-----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, CxbcER5gsPtlQwWkXP6246H2K9z0FvxCVj6mCBEvpdQ5ZSJxLJ5ExoIPQz4DNdz7 cYA9OjWk2glZxxL16+3cIQ== 0000898432-97-000252.txt : 19970429 0000898432-97-000252.hdr.sgml : 19970429 ACCESSION NUMBER: 0000898432-97-000252 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970228 FILED AS OF DATE: 19970428 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEUBERGER & BERMAN EQUITY TRUST CENTRAL INDEX KEY: 0000906926 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07784 FILM NUMBER: 97588341 BUSINESS ADDRESS: STREET 1: 605 THIRD AVE STREET 2: 2ND FLOOR CITY: NEW YORK STATE: NY ZIP: 10158-0006 BUSINESS PHONE: 2124768800 N-30D 1 SEMI-ANNUAL REPORT --------------------- February 28, 1997 NEUBERGER&BERMAN EQUITY TRUST-Registered Trademark- Neuberger&Berman NYCDC SOCIALLY RESPONSIVE TRUST TABLE OF CONTENTS
THE FUND CHAIRMAN'S LETTER 4 PORTFOLIO COMMENTARY 5 FINANCIAL STATEMENTS 7 FINANCIAL HIGHLIGHTS 13 PER SHARE DATA THE PORTFOLIO SCHEDULE OF INVESTMENTS 15 TOP TEN EQUITY HOLDINGS FINANCIAL STATEMENTS 18 FINANCIAL HIGHLIGHTS 24 DIRECTORY 25 OFFICERS AND TRUSTEES 26
3 CHAIRMAN'S LETTER April 11, 1997 Dear Fellow Shareholder: During the six months ended February 28, 1997, we witnessed one of the most explosive rallies in stock market history with the Dow Jones Industrial Average and Standard & Poor's 500 Index gaining 23.82% and 22.60%, respectively. High multiple blue chip stocks (particularly branded consumer goods companies), continued to lead the market parade. Not left out of the rally were technology, financial services, and health care stocks, which rebounded as well, helping our funds achieve solid gains. With the Dow and S&P "500" near record levels and equities valuations well above historic norms, we are comforted by our conviction that our portfolios are comprised of high quality companies trading at reasonable fundamental valuations relative to the market and their long term growth prospects. We have a talented and experienced group of analysts and portfolio managers who, in keeping with our firm's heritage, focus primarily on value. If the economy continues to provide low inflation, relatively low interest rates and reasonable corporate earnings, stocks can continue to progress. We believe well managed, financially sound companies in out-of-favor industries will participate more fully in a market advance. We have faith investors will ultimately see the folly in chasing a relative handful of blue-chip growth stocks simply because they are going up in price. Sooner or later, money will gravitate to equally high-quality companies selling at much more reasonable fundamental valuations. Whatever the market holds in store for us over the next six months and beyond, we will continue to do what we have always done -- focus on quality and value -- the two most important ingredients in the recipe for long term investment success. Sincerely, /s/ Stanley Egener Stanley Egener Chairman of the Board Neuberger&Berman Equity Trusts 4 PORTFOLIO COMMENTARY Neuberger&Berman - ---------------------------------------------------------------------- NYCDC Socially Responsive Trust PORTFOLIO MANAGER JANET PRINDLE BELIEVES DOING GOOD IS GOOD BUSINESS AND HAS THE POTENTIAL TO PRODUCE SOLID INVESTMENT RESULTS. SHE FOCUSES ON COMPANIES THAT ARE AGENTS OF FAVORABLE CHANGE IN WORKPLACE POLICIES (PARTICULARLY FOR WOMEN AND MINORITIES); THOSE THAT ARE GOOD CORPORATE CITIZENS; AND THOSE THAT ARE RESPONSIVE TO ENVIRONMENTAL ISSUES. BUT, SOCIAL RESPONSIBILITY ALONE DOES NOT QUALIFY A COMPANY AS A GOOD INVESTMENT. TRUE TO NEUBERGER&BERMAN'S VALUE-ORIENTED INVESTMENT PHILOSOPHY, SHE FIRST DETERMINES WHETHER PORTFOLIO CANDIDATES MEET FUNDAMENTAL VALUES. HER AIM IS SIMPLE AND STRAIGHTFORWARD -- TO SERVE BOTH SOCIETY AND HER SHAREHOLDERS. For the six months ended February 28, 1997, the fund returned 15.96% compared to the Standard & Poor's 500 Index's 22.60% gain. During the first half of fiscal 1997, our investments in the banking, insurance, technology, and specialty chemical industries worked quite well. We believe our portfolio holdings in these groups continue to represent solid fundamental values. Investments in the telecommunications and energy sectors did not perform up to our expectations. Pending further clarification of competitive issues in the telecommunications industry, we have pared our holdings. Despite this year's decline in oil and natural gas prices, we believe selected energy stocks have excellent earnings and appreciation potential. In our opinion, banks and insurance companies are no longer as interest rate sensitive as many investors perceive. We don't believe the bank stocks in our portfolio need lower interest rates to improve earnings and cash flows. Banks like CITICORP, National City, Mercantile, and CoreStates have the capacity to post the kind of fundamental progress that can change investors' perceptions. In addition, we think that, even with the good gains of the last six months, insurance companies like Chubb, Equitable and ReliaStar remain good values relative to their peer group and the broad market. Our social screens revealed that these companies have positive aspects about them as well. ReliaStar has a goal of donating 2% of pre-tax earnings to charity. CoreStates has 5 - ---------------------------------------------------------------------- NYCDC Socially Responsive Trust (Cont'd) excellent work-family programs, including on-site childcare. And Chubb has a superb diversity record, with females representing 50% of officials and managers. Despite poor relative performance over the last few months, we remain fully committed to energy stocks like Louisiana Land & Exploration, Noble Affiliates, and Tidewater. The decline in oil prices did not surprise us. In fact, we thought that oil's $24 per barrel price was unsustainable. We are not in the price collapse camp either, believing the supply projections for non-OPEC producers are dramatically over-estimated. If oil and natural gas prices stabilize around current levels, earnings from the group could trend higher. This appears to be a classic case of the stock market overreacting to a little bad news. We are currently seeking to take advantage of the sell-off of some high-quality companies in the retail industry. Wal-Mart Stores which has been a truly great company from the growth perspective, drifted down into the value range as earnings momentum investors abandoned the stock due to lower annual earnings growth projections. We were delighted to put it in our shopping basket at what we see as a bargain price. We are also proud to own stock in a firm that has been applauded for its employee relations and workplace policies and which offers cash profit sharing at virtually all levels, including part-time personnel. We enjoy the challenge of earning good returns from investments in companies that are responsive to society and their employees' needs. By so doing, we hope to reward our collective consciences and our shareholders. The composition, industries and holdings of the portfolio are subject to change. NYCDC Socially Responsive Trust's portfolio is invested in a wide array of stocks, and no single holding makes up more than a small fraction of the portfolio's total assets. Please remember that past performance is not indicative of future results. 6 STATEMENT OF ASSETS AND LIABILITIES Neuberger&Berman - ---------------------------------------------------------------------- NYCDC Socially Responsive Trust
February 28, 1997 (000'S OMITTED EXCEPT PER SHARE AMOUNT) (UNAUDITED) -------------- ASSETS Investment in Portfolio, at value (Note A) $ 154,855 Receivable for Trust shares sold 156 Deferred organization costs (Note A) 19 Receivable from administrator -- net (Note B) 8 -------------- 155,038 -------------- LIABILITIES Payable for Trust shares redeemed 59 Accrued expenses 53 -------------- 112 -------------- NET ASSETS at value $ 154,926 -------------- NET ASSETS consist of: Par value $ 10 Paid-in capital in excess of par value 115,553 Accumulated undistributed net investment income 273 Accumulated net realized gains on investment 1,275 Net unrealized appreciation in value of investment 37,815 -------------- NET ASSETS at value $ 154,926 -------------- SHARES OUTSTANDING ($.001 par value; unlimited shares authorized) 10,099 -------------- NET ASSET VALUE, offering and redemption price per share $15.34 --------------
SEE NOTES TO FINANCIAL STATEMENTS 7 STATEMENT OF OPERATIONS Neuberger&Berman - ---------------------------------------------------------------------- NYCDC Socially Responsive Trust
For the Six Months Ended February 28, 1997 (000'S OMITTED) (UNAUDITED) ------------ INVESTMENT INCOME Investment income from Portfolio (Note A) $ 1,250 ------------ Expenses: Administration fee (Note B) 35 Shareholder reports 28 Legal fees 11 Shareholder servicing agent fees 9 Custodian fees 5 Amortization of deferred organization and initial offering expenses (Note A) 5 Registration and filing fees 5 Auditing fees 3 Trustees' fees and expenses 3 Miscellaneous 1 Expenses from Portfolio (Notes A & B) 445 ------------ Total expenses 550 Deduct -- expenses reimbursed by administrator (Note B) (128) ------------ Total net expenses 422 ------------ Net investment income 828 ------------ REALIZED AND UNREALIZED GAIN ON INVESTMENTS FROM PORTFOLIO (NOTE A) Net realized gain on investment securities 3,086 Change in net unrealized appreciation of investment securities 16,551 ------------ Net gain on investments from Portfolio (Note A) 19,637 ------------ Net increase in net assets resulting from operations $ 20,465 ------------
SEE NOTES TO FINANCIAL STATEMENTS 8 STATEMENT OF CHANGES IN NET ASSETS Neuberger&Berman - ---------------------------------------------------------------------- NYCDC Socially Responsive Trust
For the Six Months For the Ended Year February 28, Ended 1997 August 31, (000'S OMITTED) (UNAUDITED) 1996 ----------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income $ 828 $ 1,173 Net realized gain on investments from Portfolio (Note A) 3,086 10,311 Change in net unrealized appreciation of investments from Portfolio (Note A) 16,551 8,073 ----------------------------- Net increase in net assets resulting from operations 20,465 19,557 ----------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income (1,442) (895) Net realized gain on investments (10,729) (2,312) ----------------------------- Total distributions to shareholders (12,171) (3,207) ----------------------------- FROM TRUST SHARE TRANSACTIONS: Proceeds from shares sold 20,202 32,430 Proceeds from reinvestment of dividends and distributions 12,171 3,206 Payments for shares redeemed (11,377) (14,893) ----------------------------- Net increase from Trust share transactions 20,996 20,743 ----------------------------- NET INCREASE IN NET ASSETS 29,290 37,093 NET ASSETS: Beginning of period 125,636 88,543 ----------------------------- End of period $ 154,926 $ 125,636 ----------------------------- Accumulated undistributed net investment income at end of period $ 273 $ 887 ----------------------------- NUMBER OF TRUST SHARES: Sold 1,316 2,332 Issued on reinvestment of dividends and distributions 812 238 Redeemed (741) (1,077) ----------------------------- Net increase in shares outstanding 1,387 1,493 -----------------------------
SEE NOTES TO FINANCIAL STATEMENTS 9 NOTES TO FINANCIAL STATEMENTS Neuberger&Berman February 28, 1997 (Unaudited) - ---------------------------------------------------------------------- Equity Trust NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: 1) GENERAL: Neuberger&Berman NYCDC Socially Responsive Trust (the "Fund") is a separate operating series of Neuberger&Berman Equity Trust (the "Trust"), a Delaware business trust organized pursuant to a Trust Instrument dated May 6, 1993. The Trust is registered as a diversified, open-end management investment company under the Investment Company Act of 1940, as amended, and its shares are registered under the Securities Act of 1933, as amended. The trustees of the Trust may establish additional series or classes of shares without the approval of shareholders. The assets of each series belong only to that series, and the liabilities of each series are borne solely by that series and no other. The Fund seeks to achieve its investment objective by investing all of its net investable assets in the Neuberger&Berman Socially Responsive Portfolio of Equity Managers Trust (the "Portfolio") having the same investment objective and policies as the Fund. The value of the Fund's investment in the Portfolio reflects the Fund's proportionate interest in the net assets of the Portfolio (76.39% at February 28, 1997). The Fund was created as an investment vehicle for participants in the Deferred Compensation Plan of the City of New York and Related Agencies and Instrumentalities. The performance of the Fund is directly affected by the performance of the Portfolio. The financial statements of the Portfolio, including the Schedule of Investments, are included elsewhere in this report and should be read in conjunction with the Fund's financial statements. 2) PORTFOLIO VALUATION: The Fund records its investment in the Portfolio at value. Investment securities held by the Portfolio are valued by Equity Managers Trust as indicated in the notes following the Portfolio's Schedule of Investments. 3) FEDERAL INCOME TAXES: Each series of the Trust is treated as a separate entity for Federal income tax purposes. It is the policy of the Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of investment company taxable income and net capital gains (after reduction for any amounts available for Federal income tax purposes as capital loss carryforwards) sufficient to relieve it from all, or substantially all, Federal income taxes. Accordingly, the Fund paid no Federal income taxes and no provision for Federal income taxes was required. 4) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund earns income, net of Portfolio expenses, daily on its investment in the Portfolio. Dividends and 10 distributions from net realized capital gains, if any, are normally distributed in December. Income dividends and capital gain distributions to shareholders are recorded on the ex-dividend date. To the extent the Fund's net realized capital gains, if any, can be offset by capital loss carryforwards, it is the policy of the Fund not to distribute such gains. The Fund distinguishes between dividends on a tax basis and a financial reporting basis and only distributions in excess of tax basis earnings and profits are reported in the financial statements as a return of capital. Differences in the recognition or classification of income between the financial statements and tax earnings and profits which result in temporary over-distributions for financial statement purposes are classified as distributions in excess of net investment income or accumulated net realized gains. 5) ORGANIZATION EXPENSES: Expenses incurred by the Fund in connection with its organization are being amortized on a straight-line basis over a five-year period. At February 28, 1997, the unamortized balance of such expenses amounted to $19,461. 6) EXPENSE ALLOCATION: The Fund bears all costs of its operations. Expenses incurred by the Trust with respect to any two or more funds are allocated in proportion to the net assets of such funds, except where a more appropriate allocation of expenses to each fund can otherwise be made fairly. Expenses directly attributable to a fund are charged to that fund. 7) OTHER: All net investment income and realized and unrealized capital gains and losses of the Portfolio are allocated pro rata among its respective funds and any other investors in the Portfolio. NOTE B -- ADMINISTRATION FEES, DISTRIBUTION ARRANGEMENTS, AND OTHER TRANSACTIONS WITH AFFILIATES: The Fund retains Neuberger&Berman Management Incorporated ("Management") as its administrator under an Administration Agreement ("Agreement") dated as of March 11, 1994. Pursuant to this Agreement the Fund pays Management an administration fee at the annual rate of 0.05% of the Fund's average daily net assets and indirectly pays for investment management services through its investment in the Portfolio (see Note B of Notes to Financial Statements of the Portfolio). Management has voluntarily undertaken to reimburse the Fund for its operating expenses and its pro rata share of the Portfolio's operating expenses (including the fees payable to Management but excluding interest, taxes, brokerage commissions, and extraordinary expenses) which exceed, in the aggregate, 0.60% per annum of the Fund's average daily net assets. This undertaking is subject to termination by Management upon at least 60 days' prior written notice to the Fund. For the six months ended February 28, 1997, such excess expenses amounted to $128,258. All of the capital stock of Management is owned by individuals who are also principals of Neuberger&Berman, LLC ("Neuberger"), a member firm of The New 11 York Stock Exchange and sub-adviser to the Portfolio. Several individuals who are officers and/or trustees of the Trust are also principals of Neuberger and/or officers and/or directors of Management. The Fund also has a distribution agreement with Management. Management receives no compensation therefor and no commissions for sales or redemptions of shares of beneficial interest of the Fund. The Portfolio has an expense offset arrangement in connection with its custodian contract. The impact of this arrangement, reflected in the Statement of Operations under the caption Expenses from Portfolio, was a reduction of $223, which is less than .01% of the Fund's average daily net assets. NOTE C -- INVESTMENT TRANSACTIONS: During the six months ended February 28, 1997, additions and reductions in the Fund's investment in the Portfolio amounted to $13,182,058 and $4,397,750, respectively. NOTE D -- UNAUDITED FINANCIAL INFORMATION: The financial information included in this interim report is taken from the records of the Fund without audit by independent accountants. Annual reports contain audited financial statements. 12 FINANCIAL HIGHLIGHTS Neuberger&Berman - -------------------------------------------------------------------------------- NYCDC Socially Responsive Trust The following table includes selected data for a share outstanding throughout each period and other performance information derived from the Financial Statements. The per share amounts and ratios which are shown reflect income and expenses, including the Fund's proportionate share of the Portfolio's income and expenses. It should be read in conjunction with the Portfolio's Financial Statements and notes thereto.
For the For the Period from Six Months Ended For the Year March 14, February 28, Ended 1994(1) 1997 August 31, to August 31, (UNAUDITED) 1996 1995 1994 ----------------------------------------------------- Net Asset Value, Beginning of Period $14.42 $ 12.27 $ 10.43 $10.20 ----------------------------------------------------- Income From Investment Operations Net Investment Income .09 .14 .13 .06 Net Gains or Losses on Securities (both realized and unrealized) 2.18 2.44 1.82 .17 ----------------------------------------------------- Total From Investment Operations 2.27 2.58 1.95 .23 ----------------------------------------------------- Less Distributions Dividends (from net investment income) (.16) (.12) (.11) -- Distributions (from capital gains) (1.19) (.31) -- -- ----------------------------------------------------- Total Distributions (1.35) (.43) (.11) -- ----------------------------------------------------- Net Asset Value, End of Period $15.34 $ 14.42 $ 12.27 $10.43 ----------------------------------------------------- Total Return(2) +15.96%(3) +21.27% +18.95% +2.26%(3) ----------------------------------------------------- Ratios/Supplemental Data Net Assets, End of Period (in millions) $154.9 $ 125.6 $ 88.5 $ 68.6 ----------------------------------------------------- Ratio of Expenses to Average Net Assets(4) .60%(5) .60% .60% .60%(5) ----------------------------------------------------- Ratio of Net Investment Income to Average Net Assets(4) 1.18%(5) 1.06% 1.26% 1.42%(5) -----------------------------------------------------
SEE NOTES TO FINANCIAL HIGHLIGHTS 13 NOTES TO FINANCIAL HIGHLIGHTS Neuberger&Berman February 28, 1997 (Unaudited) - ---------------------------------------------------------------------- NYCDC Socially Responsive Trust 1) The date investment operations commenced. 2) Total return based on per share net asset value reflects the effects of changes in net asset value on the performance of the Fund during each fiscal period and assumes dividends and other distributions, if any, were reinvested. Results represent past performance and do not guarantee future results. Investment returns and principal may fluctuate and shares when redeemed may be worth more or less than original cost. Total return would have been lower if Management had not reimbursed certain expenses. 3) Not annualized. 4) After reimbursement of expenses by Management as described in Note B of Notes to Financial Statements. Had Management not undertaken such action the annualized ratios to average daily net assets would have been:
For the For the For the Period from Six Months Ended Year Ended March 14, 1994 February 28, August 31, to August 31, 1997 1996 1995 1994 - --------------------------------------------------------------------------------------------------------- Expenses .78% .80% .85% .84% -------------------------------------------------------- Net Investment Income 1.00% .86% 1.01% 1.18% --------------------------------------------------------
5) Annualized. 14 SCHEDULE OF INVESTMENTS Neuberger&Berman February 28, 1997 (Unaudited) - -------------------------------------------------------------------------------- Socially Responsive Portfolio
TOP TEN EQUITY HOLDINGS --------------------------------------------------- HOLDING PERCENTAGE 1. Intel Corp. 2.7% 2. ReliaStar Financial 2.4% 3. Warner-Lambert 2.3% 4. National City 2.2% 5. Travelers Group 2.1% 6. A.G. Edwards 2.1% 7. Hewlett-Packard 2.1% 8. CoreStates Financial 2.1% 9. Morton International 2.0% 10. Equitable Cos. 2.0%
Market Value(1) Number (000's of Shares omitted) - ---------- ------------- COMMON STOCKS (96.0%) AGRICULTURE (1.1%) 83,500 Mycogen Corp. $ 2,181 ------------- AUTOMOTIVE (2.0%) 103,000 Borg-Warner Automotive 4,068 ------------- BANKING (10.1%) 32,000 CITICORP 3,736 80,007 CoreStates Financial 4,211 230,000 Dime Bancorp 4,025 70,000 Mercantile Bancorporation 4,051 90,000 National City 4,545 ------------- 20,568 ------------- BUSINESS SERVICES (3.4%) 120,000 Dun & Bradstreet 2,940 130,000 John H. Harland 3,932 ------------- 6,872 ------------- CHEMICALS (8.1%) 45,000 Air Products & Chemicals 3,336 110,000 Dexter Corp. 3,245 Market Value(1) Number (000's of Shares omitted) - ---------- ------------- 60,000 Minerals Technologies $ 2,272 100,000 Morton International 4,125 50,000 Perkin-Elmer 3,550 ------------- 16,528 ------------- COMMUNICATIONS (1.0%) 141,700 Matav-Cable Systems Media ADR 2,037 ------------- CONSUMER GOODS & SERVICES (5.0%) 30,000 Kimberly-Clark 3,180 29,400 Procter & Gamble 3,532 100,000 Viacom Inc. Class B 3,525 ------------- 10,237 ------------- DIVERSIFIED (1.7%) 60,000 Tyco International 3,540 ------------- ENERGY (1.5%) 80,000 Noble Affiliates 3,120 ------------- FINANCIAL SERVICES (7.9%) 120,000 A.G. Edwards 4,260 20,000 ADVANTA Corp. Class A 828 64,000 ADVANTA Corp. Class B 2,568 100,000 Fannie Mae 4,000 80,000 Travelers Group 4,290 ------------- 15,946 ------------- FOOD & BEVERAGE (3.7%) 85,200 McDonald's Corp. 3,685 160,000 Whitman Corp. 3,760 ------------- 7,445 ------------- FURNISHINGS (1.8%) 100,000 Leggett & Platt 3,587 ------------- HEALTH CARE (7.4%) 70,000 Johnson & Johnson 4,034 50,000 McKesson Corp. 3,312
15 SCHEDULE OF INVESTMENTS Neuberger&Berman February 28, 1997 (Unaudited) - -------------------------------------------------------------------------------- Socially Responsive Portfolio (Cont'd)
Market Value(1) Number (000's of Shares omitted) - ---------- ------------- 40,000 SmithKline Beecham ADR $ 2,970 55,000 Warner-Lambert 4,620 ------------- 14,936 ------------- INDUSTRIAL & COMMERCIAL PRODUCTS (1.7%) 40,000 Raychem Corp. 3,405 ------------- INSURANCE (7.8%) 102,600 Allmerica Property & Casualty 3,219 60,000 Chubb Corp. 3,517 130,000 Equitable Cos. 4,079 80,000 ReliaStar Financial 4,960 ------------- 15,775 ------------- OIL & GAS (3.9%) 100,000 ENSERCH Corp. 2,100 200,000 Enserch Exploration 1,925 80,000 Louisiana Land & Exploration 3,820 ------------- 7,845 ------------- OIL SERVICES (1.0%) 50,000 Tidewater Inc. 2,150 ------------- PAPER & FOREST PRODUCTS (1.4%) 50,000 Mead Corp. 2,912 ------------- RAILROADS (1.8%) 104,600 Illinois Central 3,596 ------------- RECYCLING (1.2%) 150,000 IMCO Recycling 2,363 ------------- RETAIL STORES (1.6%) 90,000 Nordstrom, Inc. 3,308 ------------- RETAILING (3.8%) 145,000 Costco Cos. 3,716 150,000 Wal-Mart Stores 3,956 ------------- 7,672 ------------- TECHNOLOGY (8.2%) 85,000 AMP, Inc. 3,305 120,000 Cabletron Systems 3,600 Market Value(1) Number (000's of Shares omitted) - ---------- ------------- 76,000 Hewlett-Packard $ 4,256 38,000 Intel Corp. 5,391 ------------- 16,552 ------------- TELECOMMUNICATIONS (7.3%) 70,000 AT&T Corp. 2,791 167,500 Jones Intercable Inc. Class A 1,612 250,000 Metromedia International Group 2,485 52,000 Southern New England Telecommunications 1,885 50,000 Telephone & Data Systems 2,000 150,000 WorldCom Inc. 3,994 ------------- 14,767 ------------- UTILITIES (1.6%) 115,000 Brooklyn Union Gas 3,277 ------------- TOTAL COMMON STOCKS (COST $149,589) 194,687 ------------- Principal Amount - ---------- U.S. TREASURY SECURITIES (5.4%) $10,985,000 U.S. Treasury Bills, 4.87% - 5.02%, due 3/6/97 - 4/24/97 (COST $10,933) 10,933(2) ------------- TOTAL INVESTMENTS (101.4%) (COST $160,522) 205,620(3) Liabilities, less cash, receivables and other assets [(1.4%)] (2,904) ------------- TOTAL NET ASSETS (100.0%) $ 202,716 -------------
SEE NOTES TO SCHEDULE OF INVESTMENTS 16 NOTES TO SCHEDULE OF INVESTMENTS Neuberger&Berman February 28, 1997 (Unaudited) - ---------------------------------------------------------------------- Socially Responsive Portfolio 1) Investment securities of the Portfolio are valued at the latest sales price; securities for which no sales were reported, unless otherwise noted, are valued at the mean between the closing bid and asked prices. The Portfolio values all other securities by a method that the trustees of Equity Managers Trust believe accurately reflects fair value. 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. 2) At cost, which approximates market value. 3) The cost of investments for Federal income tax purposes was $160,550,000. At February 28, 1997, gross unrealized appreciation of investments was $48,652,000 and gross unrealized depreciation of investments was $3,582,000, resulting in net unrealized appreciation of $45,070,000, based on cost for Federal income tax purposes. SEE NOTES TO FINANCIAL STATEMENTS 17 STATEMENT OF ASSETS AND LIABILITIES Neuberger&Berman - ---------------------------------------------------------------------- Socially Responsive Portfolio
February 28, 1997 (000'S OMITTED) (UNAUDITED) -------------- ASSETS Investments in securities, at market value* (Note A) -- see Schedule of Investments $ 205,620 Cash 1 Dividends receivable 224 Deferred organization costs (Note A) 14 Prepaid expenses 2 -------------- 205,861 -------------- LIABILITIES Payable for collateral on securities loaned (Note A) 2,200 Payable for securities purchased 827 Payable to investment manager (Note B) 85 Accrued expenses 33 -------------- 3,145 -------------- NET ASSETS Applicable to Investors' Beneficial Interests $ 202,716 -------------- NET ASSETS consist of: Paid-in capital $ 157,618 Net unrealized appreciation in value of investment securities 45,098 -------------- NET ASSETS $ 202,716 -------------- *Cost of investments $ 160,522 --------------
SEE NOTES TO FINANCIAL STATEMENTS 18 STATEMENT OF OPERATIONS Neuberger&Berman - ---------------------------------------------------------------------- Socially Responsive Portfolio
For the Six Months Ended February 28, 1997 (000'S OMITTED) (UNAUDITED) ------------ INVESTMENT INCOME Income: Dividend income $ 1,358 Interest income 252 Foreign taxes withheld (Note A) (2) ------------ Total income 1,608 ------------ Expenses: Investment management fee (Note B) 497 Custodian fees (Note B) 42 Auditing fees 10 Legal fees 10 Accounting fees 5 Trustees' fees and expenses 4 Amortization of deferred organization and initial offering expenses (Note A) 3 Insurance expense 2 ------------ Total expenses 573 ------------ Net investment income 1,035 ------------ REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on investment securities sold 3,304 Change in net unrealized appreciation of investment securities 21,855 ------------ Net gain on investments 25,159 ------------ Net increase in net assets resulting from operations $ 26,194 ------------
SEE NOTES TO FINANCIAL STATEMENTS 19 STATEMENT OF CHANGES IN NET ASSETS Neuberger&Berman - ---------------------------------------------------------------------- Socially Responsive Portfolio
For the Six Months For the Ended Year February 28, Ended 1997 August 31, (000'S OMITTED) (UNAUDITED) 1996 ----------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income $ 1,035 $ 1,307 Net realized gain on investments 3,304 11,385 Change in net unrealized appreciation of investments 21,855 9,035 ----------------------------- Net increase in net assets resulting from operations 26,194 21,727 ----------------------------- TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS: Additions 23,082 45,974 Reductions (5,045) (5,963) ----------------------------- Net increase in net assets resulting from transactions in investors' beneficial interests 18,037 40,011 ----------------------------- NET INCREASE IN NET ASSETS 44,231 61,738 NET ASSETS: Beginning of period 158,485 96,747 ----------------------------- End of period $ 202,716 $ 158,485 -----------------------------
SEE NOTES TO FINANCIAL STATEMENTS 20 NOTES TO FINANCIAL STATEMENTS February 28, 1997 (Unaudited) - ---------------------------------------------------------------------- Equity Managers Trust NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: 1) GENERAL: Neuberger&Berman Socially Responsive Portfolio (the "Portfolio") is a separate operating series of Equity Managers Trust ("Managers Trust"), a New York common law trust organized as of December 1, 1992. Managers Trust is registered as a diversified, open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"). Other regulated investment companies sponsored by Neuberger&Berman Management Incorporated ("Management"), whose financial statements are not presented herein, also invest in the Portfolio and other portfolios of Managers Trust. The assets of each series belong only to that series, and the liabilities of each series are borne solely by that series and no other. 2) PORTFOLIO VALUATION: Investment securities are valued as indicated in the notes following the Portfolio's Schedule of Investments. 3) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Dividend income is recorded on the ex-dividend date or, for certain foreign dividends, as soon as the Portfolio becomes aware of the dividends. Interest 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 are recorded on the basis of identified cost. 4) FEDERAL INCOME TAXES: Managers Trust intends to comply with the requirements of the Internal Revenue Code of 1986, as amended. Each portfolio of Managers Trust also intends to conduct its operations so that each of its investors will be able to qualify as a regulated investment company. Each portfolio will be treated as a partnership for Federal income tax purposes and is therefore not subject to Federal income tax. 5) FOREIGN TAXES: Foreign taxes withheld represents amounts withheld by foreign tax authorities, net of refunds recoverable. 6) ORGANIZATION EXPENSES: Expenses incurred by the Portfolio in connection with its organization are being amortized by the Portfolio on a straight-line basis over a five-year period. At February 28, 1997, the unamortized balance of such expenses amounted to $13,745. 7) EXPENSE ALLOCATION: The Portfolio bears all costs of its operations. Expenses incurred by Managers Trust with respect to any two or more portfolios are 21 allocated in proportion to the net assets of such portfolios, except where a more appropriate allocation of expenses to each portfolio can otherwise be made fairly. Expenses directly attributable to a portfolio are charged to that portfolio. 8) SECURITY LENDING: Portfolio securities loans involve certain risks in the event a borrower should fail financially, including delays or inability to recover the lent securities or foreclosure against the collateral. The investment manager, under the general supervision of Managers Trust's Board of Trustees, monitors the creditworthiness of the parties to whom the Portfolio makes security loans. The Portfolio will not lend securities on which covered call options have been written, or lend securities on terms which would prevent each of their investors from qualifying as a regulated investment company. Portfolio securities loans to Neuberger&Berman, LLC ("Neuberger"), the Portfolio's principal broker and sub-adviser, are made in accordance with an exemptive order issued by the Securities and Exchange Commission under the 1940 Act. The Portfolio receives cash as collateral against the lent securities, which must be maintained at not less than 100% of the market value of the lent securities during the period of the loan. The Portfolio receives income earned on the lent securities and a portion on the income earned on the cash collateral. During the six months ended February 28, 1997, the Portfolio lent securities to Neuberger. At February 28, 1997, cash collateral received by the Portfolio was equal to or in excess of 100% of the market value of the loaned securities. 9) REPURCHASE AGREEMENTS: The Portfolio may enter into repurchase agreements with institutions that the Portfolio's investment manager has determined are creditworthy. Each repurchase agreement is recorded at cost. The Portfolio requires that the securities purchased in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the Portfolio to obtain those securities in the event of a default under the repurchase agreement. The Portfolio monitors, on a daily basis, the value of the securities transferred to ensure that their value, including accrued interest, is greater than amounts owed to the Portfolio under each such repurchase agreement. NOTE B -- MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES: The Portfolio retains Management as its investment manager under a Management Agreement dated as of March 11, 1994. For such investment management services, the Portfolio pays Management a fee at the annual rate of 0.55% of the first $250 million of the Portfolio's average daily net assets, 0.525% of the next $250 million, 0.50% of the next $250 million, 0.475% of the next $250 million, 0.45% of the next $500 million, and 0.425% of average daily net assets in excess of $1.5 billion. All of the capital stock of Management is owned by individuals who are also principals of Neuberger, a member firm of The New York Stock Exchange and sub- adviser to the Portfolio. Neuberger is retained by Management to furnish it with 22 investment recommendations and research information without added cost to the Portfolio. Several individuals who are officers and/or trustees of Managers Trust are also principals of Neuberger and/or officers and/or directors of Management. The Portfolio has an expense offset arrangement in connection with its custodian contract. The impact of this arrangement, reflected in the Statement of Operations under the caption Custodian fees was a reduction of $287, which is less than .01% of the Portfolio's average daily net assets. NOTE C -- SECURITIES TRANSACTIONS: During the six months ended February 28, 1997, there were purchase and sale transactions (excluding short-term securities) of $60,285,463 and $40,655,492, respectively. During the six months ended February 28, 1997, brokerage commissions on securities transactions amounted to $134,333, of which Neuberger received $101,505, and other brokers received $32,828. In addition, Neuberger's share of the total interest income earned for the six months ended February 28, 1997 from the collateralization of securities loaned to or through Neuberger was $11,117. NOTE D -- UNAUDITED FINANCIAL INFORMATION: The financial information included in this interim report is taken from the records of the Portfolio without audit by independent accountants. Annual reports contain audited financial statements. 23 FINANCIAL HIGHLIGHTS Neuberger&Berman - -------------------------------------------------------------------------------- Socially Responsive Portfolio
For the Six Months Ended For the February Period from 28, For the Year Ended March 14, 1994(1) 1997 August 31, to August 31, (UNAUDITED) 1996 1995 1994 --------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS: Expenses .63%(2) .65% .68% .69%(2) --------------------------------------------------------- Net Investment Income 1.15%(2) 1.02% 1.18% 1.33%(2) --------------------------------------------------------- Portfolio Turnover Rate 23% 53% 58% 14% --------------------------------------------------------- Average Commission Rate Paid $0.0575 $0.0587 -- -- --------------------------------------------------------- Net Assets, End of Period (in millions) $202.7 $158.5 $96.7 $70.7 ---------------------------------------------------------
1) The date investment operations commenced. 2) Annualized. 24 DIRECTORY INVESTMENT MANAGER, ADMINISTRATOR AND DISTRIBUTOR Neuberger&Berman Management Incorporated 605 Third Avenue 2nd Floor New York, NY 10158-0180 800-877-9700 Institutional Services 800-366-6264 SUB-ADVISER Neuberger&Berman, LLC 605 Third Avenue New York, NY 10158-3698 CUSTODIAN AND SHAREHOLDER SERVICING AGENT State Street Bank and Trust Company 225 Franklin Street Boston, MA 02110 ADDRESS CORRESPONDENCE TO: Deferred Compensation Plan of the City of New York and Related Agencies and Instrumentalities 40 Rector Street 3rd Floor New York, NY 10006 212-306-7760 LEGAL COUNSEL Kirkpatrick & Lockhart LLP 1800 Massachusetts Avenue, NW 2nd Floor Washington, DC 20036-1800 Neuberger&Berman Management Inc. & Neuberger&Berman NYCDC Socially Responsive Trust are service marks of Neuberger&Berman Management Inc. - -C- 1997 Neuberger&Berman Management Inc. 25 OFFICERS AND TRUSTEES Stanley Egener CHAIRMAN OF THE BOARD AND TRUSTEE Lawrence Zicklin PRESIDENT AND TRUSTEE Faith Colish TRUSTEE Donald M. Cox TRUSTEE Alan R. Gruber TRUSTEE Howard A. Mileaf TRUSTEE Edward I. O'Brien TRUSTEE John T. Patterson, Jr. TRUSTEE John P. Rosenthal TRUSTEE Cornelius T. Ryan TRUSTEE Gustave H. Shubert TRUSTEE Daniel J. Sullivan VICE PRESIDENT Michael J. Weiner VICE PRESIDENT Richard Russell TREASURER Claudia A. Brandon SECRETARY Barbara DiGiorgio ASSISTANT TREASURER Celeste Wischerth ASSISTANT TREASURER Stacy Cooper-Shugrue ASSISTANT SECRETARY C. Carl Randolph ASSISTANT SECRETARY 26 NEUBERGER&BERMAN MANAGEMENT INC.-Registered Trademark- 605 THIRD AVENUE 2ND FLOOR NEW YORK, NY 10158-0180 SHAREHOLDER SERVICES 800.877.9700 INSTITUTIONAL SERVICES 800.366.6264 Statistics and projections in this report are derived from sources deemed to be reliable but cannot be regarded as a representation of future results of the Fund. This report is prepared for the general information of shareholders and is not an offer of shares of the Fund. Shares are sold only through the currently effective prospectus, which must precede or accompany this report. [RECYCLE SYMBOL] PRINTED ON RECYCLED PAPER NBESAR050297 -----END PRIVACY-ENHANCED MESSAGE-----