Neuberger&Berman Equity Trust[REGISTERED TRADEMARK]

Supplement to the Prospectus dated December 6, 1996

      The  table  on  page 4  under  the  heading,  "SUMMARY  -- The  Funds  and
Portfolios; Risk Factors," is amended to read as follows:

NEUBERGER&BERMAN
EQUITY TRUST          INVESTMENT STYLE           PORTFOLIO CHARACTERISTICS

MANHATTAN TRUST       Broadly diversified,       Invests in securities believed 
                      small-, medium- and        to have the maximum potential  
                      large-cap growth fund.     for long-term capital          
                                                 appreciation. Portfolio        
                                                 managers seek stocks of        
                                                 companies that are projected to
                                                 grow at above-average rates and
                                                 that may appear poised for a   
                                                 period of accelerated earnings.
                                                                                

      The  following  replaces  pages  5-6 under the  heading,  "SUMMARY  -- The
Neuberger&Berman Investment Approach":

      While each  Portfolio  has its own  investment  objective,  policies,  and
limitations,  each  Portfolio  is  managed  using  one of two  basic  investment
approaches -- value or growth.
      A value-oriented  portfolio  manager buys stocks that are selling for less
than their  perceived  market  values.  These include  stocks that are currently
under-researched or are temporarily out of favor on Wall Street.
      Portfolio  managers identify value stocks in several ways. One of the most
common identifiers is a low  price-to-earnings  ratio -- that is, stocks selling
at  multiples  of earnings per share that are lower than that of the market as a
whole.  Other  criteria are high  dividend  yield,  a strong  balance  sheet and
financial position, a recent company restructuring with the potential to realize
hidden values, strong management,  and low price-to-book value (net value of the
company's assets). A value-oriented manager believes that, over time, securities
that are  undervalued  are more likely to  appreciate in price and be subject to
less risk of price  decline than  securities  whose  market  prices have already
reached their perceived economic values. This approach also contemplates selling
portfolio  securities  when N&B  Management  believes  they have  reached  their
potential.
      While a value approach  concentrates on securities that are undervalued in
relation to their fundamental economic values, a growth approach seeks stocks of
companies  that N&B  Management  projects will grow at  above-average  rates and
faster than others expect.  While a growth  portfolio  manager may be willing to
pay a higher  multiple of earnings per share than a value manager,  the multiple
tends to be reasonable  relative to the manager's  expectation  of the company's
earnings growth rate.
      In   general,    Neuberger&Berman   FOCUS,    Neuberger&Berman    GENESIS,
Neuberger&Berman  GUARDIAN, and Neuberger&Berman PARTNERS Portfolios adhere to a
value-oriented investment approach. Neuberger&Berman MANHATTAN Portfolio adheres
to a growth-oriented  investment approach.  Neuberger&Berman MANHATTAN Portfolio





is  therefore  willing  to invest in  securities  with  prices  that are  higher
multiples of earnings than  securities  purchased by the other  Portfolios,  but
generally buys companies that have higher earnings growth rates.

      The following replaces pages 20-21 under the heading, "INVESTMENT PROGRAMS
- -- Neuberger&Berman MANHATTAN Portfolio":

      The  investment  objective of  Neuberger&Berman  MANHATTAN  Portfolio  and
Neuberger&Berman  MANHATTAN Trust is to seek capital appreciation without regard
to income.
      Neuberger&Berman  MANHATTAN  Portfolio can invest in securities of small-,
medium-,  and  large-capitalization  companies  believed  to  have  the  maximum
potential for long-term capital  appreciation.  The portfolio managers currently
intend to focus primarily on the securities of medium-capitalization  companies.
The portfolio managers do not seek to invest in securities that pay dividends or
interest, and any such income is incidental.
      The  Portfolio  uses  a  growth-oriented  investment  approach.  When  N&B
Management  believes  that  particular  securities  have greater  potential  for
long-term  capital  appreciation,  the Portfolio may purchase such securities at
prices with relatively  higher  multiples to measures of economic value (such as
earnings  or  cash  flow)  than  other  Portfolios.  In  selecting  stocks,  N&B
Management  considers,  among other  factors,  a company's  financial  strength,
competitive  position,  projected  future  earnings,   management  strength  and
experience,  reasonable valuation and other investment  criteria.  The Portfolio
also diversifies its investments among companies and industries.
      The Portfolio's growth investment program involves greater risks and share
price  volatility  than  programs  that invest in more  undervalued  securities.
Investments  in  smaller  and  medium  sized   companies  may  present   greater
opportunities for capital appreciation,  but may involve greater risks and share
price  volatility  than  investment  in  securities  of  larger   capitalization
companies.  These companies may have limited product lines,  market or financial
resources,  or they may be  dependent  upon a limited  management  group.  Their
securities  may be traded only in the  over-the-counter  market or on a regional
securities  exchange.  As a result, such companies may be subject to more abrupt
or erratic market  movements than larger,  more established  companies,  and any
such  movements  may be reflected in the Fund's net asset value.  Moreover,  the
Portfolio  does not follow a policy of active  trading for  short-term  profits.
Accordingly,  the  Portfolio  may  be  more  appropriate  for  investors  with a
longer-range perspective.

      The  following  replaces  pages 33-35 under the heading,  "MANAGEMENT  AND
ADMINISTRATION--Investment Manager, Administrator, Distributor, and
Sub-Adviser":


                                       2





      Unless otherwise indicated,  the following is five-year  information about
the individuals who are primarily  responsible for the day-to-day  management of
the Portfolios.
      Neuberger&Berman FOCUS Portfolio and Neuberger&Berman GUARDIAN Portfolio -
Kent C. Simons and Kevin L. Risen are co-managers of the Portfolios.  Mr. Simons
and  Mr.  Risen  are  Vice  Presidents  of  N&B  Management  and  principals  of
Neuberger&Berman.  Mr. Simons has had responsibility for Neuberger&Berman  FOCUS
Portfolio since 1988, and for  Neuberger&Berman  GUARDIAN  Portfolio since 1983.
Mr. Risen has had those  responsibilities  since 1996, and during the year prior
thereto,  he was a  portfolio  manager for  Neuberger&Berman.  He was a research
analyst at Neuberger&Berman from 1992 to 1995.
      Neuberger&Berman GENESIS Portfolio - Judith M. Vale and Robert W. D'Alelio
are  co-managers  of the Portfolio.  Ms. Vale and Mr.  D'Alelio have been senior
members of Neuberger&Berman's Small Cap Group since 1992 and 1996, respectively,
and are both Vice  Presidents  of N&B  Management.  Ms. Vale is a  principal  of
Neuberger&Berman.  Ms. Vale and Mr. D'Alelio have been primarily responsible for
the day-to-day  management of Neuberger&Berman  GENESIS Portfolio since February
1994 and July 1997,  respectively.  Mr. D'Alelio was a senior portfolio  manager
for another investment management group from 1992 to 1996.
      Neuberger&Berman  MANHATTAN  Portfolio  - Jennifer K. Silver and Brooke A.
Cobb  are  co-managers  of  the  Portfolio.   Ms.  Silver  is  Director  of  the
Neuberger&Berman  Growth  Equity  Group,  and  both  she and Mr.  Cobb  are Vice
Presidents of N&B  Management.  Ms.  Silver is a principal of  Neuberger&Berman.
Both Ms.  Silver  and Mr.  Cobb  have had  responsibility  for  Neuberger&Berman
MANHATTAN  Portfolio  since July 1997.  Previously,  Ms.  Silver was a portfolio
manager  for  several  large  mutual  funds  managed by a  prominent  investment
adviser.  Mr. Cobb was the chief investment  officer for an investment  advisory
firm  managing  individual  accounts from 1995 to 1997 and, from 1992 to 1995, a
portfolio  manager of a large  mutual  fund  managed by a  prominent  investment
adviser.
      Neuberger&Berman  PARTNERS  Portfolio  - Michael  M.  Kassen and Robert I.
Gendelman are  co-managers  of the Portfolio.  Mr. Kassen and Mr.  Gendelman are
Vice Presidents of N&B Management and principals of Neuberger&Berman. Mr. Kassen
and  Mr.  Gendelman  have  had  responsibility  for  Neuberger&Berman   PARTNERS
Portfolio since June 1990 and October 1994, respectively. Mr. Kassen has been an
employee of N&B Management since 1990. Mr. Gendelman was a portfolio manager for
another mutual fund manager from 1992 to 1993.
      Neuberger&Berman  acts as the principal  broker for the  Portfolios in the
purchase  and  sale of  portfolio  securities  and in the sale of  covered  call
options,  and for those services receives  brokerage  commissions.  In effecting
securities  transactions,  each  Portfolio  seeks to obtain  the best  price and
execution of orders. For more information, see the SAI.

 
                                      3




      The  principals  and  employees  of  Neuberger&Berman   and  officers  and
employees of N&B Management,  together with their  families,  have invested over
$100 million of their own money in Neuberger&Berman Funds.
      To mitigate the possibility that a Portfolio will be adversely affected by
employees'  personal  trading,  the Trust,  Managers Trust, N&B Management,  and
Neuberger&Berman  have adopted policies that restrict  securities trading in the
personal  accounts of the  portfolio  managers and others who normally come into
possession of information on portfolio transactions.

      This  Supplement  supersedes the  Supplements  dated December 17, 1996 and
July 15, 1997.

      The date of this Supplement is July 31, 1997.


















                                       4






                         NEUBERGER & BERMAN EQUITY TRUST
           Supplement dated July 31, 1997 to Statement of Additional
                       Information dated December 6, 1996

                             INVESTMENT INFORMATION

The sections  regarding the  investment  programs and managers of the Portfolios
(pages 6 - 11) are revised to read as follows:

NEUBERGER & BERMAN MANHATTAN PORTFOLIO
- --------------------------------------

            Neuberger  &  Berman  MANHATTAN  Portfolio's  objective  is  capital
appreciation,  without  regard to  income.  The  Portfolio  differs  from  other
Portfolios in its willingness to invest in stocks with price/earnings  ratios or
price-to-cash-flow  ratios  that are  higher  relative  to those of the  general
market but that are reasonable relative to the companies' earnings growth rates.
The Portfolio is comprised of what the portfolio  co-managers believe are stocks
of financially  sound  companies with a special  market  capability,  management
strength and  experience,  a competitive  advantage or a product that makes them
particularly attractive over the long term.

            Neuberger & Berman MANHATTAN  Portfolio's  co-managers view value on
both a relative  and an absolute  basis,  so the  Portfolio  may buy stocks with
somewhat  above-market  historical  growth rates.  The Portfolio steers clear of
popular growth stocks selling at extremely high prices.

NEUBERGER & BERMAN GENESIS PORTFOLIO
- ------------------------------------

            The  predecessor  of Neuberger & Berman  GENESIS  Fund (which,  like
Neuberger & Berman  GENESIS Trust,  invests all of its net investable  assets in
Neuberger & Berman GENESIS  Portfolio) was established in 1988. A fund dedicated
primarily to  small-capitalization  stocks (companies with total market value of
outstanding  common  stock  of up to $1.5  billion  at the  time  the  Portfolio
invests),  Neuberger  & Berman  GENESIS  Portfolio  is devoted to the same value
principles  as most of the other equity  funds  managed by N&B  Management.  The
Portfolio is comprised of what the portfolio  co-managers  believe are small-cap
stocks with solid earnings today, not just promises for tomorrow.

            Many  people  think  that   small-capitalization   stock  funds  are
predominantly invested in high-risk companies. That is not necessarily the case.
Neuberger  &  Berman  GENESIS  Portfolio  looks  for the  same  fundamentals  in
small-capitalization  stocks  as other  Portfolios  look for in stocks of larger
companies.  The portfolio  co-managers stick to the areas they understand.  They
look for the most persistent earnings growth at the lowest multiple,  as well as
for  well-established   companies  with  entrepreneurial  management  and  sound
finances.  Also considered are catalysts to exposing  value,  such as management
changes  and new  product  lines.  Often,  these  are firms  that have  suffered
temporary setbacks or undergone a restructuring.





            Neuberger  &  Berman  GENESIS   Portfolio's   motto  is  "boring  is
beautiful." Instead of investing in trendy, high-priced stocks that tend to hurt
shareholders  on the downside,  the  Portfolio  looks for  little-known,  solid,
growing companies whose stocks the managers believe are wonderful bargains.

AN INTERVIEW WITH THE CO-PORTFOLIO MANAGER

            Q:    If I  already  own a  large-cap  stock  fund,  why  should I
consider investing in a small-cap fund as well?

            A:    Look at how fast a sapling grows  compared to, say, a mature
tree.  Much of the same  can be true  about  companies.  It's  possible  for a
smaller company to grow 50% faster than an IBM or a Coca-Cola.

            So, many small-cap stocks offer superior growth potential.  Consider
the cereal you eat, the  detergent  you use, the coffee you drink -- and imagine
if you had invested in these products BEFORE they became household names. If you
had invested only in the  blue-chip  companies of the day, you would have missed
out on these opportunities.

            Of course,  we're not advocating investing in a portfolio consisting
only of small-cap  stock funds.  It pays to diversify.  Let's look back about 25
years.  While past  performance  cannot indicate future  performance,  small-cap
stocks outperformed  larger-cap stocks 16 out of the 25 years from 1971 to 1996,
which means larger-cap stocks did better the rest of the time.1/

            Q:    Neuberger  &  Berman   GENESIS  Trust  is  classified  as  a
"small-cap  value  fund." To many  people,  "small-cap  value" is an oxymoron.
Can you clarify the Portfolio's investment approach?

- ---------------------------

1/    Results  are on a total  return  basis  and  include  reinvestment  of all
dividends and capital gain  distributions.  Small-cap  stocks are represented by
the fifth  capitalization  quintile  of stocks on the NYSE from 1971 to 1981 and
performance of the Dimensional  Fund Advisors (DFA) Small Company Fund from 1982
to 1996.  Larger-cap stocks are represented by the S&P "500" Index, an unmanaged
group of stocks.  Please note that  indices do not take into account any fees or
expenses of investing in the individual  securities that they track.  Data about
these  indices are prepared or obtained by N&B  Management.  The  Portfolio  may
invest in many securities not included in the above-described  indices.  Source:
STOCKS, BONDS, BILL AND INFLATION 1996 YEARBOOKTM,  Ibbotson Associates, Chicago
(annually updates work by Roger G. Ibbotson and Rex A.  Sinquefield).  Used with
permission. All rights reserved.

                                       2




            A:    We understand the confusion. After all, a lot of people equate
"small-cap" with "growth." They also equate "value" with "cheap." At Neuberger &
Berman GENESIS Portfolio,  we're 100% behind finding GROWING small-cap companies
- -- what we believe  are highly  profitable  companies  with  solid  records  and
promising  futures.  So where do we part  company  with  managers  who  follow a
"small-cap  growth"  style?  It comes down to how much growth and at what price.
Small-cap  growth  investors  seem willing to pay a premium for vastly  superior
growth.  This results in two  problems:  a) growth tends to be discounted by the
premium  valuations,  and b)  the  growth  expectations  are  so  high  as to be
unsustainable.  We believe  superior yet more stable returns can be purchased at
significant  discounts.  They may be  found in  mundane,  perhaps  even  boring,
industries.  Remember,  the same  glamorous  appeal that attracts so many growth
investors also attracts competitors.

            In that respect,  we're "value" managers. Yet we'd like to make this
point clear:  Low  price-to-earnings  multiples,  in and of  themselves,  cannot
justify a "buy"  decision.  When we search for growing,  high-quality  small-cap
companies selling at what we feel are bargain prices,  we ask ourselves:  Is the
company cheap for a good reason?  Or, does it have the financial  muscle and the
management talent to make it into the big leagues?

            Q:    Let's turn to  specifics.  What  criteria are used to decide
which small-cap companies make the cut -- and which ones don't?

            A:    Over the years,  we've seen  hundreds of  small-cap  companies
that flourished and just as many that failed to deliver on their early promises.
What made the difference?  While every case is unique,  here are a few important
traits of the winners.

            First of all, a successful  small-cap company normally produces high
returns. In practice, this means the business has a number of barriers to entry.
Perhaps the company has a technology  that's hard to duplicate.  Or maybe it can
make a product at a  substantially  lower cost than  anyone  else.  Unlike  most
businesses,  it has an advantage that allows it to continue earning above-market
returns.

            In addition to having a  competitive  edge, a  successful  small-cap
company should  generate  healthy cash flow. With excess cash, a company has the
ability to finance  its own  growth  without  diluting  the  ownership  stake of
existing stockholders by issuing more shares.

            No  small-cap  company can grow  without  having the right people on
board.  That's why we spend so much time  meeting the CEOs and CFOs of small-cap
companies.  While we question the managers about future plans and strategies, we
spend as much time evaluating  them as people.  Do they seem honest and capable?
Or do they puff up their case? Making portfolio  decisions is a lot about making
character  judgments -- who has the stuff to manage a growing  company,  and who
doesn't.

                                       3




            THE RISKS INVOLVED IN SEEKING CAPITAL  APPRECIATION FROM INVESTMENTS
PRIMARILY IN COMPANIES  WITH SMALL  MARKET  CAPITALIZATION  ARE SET FORTH IN THE
PROSPECTUS.

NEUBERGER & BERMAN FOCUS AND NEUBERGER & BERMAN GUARDIAN PORTFOLIOS
- -------------------------------------------------------------------

            Neuberger  &  Berman  FOCUS  Portfolio's   investment  objective  is
long-term   capital   appreciation.   Like  the  other  Portfolios  that  use  a
value-oriented  investment approach, it seeks to buy undervalued securities that
offer  opportunities for growth, but then it focuses its assets in those sectors
where  undervalued  stocks are  clustered.  The portfolio  co-managers  begin by
looking for stocks that are selling  for less than the  managers  think  they're
worth,  a "bottom-up  approach."  More often than not,  such stocks are in a few
economic  sectors  that are out of favor  and are  undervalued  as a group.  The
portfolio  co-managers  think 90% of cheap stocks  deserve to be cheap and their
job is to find the 10% that don't.

            The portfolio  co-managers don't pick sectors for Neuberger & Berman
FOCUS Portfolio based on their perception of how the economy is going to do. Nor
do they engage in making economic or currency predictions.  They look for stocks
with either low relative or low absolute valuations. Often, these stocks will be
found in a particular sector, but the managers didn't start out being bullish on
that sector. It's just where they happened to find the values. They find that if
one company comes under a cloud, it tends to happen to its whole industry. If an
investment  manager  rotates the sectors in a portfolio  by buying  sectors when
they are undervalued and selling them when they become fully valued, the manager
would be able to achieve above-average performance.

            Neuberger  &  Berman  GUARDIAN  Portfolio  subscribes  to  the  same
stock-picking  philosophy followed since 1950, when Roy R. Neuberger founded the
predecessor of Neuberger & Berman GUARDIAN Fund,  which, like Neuberger & Berman
GUARDIAN Trust,  invests all of its net investable  assets in Neuberger & Berman
GUARDIAN Portfolio.

            It's no great  trick for a mutual fund to make money when the market
is rising.  The tide that lifts stock  values will carry most funds  along.  The
true test of  management  is its  ability  to make money even when the market is
flat or declining.  By that measure,  the Fund, Neuberger & Berman GUARDIAN Fund
and its predecessor have served shareholders well and have paid a dividend every
quarter and a capital gain distribution  EVERY YEAR since 1950. Of course,  this
past record does not necessarily predict the Fund's future practices.


                                       4





            The   portfolio   co-managers   place  a  high   premium   on  being
knowledgeable  about the  companies  whose  stocks they buy.  That  knowledge is
important, because sometimes it takes courage to buy stocks that the rest of the
market  has  forsaken.  The  Portfolio  is usually  early in and early out.  The
managers would rather buy an undervalued  stock because they expect it to become
fairly  valued than buy one fairly  valued and hope it becomes  overvalued.  The
managers  like a stock  "under a rock" or with a cloud over it; they  believe an
investor is not going to get great companies at great valuations when the market
perception is great.

            Investors  who  switch  around a lot are not going to  benefit  from
Neuberger & Berman GUARDIAN Portfolio's  approach.  They're following the market
- -- the Portfolio is looking at fundamentals.

NEUBERGER & BERMAN PARTNERS PORTFOLIO
- -------------------------------------

            Neuberger & Berman PARTNERS Portfolio's objective is capital growth.
It seeks to make money in good  markets and not give up those gains during rough
times.

            Investors in the Portfolio typically seek consistent performance and
have a moderate risk tolerance.  They do know,  however,  that stock investments
can provide the long-term upside potential  essential to meeting their long-term
investment  goals,  particularly  a  comfortable  retirement  and planning for a
college education.

            The portfolio  co-managers  look for stocks that are  undervalued in
the marketplace either in relation to strong current fundamentals, such as a low
price-to-earnings ratio, consistent cash flow, and support from asset values, or
in relation to their  projection of the growth of the company's future earnings.
If  the  market  goes  down,   those  stocks  the  Portfolio   elects  to  hold,
historically, have gone down less.

            The portfolio  co-managers  monitor stocks of medium- to large-sized
companies  that  often  are not  closely  scrutinized  by other  investors.  The
managers  research  these  companies in order to determine if they are likely to
produce a new  product,  become an  acquisition  target,  or undergo a financial
restructuring.

            What else catches the portfolio  co-managers' eyes?  Companies whose
managements  own  their  own  stock.  These  companies  usually  seek  to  build
shareholder  wealth by buying  back  shares or making  acquisitions  that have a
swift and positive impact on the bottom line.

                                       5





            To increase the upside potential,  the managers zero in on companies
that  dominate  their  industries  or their  specialized  niches.  The managers'
reasoning? Market leaders tend to earn higher levels of profits.

            Neuberger  & Berman  PARTNERS  Portfolio  invests in a wide array of
stocks,  and no  single  stock  makes  up  more  than a  small  fraction  of the
Portfolio's  total assets.  Of course,  the Portfolio's  holdings are subject to
change.

            This Supplement supersedes the Supplement dated April 1, 1997.























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