages (3.0%)  
PepsiCo, Inc.     300,000     $ 17,001    
Biotechnology (5.3%)  
Amgen Inc.*     185,000       11,052    
Genzyme Corp.*È      350,000       19,498    
      30,550    
Capital Markets (4.7%)  
The Bank of
New York MellonÈ 		     910,000       26,945    
Communications Equipment (5.0%)  
Cisco Systems*     715,000       15,444    
QUALCOMM Inc.     285,000       13,230    
      28,674    
Computers & Peripherals (5.5%)  
Hewlett-Packard     480,000       21,547    
IBM     85,000       10,034    
      31,581    
Diversified Financial Services (5.5%)  
J.P. Morgan Chase     725,000       31,508    
Electric Utilities (3.3%)  
Exelon Corp.     380,000       19,008    
Electrical Equipment (6.9%)  
ABB Ltd.È      850,000       16,295    
Rockwell
Automation		     565,000       23,645    
      39,940    
Food & Staples Retailing (5.9%)  
CVS Corp.     560,000       21,011    
Wal-Mart Stores     250,000       12,718    
      33,729    
Food Products (0.8%)  
Unilever NV     165,000       4,608    
Health Care Equipment & Supplies
(4.4%)		  
Covidien PLC     640,000       25,325    
Hotels, Restaurants & Leisure (1.4%)  
Brinker
International		     565,000       8,226    
Household Products (2.6%)  
Energizer
Holdings*		     225,000       14,722    
Insurance (2.1%)  
Willis Group
Holdings		     465,000       11,992    

 

    Number
of Shares		   Value†
 (000's)		  
IT Services (1.7%)  
Accenture Ltd.     290,000     $ 9,570    
Life Science Tools & Services (3.6%)  
Thermo Fisher
Scientific*		     460,000       20,797    
Machinery (3.8%)  
Ingersoll-Rand PLC     700,000       21,623    
Oil, Gas & Consumable Fuels (13.9%)  
Cabot Oil & Gas     190,000       6,697    
Occidental
Petroleum		     410,000       29,971    
Range ResourcesÈ      305,000       14,753    
XTO Energy     745,000       28,757    
      80,178    
Pharmaceuticals (2.6%)  
Merck & Co.È      455,000       14,756    
Semiconductors & Semiconductor
Equipment (3.8%)		  
Intel Corp.     1,090,000       22,149    
Software (3.8%)  
Microsoft Corp.     890,000       21,939    
Specialty Retail (7.0%)  
PETsMART, Inc.È      500,000       10,455    
Tiffany & Co.È      480,000       17,462    
TJX Cos.È      345,000       12,403    
      40,320    
Total Common Stocks
(Cost $513,417)		             555,141    
Short-Term Investments (11.5%)  
Neuberger Berman
Securities Lending
Quality Fund,
LLC‡ 		     46,141,223       46,603    
State Street
Institutional
Liquid Reserves
Fund Institutional
Class		     19,597,443       19,597    
Total Short-Term Investments
(Cost $66,200)		             66,200    
Total Investments##(108.1%)
(Cost $579,617)		             621,341    
Liabilities, less cash,
receivables and
other assets [(8.1%)]		             (46,446 )  
Total Net Assets (100.0%)           $ 574,895    


 

See Notes to Schedule of Investments

80


Schedule of Investments Genesis Fund

TOP TEN EQUITY HOLDINGS

  1     Church & Dwight     2.7 %  
  2     AptarGroup Inc.     2.6 %  
  3     Compass Minerals International     2.4 %  
  4     CLARCOR Inc.     2.0 %  
  5     Alberto-Culver Co.     1.8 %  
  6     MICROS Systems     1.7 %  
  7     Henry Schein     1.7 %  
  8     IDEXX Laboratories     1.7 %  
  9     Haemonetics Corp.     1.6 %  
  10     Southwestern Energy     1.6 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (96.1%)  
Aerospace & Defense (2.0%)  
Alliant
Techsystems*^ 		     1,746,962     $ 135,005    
Argon ST*     173,300       3,463    
Teledyne
Technologies*		     851,400       28,743    
      167,211    
Air Freight & Logistics (1.0%)  
Forward Air^      2,043,600       47,166    
Hub Group
Class A*		     1,862,500       40,845    
      88,011    
Auto Components (0.7%)  
Gentex Corp.     3,948,014       57,602    
Beverages (0.5%)  
Boston Beer
Company*^ 		     1,019,019       40,506    
Building Products (0.4%)  
Simpson
Manufacturing		     1,302,900       33,485    
Capital Markets (0.9%)  
Eaton Vance     1,070,300       30,578    
Greenhill & Co.     585,200       46,348    
      76,926    
Chemicals (0.5%)  
Intrepid Potash*     1,728,120       40,594    
Commercial Banks (3.6%)  
Bank of Hawaii     1,485,900       58,619    
BOK Financial     1,089,894       49,307    
Cullen/Frost
Bankers		     1,473,600       72,619    
Glacier Bancorp     1,401,908       20,902    
Westamerica
Bancorp^ 		     2,121,843       109,126    
      310,573    
Commercial Services & Supplies (5.0%)  
Copart, Inc.*     3,163,531       111,799    
Healthcare Services Group^      3,606,154       63,757    
Knoll, Inc.     1,701,300       16,384    
Ritchie Bros.
Auctioneers^ 		     5,338,160       133,774    
Rollins, Inc.     3,482,372       62,160    
United Stationers*     923,375       42,189    
      430,063    

 

    Number
of Shares		   Value†
 (000's)		  
Construction & Engineering (0.7%)  
Layne
Christensen*^ 		     2,240,321     $ 57,800    
Containers & Packaging (2.6%)  
AptarGroup Inc.^      6,555,400       225,375    
Diversified Consumer Services (2.3%)  
Matthews
International^ 		     3,518,900       122,599    
Strayer Education     346,111       73,064    
      195,663    
Diversified Financial Services (0.3%)  
Pico Holdings*     838,772       27,789    
Electrical Equipment (0.5%)  
Brady Corp.     1,420,289       42,083    
Electronic Equipment, Instruments &
Components (1.9%)		  
Rofin-Sinar
Technologies*^ 		     3,423,150       77,843    
Trimble
Navigation*		     3,409,242       86,799    
      164,642    
Energy Equipment & Services (3.3%)  
CARBO
Ceramics^ 		     2,217,200       95,450    
NATCO Group*^      1,974,328       82,132    
National Oilwell
Varco*		     808,078       29,374    
Natural Gas Services
Group*		     150,000       2,143    
Oceaneering
International*		     1,237,700       64,571    
Pason Systems     1,287,365       12,078    
      285,748    
Food & Staples Retailing (1.2%)  
Ruddick Corp.^      3,956,002       105,071    
Food Products (1.0%)  
Flowers Foods     1,323,500       31,460    
J&J Snack Foods^      1,270,946       55,540    
      87,000    
Gas Utilities (1.0%)  
New Jersey
Resources		     1,366,400       50,215    
Northwest Natural
Gas		     477,300       20,094    
South Jersey
Industries		     432,200       14,976    
      85,285    

 

    Number
of Shares		   Value†
 (000's)		  
Health Care Equipment & Supplies
(8.5%)		  
Abaxis, Inc.*     1,090,300     $ 29,002    
American Medical
Systems
Holdings*^ 		     7,874,765       120,012    
DENTSPLY
International		     2,059,900       69,439    
Haemonetics
Corp.*^ 		     2,660,600       140,054    
IDEXX
Laboratories*		     2,796,662       141,959    
Immucor Inc.*     3,307,491       59,833    
Integra LifeSciences
Holdings*		     114,392       3,865    
Meridian
Bioscience		     624,800       15,058    
Sirona Dental
Systems*^ 		     2,805,726       74,183    
Surmodics,
Inc.*^ 		     2,032,430       46,522    
Wright Medical
Group*		     1,850,194       30,047    
      729,974    
Health Care Providers & Services
(5.1%)		  
AmSurg Corp.*^      1,930,734       39,194    
Henry Schein*     2,717,540       143,975    
Landauer, Inc.^      542,800       29,876    
MWI Veterinary
Supply*^ 		     1,168,629       43,485    
Patterson
Companies*		     3,457,400       94,145    
VCA Antech*     3,620,705       89,612    
      440,287    
Household Products (2.7%)  
Church &
Dwight^ 		     4,050,055       231,380    
Industrial Conglomerates (0.6%)  
Raven Industries^      1,872,976       54,129    
Insurance (4.6%)  
Brown & Brown     4,269,355       84,832    
Hanover Insurance
Group		     1,214,100       49,645    
Harleysville Group     435,980       14,130    
HCC Insurance
Holdings		     1,291,300       34,142    
Infinity Property &
Casualty		     99,400       4,371    


See Notes to Schedule of Investments

81


    Number
of Shares		   Value†
 (000's)		  
RenaissanceRe
Holdings		     1,480,553     $ 80,616    
RLI Corp.     984,407       52,183    
Validus Holdings     1,402,100       35,978    
Zenith National
Insurance		     1,410,700       38,032    
      393,929    
IT Services (1.6%)  
ManTech
International*^ 		     2,426,100       128,195    
NCI, Inc. Class A*     353,099       10,364    
      138,559    
Life Science Tools & Services (4.3%)  
Charles River Laboratories
International*		     1,474,900       50,869    
Dionex Corp.*^      2,041,532       122,778    
ICON PLC*^      3,798,400       82,121    
Pharmaceutical Product
Development		     4,292,900       86,330    
Techne Corp.     352,500       21,739    
      363,837    
Machinery (13.0%)  
Astec
Industries*^ 		     1,949,622       49,384    
Bucyrus
International^ 		     4,385,700       130,913    
Chart
Industries*^ 		     2,188,928       40,845    
CLARCOR Inc.^      5,421,622       173,817    
Donaldson Co.     2,632,100       98,888    
Graco Inc.     1,629,417       40,915    
Joy Global     1,890,200       73,434    
Lincoln Electric
Holdings		     88,347       4,021    
Lindsay Corp.^      1,342,250       55,717    
Nordson Corp.^      2,405,430       128,883    
Robbins &
Myers^ 		     1,787,500       41,506    
Titan
International^ 		     2,200,047       18,282    
Toro Co.     1,296,994       49,195    
Valmont
Industries		     1,102,304       90,753    
Wabtec Corp.^      3,002,100       112,429    
      1,108,982    
Media (1.0%)  
Arbitron Inc.     1,300,567       23,826    
Interactive Data     2,678,700       62,173    
      85,999    
Metals & Mining (2.4%)  
Compass Minerals
International^ 		     3,802,000       202,190    
Mutual Funds (1.0%)  
SPDR Gold Trust*     900,000       84,060    
Office Electronics (1.1%)  
Zebra
Technologies*^ 		     3,874,247       96,817    

 

    Number
of Shares		   Value†
 (000's)		  
Oil, Gas & Consumable Fuels (10.7%)  
Alpha Natural
Resources*		     3,331,674     $ 107,646    
Arena
Resources*^ 		     3,283,628       100,413    
Cabot Oil & Gas     2,981,700       105,105    
Carrizo Oil &
Gas*^ 		     1,681,227       32,498    
Concho
Resources*		     1,225,600       39,942    
Denbury
Resources*		     6,346,277       96,590    
Encore
Acquisition*		     1,615,200       60,877    
Petrobank Energy
and Resources*		     3,197,000       118,992    
Petrohawk
Energy*		     2,585,830       55,673    
Southwestern
Energy*		     3,681,700       135,708    
St. Mary Land &
Exploration		     1,237,600       32,549    
XTO Energy     828,225       31,970    
      917,963    
Personal Products (2.4%)  
Alberto-Culver
Co.^ 		     5,742,450       151,543    
Chattem, Inc.*     823,995       50,462    
      202,005    
Professional Services (0.4%)  
Exponent, Inc.*^      1,164,735       32,939    
Road & Rail (0.1%)  
Landstar System     120,400       4,198    
Software (5.4%)  
ANSYS, Inc.*     503,200       17,683    
Blackbaud, Inc.^      4,369,503       84,157    
FactSet Research
Systems		     1,304,600       71,805    
Jack Henry &
Associates		     1,119,600       26,098    
MICROS
Systems*^ 		     5,249,242       146,296    
Solera
Holdings*^ 		     4,480,005       118,003    
      464,042    
Specialty Retail (0.8%)  
Hibbett Sports*^      1,864,063       32,752    
Sally Beauty
Holdings*		     620,208       4,410    
Tractor Supply*     631,800       29,732    
      66,894    
Thrifts & Mortgage Finance (0.5%)  
Brookline
Bancorp		     2,426,354       25,331    
Oritani Financial     1,170,000       15,608    
      40,939    

 

    Number
of Shares		   Value†
 (000's)		  
Trading Companies & Distributors
(0.4%)		  
MSC Industrial
Direct		     810,900     $ 32,039    
Water Utilities (0.1%)  
American States
Water		     149,500       4,936    
Total Common Stocks
(Cost $6,432,709)		             8,217,525    
Short-Term Investments (3.9%)  
State Street
Institutional
Liquid Reserves
Fund Institutional
Class
(Cost
$335,213)		     335,212,934       335,213    
Total Investments##(100.0%)
(Cost $6,767,922)		             8,552,738    
Liabilities, less cash,
receivables and
other assets [(0.0%)]		             (876 )  
Total Net Assets (100.0%)           $ 8,551,862    

 


See Notes to Schedule of Investments

82


Schedule of Investments Guardian Fund

TOP TEN EQUITY HOLDINGS

  1     Scripps Networks Interactive     5.2 %  
  2     Altera Corp.     5.0 %  
  3     Washington Post     5.0 %  
  4     Intuit Inc.     4.9 %  
  5     Danaher Corp.     4.7 %  
  6     National Instruments     4.5 %  
  7     3M Co.     4.2 %  
  8     Newfield Exploration     4.0 %  
  9     Charles Schwab     3.9 %  
  10     Comcast Corp. Class A Special     3.9 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (96.5%)  
Automobiles (2.0%)  
Toyota Motor ADRÈ      225,860     $ 19,241    
Biotechnology (3.6%)  
Genzyme Corp.*     606,540       33,790    
Capital Markets (6.4%)  
Charles Schwab     2,043,255       36,901    
The Bank of
New York Mellon		     786,913       23,301    
      60,202    
Commercial Services & Supplies
(6.2%)		  
Republic Services     1,031,050       26,405    
Waste
Management		     1,072,725       32,107    
      58,512    
Diversified Financial Services (1.6%)  
IntercontinentalExchange
Inc.*		     157,754       14,797    
Electronic Equipment, Instruments &
Components (8.1%)		  
Anixter
International*		     978,955       34,342    
National
Instruments		     1,664,254       42,655    
      76,997    
Energy Equipment & Services (3.7%)  
Schlumberger Ltd.     615,600       34,597    
Health Care Providers & Services (1.8%)  
UnitedHealth
Group		     624,675       17,491    
Industrial Conglomerates (4.2%)  
3M Co.     547,300       39,460    
Industrial Gases (3.1%)  
Praxair, Inc.     384,896       29,491    
Insurance (5.3%)  
Markel Corp.*     63,550       20,899    
Progressive
Corp.*		     1,762,550       29,117    
      50,016    
Internet Software & Services (3.1%)  
Yahoo! Inc.*     2,009,500       29,359    
Life Science Tools & Services (2.1%)  
Millipore Corp.*     303,290       20,087    

 

    Number
of Shares		   Value†
 (000's)		  
Machinery (4.7%)  
Danaher Corp.     734,240     $ 44,576    
Media (14.0%)  
Comcast Corp.
Class A Special		     2,511,125       36,637    
Scripps Networks
Interactive		     1,521,735       49,411    
Washington Post     108,128       46,966    
      133,014    
Multi-Utilities (2.6%)  
National Grid     2,234,232       21,551    
National Grid ADR     67,218       3,232    
      24,783    
Oil, Gas & Consumable Fuels (8.9%)  
BG Group PLC     1,934,950       32,035    
Cimarex Energy     368,175       14,374    
Newfield
Exploration*		     978,800       37,870    
      84,279    
Road & Rail (3.2%)  
Canadian National
Railway		     629,565       30,389    
Semiconductors & Semiconductor
Equipment (7.0%)		  
Altera Corp.     2,462,669       47,308    
Texas Instruments     787,800       19,372    
      66,680    
Software (4.9%)  
Intuit Inc.*     1,674,752       46,508    
Total Common Stocks
(Cost $912,709)		             914,269    
Short-Term Investments (3.4%)  
Neuberger Berman
Securities Lending
Quality Fund,
LLC‡ 		     3,129,168       3,160    
State Street
Institutional
Liquid Reserves
Fund Institutional
ClassØØ 		     28,878,874       28,879    
Total Short-Term Investments
(Cost $32,039)		             32,039    
Total Investments##(99.9%)
(Cost $944,748)		             946,308    
Cash, receivables
and other assets,
less liabilities (0.1%)		             1,410    
Total Net Assets (100.0%)           $ 947,718    

 


See Notes to Schedule of Investments

83


Schedule of Investments International Fund

TOP TEN EQUITY HOLDINGS

      Country   Industry    
  1     Vodafone Group   United Kingdom   Wireless Telecommunication Services     2.8 %  
  2     Unilever NV   Netherlands   Food Products     2.0 %  
  3     MacDonald, Dettwiler   Canada   Software     2.0 %  
  4     HSBC Holdings   United Kingdom   Commercial Banks     1.9 %  
  5     Deutsche Boerse   Germany   Diversified Financial Services     1.7 %  
  6     Banco Santander   Spain   Commercial Banks     1.6 %  
  7     Nihon Kohden   Japan   Health Care Equipment & Supplies     1.6 %  
  8     Chemring Group   United Kingdom   Aerospace & Defense     1.5 %  
  9     Ipsen SA   France   Pharmaceuticals     1.5 %  
  10     Amlin PLC   United Kingdom   Insurance     1.5 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (92.1%)  
Australia (0.8%)  
BHP Billiton ADRÈ      54,100     $ 3,370    
Austria (0.6%)  
Schoeller-Bleckmann
Oilfield Equipment		     55,300       2,258    
Belgium (2.8%)  
Anheuser-Busch
InBev		     75,888       3,276    
Colruyt SA     15,630       3,585    
Fortis*     192,640       824    
Telenet Group
Holding		     162,840       3,877    
      11,562    
Brazil (0.5%)  
Vivo
Participacoes ADR		     91,500       2,083    
Canada (4.4%)  
Barrick Gold     72,100       2,488    
Cameco Corp.     134,520       3,580    
MacDonald,
Dettwiler*		     289,990       8,079    
Talisman Energy     243,820       3,920    
      18,067    
Chile (0.8%)  
Sociedad Quimica
y Minera de Chile
ADR, B Shares		     97,480       3,395    
Czech Republic (0.5%)  
Telefonica O2 Czech
Republic		     74,300       2,062    
Denmark (1.3%)  
Novo Nordisk
Class B		     83,490       5,089    
France (7.1%)  
Arkema     102,192       3,333    
France TelecomÈ      119,560       3,041    
Ipsen SA     124,704       6,168    
IpsosÑ      181,723       5,060    
Sodexo     54,805       3,157    

 

    Number
of Shares		   Value†
 (000's)		  
Teleperformance     138,930     $ 4,773    
Thales SA     79,485       3,646    
      29,178    
Germany (9.6%)  
Deutsche Boerse     89,365       6,822    
Fresenius Medical
Care		     76,910       3,456    
GEA Group     202,280       3,584    
Gerresheimer AG     181,277       5,109    
Linde AG     54,770       5,504    
SAP AG     86,875       4,236    
SMA Solar
TechnologyÈ 		     24,715       1,831    
Tognum AG     243,226       3,707    
Wincor Nixdorf     89,952       5,099    
      39,348    
Greece (0.0%)  
Titan Cement     4,878       141    
Hong Kong (1.1%)  
China Mobile ADR     93,465       4,600    
India (0.8%)  
State Bank of India
GDR		     45,586       3,373    
Ireland (1.0%)  
DCC PLC     173,225       4,248    
Israel (0.9%)  
Makhteshim-Agan
Industries		     827,930       3,794    
Italy (2.4%)  
Lottomatica SPA     128,375       2,888    
Milano
Assicurazioni		     462,346       1,521    
UBI Banca     348,395       5,264    
      9,673    
Japan (12.1%)  
Circle K Sunkus     254,900       4,145    
Hisamitsu
Pharmaceutical		     118,200       4,560    
Jupiter
Telecommunications		     5,296       4,610    
KDDI Corp.     534       3,036    

 

    Number
of Shares		   Value†
 (000's)		  
Kenedix Realty
Investment		     635     $ 2,382    
Nihon Kohden     398,800       6,536    
Nintendo Co. ADR     131,630       4,416    
NSD Co.     118,400       1,256    
Sankyo Co.     79,500       5,006    
Seven Bank     1,809       4,590    
Sundrug Co.     167,400       4,300    
Toyota Motor ADR     33,420       2,847    
Unicharm PetcareÈ      56,700       2,035    
      49,719    
Korea (1.7%)  
Hyundai Mobis     40,905       4,340    
Samsung SDI     23,375       2,770    
      7,110    
Netherlands (9.7%)  
ArcelorMittal     87,500       3,132    
Fugro NV     86,537       4,658    
Koninklijke Ahold     454,370       5,323    
Koninklijke DSM     81,379       2,966    
Nutreco Holding     105,400       4,744    
Sligro Food GroupÑ      171,181       4,810    
TNT NV     238,036       5,873    
Unilever NVÈ      296,237       8,279    
      39,785    
Norway (1.8%)  
DnB NOR*     413,280       4,224    
Prosafe ASA     636,435       3,092    
      7,316    
Singapore (0.7%)  
United
Overseas Bank		     247,000       2,863    
Spain (1.6%)  
Banco Santander     427,350       6,577    
Sweden (1.5%)  
Svenska
Handelsbanken,
A Shares		     151,620       3,972    
Swedbank AB,
A Shares*		     192,000       2,010    
      5,982    

 


See Notes to Schedule of Investments

84


    Number
of Shares		   Value†
 (000's)		  
Switzerland (7.3%)  
Barry Callebaut     6,411     $ 3,475    
Bucher Industries     16,428       1,921    
Credit Suisse Group     61,945       3,156    
Givaudan SA     4,475       3,216    
Nestle SA     123,155       5,115    
Nobel Biocare
Holding		     79,485       2,428    
Roche Holding     21,810       3,466    
SGS SA     2,442       3,019    
Sulzer AG     52,449       4,057    
      29,853    
United Kingdom (21.1%)  
Amdocs Ltd.*     90,800       2,208    
Amlin PLC     1,016,625       6,110    
Antofagasta PLC     164,900       2,058    
Balfour Beatty     438,830       2,405    
Barclays PLC*     859,655       5,322    
BP PLC     353,100       3,058    
Cairn Energy*     92,172       3,762    
Chemring Group     185,238       6,300    
Croda International     272,515       2,786    
Diageo PLC     306,465       4,760    
Experian Group     677,267       5,706    
HSBC HoldingsÈ      750,800       7,948    
Informa PLC     1,049,676       4,860    
Reed Elsevier     235,880       1,716    
RPS Group     1,397,851       4,551    
Smith & Nephew     464,292       3,961    
Tullow Oil     194,801       3,415    
Vodafone Group     5,401,649       11,678    
Willis Group
Holdings		     153,600       3,961    
      86,565    
Total Common Stocks
(Cost $353,064)		             378,011    
Preferred Stocks (2.1%)  
Brazil (2.1%)  
Petroleo
Brasileiro ADR		     132,625       4,403    
Refinaria de Petroleo
Ipiranga*^^ 		     19,056       10    
Ultrapar
Participacoes		     109,290       3,998    
Total Preferred Stocks
(Cost $5,603)		             8,411    
Rights (0.0%)  
Belgium (0.0%)  
Anheuser-Busch InBev
VVPR Strip*		     177,256       1    
Fortis*     192,640       0    
Fortis VVPR Strip*     192,640       0    
Total Rights
(Cost $0)		             1    

 

    Number
of Shares		   Value†
 (000's)		  
Warrants (0.0%)  
Italy (0.0%)  
UBI Banca*
(Cost $0)		     165,350     $ 17    
Short-Term Investments (7.8%)  
Neuberger Berman
Securities Lending
Quality Fund,
LLC‡ 		     15,429,775       15,584    
State Street
Institutional
Liquid Reserves
Fund Institutional
Class		     16,420,160       16,420    
Total Short-Term Investments
(Cost $32,004)		             32,004    
Total Investments##(102.0%)
(Cost $390,671)		             418,444    
Liabilities, less cash,
receivables and
other assets [(2.0%)]		             (8,186 )  
Total Net Assets (100.0%)           $ 410,258    

 


See Notes to Schedule of Investments

85


SUMMARY SCHEDULE OF INVESTMENTS BY INDUSTRY INTERNATIONAL FUND

Industry   Investments at
Value†
 (000's omitted)		   Percentage of
Net Assets		  
Commercial Banks   $ 42,188       10.3 %  
Chemicals     24,994       6.1 %  
Food Products     23,648       5.8 %  
Food & Staples Retailing     22,163       5.4 %  
Oil, Gas & Consumable Fuels     22,138       5.4 %  
Wireless Telecommunication Services     21,397       5.2 %  
Software     20,195       4.9 %  
Pharmaceuticals     19,283       4.7 %  
Media     16,246       4.0 %  
Professional Services     13,498       3.3 %  
Health Care Equipment & Supplies     12,925       3.2 %  
Insurance     11,592       2.8 %  
Metals & Mining     11,048       2.7 %  
Energy Equipment & Services     10,008       2.4 %  
Aerospace & Defense     9,946       2.4 %  
Machinery     9,562       2.3 %  
Diversified Telecommunication Services     8,980       2.2 %  
Beverages     8,037       2.0 %  
Diversified Financial Services     7,646       1.9 %  
Hotels, Restaurants & Leisure     6,045       1.5 %  
Air Freight & Logistics     5,873       1.4 %  
Electrical Equipment     5,538       1.3 %  
Life Science Tools & Services     5,109       1.2 %  
Computers & Peripherals     5,099       1.2 %  
Leisure Equipment & Products     5,006       1.2 %  
Commercial Services & Supplies     4,551       1.1 %  
Auto Components     4,340       1.1 %  
Industrial Conglomerates     4,248       1.0 %  
Specialty Retail     3,998       1.0 %  
Banking     3,972       1.0 %  
Health Care Providers & Services     3,456       0.8 %  
Capital Markets     3,156       0.8 %  
Automobiles     2,847       0.7 %  
Electronic Equipment, Instruments & Components     2,770       0.7 %  
Construction & Engineering     2,405       0.6 %  
Real Estate Investment Trusts     2,382       0.6 %  
Construction Materials     141       0.0 %  
Consumer Discretionary     10       0.0 %  
Other Assets-Net     23,818       5.8 %  
    $ 410,258       100.0 %  

 


See Notes to Schedule of Investments

86


Schedule of Investments International Institutional Fund

TOP TEN EQUITY HOLDINGS

      Country   Industry    
  1     Vodafone Group   United Kingdom   Wireless Telecommunication Services     2.8 %  
  2     Unilever NV   Netherlands   Food Products     2.0 %  
  3     MacDonald, Dettwiler   Canada   Software     2.0 %  
  4     HSBC Holdings   United Kingdom   Commercial Banks     2.0 %  
  5     Deutsche Boerse   Germany   Diversified Financial Services     1.7 %  
  6     Banco Santander   Spain   Commercial Banks     1.6 %  
  7     Nihon Kohden   Japan   Health Care Equipment & Supplies     1.6 %  
  8     Chemring Group   United Kingdom   Aerospace & Defense     1.6 %  
  9     Ipsen SA   France   Pharmaceuticals     1.5 %  
  10     Amlin PLC   United Kingdom   Insurance     1.5 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (93.4%)  
Australia (0.8%)  
BHP Billiton ADRÈ      29,900     $ 1,863    
Austria (0.6%)  
Schoeller-Bleckmann
Oilfield Equipment		     31,300       1,278    
Belgium (2.7%)  
Anheuser-Busch
InBev		     42,003       1,813    
Colruyt SA     8,650       1,984    
Telenet Group
Holding		     90,125       2,146    
      5,943    
Brazil (0.5%)  
Vivo
Participacoes ADR		     50,600       1,152    
Canada (4.5%)  
Barrick Gold     39,900       1,377    
Cameco Corp.     74,410       1,980    
MacDonald,
Dettwiler*		     160,509       4,472    
Talisman Energy     134,940       2,169    
      9,998    
Chile (0.9%)  
Sociedad Quimica
y Minera de Chile
ADR, B Shares		     54,005       1,881    
Czech Republic (0.5%)  
Telefonica O2 Czech
Republic		     41,400       1,149    
Denmark (1.3%)  
Novo Nordisk
Class B		     46,210       2,817    
France (7.2%)  
Arkema     56,560       1,845    
France TelecomÈ      66,170       1,683    
Ipsen SA     69,015       3,413    
Ipsos     100,575       2,801    
Sodexo     30,330       1,747    
Teleperformance     76,890       2,641    
Thales SA     43,990       2,018    
      16,148    

 

    Number
of Shares		   Value†
 (000's)		  
Germany (9.7%)  
Deutsche Boerse     48,425     $ 3,697    
Fresenius Medical
Care		     42,565       1,912    
GEA Group     111,950       1,984    
Gerresheimer AG     100,325       2,828    
Linde AG     30,310       3,046    
SAP AG     48,105       2,345    
SMA Solar
Technology		     13,680       1,014    
Tognum AG     134,615       2,051    
Wincor Nixdorf     49,785       2,822    
      21,699    
Greece (0.0%)  
Titan Cement     2,760       80    
Hong Kong (1.1%)  
China Mobile ADR     51,770       2,548    
India (0.8%)  
State Bank of India
GDR		     25,230       1,867    
Ireland (1.1%)  
DCC PLC     95,870       2,351    
Israel (0.9%)  
Makhteshim-Agan
Industries		     458,215       2,099    
Italy (2.4%)  
Lottomatica SPAÈ      71,050       1,598    
Milano
Assicurazioni		     260,505       857    
UBI Banca     195,295       2,951    
      5,406    
Japan (12.4%)  
Circle K Sunkus     144,800       2,354    
Hisamitsu
Pharmaceutical		     65,400       2,523    
Jupiter
Telecommunications		     2,933       2,553    
KDDI Corp.     295       1,677    
Kenedix Realty
Investment		     350       1,313    
Nihon Kohden     220,700       3,617    
Nintendo Co. ADR     72,775       2,442    
NSD Co.     67,100       712    

 

    Number
of Shares		   Value†
 (000's)		  
Sankyo Co.     44,000     $ 2,771    
Seven Bank     1,001       2,540    
Sundrug Co.     95,300       2,448    
Takuma Co.*     15,000       40    
Toyota Motor ADR     18,470       1,574    
Unicharm Petcare     32,600       1,170    
      27,734    
Korea (1.8%)  
Hyundai Mobis     22,639       2,402    
Samsung SDI     12,940       1,533    
      3,935    
Netherlands (9.9%)  
ArcelorMittal     48,425       1,734    
Fugro NV     47,895       2,578    
Koninklijke Ahold     254,346       2,979    
Koninklijke DSM     45,042       1,642    
Nutreco Holding     58,336       2,626    
Sligro Food Group     94,741       2,662    
TNT NV     131,767       3,251    
Unilever NVÈ      163,952       4,582    
      22,054    
Norway (1.8%)  
DnB NOR*     228,715       2,337    
Prosafe ASA     352,285       1,712    
      4,049    
Singapore (0.7%)  
United
Overseas Bank		     137,000       1,588    
Spain (1.6%)  
Banco Santander     235,325       3,622    
Sweden (1.5%)  
Svenska Handelsbanken,
A Shares		     83,915       2,198    
Swedbank AB,
A Shares*		     109,110       1,142    
      3,340    
Switzerland (7.4%)  
Barry Callebaut     3,550       1,924    
Bucher Industries     9,197       1,075    
Credit Suisse Group     34,120       1,738  
Givaudan SA     2,475       1,779    

 


See Notes to Schedule of Investments

87


    Number
of Shares		   Value†
 (000's)		  
Nestle SA     69,985     $ 2,907    
Nobel Biocare
Holding		     43,990       1,344    
Roche Holding     12,070       1,918    
SGS SA     1,361       1,683    
Sulzer AG     29,165       2,256    
      16,624    
United Kingdom (21.3%)  
Amdocs Ltd.*     50,300       1,223    
Amlin PLC     562,649       3,382    
Antofagasta PLC     93,400       1,166    
Balfour Beatty     244,980       1,343    
Barclays PLC*     475,775       2,945    
BP PLC     200,000       1,732    
Cairn Energy*     51,015       2,082    
Chemring Group     102,518       3,486    
Croda International     150,820       1,542    
Diageo PLC     171,107       2,657    
Experian Group     374,836       3,158    
GlaxoSmithKline
PLC		     1,016       20    
HSBC Holdings     414,000       4,383    
Informa PLC     580,938       2,690    
Reed Elsevier     134,700       980    
RPS Group     773,639       2,519    
Smith & Nephew     256,962       2,192    
Tullow Oil     107,814       1,890    
Vodafone Group     2,871,496       6,208    
Willis Group
Holdings		     85,000       2,192    
      47,790    
Total Common Stocks
(Cost $205,058)		             209,015    
Preferred Stocks (2.1%)  
Brazil (2.1%)  
Petroleo
Brasileiro ADR		     73,400       2,437    
Ultrapar
Participacoes ADR 		    61,030       2,213    
Total Preferred Stocks
(Cost $3,636)		             4,650    
Rights (0.0%)  
Belgium (0.0%)  
Anheuser-Busch InBev
VVPR Strip*		     101,696       1    
Fortis VVPR Strip*     77,074       0    
Total Rights
(Cost $0)		             1    
Warrants (0.0%)  
Italy (0.0%)  
UBI Banca*
(Cost $0)		     89,730       9    

 

    Number
of Shares		   Value†
 (000's)		  
Short-Term Investments (6.5%)  
Neuberger Berman
Securities Lending
Quality Fund,
LLC‡ 		     4,502,766     $ 4,548    
State Street
Institutional
Liquid Reserves
Fund Institutional
Class		     10,154,371       10,154    
Total Short-Term Investments
(Cost $14,702)		         14,702    
Total Investments##(102.0%)
(Cost $223,396)		         228,377    
Liabilities, less cash,
receivables and
other assets [(2.0%)]		         (4,583 )  
Total Net Assets (100.0%)       $ 223,794    

 


See Notes to Schedule of Investments

88


SUMMARY SCHEDULE OF INVESTMENTS BY INDUSTRY INTERNATIONAL INSTITUTIONAL FUND

Industry   Investments at
Value†
 (000's omitted)		   Percentage of
Net Assets		  
Commercial Banks   $ 25,582       11.4 %  
Oil, Gas & Consumable Fuels     14,503       6.5 %  
Chemicals     13,834       6.2 %  
Food Products     13,209       5.9 %  
Food & Staples Retailing     12,427       5.6 %  
Wireless Telecommunication Services     11,585       5.2 %  
Software     11,194       5.0 %  
Pharmaceuticals     10,691       4.8 %  
Media     9,024       4.0 %  
Professional Services     7,482       3.3 %  
Health Care Equipment & Supplies     7,153       3.2 %  
Insurance     6,431       2.9 %  
Metals & Mining     6,140       2.7 %  
Energy Equipment & Services     5,568       2.5 %  
Aerospace & Defense     5,504       2.5 %  
Machinery     5,355       2.4 %  
Diversified Telecommunication Services     4,978       2.2 %  
Beverages     4,471       2.0 %  
Diversified Financial Services     3,697       1.6 %  
Hotels, Restaurants & Leisure     3,345       1.5 %  
Air Freight & Logistics     3,251       1.4 %  
Electrical Equipment     3,065       1.4 %  
Life Science Tools & Services     2,828       1.3 %  
Computers & Peripherals     2,822       1.3 %  
Leisure Equipment & Products     2,771       1.2 %  
Commercial Services & Supplies     2,519       1.1 %  
Auto Components     2,402       1.1 %  
Industrial Conglomerates     2,351       1.0 %  
Health Care Providers & Services     1,912       0.9 %  
Capital Markets     1,738       0.8 %  
Automobiles     1,574       0.7 %  
Electronic Equipment, Instruments & Components     1,533       0.7 %  
Construction & Engineering     1,343       0.6 %  
Real Estate Investment Trusts     1,313       0.6 %  
Construction Materials     80       0.0 %  
Other Assets-Net     10,119       4.5 %  
    $ 223,794       100.0 %  

 


See Notes to Schedule of Investments

89


Schedule of Investments International Large Cap Fund

TOP TEN EQUITY HOLDINGS

      Country   Industry    
  1     Vodafone Group   United Kingdom   Wireless Telecommunication Services     3.3 %  
  2     HSBC Holdings   United Kingdom   Commercial Banks     2.4 %  
  3     Unilever NV   Netherlands   Food Products     2.3 %  
  4     Deutsche Boerse   Germany   Diversified Financial Services     2.0 %  
  5     Banco Santander   Spain   Commercial Banks     1.8 %  
  6     Ipsen SA   France   Pharmaceuticals     1.7 %  
  7     Informa PLC   United Kingdom   Media     1.7 %  
  8     Novo Nordisk Class B   Denmark   Pharmaceuticals     1.7 %  
  9     Amlin PLC   United Kingdom   Insurance     1.7 %  
  10     Barclays PLC   United Kingdom   Commercial Banks     1.6 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (90.7%)  
Australia (1.1%)  
BHP Billiton ADRÈ      17,800     $ 1,109    
Belgium (2.4%)  
Anheuser-Busch
InBev		     24,586       1,061    
Colruyt SA     5,735       1,316    
      2,377    
Brazil (0.8%)  
Vivo
Participacoes ADR		     33,600       765    
Canada (2.9%)  
Barrick Gold     17,600       607    
Cameco Corp.     42,820       1,139    
Talisman Energy     71,985       1,157    
      2,903    
Chile (1.2%)  
Sociedad Quimica
y Minera de Chile
ADR, B Shares		     35,645       1,242    
Czech Republic (0.8%)  
Telefonica O2 Czech
Republic		     27,480       763    
Denmark (1.7%)  
Novo Nordisk
Class B		     28,550       1,740    
France (4.8%)  
France TelecomÈ      39,020       992    
Ipsen SA     35,715       1,766    
Sodexo     17,285       996    
Thales SA     22,865       1,049    
      4,803    
Germany (10.2%)  
Deutsche Boerse     25,980       1,983    
Fresenius Medical
Care		     23,160       1,041    
GEA Group     60,365       1,070    
Linde AG     16,155       1,623    
SAP AG     26,885       1,311    
Siemens AG     8,620       747    

 

    Number
of Shares		   Value†
 (000's)		  
Tognum AG     71,525     $ 1,090    
Wincor Nixdorf     25,930       1,470    
      10,335    
Hong Kong (1.3%)  
China Mobile ADR     27,515       1,354    
India (1.1%)  
State Bank of India
GDR		     15,085       1,116    
Israel (1.3%)  
Makhteshim-Agan
Industries		     281,135       1,288    
Italy (2.9%)  
Lottomatica SPA     42,220       950    
Milano
Assicurazioni		     136,860       450    
UBI Banca     100,270       1,515    
      2,915    
Japan (9.5%)  
Hisamitsu
Pharmaceutical		     36,100       1,393    
Hitachi Construction
Machinery		     42,600       865    
Jupiter
Telecommunications		     1,668       1,452    
KDDI Corp.     175       995    
Nintendo Co.     4,800       1,298    
Sankyo Co.     24,720       1,557    
Seven Bank     442       1,121    
Toyota Motor ADR     11,095       945    
      9,626    
Korea (2.0%)  
Hyundai Mobis     12,470       1,323    
Samsung SDI     5,665       671    
      1,994    
Netherlands (7.5%)  
Fugro NV     26,521       1,428    
Koninklijke Ahold     133,170       1,560    
Koninklijke DSM     19,831       723    
TNT NV     65,238       1,610    
Unilever NVÈ      82,709       2,311    
      7,632    

 

    Number
of Shares		   Value†
 (000's)		  
Norway (1.0%)  
DnB NOR*     99,950     $ 1,022    
Singapore (0.9%)  
United
Overseas Bank		     82,000       951    
Spain (1.9%)  
Banco Santander     121,500       1,870    
Sweden (2.0%)  
Svenska Handelsbanken,
A Shares		     49,510       1,297    
Swedbank AB,
A Shares*		     70,640       739    
      2,036    
Switzerland (7.8%)  
Credit Suisse Group     20,130       1,026    
Givaudan SA     1,435       1,031    
Nestle SA     36,245       1,505    
Nobel Biocare
Holding		     29,100       889    
Novartis AG     24,549       1,138    
Roche Holding     8,035       1,277    
SGS SA     820       1,014    
      7,880    
Taiwan, Province Of China (0.7%)  
Taiwan Semiconductor
Manufacturing ADR		     68,334       731    
United Kingdom (24.9%)  
Amdocs Ltd.*     33,600       817    
Amlin PLC     283,560       1,704    
Antofagasta PLC     60,400       754    
ArcelorMittal     28,740       1,029    
BAE Systems     194,966       991    
Barclays PLC*     262,370       1,624    
BP PLC     172,600       1,495    
Cairn Energy*     23,285       950    
Diageo PLC     87,650       1,361    
Experian Group     181,369       1,528    
HSBC Holdings     228,800       2,422    
Informa PLC     380,953       1,764    
Reed Elsevier     85,800       624    
Smith & Nephew     143,273       1,222    
Tesco PLC     229,053       1,402    
Tullow Oil     59,389       1,041    

 


See Notes to Schedule of Investments

90


    Number
of Shares		   Value†
 (000's)		  
Vodafone Group     1,537,787     $ 3,325    
Willis Group
Holdings		     44,900       1,158    
      25,211    
Total Common Stocks
(Cost $86,221)		             91,663    
Preferred Stocks (1.3%)  
Brazil (1.3%)  
Petroleo
Brasileiro ADR
(Cost $1,260)		     40,861       1,357    
Rights (0.0%)  
Belgium (0.0%)  
Anheuser-Busch InBev
VVPR Strip*		     58,520       0    
Fortis VVPR Strip*     23,964       0    
Total Rights
(Cost $0)		             0    
Warrants (0.0%)  
Italy (0.0%)  
UBI Banca*
(Cost $0)		     48,665       5    
Short-Term Investments (10.3%)  
Neuberger Berman
Securities Lending
Quality Fund,
LLC‡ 		     2,310,165       2,333    
State Street
Institutional
Liquid Reserves
Fund Institutional
Class		     8,121,357       8,121    
Total Short-Term Investments
(Cost $10,454)		             10,454    
Total Investments##(102.3%)
(Cost $97,935)		             103,479    
Liabilities, less cash,
receivables and
other assets [(2.3%)]		             (2,366 )  
Total Net Assets (100.0%)           $ 101,113    

 


See Notes to Schedule of Investments

91


SUMMARY SCHEDULE OF INVESTMENTS BY INDUSTRY INTERNATIONAL LARGE CAP FUND

Industry   Investments at
Value†
 (000's omitted)		   Percentage of
Net Assets		  
Commercial Banks   $ 12,943       12.8 %  
Pharmaceuticals     7,314       7.2 %  
Oil, Gas & Consumable Fuels     7,138       7.1 %  
Wireless Telecommunication Services     6,439       6.4 %  
Chemicals     5,907       5.9 %  
Food & Staples Retailing     4,278       4.2 %  
Media     3,840       3.8 %  
Food Products     3,816       3.8 %  
Metals & Mining     3,499       3.5 %  
Software     3,426       3.4 %  
Insurance     3,312       3.3 %  
Professional Services     2,542       2.5 %  
Beverages     2,422       2.4 %  
Health Care Equipment & Supplies     2,111       2.1 %  
Aerospace & Defense     2,040       2.0 %  
Diversified Financial Services     1,983       2.0 %  
Hotels, Restaurants & Leisure     1,946       1.9 %  
Machinery     1,935       1.9 %  
Diversified Telecommunication Services     1,755       1.7 %  
Air Freight & Logistics     1,610       1.6 %  
Leisure Equipment & Products     1,557       1.5 %  
Computers & Peripherals     1,470       1.5 %  
Energy Equipment & Services     1,428       1.4 %  
Auto Components     1,323       1.3 %  
Electrical Equipment     1,090       1.1 %  
Health Care Providers & Services     1,041       1.0 %  
Capital Markets     1,026       1.0 %  
Automobiles     945       0.9 %  
Industrial Conglomerates     747       0.7 %  
Diversified Banks     740       0.7 %  
Semiconductors & Semiconductor Equipment     731       0.7 %  
Electronic Equipment, Instruments & Components     671       0.7 %  
Other Assets-Net     8,088       8.0 %  
    $ 101,113       100.0 %  

 


See Notes to Schedule of Investments

92


Schedule of Investments Large Cap Disciplined Growth Fund

TOP TEN EQUITY HOLDINGS

  1     Microsoft Corp.     4.5 %  
  2     Apple, Inc.     3.9 %  
  3     IBM     3.2 %  
  4     Procter & Gamble     3.0 %  
  5     Hewlett-Packard     2.6 %  
  6     Cisco Systems     2.4 %  
  7     Wal-Mart Stores     2.1 %  
  8     United Technologies     2.1 %  
  9     Adobe Systems     2.0 %  
  10     Google Inc. Class A     2.0 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (97.2%)  
Aerospace & Defense (2.8%)  
Lockheed Martin     11,784     $ 884    
United Technologies     43,673       2,592    
      3,476    
Air Freight & Logistics (1.0%)  
United Parcel Service     22,660       1,211    
Auto Components (1.0%)  
Johnson Controls     51,749       1,282    
Beverages (1.8%)  
PepsiCo, Inc.     40,047       2,269    
Biotechnology (4.1%)  
Amgen Inc.*     32,960       1,969    
Celgene Corp.*     14,997       782    
Gilead Sciences*     52,819       2,380    
      5,131    
Capital Markets (2.3%)  
Goldman Sachs
Group		     11,867       1,964    
Northern Trust     16,439       961    
      2,925    
Chemicals (2.0%)  
Monsanto Co.     13,142       1,102    
Potash Corp. of
Saskatchewan		     16,151       1,430    
      2,532    
Communications Equipment (4.2%)  
Cisco Systems*     138,662       2,995    
QUALCOMM Inc.     48,452       2,249    
      5,244    
Computers & Peripherals (11.3%)  
Apple, Inc.*     29,006       4,879    
EMC Corp.*     127,064       2,020    
Hewlett-Packard     71,278       3,200    
IBM     33,640       3,971    
      14,070    
Consumer Finance (1.1%)  
American Express     41,695       1,410    
Diversified Financial Services (1.7%)  
J.P. Morgan Chase     49,689       2,160    
Electrical Equipment (0.5%)  
Emerson Electric     16,727       617    

 

    Number
of Shares		   Value†
 (000's)		  
Energy Equipment & Services (2.6%)  
National Oilwell
Varco*		     53,972     $ 1,962    
TransOcean*     17,139       1,300    
      3,262    
Food & Staples Retailing (5.1%)  
CVS Corp.     52,326       1,963    
Wal-Mart Stores     52,242       2,658    
Walgreen Co.     52,902       1,792    
      6,413    
Health Care Equipment & Supplies (3.5%)  
Baxter International     29,974       1,706    
Becton,
Dickinson & Co.		     15,224       1,060    
St. Jude Medical*     42,767       1,648    
      4,414    
Household Products (3.0%)  
Procter & Gamble     68,064       3,683    
Industrial Gases (1.0%)  
Praxair, Inc.     15,574       1,193    
Internet & Catalog Retail (2.0%)  
Amazon.com*     30,406       2,469    
Internet Software & Services (3.5%)  
Google Inc. Class A*     5,356       2,473    
Yahoo! Inc.*     126,817       1,853    
      4,326    
IT Services (2.2%)  
Accenture PLC
Class A		     35,845       1,183    
Visa Inc.     21,425       1,523    
      2,706    
Machinery (3.9%)  
Caterpillar Inc.     30,900       1,400    
Cummins Inc.     50,511       2,289    
Danaher Corp.     18,932       1,150    
      4,839    
Media (1.5%)  
Time Warner     67,982       1,897    
Metals & Mining (4.1%)  
BHP Billiton ADR     19,117       1,191    
Freeport-McMoRan
Copper & Gold		     31,561       1,988    
United States Steel     45,238       1,980    
      5,159    

 

    Number
of Shares		   Value†
 (000's)		  
Oil, Gas & Consumable Fuels (5.1%)  
Canadian Natural
Resources		     34,440     $ 1,971    
Occidental
Petroleum		     29,747       2,174    
Petroleo Brasileiro
ADR		     28,552       1,132    
Range Resources     22,908       1,108    
      6,385    
Pharmaceuticals (4.1%)  
Abbott Laboratories     46,619       2,108    
Johnson & Johnson     29,088       1,758    
Teva Pharmaceutical
Industries ADR		     23,566       1,214    
      5,080    
Restaurants (0.9%)  
Yum! Brands     32,301       1,106    
Road & Rail (1.7%)  
Union Pacific     34,361       2,055    
Semiconductors & Semiconductor Equipment (5.2%)  
Analog Devices     44,002       1,243    
ASML Holding ADR     48,535       1,333    
Broadcom Corp.*     48,781       1,388    
Intel Corp.     120,966       2,458    
      6,422    
Software (8.1%)  
Adobe Systems*     80,177       2,519    
Microsoft Corp.     229,325       5,653    
Oracle Corp.     85,451       1,869    
      10,041    
Specialty Retail (3.4%)  
Best Buy     33,125       1,202    
Lowe's Cos.     83,143       1,788    
Staples, Inc.     58,506       1,264    
      4,254    
Tobacco (1.3%)  
Philip Morris
International		     34,031       1,556    
Wireless Telecommunication Services (1.2%)  
American Tower*     47,505       1,504    
Total Common Stocks
(Cost $107,511)		             121,091    

 


See Notes to Schedule of Investments

93


    Number
of Shares		   Value†
 (000's)		  
Short-Term Investments (3.8%)  
State Street
Institutional
Liquid Reserves
Fund Institutional
Class
(Cost $4,732)		     4,732,295     $ 4,732    
Total Investments##(101.0%)
(Cost $112,243)		         125,823    
Liabilities, less cash,
receivables and
other assets [(1.0%)]		         (1,223 )  
Total Net Assets (100.0%)       $ 124,600    

 


See Notes to Schedule of Investments

94


Schedule of Investments Mid Cap Growth Fund

TOP TEN EQUITY HOLDINGS

  1     WMS Industries     2.0 %  
  2     SBA Communications     1.8 %  
  3     Urban Outfitters     1.8 %  
  4     Ross Stores     1.6 %  
  5     Lazard Ltd.     1.6 %  
  6     Airgas, Inc.     1.5 %  
  7     Stericycle, Inc.     1.5 %  
  8     Ecolab Inc.     1.5 %  
  9     Dolby Laboratories     1.4 %  
  10     Express Scripts     1.4 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (94.4%)  
Aerospace & Defense (1.2%)  
Precision Castparts     61,300     $ 5,595    
Air Freight & Logistics (2.0%)  
C.H. Robinson
Worldwide		     105,800       5,952    
Expeditors
International		     94,900       3,100    
      9,052    
Biotechnology (3.2%)  
Alexion
Pharmaceuticals*		     76,400       3,449    
Dendreon Corp.*     60,400       1,412    
Human Genome
Sciences*È 		     130,000       2,571    
United
Therapeutics*		     24,500       2,242    
Vertex
Pharmaceuticals*È 		     125,000       4,676    
      14,350    
Capital Markets (4.9%)  
Affiliated Managers
Group*		     71,900       4,697    
Invesco Ltd.     205,300       4,260    
Lazard Ltd.     185,100       7,195    
Northern Trust     101,900       5,957    
      22,109    
Chemicals (3.0%)  
Airgas, Inc.     150,300       6,989    
Ecolab Inc.È      155,100       6,559    
      13,548    
Commercial Banks (0.8%)  
Signature Bank*     111,900       3,397    
Commercial Services & Supplies
(3.1%)		  
Copart, Inc.*È      65,600       2,318    
Iron Mountain*È      78,000       2,285    
Stericycle, Inc.*     140,900       6,978    
Waste Connections*     81,000       2,215    
      13,796    
Communications Equipment (1.4%)  
Brocade
Communications*		     278,200       2,011    
Juniper Networks*     181,900       4,197    
      6,208    

 

    Number
of Shares		   Value†
 (000's)		  
Computers & Peripherals (1.0%)  
NetApp, Inc.*     95,700     $ 2,177    
Western Digital*     72,400       2,482    
      4,659    
Construction & Engineering (1.0%)  
Jacobs Engineering
Group*		     102,800       4,521    
Diversified Consumer Services (2.3%)  
DeVry, Inc.     91,000       4,650    
Strayer EducationÈ      27,900       5,890    
      10,540    
Diversified Financial Services (2.0%)  
IntercontinentalExchange
Inc.*		     43,600       4,090    
MSCI Inc.*     159,400       4,689    
      8,779    
Electrical Equipment (1.6%)  
AMETEK, Inc.     135,500       4,265    
Roper Industries     65,400       3,099    
      7,364    
Electronic Equipment, Instruments & Components (3.8%)  
Amphenol Corp.     99,200       3,468    
Dolby Laboratories*     159,300       6,214    
National
Instruments		     131,900       3,381    
Trimble Navigation*     154,100       3,923    
      16,986    
Energy Equipment & Services (2.6%)  
CARBO CeramicsÈ      97,500       4,197    
Core
Laboratories N.V.È 		     43,600       4,041    
Noble Corp.     96,900       3,394    
      11,632    
Food & Staples Retailing (1.2%)  
Shoppers Drug
MartÈ 		     132,500       5,204    
Food Products (1.2%)  
Ralcorp Holdings*     83,100       5,213    
Health Care Equipment & Supplies (2.2%)  
C.R. BardÈ      34,800       2,804    
NuVasive, Inc.*È      66,400       2,661    

 

    Number
of Shares		   Value†
 (000's)		  
ResMed Inc.*     51,300     $ 2,355    
Wright Medical
Group*		     122,600       1,991    
      9,811    
Health Care Providers & Services (2.8%)  
Express Scripts*     85,300       6,161    
HMS Holdings*     66,800       2,512    
VCA Antech*     158,100       3,913    
      12,586    
Health Care Technology (1.0%)  
Allscripts Healthcare
SolutionsÈ 		     147,400       2,189    
MedAssets Inc.*     111,500       2,490    
      4,679    
Hotels, Restaurants & Leisure (4.7%)  
Ameristar CasinosÈ      149,500       2,483    
International Game
Technology		     84,600       1,770    
Marriott
International		     82,698       1,977    
Penn National
Gaming*		     203,800       5,953    
WMS Industries*     213,800       9,050    
      21,233    
Household Products (1.0%)  
Church & Dwight     76,700       4,382    
Internet & Catalog Retail (0.7%)  
Priceline.com Inc.*È      21,300       3,280    
Internet Software & Services (2.3%)  
Equinix, Inc.*È      55,300       4,659    
VistaPrint Ltd.*È      139,300       5,773    
      10,432    
IT Services (0.9%)  
Cognizant Technology
Solutions*		     116,000       4,046    
Life Science Tools & Services (1.5%)  
AMAG
Pharmaceuticals*		     58,700       2,409    
Illumina, Inc.*È      124,500       4,391    
      6,800    
Machinery (1.5%)  
Danaher Corp.     82,800       5,027    
Flowserve Corp.     21,500       1,854    
      6,881    

 


See Notes to Schedule of Investments

95


    Number
of Shares		   Value†
 (000's)		  
Media (1.4%)  
DreamWorks
Animation SKG*		     88,900     $ 3,001    
McGraw-Hill Cos.     95,700       3,217    
      6,218    
Metals & Mining (0.6%)  
Freeport-McMoRan
Copper & Gold		     41,900       2,639    
Multiline Retail (2.5%)  
Dollar Tree*     71,800       3,586    
Kohl's Corp.*È      73,400       3,787    
Nordstrom, Inc.È      140,000       3,925    
      11,298    
Oil, Gas & Consumable Fuels (4.5%)  
Alpha Natural
Resources*		     45,000       1,454    
Cabot Oil & Gas     63,100       2,224    
Concho Resources*     183,800       5,990    
Range Resources     122,500       5,926    
Southwestern
Energy*		     132,500       4,884    
      20,478    
Personal Products (1.6%)  
Avon Products     74,700       2,381    
Mead Johnson
Nutrition		     126,600       5,021    
      7,402    
Pharmaceuticals (0.6%)  
Mylan
Laboratories*È 		     191,900       2,815    
Professional Services (1.6%)  
CoStar Group*È      65,300       2,478    
IHS Inc.*     98,800       4,782    
      7,260    
Road & Rail (0.9%)  
J.B. Hunt Transport
ServicesÈ 		     139,400       3,907    
Semiconductors & Semiconductor Equipment (7.0%)  
Altera Corp.     90,400       1,737    
Analog Devices     144,300       4,076    
Avago
Technologies*		     125,000       2,275    
Broadcom Corp.*     109,000       3,101    
Lam Research*     79,700       2,447    
Marvell Technology
Group*		     263,600       4,020    
Microchip
TechnologyÈ 		     208,400       5,533    
Silicon
Laboratories*		     111,800       5,035    
Varian Semiconductor
Equipment*È 		     107,900       3,299    
      31,523    

 

    Number
of Shares		   Value†
 (000's)		  
Software (5.3%)  
Activision Blizzard*     485,800     $ 5,640    
ANSYS, Inc.*     159,100       5,591    
Citrix Systems*È      63,500       2,266    
McAfee Inc.*È      69,200       2,753    
MICROS Systems*     74,800       2,085    
Rovi Corp.*     107,100       3,260    
Sybase, Inc.*È      70,000       2,439    
      24,034    
Specialty Retail (7.6%)  
Bed Bath &
Beyond*		     137,400       5,012    
CarMax, Inc.*     135,600       2,347    
Gap Inc.     63,700       1,252    
O' Reilly
Automotive*È 		     84,600       3,238    
Ross Stores     158,200       7,378    
TJX Cos.     119,100       4,282    
Urban Outfitters*     283,600       8,063    
Williams-Sonoma     143,100       2,738    
      34,310    
Textiles, Apparel & Luxury Goods (0.5%)  
Coach, Inc.     77,000       2,178    
Trading Companies & Distributors (1.6%)  
Fastenal Co.È      125,600       4,547    
W.W. Grainger     31,800       2,781    
      7,328    
Wireless Telecommunication Services (3.8%)  
American Tower*     194,300       6,150    
Millicom International
Cellular*È 		     41,300       2,914    
SBA
Communications*		     338,400       8,159    
      17,223    
Total Common Stocks
(Cost $367,935)		             425,696    
Short-Term Investments (20.9%)  
Neuberger Berman
Securities Lending
Quality Fund,
LLC‡ 		     68,669,144       69,356    
State Street
Institutional
Liquid Reserves
Fund Institutional
Class		     25,018,476       25,018    
Total Short-Term Investments
(Cost $94,374)		             94,374    
Total Investments##(115.3%)
(Cost $462,309)		             520,070    
Liabilities, less cash,
receivables and
other assets [(15.3%)]		             (69,081 )  
Total Net Assets (100.0%)           $ 450,989    

 


See Notes to Schedule of Investments

96


Schedule of Investments Partners Fund

TOP TEN EQUITY HOLDINGS

  1     Bank of America     3.4 %  
  2     NBTY, Inc.     2.6 %  
  3     Petroleo Brasileiro ADR     2.3 %  
  4     Canadian Natural Resources     2.2 %  
  5     Berkshire Hathaway Class B     2.2 %  
  6     Moody's Corp.     2.2 %  
  7     Shire Limited ADR     2.1 %  
  8     Teck Cominco Class B     2.1 %  
  9     Harley-Davidson     1.9 %  
  10     J.P. Morgan Chase     1.9 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (96.9%)  
Aerospace & Defense (2.3%)  
Boeing Co.È      435,100     $ 21,612    
L-3 Communications
HoldingsÈ 		     476,200       35,429    
      57,041    
Automobiles (1.9%)  
Harley-Davidson     2,033,066       48,753    
Beverages (1.6%)  
Dr. Pepper Snapple
Group*		     1,559,800       41,241    
Building Products (1.0%)  
Owens Corning*È      1,168,000       26,093    
Capital Markets (5.3%)  
Goldman Sachs
Group		     153,100       25,332    
Invesco Ltd.     1,877,500       38,958    
Morgan StanleyÈ      1,115,782       32,313    
State Street     661,500       34,716    
      131,319    
Commercial Banks (2.8%)  
Comerica Inc.È      255,400       6,811    
Fifth Third
Bancorp		     1,151,400       12,596    
SunTrust BanksÈ      305,500       7,140    
Wells Fargo     1,564,300       43,050    
      69,597    
Computers & Peripherals (1.8%)  
Hewlett-Packard     979,200       43,956    
Construction & Engineering (2.6%)  
Chicago Bridge &
Iron		     2,434,600       38,320    
KBR, Inc.     1,164,532       26,377    
      64,697    
Consumer Finance (1.6%)  
American Express     1,187,900       40,175    
Diversified Financial Services (9.3%)  
Bank of America     4,780,400       84,087    
Citigroup Inc.     9,303,037       46,515    
J.P. Morgan
Chase		     1,088,900       47,324    
Moody's Corp.     1,981,994       53,990    
      231,916    
Electric Utilities (0.2%)  
FirstEnergy Corp.     83,600       3,773    

 

    Number
of Shares		   Value†
 (000's)		  
Electrical Equipment (1.5%)  
ABB Ltd.     1,977,500     $ 37,909    
Energy Equipment & Services (3.0%)  
National Oilwell
Varco*		     966,700       35,139    
Noble Corp.     1,136,900       39,826    
      74,965    
Health Care Equipment & Supplies (2.1%)  
Covidien PLC     688,000       27,224    
Zimmer Holdings*     550,700       26,076    
      53,300    
Health Care Providers & Services (3.0%)  
Aetna Inc.     1,031,700       29,403    
WellPoint Inc.*     851,800       45,018    
      74,421    
Health Care Technology (0.8%)  
IMS HealthÈ      1,482,100       20,542    
Household Durables (0.7%)  
NVR, Inc.*     5,400       3,646    
Whirlpool Corp.È      199,900       12,836    
      16,482    
Household Products (1.9%)  
Energizer Holdings*     714,500       46,750    
Independent Power Producers & Energy Traders (1.5%)  
NRG Energy*È      1,375,868       36,942    
Industrial Conglomerates (1.7%)  
McDermott
International*		     1,790,700       42,547    
Insurance (4.2%)  
Assurant, Inc.     674,500       20,202    
Berkshire Hathaway
Class B*		     16,700       54,876    
MetLife, Inc.     814,542       30,757    
      105,835    
IT Services (4.6%)  
Affiliated Computer
Services*		     686,200       30,742    
Fidelity National
Information
ServicesÈ 		     1,738,530       42,698    
Lender Processing
Services		     1,230,915       42,196    
      115,636    

 

    Number
of Shares		   Value†
 (000's)		  
Machinery (4.1%)  
Ingersoll-Rand
PLC		     1,050,174     $ 32,440    
Joy GlobalÈ      721,458       28,028    
Terex Corp.*     2,475,900       40,803    
      101,271    
Marine (0.5%)  
Genco Shipping &
TradingÈ 		     606,400       11,746    
Media (3.1%)  
Cablevision
Systems		     1,474,313       32,936    
McGraw-Hill Cos.     1,362,800       45,804    
      78,740    
Metals & Mining (6.2%)  
Cliffs Natural
Resources		     563,200       14,255    
Freeport-McMoRan
Copper & GoldÈ 		     669,400       42,159    
Sterlite Industries
(India) ADR*		     961,900       12,880    
Teck Cominco
Class B*È 		     2,185,900       52,593    
Xstrata PLC     2,427,000       32,655    
      154,542    
Multiline Retail (2.5%)  
J.C. PenneyÈ      1,270,900       38,178    
Macy's Inc.     1,572,400       24,403    
      62,581    
Oil, Gas & Consumable Fuels (13.7%)  
Canadian Natural
ResourcesÈ 		     964,400       55,193    
Denbury
Resources* 		     1,423,760       21,670    
EOG Resources     422,200       30,398    
Exxon Mobil     28,200       1,950    
Peabody Energy     861,400       28,151    
Petroleo Brasileiro
ADRÈ 		     1,439,500       57,062    
Ship Finance
InternationalÈ 		     1,290,203       16,334    
Southwestern
Energy*		     1,084,225       39,964    
Suncor Energy     822,305       25,195    
Talisman EnergyÈ      1,403,940       22,547    
Walter Industries     358,100       18,589    
XTO Energy     634,457       24,490    
      341,543    

 


See Notes to Schedule of Investments

97


    Number
of Shares		   Value†
 (000's)		  
Personal Products (3.3%)  
Avon Products     620,457     $ 19,774    
NBTY, Inc.*     1,724,774       63,920    
      83,694    
Pharmaceuticals (2.1%)  
Shire Limited
ADRÈ 		     1,065,659       52,814    
Road & Rail (0.3%)  
Norfolk SouthernÈ      183,900       8,435    
Software (3.1%)  
Check Point Software
Technologies*È 		     806,573       22,479    
Microsoft Corp.     957,400       23,600    
Oracle Corp.È      1,468,500       32,116    
      78,195    
Specialty Retail (1.2%)  
Best BuyÈ      829,975       30,111    
Wireless Telecommunication Services (1.4%)  
China Mobile
ADRÈ 		     712,600       35,074    
Total Common Stocks
(Cost $2,295,212)		             2,422,636    
Short-Term Investments (7.6%)  
Neuberger Berman
Securities Lending
Quality Fund,
LLC‡ 		     120,980,475       122,190    
State Street
Institutional
Liquid Reserves
Fund Institutional
Class		     67,955,372       67,955    
Total Short-Term Investments
(Cost $190,145)		             190,145    
Total Investments##(104.5%)
(Cost $2,485,357)		             2,612,781    
Liabilities, less cash,
receivables and
other assets [(4.5%)]		             (111,964 )  
Total Net Assets (100.0%)           $ 2,500,817    

 


See Notes to Schedule of Investments

98


Schedule of Investments Real Estate Fund

TOP TEN EQUITY HOLDINGS

  1     Simon Property Group     9.0 %  
  2     Boston Properties     5.6 %  
  3     Public Storage     5.6 %  
  4     Digital Realty Trust     4.8 %  
  5     HCP, Inc.     4.6 %  
  6     Equity Residential     4.0 %  
  7     Vornado Realty Trust     3.8 %  
  8     Ventas, Inc.     3.6 %  
  9     Federal Realty Investment Trust     2.8 %  
  10     Essex Property Trust     2.8 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (96.7%)  
Apartments (13.5%)  
American Campus
Communities		     39,451     $ 1,026    
AvalonBay
Communities		     28,032       1,806    
Camden Property
Trust		     43,500       1,597    
Equity Residential     97,700       2,668    
Essex Property
TrustÈ 		     24,900       1,858    
      8,955    
Diversified (3.8%)  
Vornado Realty
Trust		     43,442       2,499    
Health Care (12.1%)  
HCP, Inc.     106,800       3,042    
Nationwide Health
Properties		     57,600       1,836    
OMEGA Healthcare
Investors		     47,600       805    
Ventas, Inc.     60,300       2,364    
      8,047    
Home Financing (1.8%)  
Starwood Property
Trust*		     61,600       1,219    
Industrial (5.8%)  
AMB Property     66,100       1,509    
DCT Industrial
Trust		     131,500       694    
EastGroup
Properties		     24,900       937    
ProLogis     61,100       680    
      3,820    
Lodging (5.2%)  
Host Hotels &
Resorts		     121,500       1,211    
LaSalle Hotel
Properties		     36,300       601    
Starwood
Hotels & Resorts
WorldwideÈ 		     56,000       1,668    
      3,480    
Mixed (2.8%)  
Duke Realty     78,100       900    
PS Business Parks     17,500       926    
      1,826    

 

    Number
of Shares		   Value†
 (000's)		  
Office (15.3%)  
Alexandria Real
Estate EquitiesÈ 		     29,350     $ 1,635    
Boston Properties     61,600       3,732    
Brandywine
Realty Trust		     88,900       943    
Brookfield
Properties		     149,400       1,639    
Corporate Office
Properties Trust		     29,370       1,082    
Highwoods
Properties		     38,200       1,122    
      10,153    
Regional Malls (10.0%)  
Simon Property
GroupÈ 		     93,679       5,960    
Taubman Centers     21,400       677    
      6,637    
Self Storage (6.9%)  
Public Storage     52,300       3,690    
Sovran Self Storage     31,100       914    
      4,604    
Shopping Centers (9.8%)  
Acadia Realty
TrustÈ 		     40,722       624    
Federal Realty
Investment Trust		     29,900       1,865    
Kimco Realty     115,000       1,443    
Regency Centers     28,000       939    
Tanger Factory
Outlet Centers		     44,200       1,663    
      6,534    
Specialty (9.7%)  
Digital Realty Trust     73,500       3,203    
Dupont Fabros
Technology		     54,500       713    
Plum Creek Timber
Company		     36,000       1,091    
Rayonier Inc.     32,600       1,400    
      6,407    
Total Common Stocks
(Cost $50,864)		             64,181    

 

    Number
of Shares		   Value†
 (000's)		  
Short-Term Investments (17.2%)  
Neuberger Berman
Securities Lending
Quality Fund,
LLC‡ 		     9,144,630     $ 9,236    
State Street
Institutional
Liquid Reserves
Fund Institutional
Class		     2,226,248       2,226    
Total Short-Term Investments
(Cost $11,462)		         11,462    
Total Investments##(113.9%)
(Cost $62,326)		         75,643    
Liabilities, less cash,
receivables and
other assets [(13.9%)]		         (9,257 )  
Total Net Assets (100.0%)       $ 66,386    

 


See Notes to Schedule of Investments

99


Schedule of Investments Regency Fund

TOP TEN EQUITY HOLDINGS

  1     NBTY, Inc.     2.6 %  
  2     Teck Cominco Class B     2.5 %  
  3     Whirlpool Corp.     2.3 %  
  4     Whiting Petroleum     1.9 %  
  5     Harley-Davidson     1.9 %  
  6     Dr. Pepper Snapple Group     1.8 %  
  7     McGraw-Hill Cos.     1.7 %  
  8     Moody's Corp.     1.7 %  
  9     Lender Processing Services     1.7 %  
  10     NRG Energy     1.7 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (96.4%)  
Aerospace & Defense (2.3%)  
Embraer-Empresa
Brasileira de
Aeronautica ADRÈ 		     38,700     $ 822    
L-3 Communications
Holdings		     10,700       796    
      1,618    
Auto Components (1.7%)  
Johnson Controls     20,400       506    
WABCO Holdings     36,300       692    
      1,198    
Automobiles (1.9%)  
Harley-Davidson     55,200       1,324    
Beverages (1.8%)  
Dr. Pepper Snapple
Group*		     47,100       1,245    
Building Products (1.2%)  
Owens Corning*     38,500       860    
Capital Markets (4.1%)  
Invesco Ltd.     56,600       1,174    
Jefferies Group*     28,500       674    
Morgan Stanley     35,000       1,014    
      2,862    
Commercial Banks (6.0%)  
Comerica Inc.     29,700       792    
Fifth Third
Bancorp		     56,400       617    
First Horizon
National*		     42,405       567    
KeyCorp     99,800       665    
Regions FinancialÈ      95,900       562    
SunTrust Banks     21,200       495    
Zions BancorpÈ      29,400       520    
      4,218    
Construction & Engineering (1.4%)  
Chicago Bridge &
Iron		     63,000       992    
Diversified Financial Services (1.7%)  
Moody's Corp.     43,700       1,190    
Electric Utilities (5.0%)  
DPL Inc.     37,800       936    
Entergy Corp.     7,100       561    
FirstEnergy Corp.     17,100       772    

 

    Number
of Shares		   Value†
 (000's)		  
NV Energy     69,000     $ 832    
PPL Corp.     15,900       468    
      3,569    
Electronic Equipment, Instruments & Components (2.3%)  
Anixter
International*		     24,900       873    
Avnet, Inc.*     28,800       768    
      1,641    
Energy Equipment & Services (3.0%)  
National Oilwell
Varco*		     27,600       1,003    
Noble Corp.     20,400       715    
Oceaneering
International*		     7,400       386    
      2,104    
Food Products (1.4%)  
ConAgra, Inc.     24,300       499    
J.M. Smucker     9,600       502    
      1,001    
Health Care Equipment & Supplies (0.6%)  
Covidien PLC     10,900       431    
Health Care Providers & Services (5.0%)  
Aetna Inc.     26,800       764    
AmerisourceBergen
Corp.		     30,900       658    
CIGNA Corp.     19,800       583    
Coventry Health
Care*		     19,300       421    
Mednax, Inc.*     21,500       1,120    
      3,546    
Health Care Technology (0.7%)  
IMS Health     33,600       466    
Household Durables (3.4%)  
NVR, Inc.*     1,150       776    
Whirlpool Corp.     25,600       1,644    
      2,420    
Household Products (1.6%)  
Energizer
Holdings*		     17,300       1,132    
Independent Power Producers & Energy Traders (1.7%)  
NRG Energy*     44,100       1,184    

 

    Number
of Shares		   Value†
 (000's)		  
Industrial Conglomerates (0.8%)  
McDermott
International*		     25,100     $ 596    
Insurance (6.7%)  
Assurant, Inc.     29,800       893    
Fidelity National
Financial Class A		     17,000       255    
PartnerRe Ltd.     10,200       754    
Principal Financial
Group		     32,600       926    
StanCorp
Financial Group		     30,300       1,147    
W.R. Berkley     31,000       792    
      4,767    
IT Services (3.9%)  
Affiliated Computer
Services*		     15,900       712    
Fidelity National
Information
Services		     36,100       887    
Lender Processing
Services		     34,700       1,189    
      2,788    
Life Science Tools & Services (0.6%)  
Charles River
Laboratories
International*		     11,600       400    
Machinery (5.2%)  
Bucyrus
International		     20,700       618    
Ingersoll-Rand PLC     35,000       1,081    
Navistar
International*		     12,100       523    
SPX Corp.     7,400       412    
Terex Corp.*     62,700       1,034    
      3,668    
Marine (0.5%)  
Genco Shipping &
TradingÈ 		     17,000       329    
Media (3.2%)  
Cablevision Systems     46,500       1,039    
McGraw-Hill Cos.     35,700       1,200    
      2,239    

 


See Notes to Schedule of Investments

100


    Number
of Shares		   Value†
 (000's)		  
Metals & Mining (5.3%)  
Cliffs Natural
Resources		     23,800     $ 603    
Freeport-McMoRan
Copper & Gold		     16,200       1,020    
Sterlite Industries
(India) ADR*		     31,300       419    
Teck Cominco
Class B*		     72,100       1,735    
      3,777    
Multi-Utilities (1.3%)  
CMS Energy     66,500       892    
Multiline Retail (2.6%)  
J.C. Penney     37,700       1,133    
Macy's Inc.     47,500       737    
      1,870    
Oil, Gas & Consumable Fuels (8.5%)  
Apache Corp.È      8,700       739    
Denbury
Resources*		     32,200       490    
Noble Energy     17,300       1,046    
Ship Finance
InternationalÈ 		     28,279       358    
Southwestern
Energy*		     23,100       851    
Talisman Energy     71,585       1,150    
Whiting
Petroleum*		     28,100       1,364    
      5,998    
Personal Products (2.6%)  
NBTY, Inc.*     49,300       1,827    
Pharmaceuticals (1.5%)  
Shire Limited ADR     22,100       1,095    
Real Estate Investment Trusts (6.0%)  
Alexandria Real
Estate EquitiesÈ 		     12,200       680    
Annaly Capital
Management		     35,800       621    
Boston Properties     17,900       1,084    
Macerich Co.È      30,003       860    
Vornado Realty
Trust		     16,954       975    
      4,220    
Semiconductors & Semiconductor Equipment (0.4%)  
International
Rectifier*		     16,100       302    
Specialty Retail (0.5%)  
GameStop Corp.
Class A*		     13,800       328    
Total Common Stocks
(Cost $68,039)		             68,097    

 

    Number
of Shares		   Value†
 (000's)		  
Short-Term Investments (8.1%)  
Neuberger Berman
Securities Lending
Quality Fund,
LLC‡ 		     3,651,833     $ 3,688    
State Street
Institutional
Liquid Reserves
Fund Institutional
ClassØØ 		     2,047,443       2,047    
Total Short-Term Investments
(Cost $5,735)		         5,735    
Total Investments##(104.5%)
(Cost $73,774)		         73,832    
Liabilities, less cash,
receivables and
other assets [(4.5%)]		         (3,188 )  
Total Net Assets (100.0%)       $ 70,644    

 


See Notes to Schedule of Investments

101


Schedule of Investments Select Equities Fund

TOP TEN EQUITY HOLDINGS

  1     FPL Group     4.9 %  
  2     American Tower     4.5 %  
  3     Hewlett-Packard     4.0 %  
  4     J.P. Morgan Chase     3.9 %  
  5     Expeditors International     3.8 %  
  6     Lockheed Martin     3.4 %  
  7     QUALCOMM Inc.     3.3 %  
  8     Canadian Natural Resources     3.2 %  
  9     Visa Inc.     3.0 %  
  10     Baxter International     2.9 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (83.3%)  
Aerospace & Defense (3.5%)  
Lockheed Martin     24,002     $ 1,800    
Air Freight & Logistics (6.1%)  
C.H. Robinson
Worldwide		     21,922       1,233    
Expeditors
International		     60,442       1,974    
      3,207    
Capital Markets (2.5%)  
Goldman Sachs
Group		     7,821       1,294    
Chemicals (2.3%)  
Monsanto Co.     14,229       1,193    
Commercial Banks (5.7%)  
Banco Santander
ADR		     97,360       1,502    
HSBC Holdings PLC
ADR		     27,252       1,470    
      2,972    
Communications Equipment (3.3%)  
QUALCOMM Inc.     37,507       1,741    
Computers & Peripherals (4.0%)  
Hewlett-Packard     45,965       2,063    
Diversified Financial Services (3.9%)  
J.P. Morgan Chase     46,917       2,039    
Electric Utilities (4.9%)  
FPL Group     45,331       2,547    
Food & Staples Retailing (2.9%)  
Wal-Mart Stores     29,567       1,504    
Health Care Equipment & Supplies (4.8%)  
Alcon, Inc.     7,587       982    
Baxter International     26,940       1,534    
      2,516    
Household Products (2.9%)  
Procter & Gamble     28,305       1,531    
Industrial Gases (2.9%)  
Praxair, Inc.     19,874       1,523    
IT Services (3.0%)  
Visa Inc.     22,136       1,574    

 

    Number
of Shares		   Value†
 (000's)		  
Metals & Mining (2.3%)  
BHP Billiton ADR     19,500     $ 1,215    
Oil, Gas & Consumable Fuels (12.8%)  
Canadian Natural
Resources		     28,752       1,645    
Enbridge Inc.     33,990       1,265    
Petroleo Brasileiro
ADR		     28,327       1,123    
Range Resources     25,883       1,252    
Suncor Energy     45,480       1,394    
      6,679    
Pharmaceuticals (2.9%)  
Johnson & Johnson     24,918       1,506    
Real Estate Investment Trusts (2.5%)  
Vornado Realty
Trust		     22,563       1,298    
Software (2.8%)  
Oracle Corp.     67,816       1,483    
Tobacco (2.8%)  
Philip Morris
International		     32,142       1,469    
Wireless Telecommunication Services (4.5%)  
American Tower*     74,948       2,372    
Total Common Stocks
(Cost $39,591)		             43,526    
Short-Term Investments (14.9%)  
State Street
Institutional
Liquid Reserves
Fund Institutional
Class
(Cost $7,805)		     7,805,144       7,805    
Total Investments##(98.2%)
(Cost $47,396)		             51,331    
Cash, receivables
and other assets,
less liabilities (1.8%)		             936    
Total Net Assets (100.0%)           $ 52,267    

 


See Notes to Schedule of Investments

102


Schedule of Investments Small and Mid Cap Growth Fund

TOP TEN EQUITY HOLDINGS

  1     Urban Outfitters     2.8 %  
  2     Royal Caribbean Cruises     2.5 %  
  3     Ross Stores     2.4 %  
  4     Stericycle, Inc.     2.4 %  
  5     Lazard Ltd.     2.3 %  
  6     SBA Communications     2.2 %  
  7     Equinix, Inc.     2.2 %  
  8     Southwestern Energy     2.2 %  
  9     Marvell Technology Group     2.1 %  
  10     Shoppers Drug Mart     2.1 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (98.0%)  
Aerospace & Defense (3.0%)  
HEICO Corp.     1,700     $ 63    
Precision Castparts     1,300       119    
      182    
Air Freight & Logistics (1.9%)  
C.H. Robinson
Worldwide		     2,100       118    
Biotechnology (1.6%)  
Vertex
Pharmaceuticals*		     2,600       97    
Building Products (0.9%)  
Ameron International     700       57    
Capital Markets (5.4%)  
Lazard Ltd.     3,600       140    
Northern Trust     1,800       105    
Waddell & Reed
Financial		     3,200       85    
      330    
Chemicals (1.8%)  
Airgas, Inc.     2,300       107    
Commercial Services & Supplies (2.4%)  
Stericycle, Inc.*     2,900       144    
Construction & Engineering (1.2%)  
Jacobs Engineering
Group*		     1,600       70    
Diversified Consumer Services (2.7%)  
DeVry, Inc.     1,550       79    
Lincoln Educational
Services*		     3,900       87    
      166    
Diversified Financial Services (3.5%)  
IntercontinentalExchange
Inc.*		     1,100       103    
MSCI Inc.*     3,700       109    
      212    
Electrical Equipment (1.2%)  
AMETEK, Inc.     2,300       72    
Electronic Equipment, Instruments & Components (1.7%)  
Dolby Laboratories*     2,600       101    

 

    Number
of Shares		   Value†
 (000's)		  
Food & Staples Retailing (2.1%)  
Shoppers Drug Mart     3,200     $ 126    
Food Products (1.7%)  
Ralcorp Holdings*     1,600       100    
Health Care Equipment & Supplies (4.7%)  
Emergency Medical
Services*		     2,200       100    
NuVasive, Inc.*     2,300       92    
ResMed Inc.*     2,100       96    
      288    
Health Care Providers & Services (4.4%)  
Air Methods*     2,200       75    
Express Scripts*     1,400       101    
Mednax, Inc.*     1,800       94    
      270    
Hotels, Restaurants & Leisure (6.9%)  
Orient-Express Hotel     8,300       82    
Penn National
Gaming*		     2,600       76    
Royal Caribbean
Cruises		     7,900       151    
WMS Industries*     2,600       110    
      419    
Internet Software & Services (3.3%)  
Equinix, Inc.*     1,600       135    
VistaPrint Ltd.*     1,600       66    
      201    
IT Services (1.6%)  
RightNow
Technologies*		     7,800       98    
Marine (1.5%)  
Kirby Corp.*     2,500       93    
Media (1.2%)  
McGraw-Hill Cos.     2,100       71    
Oil, Gas & Consumable Fuels (6.9%)  
Arena Resources*     2,300       70    
Concho Resources*     3,500       114    
Range Resources     2,100       102    
Southwestern
Energy*		     3,600       133    
      419    

 

    Number
of Shares		   Value†
 (000's)		  
Personal Products (1.4%)  
Mead Johnson
Nutrition		     2,100     $ 83    
Professional Services (3.2%)  
IHS Inc.*     2,100       102    
TrueBlue, Inc.*     6,700       91    
      193    
Road & Rail (1.9%)  
Old Dominion
Freight Line*		     3,200       115    
Semiconductors & Semiconductor Equipment (14.6%)  
Analog Devices     3,200       90    
Hittite Microwave*     1,500       52    
Lam Research*     2,600       80    
Marvell Technology
Group*		     8,500       130    
Microchip
Technology		     4,200       112    
Netlogic
Microsystems*		     2,100       92    
Semtech Corp.*     3,900       71    
Silicon
Laboratories*		     2,200       99    
Varian Semiconductor
Equipment*		     3,300       101    
Veeco Instruments*     3,000       64    
      891    
Software (4.8%)  
Activision Blizzard*     7,400       86    
Informatica Corp.*     5,400       97    
Ultimate Software
Group*		     4,200       110    
      293    
Specialty Retail (8.3%)  
Bed Bath & Beyond*     2,600       95    
Ross Stores     3,200       149    
Tractor Supply*     2,000       94    
Urban Outfitters*     5,900       168    
      506    
Wireless Telecommunication Services (2.2%)  
SBA
Communications*		     5,600       135    
Total Common Stocks
(Cost $5,420)		             5,957    

 


See Notes to Schedule of Investments

103


    Number
of Shares		   Value†
 (000's)		  
Short-Term Investments (2.8%)  
State Street
Institutional
Liquid Reserves
Fund Institutional
Class
(Cost $173)		     172,701     $ 173    
Total Investments##(100.8%)
(Cost $5,593)		         6,130    
Liabilities, less cash,
receivables and
other assets [(0.8%)]		         (48 )  
Total Net Assets (100.0%)       $ 6,082    

 


See Notes to Schedule of Investments

 104


Schedule of Investments Small Cap Growth Fund

TOP TEN EQUITY HOLDINGS

  1     Royal Caribbean Cruises     2.4 %  
  2     Ultimate Software Group     2.1 %  
  3     Old Dominion Freight Line     2.0 %  
  4     Taleo Corp. Class A     2.0 %  
  5     Concho Resources     2.0 %  
  6     Informatica Corp.     1.9 %  
  7     Lincoln Educational Services     1.9 %  
  8     RightNow Technologies     1.8 %  
  9     IPC The Hospitalist     1.8 %  
  10     Orient-Express Hotel     1.8 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (97.7%)  
Aerospace & Defense (0.8%)  
HEICO Corp.È      44,900     $ 1,664    
Biotechnology (7.3%)  
Alexion
Pharmaceuticals*		     56,100       2,532    
Human Genome
Sciences*È 		     148,600       2,939    
Isis
Pharmaceuticals*		     129,000       2,082    
Onyx
Pharmaceuticals*È 		     71,900       2,306    
Regeneron
Pharmaceuticals*È 		     110,100       2,503    
Seattle Genetics*     182,500       2,236    
      14,598    
Building Products (1.0%)  
Ameron
International		     23,300       1,887    
Capital Markets (4.4%)  
GFI Group     330,300       2,365    
Janus Capital
GroupÈ 		     254,800       3,241    
Waddell & Reed
Financial		     117,500       3,117    
      8,723    
Chemicals (1.2%)  
NewMarket Corp     29,800       2,477    
Commercial Services & Supplies (4.8%)  
Cornell
Companies*		     125,500       2,521    
Geo Group*     114,900       2,105    
Healthcare Services
GroupÈ 		     141,300       2,498    
Tetra Tech*     78,400       2,316    
      9,440    
Consumer Finance (1.3%)  
Dollar Financial*     150,400       2,622    
Containers & Packaging (1.3%)  
Rock-Tenn     48,900       2,508    
Diversified Consumer Services (3.5%)  
Capella
Education*È 		     50,100       3,174    
Lincoln Educational
Services*		     165,800       3,677    
      6,851    

 

    Number
of Shares		   Value†
 (000's)		  
Electrical Equipment (2.1%)  
Harbin Electric*     163,400     $ 2,028    
Polypore
International*È 		     183,700       2,088    
      4,116    
Food & Staples Retailing (1.5%)  
United Natural
Foods*		     110,700       2,991    
Health Care Equipment & Supplies (5.1%)  
ICU Medical*     61,300       2,280    
Inverness Medical
Innovations*		     56,600       2,015    
NuVasive, Inc.*È      62,100       2,488    
Sirona Dental
Systems*È 		     126,800       3,353    
      10,136    
Health Care Providers & Services (9.8%)  
Air Methods*     77,100       2,632    
Emergency Medical
Services*		     64,000       2,902    
HMS Holdings*     61,200       2,302    
IPC The
Hospitalist*		     119,400       3,527    
Mednax, Inc.*     60,300       3,140    
PSS World
Medical*		     114,400       2,338    
Psychiatric
Solutions*È 		     101,500       2,719    
      19,560    
Health Care Technology (2.6%)  
MedAssets Inc.*     115,300       2,575    
SXC Health
Solutions*		     62,300       2,536    
      5,111    
Hotels, Restaurants & Leisure (6.7%)  
BJ Restaurants*È      133,900       2,296    
Orient-Express
HotelÈ 		     351,500       3,501    
Royal Caribbean
CruisesÈ 		     253,900       4,844    
WMS Industries*     62,500       2,646    
      13,287    
Household Durables (1.3%)  
Jarden Corp.*È      103,100       2,511    

 

    Number
of Shares		   Value†
 (000's)		  
Internet Software & Services (3.5%)  
Constant
Contact*È 		     114,600     $ 2,387    
LivePerson, Inc.*     544,500       2,243    
VistaPrint Ltd.*È      57,300       2,375    
      7,005    
IT Services (2.7%)  
Global Cash Access
Holdings*È 		     258,000       1,870    
RightNow
Technologies*È 		     281,700       3,544    
      5,414    
Marine (1.5%)  
Kirby Corp.*     82,000       3,038    
Oil, Gas & Consumable Fuels (3.1%)  
Arena Resources*     73,100       2,236    
Concho
Resources*		     120,600       3,930    
      6,166    
Professional Services (2.8%)  
ICF International*     96,400       2,637    
TrueBlue, Inc.*È      217,800       2,962    
      5,599    
Road & Rail (2.0%)  
Old Dominion
Freight Line*È 		     113,000       4,043    
Semiconductors & Semiconductor Equipment (8.2%)  
Hittite Microwave*     58,400       2,010    
Netlogic
Microsystems*È 		     71,300       3,131    
Semtech Corp.*È      137,531       2,513    
Silicon
Laboratories*		     72,500       3,265    
Varian Semiconductor
Equipment*È 		     105,600       3,228    
Veeco
Instruments*		     95,600       2,054    
      16,201    
Software (12.4%)  
Informatica Corp.*     214,800       3,851    
Jack Henry &
Associates		     89,200       2,079    
Nuance
Communications*		     172,900       2,132    
Perfect World*È      73,300       2,797    

 


See Notes to Schedule of Investments

105


    Number
of Shares		   Value†
 (000's)		  
Rovi Corp.*     94,900     $ 2,889    
Solera Holdings*     86,800       2,286    
SuccessFactors,
Inc.*		     47,800       567    
Taleo Corp.
Class A*		     223,100       4,036    
Ultimate Software
Group*È 		     154,500       4,074    
      24,711    
Specialty Retail (2.5%)  
hhgregg, Inc.*È      147,000       2,540    
Tractor Supply*È      53,200       2,504    
      5,044    
Textiles, Apparel & Luxury Goods (4.3%)  
Carter's, Inc.*     83,700       2,106    
Fuqi
International*È 		     80,400       2,085    
Lululemon
Athetica*È 		     107,300       2,152    
Warnaco
Group*È 		     57,300       2,180    
      8,523    
Total Common Stocks
(Cost $159,647)		             194,226    
Short-Term Investments (19.5%)  
Neuberger Berman
Securities Lending
Quality Fund,
LLC‡ 		     31,671,128       31,988    
State Street
Institutional
Liquid Reserves
Fund Institutional
ClassØØ 		     6,686,278       6,686    
Total Short-Term Investments
(Cost $38,674)		             38,674    
Total Investments##(117.2%)
(Cost $198,321)		             232,900    
Liabilities, less cash,
receivables and
other assets [(17.2%)]		             (34,190 )  
Total Net Assets (100.0%)           $ 198,710    

 


See Notes to Schedule of Investments

106


Schedule of Investments Socially Responsive Fund

TOP TEN EQUITY HOLDINGS

  1     Scripps Networks Interactive     5.1 %  
  2     Altera Corp.     5.0 %  
  3     Intuit Inc.     4.9 %  
  4     Washington Post     4.8 %  
  5     Danaher Corp.     4.7 %  
  6     National Instruments     4.1 %  
  7     Newfield Exploration     4.1 %  
  8     3M Co.     4.0 %  
  9     Novo Nordisk A/S Class B     4.0 %  
  10     Charles Schwab     3.9 %  

 

    Number
of Shares		   Value†
 (000's)		  
Common Stocks (95.0%)  
Automobiles (2.0%)  
Toyota Motor
ADRÈ 		     230,425     $ 19,630    
Biotechnology (3.4%)  
Genzyme Corp.*     601,595       33,515    
Capital Markets (6.3%)  
Charles Schwab     2,116,589       38,225    
The Bank of
New York Mellon		     806,617       23,884    
      62,109    
Commercial Services & Supplies (1.0%)  
Herman Miller     642,500       10,421    
Diversified Financial Services (1.5%)  
IntercontinentalExchange
Inc.*		     162,965       15,286    
Electronic Equipment, Instruments & Components (7.7%)  
Anixter
International*		     1,009,460       35,412    
National
Instruments		     1,571,218       40,270    
      75,682    
Energy Equipment & Services (2.3%)  
Smith
International		     810,615       22,349    
Health Care Providers & Services (2.0%)  
UnitedHealth
Group		     696,465       19,501    
Industrial Conglomerates (4.0%)  
3M Co.     551,090       39,734    
Industrial Gases (3.2%)  
Praxair, Inc.     406,825       31,171    
Insurance (5.2%)  
Markel Corp.*     63,215       20,789    
Progressive
Corp.		     1,821,165       30,086    
      50,875    
Internet Software & Services (3.0%)  
Yahoo! Inc.*     2,054,800       30,021    

 

    Number
of Shares		   Value†
 (000's)		  
Life Science Tools & Services (2.1%)  
Millipore Corp.*     314,500     $ 20,829    
Machinery (4.7%)  
Danaher Corp.     758,845       46,069    
Media (13.6%)  
Comcast Corp.
Class A Special		     2,474,225       36,099    
Scripps Networks
Interactive		     1,550,265       50,337    
Washington Post     110,143       47,842    
      134,278    
Multi-Utilities (2.6%)  
National Grid     1,942,488       18,737    
National Grid ADR     134,438       6,465    
      25,202    
Oil, Gas & Consumable Fuels (10.1%)  
BG Group PLC     2,056,900       34,055    
Cimarex Energy     636,744       24,858    
Newfield
Exploration*		     1,040,730       40,266    
      99,179    
Pharmaceuticals (4.0%)  
Novo Nordisk A/S
Class B		     639,950       39,010    
Road & Rail (3.4%)  
Canadian National
Railway		     690,835       33,347    
Semiconductors & Semiconductor Equipment (7.0%)  
Altera Corp.     2,552,680       49,037    
Texas Instruments     797,430       19,609    
      68,646    
Software (4.9%)  
Intuit Inc.*     1,735,125       48,184    
Specialty Chemicals (1.0%)  
Novozymes A/S     115,100       9,876    
Total Common Stocks
(Cost $986,950)		             934,914    
Short-Term Investments (0.4%)  
Neuberger Berman
Securities Lending
Quality Fund,
LLC‡
(Cost $4,332)		     4,289,134       4,332    

 

    Principal
Amount		   Value†
 (000's)		  
Repurchase Agreements (4.6%)  
Repurchase
Agreement
with Fixed Income
Clearing Corp.,
0.09%, due 9/1/09,
dated 8/31/09,
Maturity Value
$45,172,113,
Collateralized by
$45,840,000,
Federal Home
Loan Bank,
1.62%, due
12/30/09 (Collateral
Value $46,532,184)#
(Cost $45,172)
   $ 45,172,000     $ 45,172    
Certificates of Deposit (0.1%)  
Carver Federal
Savings, 0.50%,
due 9/26/09		     100,000       100    
Self Help Credit
Union, 0.46%,
due 11/16/09		     100,000       100    
Shorebank Chicago,
0.75%, due
10/26/09		     100,000       100    
Shorebank Pacific,
0.75%, due
11/2/09		     100,000       100    
Total Certificates of Deposit#
(Cost $400)		             400    
Total Investments##(100.1%)
(Cost $1,036,854)		             984,818    
Liabilities, less cash,
receivables and
other assets [(0.1%)]		             (641 )  
Total Net Assets (100.0%)           $ 984,177    

 


See Notes to Schedule of Investments

107


Notes to Schedule of Investments

†  The value of investments in equity securities by each fund and written options by Equity Income are determined by Neuberger Berman Management LLC ("Management") primarily by obtaining valuations from an independent pricing service based on the latest sale price when that price is readily available. Securities traded primarily on the NASDAQ Stock Market are normally valued by the funds at the NASDAQ Official Closing Price ("NOCP") provided by NASDAQ each business day. The NOCP is the most recently reported price as of 4:00:02 p.m., Eastern time, unless that price is outside the range of the "inside" bid and asked prices (i.e., the bid and asked prices that dealers quote to each other when trading for their own accounts); in that case, NASDAQ will adjust the price to equal the inside bid or asked price, whichever is closer. Because of delays in reporting trades, the NOCP may not be based on the price of the last trade to occur before the market closes. If there is no reported sale of a security on a particular day, the independent pricing service may value the security based on reported market quotations. If a valuation is not available from an independent pricing service, each fund seeks to obtain quotations from principal market makers. The value of investments in debt securities are determined by Management primarily by obtaining valuations from independent pricing services based on readily available bid quotations, or if quotations are not available, by methods which include considerations such as: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Management has developed a process to periodically review information provided by independent pricing services. For both debt and equity securities, if such quotations are not readily available, securities are valued using methods the Board of Trustees of Neuberger Berman Equity Funds (the "Board") has approved on the belief that they reflect fair value. Numerous factors may be considered when determining the fair value of a security, including available analyst, media or other reports, trading in futures or ADRs and whether the issuer of the security being fair valued has other securities outstanding. Foreign security prices are furnished by independent quotation services and expressed in local currency values. Foreign security prices are currently translated from the local currency into U.S. dollars using the exchange rate as of 4:00 p.m., Eastern time. The Board has approved the use of Interactive Data Pricing and Reference Data, Inc. ("Interactive") to assist in determining the fair value of the funds' foreign equity securities when changes in the value of a certain index suggest that the closing prices on the foreign exchanges may no longer represent the amount that a fund could expect to receive for those securities. In this event, Interactive will provide adjusted prices for certain foreign equity securities using a statistical analysis of historical correlations of multiple factors. In the absence of precise information about the market values of these foreign securities as of the close of the New York Stock Exchange, the Board has determined on the basis of available data that prices adjusted in this way are likely to be closer to the prices the funds could realize on a current sale than are the prices of those securities established at the close of the foreign markets in which the securities primarily trade. Fair value prices are necessarily estimates, and there is no assurance that such a price will be at or close to the price at which the security next trades. Short-term debt securities with less than 60 days until maturity may be valued at cost which, when combined with interest earned, approximates market value.

  In accordance with Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("FAS 157"), investments held by a fund are carried at "fair value" on a recurring basis. Fair value is defined as the price that a fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment under current market conditions. Various inputs are used in determining the value of the funds' investments some of which are discussed above.

  In addition, effective August 31, 2009, the funds adopted FASB Staff position ("FSP") No. 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" ("FSP No. 157-4"). FSP No. 157-4 emphasizes that the objective of fair value measurement described in FAS 157 remains unchanged and provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity for the asset or liability have significantly decreased, as well as identifying circumstances that indicate that transactions are not orderly. FSP No. 157-4


See Notes to Financial Statements

108


Notes to Schedule of Investments (cont'd)

identifies factors to be considered when determining whether or not a market is inactive and indicates that if a market is determined to be inactive and/or current market prices are reflective of "distressed sales" significant management judgment may be necessary to estimate fair value in accordance with FAS 157.

  In addition to defining fair value, FAS 157 established a three-tier hierarchy of inputs to establish a classification of fair value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

•  Level 1 – quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, amortized cost, etc.)

•  Level 3 – significant unobservable inputs (including the funds' own assumptions in determining the fair value of investments)

  The inputs or methodology used for valuing an investment are not necessarily an indication of the risk associated with investing in those securities.

  The following is a summary, by category of Level, of inputs used to value the funds' investments as of August 31, 2009:

Asset Valuation Inputs  
Neuberger Berman
(000's omitted)		   Level 1   Level 2   Level 3§§    Total  
Climate Change Fund  
Investments:  
Common Stocks§   $ 2,997     $ —     $ —     $ 2,997    
Short-Term Investments     —       62       —       62    
Total Investments     2,997       62       —       3,059    
Emerging Markets Equity Fund  
Investments:  
Common Stocks§     4,797       60       —       4,857    
Preferred Stocks§     556       —       0       556    
Participatory Notes§     319       —       —       319    
Convertible Bonds     —       —       8       8    
Short-Term Investments     —       161       —       161    
Total Investments     5,672       221       8       5,901    
Equity Income Fund  
Investments:  
Common Stocks§     41,483       —       —       41,483    
Convertible Preferred Stocks     2,854       —       —       2,854    
Convertible Bonds     —       14,393       —       14,393    
Corporate Debt Securities     —       248       —       248    
Short-Term Investments     —       5,780       —       5,780    
Total Investments     44,337       20,421       —       64,758    

 


See Notes to Financial Statements

109


Notes to Schedule of Investments (cont'd)

Neuberger Berman
(000's omitted)		   Level 1   Level 2   Level 3§§    Total  
Focus Fund  
Investments:  
Common Stocks§   $ 555,141     $ —     $ —     $ 555,141    
Short-Term Investments     —       66,200       —       66,200    
Total Investments     555,141       66,200       —       621,341    
Genesis Fund  
Investments:  
Common Stocks§     8,217,525       —       —       8,217,525    
Short-Term Investments     —       335,213       —       335,213    
Total Investments     8,217,525       335,213       —       8,552,738    
Guardian Fund  
Investments:  
Common Stocks§     914,269       —       —       914,269    
Short-Term Investments     —       32,039       —       32,039    
Total Investments     914,269       32,039       —       946,308    
International Fund  
Investments:  
Common Stocks§     378,011       —       —       378,011    
Preferred Stocks§     8,401       —       10       8,411    
Rights§     1       —       —       1    
Warrants§     17       —       —       17    
Short-Term Investments     —       32,004       —       32,004    
Total Investments     386,430       32,004       10       418,444    
International Institutional Fund  
Investments:  
Common Stocks§     209,015       —       —       209,015    
Preferred Stocks§     4,650       —       —       4,650    
Rights§     1       —       —       1    
Warrants§     9       —       —       9    
Short-Term Investments     —       14,702       —       14,702    
Total Investments     213,675       14,702       —       228,377    
International Large Cap Fund  
Investments:  
Common Stocks§     91,663       —       —       91,663    
Preferred Stocks§     1,357       —       —       1,357    
Rights§     0       —       —       0    
Warrants§     5       —       —       5    
Short-Term Investments     —       10,454       —       10,454    
Total Investments     93,025       10,454       —       103,479    

 


See Notes to Financial Statements

110


Notes to Schedule of Investments (cont'd)

Neuberger Berman
(000's omitted)		   Level 1   Level 2   Level 3§§    Total  
Large Cap Disciplined Growth Fund  
Investments:  
Common Stocks§   $ 121,091     $ —     $ —     $ 121,091    
Short-Term Investments     —       4,732       —       4,732    
Total Investments     121,091       4,732       —       125,823    
Mid Cap Growth Fund  
Investments:  
Common Stocks§     425,696       —       —       425,696    
Short-Term Investments     —       94,374       —       94,374    
Total Investments     425,696       94,374       —       520,070    
Partners Fund  
Investments:  
Common Stocks§     2,422,636       —       —       2,422,636    
Short-Term Investments     —       190,145       —       190,145    
Total Investments     2,422,636       190,145       —       2,612,781    
Real Estate Fund  
Investments:  
Common Stocks§     64,181       —       —       64,181    
Short-Term Investments     —       11,462       —       11,462    
Total Investments     64,181       11,462       —       75,643    
Regency Fund  
Investments:  
Common Stocks§     68,097       —       —       68,097    
Short-Term Investments     —       5,735       —       5,735    
Total Investments     68,097       5,735       —       73,832    
Select Equities Fund  
Investments:  
Common Stocks§     43,526       —       —       43,526    
Short-Term Investments     —       7,805       —       7,805    
Total Investments     43,526       7,805       —       51,331    
Small and Mid Cap Growth Fund  
Investments:  
Common Stocks§     5,957       —       —       5,957    
Short-Term Investments     —       173       —       173    
Total Investments     5,957       173       —       6,130    
Small Cap Growth Fund  
Investments:  
Common Stocks§     194,226       —       —       194,226    
Short-Term Investments     —       38,674       —       38,674    
Total Investments     194,226       38,674       —       232,900    

 


See Notes to Financial Statements

111


Notes to Schedule of Investments (cont'd)

Neuberger Berman
(000's omitted)		   Level 1   Level 2   Level 3§§    Total  
Socially Responsive Fund  
Investments:  
Common Stocks§   $ 934,914     $ —     $ —     $ 934,914    
Short-Term Investments     —       4,332       —       4,332    
Repurchase Agreements     —       45,172       —       45,172    
Certificates of Deposit     —       400       —       400    
Total Investments     934,914       49,904       —       984,818    

§  The Schedule of Investments provides information on the industry or country categorization for the portfolio.
  

§§  The following is a reconciliation between the beginning and ending balances of investments in which significant unobservable inputs (Level 3) were used in determining value:



Neuberger Berman
(000's omitted)		   Beginning
balance, as
of 9/1/08		   Accrued
discounts/
(premiums)		   Realized
gain/loss
and change
in unrealized
appreciation/
(depreciation)		   Net
purchases/
(sales)		   Net
transfers in
and/or out
of Level 3		   Balance, as
of 8/31/09		   Net change in
unrealized
appreciation/
(depreciation)
from
investments
still held
as of 8/31/09		  
Investments in Securities:  
Emerging Markets
Equity Fund		  
Preferred Stocks Brazil   $ —     $ —     $ 0     $ 0     $ —     $ 0     $ 0    
Convertible Bonds Brazil     —       —       3       5       —       8       3    
Total     —       —       3       5       —       8       3    
International Fund                                                          
Preferred Stocks Brazil     —       —       2       8       —       10       2    
Total     —       —       2       8       —       10       2    

 

Liability Valuation Inputs

  The following is a summary, by category of Level, of inputs used to value the Fund's derivatives as of August 31, 2009:

Neuberger Berman
(000's omitted)		   Level 1   Level 2   Level 3   Total  
Equity Income Fund  
Option Contracts   $ (265 )   $ —     $ —     $ (265 )  

 

#  At cost, which approximates market value.

^^  Value of the security was determined using methods the Board has approved on the belief they reflect fair value.

See Notes to Financial Statements

112




Notes to Schedule of Investments (cont'd)

##  At August 31, 2009, selected fund information on a U.S. federal income tax basis was as follows:

Neuberger Berman
(000's omitted)		   Cost   Gross
Unrealized
Appreciation		   Gross
Unrealized
Depreciation		   Net Unrealized
Appreciation
(Depreciation)		  
Climate Change Fund   $ 2,882     $ 211     $ 34     $ 177    
Emerging Markets Equity Fund     4,555       1,379       33       1,346    
Equity Income Fund     62,672       3,586       1,500       2,086    
Focus Fund     587,068       65,310       31,037       34,273    
Genesis Fund     6,781,944       2,338,204       567,410       1,770,794    
Guardian Fund     950,225       94,408       98,325       (3,917 )  
International Fund     402,933       42,275       26,764       15,511    
International Institutional Fund     228,520       18,618       18,761       (143 )  
International Large Cap Fund     100,155       9,030       5,706       3,324    
Large Cap Disciplined Growth Fund     115,463       10,637       277       10,360    
Mid Cap Growth Fund     464,329       66,172       10,431       55,741    
Partners Fund     2,489,577       477,638       354,434       123,204    
Real Estate Fund     69,377       6,659       393       6,266    
Regency Fund     75,047       8,858       10,073       (1,215 )  
Select Equities Fund     47,575       3,881       125       3,756    
Small and Mid Cap Growth Fund     5,644       676       190       486    
Small Cap Growth Fund     202,667       31,567       1,334       30,233    
Socially Responsive Fund     1,044,093       61,812       121,087       (59,275 )  

 

*  Security did not produce income during the last twelve months.

È  All or a portion of this security is on loan (see Note A of Notes to Financial Statements).

^  Affiliated issuer (see Note F of Notes to Financial Statements).

‡  Managed by an affiliate of Management and could be deemed an affiliate of the fund and is segregated in connection with obligations for security lending (see Notes A & F of Notes to Financial Statements).


See Notes to Financial Statements

113


Notes to Schedule of Investments (cont'd)

‡‡  At August 31, 2009, Neuberger Berman Equity Income Fund had outstanding call and put options written as follows:

Shares   Securities and Options   Market Value of Options  
  23,000     American Campus Communities, Call
December 2009 @ 30		   $ 20,000    
  10,000     AvalonBay Communities, Call
October 2009 @ 75		     8,000    
  10,000     Diageo PLC ADR, Call
October 2009 @ 60		     25,000    
  12,500     Digital Realty Trust, Call
October 2009 @ 45		     19,000    
  6,500     Exelon Corp., Call
October 2009 @ 55		     2,000    
  3,500     FPL Group, Call
September 2009 @ 60		     0    
  13,500     Health Care REIT, Call
December 2009 @ 45		     23,000    
  6,500     Johnson & Johnson, Call
October 2009 @ 60		     10,000    
  2,000     Marsh & McLennan, Call
January 2010 @ 25		     2,000    
  4,500     Norfolk Southern, Call
December 2009 @ 55		     4,000    
  9,000     Norfolk Southern, Call
September 2009 @ 45		     18,000    
  10,000     Phillip Morris International, Call
September 2009 @ 48		     1,000    
  5,000     Potash Corp. of Saskatchewan, Call
December 2009 @ 75		     19,000    
  5,000     Potash Corp. of Saskatchewan, Put
September 2009 @ 80		     5,000    
  21,500     Realty Income, Call
December 2009 @ 30		     11,000    
  15,000     Royal Gold, Inc., Put
October 2009 @ 35		     10,000    
  15,000     Safeway Inc., Put
December 2009 @ 17.5		     10,000    
  5,000     Schlumberger Ltd., Put
November 2009 @ 45		     5,000    
  20,000     Spectra Energy, Call
December 2009 @ 20		     12,000    
  25,500     Ventas, Inc., Call
November 2009 @ 40		     61,000    
        Total   $ 265,000    

 

ñ  Restricted security subject to restrictions on resale under federal securities laws. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers under Rule 144A under the Securities Act of 1933, as amended, and have been deemed by the investment manager to be liquid. At August 31, 2009, these securities amounted to $2,721,000 or 4.1% of net assets for Equity Income Fund.

Ñ  These securities have been deemed by the investment manager to be illiquid. At August 31, 2009, these securities amounted to $9,870,000 or 2.4% of net assets for International Fund.

µµ  Restricted security subject to restrictions on resale under federal securities laws. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers under Rule 144A under the Securities Act of 1933, as amended, and have been deemed by the investment manager to be illiquid and restricted. At August 31, 2009, these securities amounted to approximately $319,000 or 5.2% of net assets for Emerging Markets Equity Fund.


See Notes to Financial Statements

114


Notes to Schedule of Investments (cont'd)

(000's omitted)






Restricted Security		  
Acquisition
Date		  
Acquisition
Cost		  
Acquisition
Cost
Percentage
of Net Assets
as of
Acquisition
Date		  
Value as of
August 31, 2009		  
Fair Value
Percentage of
Net Assets as of
August 31, 2009		  
Bharat Heavy Electricals   2/18/2009 – 8/10/2009   $ 32       1.2 %   $ 48       0.8 %  
Cairn India   2/20/2009 – 7/29/2009     50       1.6 %     78       1.3 %  
Grasim Industry   5/12/2009 – 7/29/2009     35       0.8 %     50       0.8 %  
Hero Honda Motors   6/8/2009 & 7/29/2009     42       0.8 %     41       0.7 %  
Punjab National Bank   2/18/2009 & 7/29/2009     26       0.9 %     44       0.7 %  
Unitech Ltd.   6/30/2009 – 7/29/2009     49       1.1 %     58       0.9 %  

 

µ  Floating rate securities are securities whose yields vary with a designated market index or market rate. These securities are shown at their current rates as of August 31, 2009.

ØØ  All or a portion of this security is segregated in connection with written options and/or obligations for security lending.


See Notes to Financial Statements

115


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116


Statements of Assets and Liabilities

Neuberger Berman Equity Funds
(000's omitted except per share amounts)

    CLIMATE
CHANGE FUND		   EMERGING
MARKETS
EQUITY FUND		   EQUITY
INCOME FUND		   FOCUS FUND   GENESIS FUND  
    August 31,
2009		   August 31,
2009		   August 31,
2009		   August 31,
2009		   August 31,
2009		  
Assets  
Investments in securities, at value*† (Notes A & F)—see Schedule of Investments:  
Unaffiliated issuers   $ 3,059     $ 5,901     $ 64,758     $ 574,738     $ 4,340,279    
Affiliated issuers     —       —       —       46,603       4,212,459    
      3,059       5,901       64,758       621,341       8,552,738    
Cash     —       —       240       —       —    
Foreign currency     —       135       —       —       —    
Deposits with brokers for open option contracts     —       —       1,877       —       —    
Dividends and interest receivable     5       15       279       773       6,335    
Receivable for securities sold     113       —       962       3,292       3,098    
Receivable for Fund shares sold     2       5       555       98       13,757    
Receivable from administrator—net (Note B)     —       140       —       —       —    
Receivable for securities lending income—net (Note A)     —       —       —       16       —    
Prepaid expenses and other assets     —       —       2       40       431    
Total Assets     3,179       6,196       68,673       625,560       8,576,359    
Liabilities  
Options contracts written, at value (Note A)     —       —       265       —       —    
Due to custodian     —       8       —       —       —    
Payable for collateral on securities loaned (Note A)     —       —       —       46,099       —    
Payable for securities purchased     62       1       1,986       3,613       5,411    
Payable for Fund shares redeemed     1       —       108       286       11,411    
Payable to investment manager—net (Notes A & B)     2       5       29       257       4,832    
Payable to administrator—net (Note B)     15       —       2       133       1,966    
Accrued expenses and other payables     70       77       111       277       877    
Total Liabilities     150       91       2,501       50,665       24,497    
Net Assets at value   $ 3,029     $ 6,105     $ 66,172     $ 574,895     $ 8,551,862    
Net Assets consist of:  
Paid-in capital   $ 4,708     $ 4,730     $ 68,291     $ 669,368     $ 7,602,049    
Undistributed net investment income (loss)     —       —       365       4,523       (3 )  
Distributions in excess of net investment income     (62 )     (45 )     —       —       —    
Accumulated net realized gains (losses) on investments     (2,026 )     52       (4,795 )     (140,720 )     (835,000 )  
Net unrealized appreciation (depreciation) in value of investments     409       1,368       2,311       41,724       1,784,816    
Net Assets at value   $ 3,029     $ 6,105     $ 66,172     $ 574,895     $ 8,551,862    
Net Assets  
Investor Class   $ —     $ —     $ —     $ 540,912     $ 1,626,817    
Trust Class     —       —       —       23,747       3,244,145    
Advisor Class     —       —       —       10,236       397,851    
Institutional Class     1,510       4,054       18,883       —       3,283,049    
Class A     1,332       1,821       43,023       —       —    
Class C     187       230       4,266       —       —    
Class R3     —       —       —       —       —    

 

  


See Notes to Financial Statements

117


    GUARDIAN
FUND		   INTERNATIONAL
FUND		   INTERNATIONAL
INSTITUTIONAL
FUND		   INTERNATIONAL
LARGE CAP
FUND		   LARGE CAP
DISCIPLINED
GROWTH FUND		  
    August 31,
2009		   August 31,
2009		   August 31,
2009		   August 31,
2009		   August 31,
2009		  
Assets  
Investments in securities, at value*† (Notes A & F)—see Schedule of Investments:  
Unaffiliated issuers   $ 943,148     $ 402,860     $ 223,829     $ 101,146     $ 125,823    
Affiliated issuers     3,160       15,584       4,548       2,333       —    
      946,308       418,444       228,377       103,479       125,823    
Cash     —       —       —       —       —    
Foreign currency     —       9,915       734       186       —    
Deposits with brokers for open option contracts     —       —       —       —       —    
Dividends and interest receivable     848       642       411       212       201    
Receivable for securities sold     6,971       1,841       1,026       44       —    
Receivable for Fund shares sold     305       91       8       56       1,655    
Receivable from administrator—net (Note B)     —       —       67       6       46    
Receivable for securities lending income—net (Note A)     4       8       5       1       —    
Prepaid expenses and other assets     114       15       10       4       4    
Total Assets     954,550       430,956       230,638       103,988       127,729    
Liabilities  
Options contracts written, at value (Note A)     —       —       —       —       —    
Due to custodian     —       —       —       —       —    
Payable for collateral on securities loaned (Note A)     3,212       15,301       4,414       2,248       —    
Payable for securities purchased     1,581       3,367       2,090       481       2,150    
Payable for Fund shares redeemed     1,021       1,359       52       1       739    
Payable to investment manager—net (Notes A & B)     417       290       161       46       56    
Payable to administrator—net (Note B)     223       125       —       —       —    
Accrued expenses and other payables     378       256       127       99       184    
Total Liabilities     6,832       20,698       6,844       2,875       3,129    
Net Assets at value   $ 947,718     $ 410,258     $ 223,794     $ 101,113     $ 124,600    
Net Assets consist of:  
Paid-in capital   $ 1,071,855     $ 639,985     $ 401,041     $ 167,562     $ 121,895    
Undistributed net investment income (loss)     5,195       —       —       226       120    
Distributions in excess of net investment income     —       (464 )     (293 )     —       —    
Accumulated net realized gains (losses) on investments     (130,884 )     (257,046 )     (181,935 )     (72,226 )     (10,995 )  
Net unrealized appreciation (depreciation) in value of investments     1,552       27,783       4,981       5,551       13,580    
Net Assets at value   $ 947,718     $ 410,258     $ 223,794     $ 101,113     $ 124,600    
Net Assets  
Investor Class   $ 875,486     $ 208,808     $ —     $ —     $ 11,709    
Trust Class     71,017       201,450       —       28,904       —    
Advisor Class     543       —       —       —       —    
Institutional Class     54       —       223,794       67,725       23,336    
Class A     510       —       —       4,033       63,650    
Class C     54       —       —       396       25,850    
Class R3     54       —       —       55       55    


118


Statements of Assets and Liabilities (cont'd)

Neuberger Berman Equity Funds (cont'd)
(000's omitted except per share amounts)

    CLIMATE
CHANGE FUND		   EMERGING
MARKETS
EQUITY FUND		   EQUITY
INCOME FUND		   FOCUS FUND   GENESIS FUND  
    August 31,
2009		   August 31,
2009		   August 31,
2009		   August 31,
2009		   August 31,
2009		  
Shares Outstanding ($.001 par value; unlimited shares authorized)  
Investor Class     —       —       —       32,597       66,706    
Trust Class     —       —       —       1,956       92,701    
Advisor Class     —       —       —       1,219       19,546    
Institutional Class     240       288       2,161       —       97,586    
Class A     212       130       4,935       —       —    
Class C     30       16       490       —       —    
Class R3     —       —       —       —       —    
Net Asset Value, offering and redemption price per share  
Investor Class   $ —     $ —     $ —     $ 16.59     $ 24.39    
Trust Class     —       —       —       12.14       35.00    
Advisor Class     —       —       —       8.40       20.35    
Institutional Class     6.29       14.05       8.74       —       33.64    
Class R3     —       —       —       —       —    
Net Asset Value and redemption price per share  
Class A   $ 6.27     $ 14.02     $ 8.72     $ —     $ —    
Offering Price per share  
Class A‡   $ 6.65     $ 14.88     $ 9.25     $ —     $ —    
Net Asset Value and offering price per share  
Class C^   $ 6.21     $ 13.96     $ 8.70     $ —     $ —    
†Securities on loan, at value:  
Unaffiliated issuers   $ —     $ —     $ —     $ 45,136     $ —    
*Cost of Investments:  
Unaffiliated issuers   $ 2,650     $ 4,533     $ 62,453     $ 533,014     $ 3,226,646    
Affiliated issuers     —       —       —       46,603       3,541,276    
Total cost of investments   $ 2,650     $ 4,533     $ 62,453     $ 579,617     $ 6,767,922    
Total cost of foreign currency   $ —     $ 135     $ —     $ —     $ —    

‡  On single retail sales of less than $50,000. On sales of $50,000 or more or in certain other circumstances described in the fund's prospectus, offering price is reduced.

^  Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.


See Notes to Financial Statements

119


    GUARDIAN
FUND		   INTERNATIONAL
FUND		   INTERNATIONAL
INSTITUTIONAL
FUND		   INTERNATIONAL
LARGE CAP
FUND		   LARGE CAP
DISCIPLINED
GROWTH FUND		  
    August 31,
2009		   August 31,
2009		   August 31,
2009		   August 31,
2009		   August 31,
2009		  
Shares Outstanding ($.001 par value; unlimited shares authorized)  
Investor Class     78,509       15,375       —       —       1,939    
Trust Class     8,120       13,403       —       3,644       —    
Advisor Class     55       —       —       —       —    
Institutional Class     5       —       29,737       8,537       3,859    
Class A     58       —       —       511       10,542    
Class C     5       —       —       50       4,293    
Class R3     5       —       —       7       9    
Net Asset Value, offering and redemption price per share  
Investor Class   $ 11.15     $ 13.58     $ —     $ —     $ 6.04    
Trust Class     8.75       15.03       —       7.93       —    
Advisor Class     9.87       —       —       —       —    
Institutional Class     11.16       —       7.53       7.93       6.05    
Class R3     9.88       —       —       7.90       6.03    
Net Asset Value and redemption price per share  
Class A   $ 8.75     $ —     $ —     $ 7.90     $ 6.04    
Offering Price per share  
Class A‡   $ 9.28     $ —     $ —     $ 8.38     $ 6.41    
Net Asset Value and offering price per share  
Class C^   $ 9.86     $ —     $ —     $ 7.87     $ 6.02    
†Securities on loan, at value:  
Unaffiliated issuers   $ 3,148     $ 14,664     $ 4,255     $ 2,172     $ —    
*Cost of Investments:  
Unaffiliated issuers   $ 941,588     $ 375,087     $ 218,848     $ 95,602     $ 112,243    
Affiliated issuers     3,160       15,584       4,548       2,333       —    
Total cost of investments   $ 944,748     $ 390,671     $ 223,396     $ 97,935     $ 112,243    
Total cost of foreign currency   $ —     $ 9,898     $ 734     $ 186     $ —    

 


120


Statements of Assets and Liabilities (cont'd)

Neuberger Berman Equity Funds
(000's omitted except per share amounts)

   
MID CAP
GROWTH FUND		  
PARTNERS
FUND		  
REAL ESTATE
FUND		  
REGENCY
FUND		  
    August 31,
2009		   August 31,
2009		   August 31,
2009		   August 31,
2009		  
Assets  
Investments in securities, at value*† (Notes A & F)—see Schedule of Investments:  
Unaffiliated issuers   $ 450,714     $ 2,490,591     $ 66,407     $ 70,144    
Affiliated issuers     69,356       122,190       9,236       3,688    
      520,070       2,612,781       75,643       73,832    
Cash     —       —       —       —    
Foreign currency     —       —       —       —    
Deposits with brokers for open option contracts     —       —       —       —    
Dividends and interest receivable     249       3,284       182       144    
Receivable for securities sold     1,923       25,503       423       390    
Receivable for Fund shares sold     2,060       1,546       188       475    
Receivable from administrator—net (Note B)     —       —       28       —    
Receivable for securities lending income—net (Note A)     12       71       1       2    
Prepaid expenses and other assets     34       138       3       4    
Total Assets     524,348       2,643,323       76,468       74,847    
Liabilities  
Options contracts written, at value (Note A)     —       —       —       —    
Due to custodian     —       —       —       152    
Payable for collateral on securities loaned (Note A)     68,957       120,963       9,075       3,812    
Payable for securities purchased     3,783       15,579       658       36    
Payable for Fund shares redeemed     151       3,646       214       72    
Payable to investment manager—net (Notes A & B)     202       984       43       33    
Payable to administrator—net (Note B)     65       790       —       15    
Accrued expenses and other payables     201       544       92       83    
Total Liabilities     73,359       142,506       10,082       4,203    
Net Assets at value   $ 450,989     $ 2,500,817     $ 66,386     $ 70,644    
Net Assets consist of:  
Paid-in capital   $ 718,754     $ 2,929,578     $ 85,745     $ 101,372    
Undistributed net investment income (loss)     (1 )     16,033       —       593    
Distributions in excess of net investment income     —       —       —       —    
Accumulated net realized gains (losses) on investments     (325,525 )     (572,218 )     (32,676 )     (31,379 )  
Net unrealized appreciation (depreciation) in value of investments     57,761       127,424       13,317       58    
Net Assets at value   $ 450,989     $ 2,500,817     $ 66,386     $ 70,644    
Net Assets  
Investor Class   $ 280,880     $ 1,337,246     $ —     $ 43,785    
Trust Class     16,350       622,588       63,045       26,859    
Advisor Class     6,881       379,688       —       —    
Institutional Class     146,645       161,295       3,341       —    
Class A     122       —       —       —    
Class C     56       —       —       —    
Class R3     55       —       —       —    

 


See Notes to Financial Statements

121


    SELECT
EQUITIES
FUND		   SMALL AND
MID CAP
GROWTH FUND		  
SMALL CAP
GROWTH FUND		   SOCIALLY
RESPONSIVE
FUND		  
    August 31,
2009		   August 31,
2009		   August 31,
2009		   August 31,
2009		  
Assets  
Investments in securities, at value*† (Notes A & F)—see Schedule of Investments:  
Unaffiliated issuers   $ 51,331     $ 6,130     $ 200,912     $ 980,486    
Affiliated issuers     —       —       31,988       4,332    
      51,331       6,130       232,900       984,818    
Cash     —       —       —       —    
Foreign currency     —       —       —       —    
Deposits with brokers for open option contracts     —       —       —       —    
Dividends and interest receivable     116       2       1       753    
Receivable for securities sold     393       171       3,449       7,218    
Receivable for Fund shares sold     535       —       381       1,229    
Receivable from administrator—net (Note B)     —       18       60       —    
Receivable for securities lending income—net (Note A)     —       —       6       5    
Prepaid expenses and other assets     3       —       13       49    
Total Assets     52,378       6,321       236,810       994,072    
Liabilities  
Options contracts written, at value (Note A)     —       —       —       —    
Due to custodian     —       —       —       —    
Payable for collateral on securities loaned (Note A)     —       —       32,178       4,268    
Payable for securities purchased     —       175       4,976       3,786    
Payable for Fund shares redeemed     4       4       670       992    
Payable to investment manager—net (Notes A & B)     23       3       155       430    
Payable to administrator—net (Note B)     1       —       —       270    
Accrued expenses and other payables     83       57       121       149    
Total Liabilities     111       239       38,100       9,895    
Net Assets at value   $ 52,267     $ 6,082     198,710     $ 984,177    
Net Assets consist of:  
Paid-in capital   $ 49,606     $ 7,963     $ 385,108     $ 1,188,392    
Undistributed net investment income (loss)     90       (29 )     —       3,543    
Distributions in excess of net investment income     —       —       —       —    
Accumulated net realized gains (losses) on investments     (1,364 )     (2,389 )     (220,977 )     (155,714 )  
Net unrealized appreciation (depreciation) in value of investments     3,935       537       34,579       (52,044 )  
Net Assets at value   $ 52,267     $ 6,082     $ 198,710     $ 984,177    
Net Assets  
Investor Class   $ —     $ —     $ 144,118     $ 597,052    
Trust Class     —       6,082       35,187       308,241    
Advisor Class     —       —       11,711       —    
Institutional Class     6,517       —       7,484       77,644    
Class A     38,318       —       85       1,091    
Class C     7,432       —       69       95    
Class R3     —       —       56       54    


122


Statements of Assets and Liabilities (cont'd)

Neuberger Berman Equity Funds (cont'd)
(000's omitted except per share amounts)

    MID CAP
GROWTH FUND		   PARTNERS
FUND		   REAL ESTATE
FUND		   REGENCY
FUND		  
    August 31,
2009		   August 31,
2009		   August 31,
2009		   August 31,
2009		  
Shares Outstanding ($.001 par value; unlimited shares authorized)  
Investor Class     37,806       61,700       —       3,955    
Trust Class     1,446       37,340       8,146       2,779    
Advisor Class     592       26,336       —       —    
Institutional Class     19,556       7,402       431       —    
Class A     11       —       —       —    
Class C     5       —       —       —    
Class R3     5       —       —       —    
Net Asset Value, offering and redemption price per share  
Investor Class   $ 7.43     $ 21.67     $ —     $ 11.07    
Trust Class     11.31       16.67       7.74       9.66    
Advisor Class     11.63       14.42       —       —    
Institutional Class     7.50       21.79       7.76       —    
Class R3     11.63       —       —       —    
Net Asset Value and redemption price per share  
Class A   $ 11.31     $ —     $ —     $ —    
Offering Price per share  
Class A‡   $ 12.00     $ —     $ —     $ —    
Net Asset Value and offering price per share  
Class C^   $ 11.62     $ —     $ —     $ —    
†Securities on loan, at value:  
Unaffiliated issuers   $ 67,391     $ 118,395     $ 8,890     $ 3,732    
*Cost of Investments:  
Unaffiliated issuers   $ 392,953     $ 2,363,167     $ 53,090     $ 70,086    
Affiliated issuers     69,356       122,190       9,236       3,688    
Total cost of investments   $ 462,309     $ 2,485,357     $ 62,326     $ 73,774    
Total cost of foreign currency   $ —     $ —     $ —     $ —    

 

  

‡  On single retail sales of less than $50,000. On sales of $50,000 or more or in certain other circumstances described in the fund's prospectus, offering price is reduced.

^  Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.


See Notes to Financial Statements

123


    SELECT
EQUITIES
FUND		   SMALL AND
MID CAP
GROWTH FUND		   SMALL CAP
GROWTH FUND		   SOCIALLY
RESPONSIVE
FUND		  
    August 31,
2009		   August 31,
2009		   August 31,
2009		   August 31,
2009		  
Shares Outstanding ($.001 par value; unlimited shares authorized)  
Investor Class     —       —       10,956       31,864    
Trust Class     —       753       2,438       23,925    
Advisor Class     —       —       1,218       —    
Institutional Class     808       —       566       4,140    
Class A     4,763       —       6       85    
Class C     936       —       7       7    
Class R3     —       —       6       4    
Net Asset Value, offering and redemption price per share  
Investor Class   $ —     $ —     $ 13.15     $ 18.74    
Trust Class     —       8.07       14.43       12.88    
Advisor Class     —       —       9.61       —    
Institutional Class     8.06       —       13.23       18.75    
Class R3     —       —       9.61       12.87    
Net Asset Value and redemption price per share  
Class A   $ 8.05     $ —     $ 14.43     $ 12.88    
Offering Price per share  
Class A‡   $ 8.54     $ —     $ 15.31     $ 13.67    
Net Asset Value and offering price per share  
Class C^   $ 7.94     $ —     $ 9.60     $ 12.86    
†Securities on loan, at value:  
Unaffiliated issuers   $ —     $ —     $ 31,486     $ 4,184    
*Cost of Investments:  
Unaffiliated issuers   $ 47,396     $ 5,593     $ 166,333     $ 1,032,522    
Affiliated issuers     —       —       31,988       4,332    
Total cost of investments   $ 47,396     $ 5,593     $ 198,321     $ 1,036,854    
Total cost of foreign currency   $ —     $ —     $ —     $ —    

 


124


Statements of Operations

Neuberger Berman Equity Funds
(000's omitted)

    CLIMATE
CHANGE
FUND		  
EMERGING
MARKETS
EQUITY FUND		  
EQUITY
INCOME FUND		   FOCUS FUND   GENESIS FUND  
    For the
Year Ended
August 31,
2009		   For the
Period from
October 8, 2008
(Commencement
of Operations) to
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		  
For the
Year Ended
August 31,
2009		  
Investment Income:  
Income (Note A):  
Dividend income—unaffiliated issuers   $ 47     $ 98     $ 1,074     $ 9,588     $ 36,178    
Dividend income—affiliated issuers (Note F)     —       —       —       —       41,612    
Interest income—unaffiliated issuers     —       —       353       4       268    
Income from securities loaned—net (Note F)     —       —       —       587       —    
Income from investments in affiliated issuers (Note F)     2       4       25       189       4,922    
Foreign taxes withheld     (1 )     (12 )     (35 )     (97 )     (340 )  
Total income   $ 48     $ 90     $ 1,417     $ 10,271     $ 82,640    
Expenses:  
Investment management fees (Notes A & B)     23       32       178       2,873       53,314    
Administration fees (Note B)     2       2       19       323       4,806    
Administration fees (Note B):  
Investor Class     —       —       —       1,007       2,955    
Trust Class     —       —       —       84       10,540    
Advisor Class     —       —       —       33       1,251    
Institutional Class     1       2       3       —       2,758    
Class A     2       1       54       —       —    
Class C     —       —       4       —       —    
Class R3     —       —       —       —       —    
Distribution fees (Note B):  
Trust Class     —       —       —       25       —    
Advisor Class     —       —       —       24       920    
Class A     3       1       67       —       —    
Class C     1       1       19       —       —    
Shareholder servicing agent fees:  
Investor Class     —       —       —       428       1,487    
Trust Class     —       —       —       24       63    
Advisor Class     —       —       —       23       35    
Institutional Class     13       4       3       —       23    
Class A     9       3       89       —       —    
Class C     2       3       3       —       —    
Class R3     —       —       —       —       —    
Organization expense (Note A)     —       72       —       —       —    
Audit fees     31       25       57       57       57    
Custodian fees (Note B)     40       86       38       170       1,102    
Insurance expense     —       —       1       34       416    
Legal fees     48       157       71       56       74    
Registration and filing fees     50       39       57       49       273    
Shareholder reports     —       10       11       142       1,901    
Trustees' fees and expenses     40       40       45       45       42    
Miscellaneous     —       12       4       48       557    
Total expenses     265       490       723       5,445       82,574    

 


See Notes to Financial Statements

125


    GUARDIAN
FUND		   INTERNATIONAL
FUND		  
INTERNATIONAL
INSTITUTIONAL
FUND		  
INTERNATIONAL
LARGE CAP
FUND		   LARGE CAP
DISCIPLINED
GROWTH
FUND		  
    For the
Year Ended
August 31,
2009		  
For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		  
Investment Income:  
Income (Note A):  
Dividend income—unaffiliated issuers   $ 14,569     $ 11,710     $ 6,476     $ 2,838     $ 659    
Dividend income—affiliated issuers (Note F)     —       —       —       —       —    
Interest income—unaffiliated issuers     5       36       3       1       1    
Income from securities loaned—net (Note F)     161       603       318       152       —    
Income from investments in affiliated issuers (Note F)     129       259       147       67       4    
Foreign taxes withheld     (135 )     (963 )     (535 )     (260 )     (3 )  
Total income   $ 14,729     $ 11,645     $ 6,409     $ 2,798     $ 661    
Expenses:  
Investment management fees (Notes A & B)     4,646       3,516       1,926       529       224    
Administration fees (Note B)     540       252       136       58       24    
Administration fees (Note B):  
Investor Class     1,663       406       —       —       19    
Trust Class     233       734       —       88       —    
Advisor Class     2       —       —       —       —    
Institutional Class     —       —       204       61       4    
Class A     —       —       —       4       36    
Class C     —       —       —       —       17    
Class R3     —       —       —       —       —    
Distribution fees (Note B):  
Trust Class     68       —       —       26       —    
Advisor Class     1       —       —       —       —    
Class A     —       —       —       5       45    
Class C     —       —       —       2       83    
Shareholder servicing agent fees:  
Investor Class     870       223       —       —       37    
Trust Class     25       128       —       34       —    
Advisor Class     22       —       —       —       —    
Institutional Class     1       —       24       31       13    
Class A     1       —       —       10       32    
Class C     1       —       —       3       18    
Class R3     1       —       —       1       1    
Organization expense (Note A)     —       —       —       —       —    
Audit fees     57       59       59       60       21    
Custodian fees (Note B)     215       409       263       174       60    
Insurance expense     52       30       16       7       2    
Legal fees     65       49       49       59       99    
Registration and filing fees     113       46       44       127       40    
Shareholder reports     154       116       42       34       26    
Trustees' fees and expenses     45       45       45       45       45    
Miscellaneous     79       67       52       27       4    
Total expenses     8,854       6,080       2,860       1,385       850    

 


126


Statements of Operations (cont'd)

Neuberger Berman Equity Funds (cont'd)
(000's omitted)

    CLIMATE
CHANGE
FUND		  
EMERGING
MARKETS
EQUITY FUND		  
EQUITY
INCOME FUND		   FOCUS FUND   GENESIS FUND  
    For the
Year Ended
August 31,
2009		   For the
Period from
October 8, 2008
(Commencement
of Operations) to
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		  
Expenses reimbursed by administrator (Note B)     (235 )     (448 )     (342 )     (3 )     (510 )  
Investment management fees waived (Note A)     —       —       (3 )     (15 )     (389 )  
Expenses reduced by custodian fee expense offset arrangement (Note B)     —       —       —       —       (1 )  
Total net expenses     30       42       378       5,427       81,674    
Net investment income (loss)   $ 18     $ 48     $ 1,039     $ 4,844     $ 966    
Realized and Unrealized Gain (Loss) on Investments (Note A):  
Net realized gain (loss) on:  
Sales of investment securities of unaffiliated issuers     (1,753 )     51       (4,994 )     (140,118 )     (297,543 )  
Sales of investment securities of affiliated issuers     —       —       —       (85 )     (535,194 )  
Foreign currency     —       (15 )     (7 )     —       (3 )  
Net increase from payments by affiliates (Note B)     —       1       —       —       —    
Options written     —       —       184       —       —    
Change in net unrealized appreciation (depreciation) in value of:  
Unaffiliated investment securities     631       1,368       2,046       (58,876 )     (710,128 )  
Affiliated investment securities     —       —       —       (505 )     (1,713,558 )  
Foreign currency     —       —       —       —       —    
Options written     —       —       1       —       —    
Net gain (loss) on investments     (1,122 )     1,405       (2,770 )     (199,584 )     (3,256,426 )  
Net increase (decrease) in net assets resulting from operations   $ (1,104 )   $ 1,453     $ (1,731 )   $ (194,740 )   $ (3,255,460 )  

 

  


See Notes to Financial Statements

127


    GUARDIAN
FUND		   INTERNATIONAL
FUND		  
INTERNATIONAL
INSTITUTIONAL
FUND		  
INTERNATIONAL
LARGE CAP
FUND		   LARGE CAP
DISCIPLINED
GROWTH
FUND		  
    For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		  
Expenses reimbursed by administrator (Note B)     (23 )     —       (1,006 )     (398 )     (330 )  
Investment management fees waived (Note A)     (15 )     (16 )     (9 )     (5 )     (1 )  
Expenses reduced by custodian fee expense offset arrangement (Note B)     —       (1 )     —       —       —    
Total net expenses     8,816       6,063       1,845       982       519    
Net investment income (loss)   $ 5,913     $ 5,582     $ 4,564     $ 1,816     $ 142    
Realized and Unrealized Gain (Loss) on Investments (Note A):  
Net realized gain (loss) on:  
Sales of investment securities of unaffiliated issuers     (124,413 )     (230,634 )     (147,350 )     (61,803 )     (3,314 )  
Sales of investment securities of affiliated issuers     (1,262 )     (214 )     (124 )     21       —    
Foreign currency     (371 )     (1,658 )     (966 )     (373 )     —    
Net increase from payments by affiliates (Note B)     —       —       —       —       —    
Options written     —       —       —       —       —    
Change in net unrealized appreciation (depreciation) in value of:  
Unaffiliated investment securities     (197,850 )     31,603       29,327       21,541       12,067    
Affiliated investment securities     —       —       —       —       —    
Foreign currency     42       186       30       25       —    
Options written     —       —       —       —       —    
Net gain (loss) on investments     (323,854 )     (200,717 )     (119,083 )     (40,589 )     8,753    
Net increase (decrease) in net assets resulting from operations   $ (317,941 )   $ (195,135 )   $ (114,519 )   $ (38,773 )   $ 8,895    

 


128


Statements of Operations (cont'd)

Neuberger Berman Equity Funds
(000's omitted)

    MID CAP
GROWTH
FUND		   PARTNERS
FUND		   REAL ESTATE
FUND		   REGENCY
FUND		  
    For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		  
Investment Income:  
Income (Note A):  
Dividend income—unaffiliated issuers   $ 2,080     $ 35,078     $ 1,933     $ 1,488    
Dividend income—affiliated issuers (Note F)     —       —       —       —    
Interest income—unaffiliated issuers     6       49       —       1    
Income from securities loaned—net (Note F)     719       2,467       94       75    
Income from investments in affiliated issuers (Note F)     221       180       11       37    
Foreign taxes withheld     (23 )     (292 )     (5 )     (6 )  
Total income   $ 3,003     $ 37,482     $ 2,033     $ 1,595    
Expenses:  
Investment management fees (Notes A & B)     1,945       10,158       354       409    
Administration fees (Note B)     215       1,293       27       45    
Administration fees (Note B):  
Investor Class     538       2,336       —       82    
Trust Class     38       1,837       147       113    
Advisor Class     12       1,107       —       —    
Institutional Class     67       109       1       —    
Class A     —       —       —       —    
Class C     —       —       —       —    
Class R3     —       —       —       —    
Distribution fees (Note B):  
Trust Class     —       540       43       33    
Advisor Class     9       814       —       —    
Class A     —       —       —       —    
Class C     —       —       —       —    
Shareholder servicing agent fees:  
Investor Class     461       1,031       —       70    
Trust Class     20       32       45       49    
Advisor Class     19       31       —       —    
Institutional Class     23       23       14       —    
Class A     1       —       —       —    
Class C     1       —       —       —    
Class R3     1       —       —       —    
Organization expense (Note A)     —       —       —       —    
Audit fees     21       57       59       21    
Custodian fees (Note B)     148       468       31       66    
Insurance expense     19       136       2       5    
Legal fees     62       52       44       43    
Registration and filing fees     111       85       69       68    
Shareholder reports     73       460       16       28    
Trustees' fees and expenses     45       45       45       45    
Miscellaneous     33       173       5       14    
Total expenses     3,862       20,787       902       1,091    

 


See Notes to Financial Statements

129


    SELECT
EQUITIES
FUND		   SMALL AND
MID CAP
GROWTH FUND		   SMALL CAP
GROWTH
FUND		   SOCIALLY
RESPONSIVE
FUND		  
    For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		  
Investment Income:  
Income (Note A):  
Dividend income—unaffiliated issuers   $ 409     $ 23     $ 507     $ 12,515    
Dividend income—affiliated issuers (Note F)     —       —       —       —    
Interest income—unaffiliated issuers     2       —       2       101    
Income from securities loaned—net (Note F)     —       —       295       131    
Income from investments in affiliated issuers (Note F)     35       4       81       —    
Foreign taxes withheld     (12 )     —       —       (208 )  
Total income   $ 434     $ 27     $ 885     $ 12,539    
Expenses:  
Investment management fees (Notes A & B)     138       30       1,834       4,497    
Administration fees (Note B)     15       3       130       521    
Administration fees (Note B):  
Investor Class     —       —       346       1,087    
Trust Class     —       19       95       902    
Advisor Class     —       —       35       —    
Institutional Class     2       —       4       54    
Class A     40       —       —       —    
Class C     6       —       —       —    
Class R3     —       —       —       —    
Distribution fees (Note B):  
Trust Class     —       6       28       265    
Advisor Class     —       —       26       —    
Class A     50       —       —       —    
Class C     31       —       —       —    
Shareholder servicing agent fees:  
Investor Class     —       —       161       357    
Trust Class     —       28       22       58    
Advisor Class     —       —       20       —    
Institutional Class     22       —       18       14    
Class A     71       —       1       1    
Class C     11       —       1       1    
Class R3     —       —       1       1    
Organization expense (Note A)     —       —       —       —    
Audit fees     40       21       21       21    
Custodian fees (Note B)     34       11       127       240    
Insurance expense     1       —       7       45    
Legal fees     28       43       74       37    
Registration and filing fees     46       49       138       103    
Shareholder reports     —       9       181       212    
Trustees' fees and expenses     45       45       45       45    
Miscellaneous     —       2       22       67    
Total expenses     580       266       3,337       8,528    


130


Statements of Operations (cont'd)

Neuberger Berman Equity Funds (cont'd)
(000's omitted)

    MID CAP
GROWTH
FUND		   PARTNERS
FUND		   REAL ESTATE
FUND		   REGENCY
FUND		  
    For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		  
Expenses reimbursed by administrator (Note B)     (103 )     (10 )     (463 )     (111 )  
Investment management fees waived (Note A)     (19 )     (20 )     (1 )     (2 )  
Expenses reduced by custodian fee expense offset arrangement (Note B)     (1 )     (1 )     —       —    
Total net expenses     3,739       20,756       438       978    
Net investment income (loss)   $ (736 )   $ 16,726     $ 1,595     $ 617    
Realized and Unrealized Gain (Loss) on Investments (Note A):  
Net realized gain (loss) on:  
Sales of investment securities of unaffiliated issuers     (67,393 )     (573,688 )     (21,990 )     (30,862 )  
Sales of investment securities of affiliated issuers     526       1,909       173       (84 )  
Foreign currency     (1 )     (675 )     —       —    
Net increase from payments by affiliates (Note B)     —       —       —       —    
Options written     —       —       —       —    
Change in net unrealized appreciation (depreciation) in value of:  
Unaffiliated investment securities     (28,480 )     (472,844 )     12,292       (4,490 )  
Affiliated investment securities     —       —       —       —    
Foreign currency     1       55       —       —    
Options written     —       —       —       —    
Net gain (loss) on investments     (95,347 )     (1,045,243 )     (9,525 )     (35,436 )  
Net increase (decrease) in net assets resulting from operations   $ (96,083 )   $ (1,028,517 )   $ (7,930 )   $ (34,819 )  

 

  


See Notes to Financial Statements

131


    SELECT
EQUITIES
FUND		   SMALL AND
MID CAP
GROWTH FUND		   SMALL CAP
GROWTH
FUND		   SOCIALLY
RESPONSIVE
FUND		  
    For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		   For the
Year Ended
August 31,
2009		  
Expenses reimbursed by administrator (Note B)     (258 )     (204 )     (477 )     (20 )  
Investment management fees waived (Note A)     (6 )     —       (5 )     —    
Expenses reduced by custodian fee expense offset arrangement (Note B)     —       —       —       (3 )  
Total net expenses     316       62       2,855       8,505    
Net investment income (loss)   $ 118     $ (35 )   $ (1,970 )   $ 4,034    
Realized and Unrealized Gain (Loss) on Investments (Note A):  
Net realized gain (loss) on:  
Sales of investment securities of unaffiliated issuers     (1,082 )     (1,618 )     (90,281 )     (148,654 )  
Sales of investment securities of affiliated issuers     —       —       (349 )     (182 )  
Foreign currency     —       —       —       (191 )  
Net increase from payments by affiliates (Note B)     —       —       —       —    
Options written     —       —       —       —    
Change in net unrealized appreciation (depreciation) in value of:  
Unaffiliated investment securities     4,057       (137 )     10,318       (126,684 )  
Affiliated investment securities     —       —       —       —    
Foreign currency     —       —       —       31    
Options written     —       —       —       —    
Net gain (loss) on investments     2,975       (1,755 )     (80,312 )     (275,680 )  
Net increase (decrease) in net assets resulting from operations   $ 3,093     $ (1,790 )   $ (82,282 )   $ (271,646 )  


132


Statements of Changes in Net Assets

Neuberger Berman Equity Funds
(000's omitted)

   
CLIMATE CHANGE FUND		   EMERGING
MARKETS
EQUITY FUND		   EQUITY INCOME FUND  
    Year Ended
August 31,		   Period from
May 1, 2008
(Commencement
of Operations) to
August 31,		   Period from
October 8, 2008
(Commencement
of Operations) to
August 31,		   Year Ended
August 31,		   Year Ended
August 31,		  
    2009   2008   2009   2009   2008  
Increase (Decrease) in Net Assets:  
From Operations (Note A):  
Net investment income (loss)   $ 18     $ 20     $ 48     $ 1,039     $ 228    
Net realized gain (loss) on investments     (1,753 )     (276 )     36       (4,817 )     206    
Net increase from payments by affiliates     —       —       1       —       —    
Change in net unrealized appreciation (depreciation) of investments     631       (222 )     1,368       2,047       136    
Net increase (decrease) in net assets resulting from operations     (1,104 )     (478 )     1,453       (1,731 )     570    
Distributions to Shareholders From (Note A):  
Net investment income:  
Investor Class     —       —       —       —       —    
Trust Class     —       —       —       —       (110 )  
Advisor Class     —       —       —       —       —    
Institutional Class     (51 )     —       (73 )     (83 )     (30 )  
Class A     (44 )     —       (3 )     (593 )     (34 )  
Class C     (3 )     —       (2 )     (33 )     —    
Net realized gain on investments:  
Investor Class     —       —       —       —       —    
Trust Class     —       —       —       —       (122 )  
Advisor Class     —       —       —       —       —    
Institutional Class     —       —       —       (8 )     —    
Class A     —       —       —       (195 )     —    
Class C     —       —       —       (11 )     —    
Tax Return of Capital:  
Investor Class     —       —       —       —       —    
Trust Class     —       —       —       —       —    
Advisor Class     —       —       —       —       —    
Institutional Class     —       —       —       —       —    
Total distributions to shareholders     (98 )     —       (78 )     (923 )     (296 )  
From Fund Share Transactions (Note D):  
Proceeds from shares sold:  
Investor Class     —       —       —       —       —    
Trust Class     —       —       —       —       —    
Advisor Class     —       —       —       —       —    
Institutional Class     —       2,300       2,803       17,793       —    
Class A     766       2,062       1,839       34,665       23,659    
Class C     131       103       230       3,843       1,362    
Class R3     —       —       —       —       —    
Proceeds from reinvestment of dividends and distributions:  
Investor Class     —       —       —       —       —    
Trust Class     —       —       —       —       232    
Advisor Class     —       —       —       —       —    
Institutional Class     51       —       73       67       30    
Class A     39       —       3       645       34    
Class C     3       —       2       19       —    

 


See Notes to Financial Statements

133


    FOCUS FUND   GENESIS FUND  
    Year Ended
August 31,		   Year Ended
August 31,		   Year Ended
August 31,		   Year Ended
August 31,		  
    2009   2008   2009   2008  
Increase (Decrease) in Net Assets:  
From Operations (Note A):  
Net investment income (loss)   $ 4,844     $ 5,189     $ 966     $ (21,135 )  
Net realized gain (loss) on investments     (140,203 )     89,847       (832,740 )     656,988    
Net increase from payments by affiliates     —       —       —       —    
Change in net unrealized appreciation (depreciation) of investments     (59,381 )     (161,335 )     (2,423,686 )     518,219    
Net increase (decrease) in net assets resulting from operations     (194,740 )     (66,299 )     (3,255,460 )     1,154,072    
Distributions to Shareholders From (Note A):  
Net investment income:  
Investor Class     (4,182 )     (4,520 )     —       (8,679 )  
Trust Class     (216 )     (251 )     —       (6,795 )  
Advisor Class     (101 )     (93 )     —       (1,175 )  
Institutional Class     —       —       —       (16,557 )  
Class A     —       —       —       —    
Class C     —       —       —       —    
Net realized gain on investments:  
Investor Class     (67,093 )     (170,665 )     (80,456 )     (311,099 )  
Trust Class     (3,422 )     (12,027 )     (173,777 )     (714,962 )  
Advisor Class     (1,281 )     (3,835 )     (19,689 )     (85,542 )  
Institutional Class     —       —       (168,141 )     (580,084 )  
Class A     —       —       —       —    
Class C     —       —       —       —    
Tax Return of Capital:  
Investor Class     —       —       (4 )     —    
Trust Class     —       —       (6 )     —    
Advisor Class     —       —       (1 )     —    
Institutional Class     —       —       (6 )     —    
Total distributions to shareholders     (76,295 )     (191,391 )     (442,080 )     (1,724,893 )  
From Fund Share Transactions (Note D):  
Proceeds from shares sold:  
Investor Class     7,825       11,833       329,375       326,391    
Trust Class     6,788       7,677       732,619       1,117,558    
Advisor Class     1,361       2,397       127,612       168,479    
Institutional Class     —       —       707,914       1,544,706    
Class A     —       —       —       —    
Class C     —       —       —       —    
Class R3     —       —       —       —    
Proceeds from reinvestment of dividends and distributions:  
Investor Class     62,415       151,938       77,477       308,158    
Trust Class     3,550       12,094       161,758       700,429    
Advisor Class     1,369       3,890       19,082       84,454    
Institutional Class     —       —       167,662       593,818    
Class A     —       —       —       —    
Class C     —       —       —       —    


134


Statements of Changes in Net Assets (cont'd)

Neuberger Berman Equity Funds (cont'd)
(000's omitted)

   
CLIMATE CHANGE FUND		   EMERGING
MARKETS
EQUITY FUND		   EQUITY INCOME FUND  
    Year Ended
August 31,		   Period from
May 1, 2008
(Commencement
of Operations) to
August 31,		   Period from
October 8, 2008
(Commencement
of Operations) to
August 31,		   Year Ended
August 31,		   Year Ended
August 31,		  
    2009   2008   2009   2009   2008  
Proceeds from shares issued in connection with mergers (Note H)  
Investor Class     —       —       —       —       —    
Advisor Class     —       —       —       —       —    
Institutional Class     —       —       —       —       —    
Class A     —       —       —       —       —    
Class C     —       —       —       —       —    
Proceeds from conversion of Trust Class or Class A shares (Note H):  
Investor Class     —       —       —       —       —    
Trust Class     —       —       —       —       (5,654 )  
Institutional Class     —       —       —       —       5,654    
Class A     —       —       —                    
Payments for shares redeemed:  
Investor Class     —       —       —       —       —    
Trust Class     —       —       —       —       (200 )  
Advisor Class     —       —       —       —       —    
Institutional Class     —       —       —       (4,176 )     —    
Class A     (740 )     —       (158 )     (13,462 )     (187 )  
Class C     (6 )     —       (62 )     (978 )     (179 )  
Redemption fees retained:  
Investor Class     —       —       —       —       —    
Trust Class     —       —       —       —       —    
Institutional Class     —       —       —       —       —    
Net increase (decrease) from Fund share transactions     244       4,465       4,730       38,416       24,751    
Net Increase (Decrease) in Net Assets     (958 )     3,987       6,105       35,762       25,025    
Net Assets:  
Beginning of year     3,987       —       —       30,410       5,385    
End of year   $ 3,029     $ 3,987     $ 6,105     $ 66,172     $ 30,410    
Undistributed net investment income (loss) at end of year   $ —     $ 18     $ —     $ 365     $ 58    
Distributions in excess of net investment income at end of year   $ (62 )   $ —     $ (45 )   $ —     $ —    

 


See Notes to Financial Statements

135


    FOCUS FUND   GENESIS FUND  
    Year Ended
August 31,		   Year Ended
August 31,		   Year Ended
August 31,		   Year Ended
August 31,		  
    2009   2008   2009   2008  
Proceeds from shares issued in connection with mergers (Note H)  
Investor Class     —       —       —       205,864    
Advisor Class     —       —       —       11,848    
Institutional Class     —       —       —       —    
Class A     —       —       —       —    
Class C     —       —       —       —    
Proceeds from conversion of Trust Class or Class A shares (Note H):  
Investor Class     —       —       —       —    
Trust Class     —       —       —       —    
Institutional Class     —       —       —       —    
Class A                                  
Payments for shares redeemed:  
Investor Class     (73,700 )     (150,638 )     (475,531 )     (389,364 )  
Trust Class     (13,371 )     (34,425 )     (1,020,015 )     (1,749,307 )  
Advisor Class     (4,156 )     (7,419 )     (167,155 )     (182,141 )  
Institutional Class     —       —       (976,050 )     (442,834 )  
Class A     —       —       —       —    
Class C     —       —       —       —    
Redemption fees retained:  
Investor Class     —       —       —       —    
Trust Class     —       —       —       —    
Institutional Class     —       —       —       —    
Net increase (decrease) from Fund share transactions     (7,919 )     (2,653 )     (315,252 )     2,298,059    
Net Increase (Decrease) in Net Assets     (278,954 )     (260,343 )     (4,012,792 )     1,727,238    
Net Assets:  
Beginning of year     853,849       1,114,192       12,564,654       10,837,416    
End of year   $ 574,895     $ 853,849     $ 8,551,862     $ 12,564,654    
Undistributed net investment income (loss) at end of year   $ 4,523     $ 4,780     $ (3 )   $ —    
Distributions in excess of net investment income at end of year   $ —     $ —     $ —     $ (36,478 )  

 


136


Statements of Changes in Net Assets (cont'd)

Neuberger Berman Equity Funds
(000's omitted)

    GUARDIAN FUND   INTERNATIONAL FUND   INTERNATIONAL
INSTITUTIONAL FUND		  
    Year Ended
August 31,
2009		   Year Ended
August 31,
2008		   Year Ended
August 31,
2009		   Year Ended
August 31,
2008		   Year Ended
August 31,
2009		   Year Ended
August 31,
2008		  
Increase (Decrease) in Net Assets:  
From Operations (Note A):  
Net investment income (loss)   $ 5,913     $ 8,526     $ 5,582     $ 19,675     $ 4,564     $ 11,671    
Net realized gain (loss) on investments     (126,046 )     144,289       (232,506 )     18,355       (148,440 )     (23,075 )  
Net increase from payments by affiliates     —       —       —       —       —       —    
Change in net unrealized appreciation (depreciation) of investments     (197,808 )     (234,042 )     31,789       (234,868 )     29,357       (78,980 )  
Net increase (decrease) in net assets resulting from operations     (317,941 )     (81,227 )     (195,135 )     (196,838 )     (114,519 )     (90,384 )  
Distributions to Shareholders From (Note A):  
Net investment income:  
Investor Class     (3,980 )     (9,563 )     (6,506 )     (19,410 )     —       —    
Trust Class     (295 )     (768 )     (5,862 )     (19,811 )     —       —    
Advisor Class     —       —       —       —       —       —    
Institutional Class     —       —       —       —       (9,897 )     (19,663 )  
Class A     —       —       —       —       —       —    
Class C     —       —       —       —       —       —    
Net realized gain on investments:  
Investor Class     (94,513 )     (161,566 )     —       (80,957 )     —       —    
Trust Class     (7,812 )     (13,458 )     —       (94,488 )     —       —    
Advisor Class     (62 )     (113 )     —       —       —       —    
Institutional Class     —       —       —       —       —       (76,882 )  
Class A     —       —       —       —       —       —    
Class C     —       —       —       —       —       —    
Tax Return of Capital:  
Investor Class     —       —       —       —       —       —    
Trust Class     —       —       —       —       —       —    
Advisor Class     —       —       —       —       —       —    
Institutional Class     —       —       —       —       —       —    
Total distributions to shareholders     (106,662 )     (185,468 )     (12,368 )     (214,666 )     (9,897 )     (96,545 )  
From Fund Share Transactions (Note D):  
Proceeds from shares sold:  
Investor Class     42,010       72,374       19,420       41,919       —       —    
Trust Class     12,413       16,804       30,446       87,306       —       —    
Advisor Class     204       279       —       —       —       —    
Institutional Class     50       —       —       —       49,948       20,706    
Class A     487       —       —       —       —       —    
Class C     50       —       —       —       —       —    
Class R3     50       —       —       —       —       —    
Proceeds from reinvestment of dividends and distributions:  
Investor Class     92,722       160,182       5,498       87,842       —       —    
Trust Class     8,083       14,004       5,247       105,180       —       —    
Advisor Class     56       102       —       —       —       —    
Institutional Class     —       —       —       —       9,873       93,575    
Class A     —       —       —       —       —       —    
Class C     —       —       —       —       —       —    

 


See Notes to Financial Statements

137


    INTERNATIONAL
LARGE CAP FUND		   LARGE CAP DISCIPLINED
GROWTH FUND		  
    Year Ended
August 31,
2009		   Year Ended
August 31,
2008		   Year Ended
August 31,
2009		   Year Ended
August 31,
2008		  
Increase (Decrease) in Net Assets:  
From Operations (Note A):  
Net investment income (loss)   $ 1,816     $ 4,683     $ 142     $ (0 )  
Net realized gain (loss) on investments     (62,155 )     (8,218 )     (3,314 )     905    
Net increase from payments by affiliates     —       —       —       —    
Change in net unrealized appreciation (depreciation) of investments     21,566       (21,882 )     12,067       (1,097 )  
Net increase (decrease) in net assets resulting from operations     (38,773 )     (25,417 )     8,895       (192 )  
Distributions to Shareholders From (Note A):  
Net investment income:  
Investor Class     —       —       —       —    
Trust Class     (848 )     (907 )     —       —    
Advisor Class     —       —       —       —    
Institutional Class     (2,903 )     (2,068 )     —       —    
Class A     (52 )     —       —       —    
Class C     (3 )     —       —       —    
Net realized gain on investments:  
Investor Class     —       —       —       —    
Trust Class     —       (1,984 )     —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       (3,862 )     —       —    
Class A     —       —       —       —    
Class C     —       —       —       —    
Tax Return of Capital:  
Investor Class     —       —       —       —    
Trust Class     —       —       —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       —       —       —    
Total distributions to shareholders     (3,806 )     (8,821 )     —       —    
From Fund Share Transactions (Note D):  
Proceeds from shares sold:  
Investor Class     —       —       4,737       4,231    
Trust Class     11,048       25,593       —       —    
Advisor Class     —       —       —       —    
Institutional Class     3,498       102,215       20,375       —    
Class A     2,160       2,460       29,464       —    
Class C     278       120       7,677       —    
Class R3     50       —       50       —    
Proceeds from reinvestment of dividends and distributions:  
Investor Class     —       —       —       —    
Trust Class     823       2,674       —       —    
Advisor Class     —       —       —       —    
Institutional Class     2,264       5,429       —       —    
Class A     48       —       —       —    
Class C     2       —       —       —    


138


Statements of Changes in Net Assets (cont'd)

Neuberger Berman Equity Funds (cont'd)
(000's omitted)

    GUARDIAN FUND   INTERNATIONAL FUND   INTERNATIONAL
INSTITUTIONAL FUND		  
    Year Ended
August 31,
2009		   Year Ended
August 31,
2008		   Year Ended
August 31,
2009		   Year Ended
August 31,
2008		   Year Ended
August 31,
2009		   Year Ended
August 31,
2008		  
Proceeds from shares issued in connection with mergers (Note H)  
Investor Class     —       —       —       —       —       —    
Advisor Class     —       —       —       —       —       —    
Institutional Class     —       —       —       —       —       —    
Class A     —       —       —       —       —       —    
Class C     —       —       —       —       —       —    
Proceeds from conversion of Trust Class or Class A shares (Note H):  
Investor Class     —       —       —       —       —       —    
Trust Class     —       —       —       —       —       —    
Institutional Class     —       —       —       —       —       —    
Class A     —       —       —       —       —       —    
Payments for shares redeemed:  
Investor Class     (120,403 )     (175,230 )     (121,991 )     (221,511 )     —       —    
Trust Class     (20,513 )     (29,358 )     (143,841 )     (381,348 )     —       —    
Advisor Class     (307 )     (509 )     —       —       —       —    
Institutional Class     —       —       —       —       (123,109 )     (90,131 )  
Class A     —       —       —       —       —       —    
Class C     —       —       —       —       —       —    
Redemption fees retained:  
Investor Class     —       —       34       42       —       —    
Trust Class     —       —       37       48       —       —    
Institutional Class     —       —       —       —       3       —    
Net increase (decrease) from Fund share transactions     14,902       58,648       (205,150 )     (280,522 )     (63,285 )     24,150    
Net Increase (Decrease) in Net Assets     (409,701 )     (208,047 )     (412,653 )     (692,026 )     (187,701 )     (162,779 )  
Net Assets:  
Beginning of year     1,357,419       1,565,466       822,911       1,514,937       411,495       574,274    
End of year   $ 947,718     $ 1,357,419     $ 410,258     $ 822,911     $ 223,794     $ 411,495    
Undistributed net investment income (loss) at end of year   $ 5,195     $ 5,086     $ —     $ 5,616     $ —     $ 5,069    
Distributions in excess of net investment income at end of year   $ —     $ —     $ (464 )   $ —     $ (293 )   $ —    

 


See Notes to Financial Statements

139


    INTERNATIONAL
LARGE CAP FUND		   LARGE CAP DISCIPLINED
GROWTH FUND		  
    Year Ended
August 31,
2009		   Year Ended
August 31,
2008		   Year Ended
August 31,
2009		   Year Ended
August 31,
2008		  
Proceeds from shares issued in connection with mergers (Note H)  
Investor Class     —       —       —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       —       3,227       —    
Class A     —       —       31,234       —    
Class C     —       —       16,456       —    
Proceeds from conversion of Trust Class or Class A shares (Note H):  
Investor Class     —       —       213       —    
Trust Class     —       —       —       —    
Institutional Class     —       —       —       —    
Class A     —       —       (213 )     —    
Payments for shares redeemed:  
Investor Class     —       —       (3,387 )     (2,136 )  
Trust Class     (21,671 )     (20,604 )     —       —    
Advisor Class     —       —       —       —    
Institutional Class     (22,926 )     (80,631 )     (2,026 )     —    
Class A     (125 )     (24 )     (2,964 )     —    
Class C     —       —       (1,014 )     —    
Redemption fees retained:  
Investor Class     —       —       —       —    
Trust Class     —       1       —       —    
Institutional Class     1       2       —       —    
Net increase (decrease) from Fund share transactions     (24,550 )     37,235       103,829       2,095    
Net Increase (Decrease) in Net Assets     (67,129 )     2,997       112,724       1,903    
Net Assets:  
Beginning of year     168,242       165,245       11,876       9,973    
End of year   $ 101,113     $ 168,242     $ 124,600     $ 11,876    
Undistributed net investment income (loss) at end of year   $ 226     $ 2,589     $ 120     $ —    
Distributions in excess of net investment income at end of year   $ —     $ —     $ —     $ —    

 


140


Statements of Changes in Net Assets (cont'd)

Neuberger Berman Equity Funds
(000's omitted)

    MID CAP GROWTH FUND   PARTNERS FUND   REAL ESTATE FUND  
    Year Ended
August 31,
2009		   Year Ended
August 31,
2008		   Year Ended
August 31,
2009		   Year Ended
August 31,
2008		   Year Ended
August 31,
2009		   Year Ended
August 31,
2008		  
Increase (Decrease) in Net Assets:  
From Operations (Note A):  
Net investment income (loss)   $ (736 )   $ (2,291 )   $ 16,726     $ 13,749     $ 1,595     $ 1,133    
Net realized gain (loss) on investments     (66,868 )     29,669       (572,454 )     34,281       (21,817 )     (10,401 )  
Net increase from payments by affiliates     —       —       —       —       —       —    
Change in net unrealized appreciation (depreciation) of investments     (28,479 )     (75,581 )     (472,789 )     (325,745 )     12,292       5,445    
Net increase (decrease) in net assets resulting from operations     (96,083 )     (48,203 )     (1,028,517 )     (277,715 )     (7,930 )     (3,823 )  
Distributions to Shareholders From (Note A):  
Net investment income:  
Investor Class     —       —       (5,768 )     (8,169 )     —       —    
Trust Class     —       —       (2,401 )     (3,427 )     (1,544 )     (904 )  
Advisor Class     —       —       (1,463 )     (1,299 )     —       —    
Institutional Class     —       —       (748 )     (697 )     (29 )     (1 )  
Class A     —       —       —       —       —       —    
Class C     —       —       —       —       —       —    
Net realized gain on investments:  
Investor Class     —       —       (17,026 )     (83,956 )     —       —    
Trust Class     —       —       (7,858 )     (40,592 )     —       (10,592 )  
Advisor Class     —       —       (4,741 )     (21,932 )     —       —    
Institutional Class     —       —       (1,593 )     (5,002 )     —       —    
Class A     —       —       —       —       —       —    
Class C     —       —       —       —       —       —    
Tax Return of Capital:  
Investor Class     —       —       —       —       —       —    
Trust Class     —       —       —       —       (466 )     (755 )  
Advisor Class     —       —       —       —       —       —    
Institutional Class     —       —       —       —       (11 )     (0 )  
Total distributions to shareholders     —       —       (41,598 )     (165,074 )     (2,050 )     (12,252 )  
From Fund Share Transactions (Note D):  
Proceeds from shares sold:  
Investor Class     17,412       52,198       124,679       441,209       —       —    
Trust Class     14,486       6,833       105,676       316,286       43,725       28,095    
Advisor Class     5,117       2,615       114,148       147,161       —       —    
Institutional Class     116,820       43,188       96,082       61,308       2,486       1,665    
Class A     116       —       —       —       —       —    
Class C     51       —       —       —       —       —    
Class R3     50       —       —       —       —       —    
Proceeds from reinvestment of dividends and distributions:  
Investor Class     —       —       21,824       89,010       —       —    
Trust Class     —       —       9,724       40,444       1,942       11,214    
Advisor Class     —       —       5,823       21,877       —       —    
Institutional Class     —       —       2,341       5,699       3       1    
Class A     —       —       —       —       —       —    
Class C     —       —       —       —       —       —    

 


See Notes to Financial Statements

141


    REGENCY FUND   SELECT EQUITIES FUND  
    Year Ended
August 31,
2009		   Year Ended
August 31,
2008		   Year Ended
August 31,
2009		   Period from
December 20, 2007
(Commencement
of Operations) to
August 31,
2008		  
Increase (Decrease) in Net Assets:  
From Operations (Note A):  
Net investment income (loss)   $ 617     $ 523     $ 118     $ 27    
Net realized gain (loss) on investments     (30,946 )     4,528       (1,082 )     (282 )  
Net increase from payments by affiliates     —       —       —       —    
Change in net unrealized appreciation (depreciation) of investments     (4,490 )     (18,066 )     4,057       (122 )  
Net increase (decrease) in net assets resulting from operations     (34,819 )     (13,015 )     3,093       (377 )  
Distributions to Shareholders From (Note A):  
Net investment income:  
Investor Class     (6 )     (606 )     —       —    
Trust Class     (5 )     (358 )     —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       —       (1 )     —    
Class A     —       —       (48 )     —    
Class C     —       —       (7 )     —    
Net realized gain on investments:  
Investor Class     (2,509 )     (7,952 )     —       —    
Trust Class     (1,917 )     (5,303 )     —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       —       —       —    
Class A     —       —       —       —    
Class C     —       —       —       —    
Tax Return of Capital:  
Investor Class     —       —       —       —    
Trust Class     —       —       —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       —       —       —    
Total distributions to shareholders     (4,437 )     (14,219 )     (56 )     —    
From Fund Share Transactions (Note D):  
Proceeds from shares sold:  
Investor Class     9,424       21,941       —       —    
Trust Class     15,090       19,507       —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       —       6,127       2,501    
Class A     —       —       41,400       5,107    
Class C     —       —       6,414       810    
Class R3     —       —       —       —    
Proceeds from reinvestment of dividends and distributions:  
Investor Class     2,406       8,203       —       —    
Trust Class     1,628       5,321       —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       —       1       —    
Class A     —       —       25       —    
Class C     —       —       7       —    

 


142


Statements of Changes in Net Assets (cont'd)

Neuberger Berman Equity Funds (cont'd)
(000's omitted)

    MID CAP GROWTH FUND   PARTNERS FUND   REAL ESTATE FUND  
    Year Ended
August 31,
2009		   Year Ended
August 31,
2008		   Year Ended
August 31,
2009		   Year Ended
August 31,
2008		   Year Ended
August 31,
2009		   Year Ended
August 31,
2008		  
Proceeds from shares issued in connection with mergers (Note H)  
Investor Class     —       —       —       —       —       —    
Advisor Class     —       —       —       —       —       —    
Institutional Class     —       —       —       —       —       —    
Class A     —       —       —       —       —       —    
Class C     —       —       —       —       —       —    
Proceeds from conversion of Trust Class or Class A shares (Note H):  
Investor Class     —       —       —       —       —       —    
Trust Class     —       —       —       —       —       —    
Institutional Class     —       —       —       —       —       —    
Class A     —       —       —       —       —       —    
Payments for shares redeemed:  
Investor Class     (43,190 )     (58,010 )     (406,927 )     (357,051 )     —       —    
Trust Class     (8,369 )     (7,188 )     (221,949 )     (409,795 )     (25,838 )     (80,552 )  
Advisor Class     (1,295 )     (564 )     (149,975 )     (146,593 )     —       —    
Institutional Class     (16,789 )     (7,490 )     (54,780 )     (14,120 )     (759 )     —    
Class A     (2 )     —       —       —       —       —    
Class C     —       —       —       —       —       —    
Redemption fees retained:  
Investor Class     —       —       —       —       —       —    
Trust Class     —       —       —       —       29       18    
Institutional Class     —       —       —       —       1       —    
Net increase (decrease) from Fund share transactions     84,407       31,582       (353,334 )     195,435       21,589       (39,559 )  
Net Increase (Decrease) in Net Assets     (11,676 )     (16,621 )     (1,423,449 )     (247,354 )     11,609       (55,634 )  
Net Assets:  
Beginning of year     462,665       479,286       3,924,266       4,171,620       54,777       110,411    
End of year   $ 450,989     $ 462,665     $ 2,500,817     $ 3,924,266     $ 66,386     $ 54,777    
Undistributed net investment income (loss) at end of year   $ (1 )   $ —     $ 16,033     $ 11,319     $ —     $ —    
Distributions in excess of net investment income at end of year   $ —     $ —     $ —     $ —     $ —     $ —    

 


See Notes to Financial Statements

143


    REGENCY FUND   SELECT EQUITIES FUND  
    Year Ended
August 31,
2009		   Year Ended
August 31,
2008		   Year Ended
August 31,
2009		   Period from
December 20, 2007
(Commencement
of Operations) to
August 31,
2008		  
Proceeds from shares issued in connection with mergers (Note H)  
Investor Class     —       —       —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       —       —       —    
Class A     —       —       —       —    
Class C     —       —       —       —    
Proceeds from conversion of Trust Class or Class A shares (Note H):  
Investor Class     —       —       —       —    
Trust Class     —       —       —       —    
Institutional Class     —       —       —       —    
Class A     —       —       —       —    
Payments for shares redeemed:  
Investor Class     (23,262 )     (35,031 )     —       —    
Trust Class     (27,286 )     (16,258 )     —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       —       (2,039 )     —    
Class A     —       —       (10,454 )     (56 )  
Class C     —       —       (236 )     —    
Redemption fees retained:  
Investor Class     —       —       —       —    
Trust Class     —       —       —       —    
Institutional Class     —       —       —       —    
Net increase (decrease) from Fund share transactions     (22,000 )     3,683       41,245       8,362    
Net Increase (Decrease) in Net Assets     (61,256 )     (23,551 )     44,282       7,985    
Net Assets:  
Beginning of year     131,900       155,451       7,985       —    
End of year   $ 70,644     $ 131,900     $ 52,267     $ 7,985    
Undistributed net investment income (loss) at end of year   $ 593     $ —     $ 90     $ 28    
Distributions in excess of net investment income at end of year   $ —     $ —     $ —     $ —    

 


144


Statements of Changes in Net Assets (cont'd)

Neuberger Berman Equity Funds
(000's omitted)

    SMALL AND MID CAP
GROWTH FUND		   SMALL CAP GROWTH FUND  
    Year Ended
August 31,
2009		   Year Ended
August 31,
2008		   Year Ended
August 31,
2009		   Year Ended
August 31,
2008		  
Increase (Decrease) in Net Assets:  
From Operations (Note A):  
Net investment income (loss)   $ (35 )   $ (57 )   $ (1,970 )   $ (1,647 )  
Net realized gain (loss) on investments     (1,618 )     (431 )     (90,630 )     (26,919 )  
Net increase from payments by affiliates     —       —       —       —    
Change in net unrealized appreciation (depreciation) of investments     (137 )     (475 )     10,318       11,643    
Net increase (decrease) in net assets resulting from operations     (1,790 )     (963 )     (82,282 )     (16,923 )  
Distributions to Shareholders From (Note A):  
Net investment income:  
Investor Class     —       —       —       —    
Trust Class     —       —       —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       —       —       —    
Class A     —       —       —       —    
Class C     —       —       —       —    
Net realized gain on investments:  
Investor Class     —       —       —       —    
Trust Class     —       (626 )     —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       —       —       —    
Class A     —       —       —       —    
Class C     —       —       —       —    
Tax Return of Capital:  
Investor Class     —       —       —       —    
Trust Class     (19 )     —       —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       —       —       —    
Total distributions to shareholders     (19 )     (626 )     —       —    
From Fund Share Transactions (Note D):  
Proceeds from shares sold:  
Investor Class     —       —       82,569       248,900    
Trust Class     800       1,591       27,772       44,971    
Advisor Class     —       —       7,571       14,811    
Institutional Class     —       —       5,217       4,217    
Class A     —       —       79       —    
Class C     —       —       63       —    
Class R3     —       —       50       —    
Proceeds from reinvestment of dividends and distributions:  
Investor Class     —       —       —       —    
Trust Class     19       621       —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       —       —       —    
Class A     —       —       —       —    
Class C     —       —       —       —    

 


See Notes to Financial Statements

145


    SOCIALLY RESPONSIVE FUND  
    Year Ended
August 31,
2009		   Year Ended
August 31,
2008		  
Increase (Decrease) in Net Assets:  
From Operations (Note A):  
Net investment income (loss)   $ 4,034     $ 6,242    
Net realized gain (loss) on investments     (149,027 )     19,436    
Net increase from payments by affiliates     —       —    
Change in net unrealized appreciation (depreciation) of investments     (126,653 )     (109,089 )  
Net increase (decrease) in net assets resulting from operations     (271,646 )     (83,411 )  
Distributions to Shareholders From (Note A):  
Net investment income:  
Investor Class     (2,456 )     (3,919 )  
Trust Class     (1,472 )     (1,946 )  
Advisor Class     —       —    
Institutional Class     (334 )     (67 )  
Class A     —       —    
Class C     —       —    
Net realized gain on investments:  
Investor Class     (8,128 )     (25,723 )  
Trust Class     (3,896 )     (11,806 )  
Advisor Class     —       —    
Institutional Class     (850 )     (428 )  
Class A     —       —    
Class C     —       —    
Tax Return of Capital:  
Investor Class     —       —    
Trust Class     —       —    
Advisor Class     —       —    
Institutional Class     —       —    
Total distributions to shareholders     (17,136 )     (43,889 )  
From Fund Share Transactions (Note D):  
Proceeds from shares sold:  
Investor Class     123,093       248,757    
Trust Class     82,486       118,138    
Advisor Class     —       —    
Institutional Class     31,056       91,009    
Class A     1,109       —    
Class C     92       —    
Class R3     50       —    
Proceeds from reinvestment of dividends and distributions:  
Investor Class     9,888       27,680    
Trust Class     5,197       13,197    
Advisor Class     —       —    
Institutional Class     1,184       495    
Class A     —       —    
Class C     —       —    


146


Statements of Changes in Net Assets (cont'd)

Neuberger Berman Equity Funds (cont'd)
(000's omitted)

    SMALL AND MID CAP
GROWTH FUND		   SMALL CAP GROWTH FUND  
    Year Ended
August 31,
2009		   Year Ended
August 31,
2008		   Year Ended
August 31,
2009		   Year Ended
August 31,
2008		  
Proceeds from shares issued in connection with mergers (Note H)  
Investor Class     —       —       —       —    
Advisor Class     —       —       —       —    
Institutional Class     —       —       —       —    
Class A     —       —       —       —    
Class C     —       —       —       —    
Proceeds from conversion of Trust Class or Class A shares (Note H):  
Investor Class     —       —       —       —    
Trust Class     —       —       —       —    
Institutional Class     —       —       —       —    
Class A     —       —       —       —    
Payments for shares redeemed:  
Investor Class     —       —       (112,924 )     (53,266 )  
Trust Class     (661 )     (1,426 )     (22,460 )     (9,264 )  
Advisor Class     —       —       (5,917 )     (4,228 )  
Institutional Class     —       —       (1,114 )     —    
Class A     —       —       —       —    
Class C     —       —       —       —    
Redemption fees retained:  
Investor Class     —       —       —       —    
Trust Class     —       —       —       —    
Institutional Class     —       —       —       —    
Net increase (decrease) from Fund share transactions     158       786       (19,094 )     246,141    
Net Increase (Decrease) in Net Assets     (1,651 )     (803 )     (101,376 )     229,218    
Net Assets:  
Beginning of year     7,733       8,536       300,086       70,868    
End of year   $ 6,082     $ 7,733     $ 198,710     $ 300,086    
Undistributed net investment income (loss) at end of year   $ (29 )   $ (31 )   $ —     $ —    
Distributions in excess of net investment income at end of year   $ —     $ —     $ —     $ —    

 


See Notes to Financial Statements

147


    SOCIALLY RESPONSIVE FUND  
    Year Ended
August 31,
2009		   Year Ended
August 31,
2008		  
Proceeds from shares issued in connection with mergers (Note H)  
Investor Class     —       —    
Advisor Class     —       —    
Institutional Class     —       —    
Class A     —       —    
Class C     —       —    
Proceeds from conversion of Trust Class or Class A shares (Note H):  
Investor Class     —       —    
Trust Class     —       —    
Institutional Class     —       —    
Class A     —       —    
Payments for shares redeemed:  
Investor Class     (149,312 )     (176,994 )  
Trust Class     (59,029 )     (85,846 )  
Advisor Class     —       —    
Institutional Class     (10,100 )     (13,479 )  
Class A     (63 )     —    
Class C     —       —    
Redemption fees retained:  
Investor Class     —       —    
Trust Class     —       —    
Institutional Class     —       —    
Net increase (decrease) from Fund share transactions     35,651       222,957    
Net Increase (Decrease) in Net Assets     (253,131 )     95,657    
Net Assets:  
Beginning of year     1,237,308       1,141,651    
End of year   $ 984,177     $ 1,237,308    
Undistributed net investment income (loss) at end of year   $ 3,543     $ 5,011    
Distributions in excess of net investment income at end of year   $ —     $ —    

 


148


Notes to Financial Statements Equity Funds

Note A—Summary of Significant Accounting Policies:

1  General: Neuberger Berman Equity Funds (the "Trust") is a Delaware statutory trust organized pursuant to an Amended and Restated Trust Instrument dated June 24, 2009. The Trust is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), and its shares are registered under the Securities Act of 1933, as amended (the "1933 Act"). Neuberger Berman Climate Change Fund ("Climate Change"), Neuberger Berman Emerging Markets Equity Fund ("Emerging Markets Equity"), Neuberger Berman Equity Income Fund ("Equity Income"), Neuberger Berman Focus Fund ("Focus"), Neuberger Berman Genesis Fund ("Genesis"), Neuberger Berman Guardian Fund ("Guardian"), Neuberger Berman International Fund ("International"), Neuberger Berman International Institutional Fund ("International Institutional"), Neuberger Berman International Large Cap Fund ("International Large Cap"), Neuberger Berman Large Cap Disciplined Growth Fund ("Large Cap Disciplined Growth") (formerly, Neuberger Berman Century Fund), Neuberger Berman Mid Cap Growth Fund ("Mid Cap Growth"), Neuberger Berman Partners Fund ("Partners"), Neuberger Berman Real Estate Fund ("Real Estate"), Neuberger Berman Regency Fund ("Regency"), Neuberger Berman Select Equities Fund ("Select Equities"), Neuberger Berman Small and Mid Cap Growth Fund ("Small and Mid Cap Growth"), Neuberger Berman Small Cap Growth Fund ("Small Cap Growth"), and Neuberger Berman Socially Responsive Fund ("Socially Responsive") (individually a "Fund," collectively, the "Funds") are separate operating series of the Trust, each of which (except Focus, Large Cap Disciplined Growth, Real Estate, and Select Equities) is diversified. Under the 1940 Act, the status of a Fund that was registered as non-diversified may, under certain circumstances, change to that of a diversified fund. Ten Funds offer Investor Class shares, twelve offer Trust Class shares, six offer Advisor Class shares, fourteen offer Institutional Class shares, ten offer Class A shares, ten offer Class C shares, and six offer Class R3 shares. Emerging Markets Equity had no operations until October 8, 2008 other than matters relating to its organization and registration of shares under the 1933 Act. The Board of Trustees of the Trust (the "Board") may establish additional series or classes of shares without the approval of shareholders.

  The assets of each Fund belong only to that Fund, and the liabilities of each Fund are borne solely by that Fund and no other.

  The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires Neuberger Berman Management LLC ("Management") to make estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates.

2  Portfolio valuation: Investment securities are valued as indicated in the notes following the Funds' Schedule of Investments.

3  Foreign currency translation: The accounting records of the Funds are maintained in U.S. dollars. Foreign currency amounts are currently translated into U.S. dollars using the exchange rate as of 4:00 p.m., Eastern time, to determine the value of investments, other assets and liabilities. Purchase and sale prices of securities, and income and expenses, are translated into U.S. dollars at the prevailing rate of exchange on the respective dates of such transactions. Net unrealized foreign currency gain (loss), if any, arises from changes in the value of assets and liabilities, other than investments in securities, as a result of changes in exchange rates and is stated separately in the Statements of Operations.

4  Securities transactions and investment income: Securities transactions are recorded on trade date for financial reporting purposes. Dividend income is recorded on the ex-dividend date or, for certain foreign dividends, as soon as the Fund becomes aware of the dividends. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, including accretion of discount on securities for Equity Income, accretion of original issue discount, where applicable, and accretion of discount on short-term investments, is recorded on the accrual basis. Realized gains and losses from securities transactions and foreign currency transactions, if any, are recorded on the basis of identified cost and stated separately in the Statements of


149


Operations. Included in net realized gain (loss) on investments are proceeds from the settlements of class action litigation in which the Funds participated as class members. The amounts of such proceeds for the year ended August 31, 2009 were $45,160 $110,868, $1,695,273, $171,210, $14,139, $4,311, $1,294,337, $7,057, $162,740 and $375,332 for Focus, Genesis, Guardian, International, Large Cap Disciplined Growth, Mid Cap Growth, Partners, Regency, Small Cap Growth, and Socially Responsive, respectively.

5  Income tax information: The Funds are treated as separate entities for U.S. federal income tax purposes. It is the policy of each Fund, except Emerging Markets Equity, to continue to, and the intention of Emerging Markets Equity to qualify as regulated investment companies by complying with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its earnings to its shareholders. Therefore, no federal income or excise tax provision is required.

  The Funds have adopted the provisions of Financial Accounting Standards Board ("FASB") Interpretation No. 48 ("FIN 48") "Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109". FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken, or expected to be taken, in a tax return. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as an income tax expense in the Statements of Operations. The Funds are subject to examination by U.S. federal and state tax authorities for returns filed for the prior three fiscal years 2006-2008. As of August 31, 2009, the Funds did not have any unrecognized tax benefits.

  Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. These differences are primarily due to differing treatments of income and gains on various investment securities held by each Fund, timing differences and differing characterization of distributions made by each Fund as a whole. The Funds may also utilize earnings and profits distributed to shareholders on redemption of shares as a part of the dividends paid deduction for income tax purposes.

  As determined on August 31, 2009, permanent differences resulting primarily from different book and tax accounting for net operating losses, convertible preferred stock income adjustments, equalization, premium amortization adjustments, partnership income adjustments, depletion income adjustments, foreign currency gains and losses, non-deductible 12b-1 fees, non-taxable dividend adjustments, passive foreign investment companies gains and losses, return of capital distributions and characterization of distributions from real estate investment trusts ("REITs") were reclassified at fiscal year-end. These reclassifications had no effect on net income, net asset value or net asset value per share of each Fund.

  The tax character of distributions paid during the years ended August 31, 2009 and August 31, 2008 were as follows:

    Distributions Paid From:  
    Ordinary Income   Long-Term Capital Gain   Return of Capital   Total  
    2009   2008   2009   2008   2009   2008   2009   2008  
Climate Change   $ 98,215     $ — (2)    $ —     $ — (2)    $ —     $ — (2)    $ 98,215     $ — (2)   
Emerging
Markets Equity(3) 		     77,563       —       —       —       —       —       77,563       —    
Equity Income     723,146       276,696       199,719       19,877       —       —       922,865       296,573    
Focus     4,498,471       7,176,327       71,795,704       184,214,412       —       —       76,294,175       191,390,739    
Genesis     —       —       442,063,981       1,724,892,718       16,648       —       442,080,629       1,724,892,718    
Guardian     9,781,084       15,840,323       96,880,945       169,628,176       —       —       106,662,029       185,468,499    
International     12,367,880       75,652,027       —       139,013,741       —       —       12,367,880       214,665,768    
International
Institutional		     9,896,743       41,813,215       —       54,732,059       —       —       9,896,743       96,545,274    
International
Large Cap		     3,805,457       6,810,627       —       2,010,927       —       —       3,805,457       8,821,554    

 

      


150


    Distributions Paid From:  
    Ordinary Income   Long-Term Capital Gain   Return of Capital   Total  
    2009   2008   2009   2008   2009   2008   2009   2008  
Large Cap
Disciplined Growth		   $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —