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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-03752
THE MANAGERS FUNDS
(Exact name of registrant as specified in charter)
800 Connecticut Avenue, Norwalk, Connecticut 06854
(Address of principal executive offices) (Zip code)
Managers Investment Group LLC
800 Connecticut Avenue, Norwalk, Connecticut 06854
(Name and address of agent for service)
Registrant’s telephone number, including area code: (203) 299-3500
Date of fiscal year end: | DECEMBER 31 | |
Date of reporting period: | JANUARY 1, 2011 – JUNE 30, 2011 (Semi-Annual Shareholder Report) |
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Item 1. | Reports to Shareholders |
Table of Contents
SEMI-ANNUAL REPORT
Managers Funds
June 30, 2011
Managers International Equity Fund
Managers Emerging Markets Equity Fund
Managers Global Bond Fund
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Table of Contents
The Managers Funds
Semi-Annual Report — June 30, 2011 (unaudited)
Page | ||||
ABOUT YOUR FUND’S EXPENSES | 1 | |||
FUND PERFORMANCE | 2 | |||
FUND SNAPSHOTS AND SCHEDULES OF PORTFOLIO INVESTMENTS | ||||
3 | ||||
8 | ||||
13 | ||||
NOTES TO SCHEDULES OF PORTFOLIO INVESTMENTS | 19 | |||
FINANCIAL STATEMENTS: | ||||
24 | ||||
Funds’ balance sheet, net asset value (NAV) per share computations and cumulative undistributed amounts | ||||
25 | ||||
Detail of sources of income, Fund expenses, and realized and unrealized gains (losses) during the period | ||||
26 | ||||
Detail of changes in Fund assets for the past two periods | ||||
FINANCIAL HIGHLIGHTS | 28 | |||
Historical net asset values per share, distributions, total returns, expense ratios, turnover ratios and net assets | ||||
NOTES TO FINANCIAL STATEMENTS | 30 | |||
Accounting and distribution policies, details of agreements and transactions with Fund management and affiliates, and descriptions of certain investment risks | ||||
ANNUAL RENEWAL OF INVESTMENT ADVISORY AGREEMENTS | 36 |
Nothing contained herein is to be considered an offer, sale or solicitation of an offer to buy shares of any series of the Managers Family of Funds. Such offering is made only by Prospectus, which includes details as to offering price and other material information.
Table of Contents
As a shareholder of a Fund, you may incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on $1,000 invested at the beginning of the period and held for the entire period as indicated below.
Actual Expenses
The first line of the following table provides information about the actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that 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 line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed annual rate of return of 5% before expenses, which 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 the Fund and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. |
Six Months Ended June 30, 2011 | Expense Ratio for the Period | Beginning Account Value 01/01/2011 | Ending Account Value 06/30/2011 | Expenses Paid During the Period* | ||||||||||||
Managers International Equity Fund | ||||||||||||||||
Based on Actual Fund Return | 1.39 | % | $ | 1,000 | $ | 1,047 | $ | 7.05 | ||||||||
Based on Hypothetical 5% Annual Return | 1.39 | % | $ | 1,000 | $ | 1,018 | $ | 6.95 | ||||||||
Managers Emerging Markets Equity Fund | ||||||||||||||||
Based on Actual Fund Return | 1.74 | % | $ | 1,000 | $ | 1,006 | $ | 8.65 | ||||||||
Based on Hypothetical 5% Annual Return | 1.74 | % | $ | 1,000 | $ | 1,016 | $ | 8.70 | ||||||||
Managers Global Bond Fund | ||||||||||||||||
Based on Actual Fund Return | 1.10 | % | $ | 1,000 | $ | 1,050 | $ | 5.59 | ||||||||
Based on Hypothetical 5% Annual Return | 1.10 | % | $ | 1,000 | $ | 1,019 | $ | 5.51 | ||||||||
* Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181), then divided by 365. |
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1 |
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All periods ended June 30, 2011 (unaudited) |
The table below shows the average annual total returns for the periods indicated for each Fund, as well as each Fund’s relative index for the same time periods.
Average Annual Total Returns1 | ||||||||||||||||||||
The Managers Funds | Six Months | One Year | Five Years | Ten Years | Inception Date | |||||||||||||||
Managers International Equity Fund2,3 | 4.66 | % | 28.23 | % | (0.58 | )% | 3.55 | % | 12/31/1985 | |||||||||||
MSCI EAFE Index® 6 | 4.98 | % | 30.36 | % | 1.48 | % | 5.66 | % | ||||||||||||
Managers Emerging Markets Equity Fund2,4 | 0.58 | % | 24.93 | % | 7.41 | % | 13.40 | % | 2/9/1998 | |||||||||||
MSCI Emerging Markets Index® 7 | 0.88 | % | 27.80 | % | 11.42 | % | 16.20 | % | ||||||||||||
Managers Global Bond Fund2,3,5 | 4.97 | % | 13.31 | % | 7.18 | % | 8.32 | % | 3/25/1994 | |||||||||||
Barclays Capital Global Aggregate Bond Index8 | 4.38 | % | 10.51 | % | 7.10 | % | 7.41 | % |
The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. For performance information through the most recent month end, please call (800) 835-3879 or visit our Web site at www.managersinvest.com.
In choosing a Fund, investors should carefully consider the amount they plan to invest, their investment objectives, the Fund’s investment objectives, risks, charges and expenses before investing. For this and other information, please call 800.835.3879 or visit www.managersinvest.com for a free prospectus. Read it carefully before investing or sending money. Distributed by Managers Distributors, Inc., member FINRA.
1 | Total return equals income yield plus share price change and assumes reinvestment of all dividends and capital gain distributions. Returns are net of fees and may reflect offsets of Fund expenses as described in the Prospectus. No adjustment has been made for taxes payable by shareholders on their reinvested dividends and capital gain distributions. Returns for periods greater than one year are annualized. The listed returns on the Fund are net of expenses and based on the published NAV as of June 30, 2011. All returns are in U.S. dollars($). |
2 | Fund for which, from time to time, the Fund’s advisor has waived its fees and/or absorbed Fund expenses, which has resulted in higher returns. |
3 | Investments in foreign securities are subject to additional risks such as changing market conditions, economic and political instability, and currency exchange rate fluctuations. The Fund is subject to currency risk resulting from fluctuations in exchange rates that may affect the total loss or gain on a non-U.S. Dollar security when converted back to U.S. Dollars. |
4 | The Fund is subject to the risks associated with investments in emerging markets, such as erratic earnings patterns, economic and political instability, changing exchange controls, limitations on repatriation of foreign capital and changes in local governmental attitudes toward private investment, possibly leading to nationalization or confiscation of investor assets. The Fund is also subject to currency risk resulting from fluctuations in exchange rates that may affect the total loss or gain on a non-U.S. Dollar security when converted back to U.S. Dollars. |
5 | Changing interest rates may adversely affect the value of an investment. An increase in interest rates typically causes the value of bonds and other fixed-income securities to fall. The Fund is subject to the risks associated with investments in debt securities, such as default risk and fluctuations in the perception of the debtor’s ability to pay its creditors. |
6 | The MSCI EAFE Index® (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI EAFE Index® consists of the following 22 developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the United Kingdom. Unlike the Fund, the MSCI EAFE Index® is unmanaged, is not available for investment, and does not incur expenses. All MSCI data is provided “as is.” The products described herein are not sponsored or endorsed and have not been reviewed or passed on by MSCI. In no event shall MSCI, its affiliates or any MSCI data provider have any liability of any kind in connection with the MSCI data or the products described herein. Copying or redistributing the MSCI data is strictly prohibited. |
7 | The MSCI Emerging Markets Index® is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of the following 21 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand and Turkey. Unlike the Fund, the Index is unmanaged, is not available for investment, and does not incur expenses. All MSCI data is provided “as is.” The products described herein are not sponsored or endorsed and have not been reviewed or passed on by MSCI. In no event shall MSCI, its affiliates, or any MSCI data provider have any liability of any kind in connection with the MSCI data or the products described herein. Copying or redistributing the MSCI data is strictly prohibited. |
8 | The Barclays Capital Global Aggregate Bond Index provides a broad-based measure of the global investment-grade fixed income markets. The three major components of this index are the U.S. Aggregate, the Pan-European Aggregate, and the Asian-Pacific Aggregate Indices. The Index also includes Eurodollar and Euro-Yen corporate bonds, Canadian government, agency and corporate securities, and USD investment grade 144A securities. Unlike the Fund, the Barclays Capital Global Aggregate Bond Index is unmanaged, is not available for investment, and does not incur fees. |
Not FDIC insured, nor bank guaranteed. May lose value.
2 |
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Managers International Equity Fund Fund Snapshots June 30, 2011 (unaudited) |
Portfolio Breakdown
Industry | Managers International Equity Fund** | MSCI EAFE Index® | ||||||
Financials | 25.0 | % | 23.5 | % | ||||
Consumer Discretionary | 14.0 | % | 10.5 | % | ||||
Materials | 11.3 | % | 11.3 | % | ||||
Industrials | 10.2 | % | 12.8 | % | ||||
Energy | 9.7 | % | 8.1 | % | ||||
Health Care | 6.5 | % | 8.7 | % | ||||
Consumer Staples | 6.4 | % | 10.2 | % | ||||
Information Technology | 5.7 | % | 4.7 | % | ||||
Telecommunication Services | 5.1 | % | 5.5 | % | ||||
Utilities | 2.8 | % | 4.7 | % | ||||
Other Equities | 0.9 | % | 0.0 | % | ||||
Participatory Note | 0.3 | % | 0.0 | % | ||||
Other Assets and Liabilities | 2.1 | % | 0.0 | % | ||||
** As a percentage of net assets |
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Top Ten Holdings | ||||||||
Security Name | Percentage of Net Assets | |||||||
Novartis AG* | 1.9 | % | ||||||
ING Groep N.V. | 1.7 | |||||||
Siemens AG* | 1.5 | |||||||
Rio Tinto PLC | 1.4 | |||||||
Royal Dutch Shell PLC, Class A | 1.4 | |||||||
Vodafone Group PLC* | 1.3 | |||||||
AstraZeneca PLC* | 1.2 | |||||||
Gazprom OAO, Sponsored ADR | 1.2 | |||||||
Prudential PLC* | 1.2 | |||||||
Syngenta AG | 1.2 | |||||||
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Top Ten as a Group | 14.0 | % | ||||||
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* | Top Ten Holding at December 31, 2010 |
Any sectors, industries, or securities discussed should not be perceived as investment recommendations. Mention of a specific security should not be considered a recommendation to buy or solicitation to sell that security. Specific securities mentioned in this report may have been sold from the Fund’s portfolio of investments by the time you receive this report. |
3 |
Table of Contents
Managers International Equity Fund Fund Snapshots (continued) |
Summary of Investments by Country
Country | Managers International Equity Fund* | MSCI EAFE Index® | ||||||
Australia | 1.8 | % | 8.6 | % | ||||
Austria | 0.0 | % | 0.3 | % | ||||
Belgium | 0.8 | % | 1.0 | % | ||||
Bermuda | 0.0 | % | 0.4 | % | ||||
Brazil | 3.5 | % | 0.0 | % | ||||
Canada | 4.8 | % | 0.0 | % | ||||
Cayman Islands | 0.0 | % | 0.2 | % | ||||
China | 1.4 | % | 0.0 | % | ||||
Denmark | 0.0 | % | 1.1 | % | ||||
Finland | 0.0 | % | 1.0 | % | ||||
France | 8.5 | % | 9.9 | % | ||||
Germany | 7.9 | % | 9.0 | % | ||||
Greece | 0.0 | % | 0.2 | % | ||||
Hong Kong | 5.4 | % | 2.3 | % | ||||
India | 0.9 | % | 0.0 | % | ||||
Ireland | 0.0 | % | 0.3 | % | ||||
Israel | 0.6 | % | 0.7 | % | ||||
Italy | 1.4 | % | 2.7 | % | ||||
Japan | 18.4 | % | 20.0 | % | ||||
Jersey, Channel Islands | 0.0 | % | 0.7 | % | ||||
Luxembourg | 0.7 | % | 0.6 | % | ||||
Netherlands | 5.7 | % | 2.7 | % | ||||
New Zealand | 0.0 | % | 0.1 | % | ||||
Norway | 0.5 | % | 0.7 | % | ||||
Portugal | 0.3 | % | 0.2 | % | ||||
Russia | 1.4 | % | 0.0 | % | ||||
Singapore | 1.4 | % | 1.5 | % | ||||
South Africa | 0.9 | % | 0.0 | % | ||||
South Korea | 2.2 | % | 0.0 | % | ||||
Spain | 1.1 | % | 3.6 | % | ||||
Supranational & Other | 0.2 | % | 0.2 | % | ||||
Sweden | 1.0 | % | 3.1 | % | ||||
Switzerland | 7.9 | % | 8.3 | % | ||||
Thailand | 1.8 | % | 0.0 | % | ||||
Turkey | 0.1 | % | 0.0 | % | ||||
United Kingdom | 15.4 | % | 20.5 | % | ||||
United States | 4.0 | % | 0.1 | % | ||||
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100.0 | % | 100.0 | % | |||||
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* | As a percentage of total market value on June 30, 2011 |
4 |
Table of Contents
Managers International Equity Fund Schedule of Portfolio Investments June 30, 2011 (unaudited) |
Shares | Value | |||||||
Common Stocks - 96.7% | ||||||||
Consumer Discretionary - 14.0% | ||||||||
adidas-Salomon AG (Germany) | 6,629 | $ | 525,561 | |||||
Bridgestone Corp. (Japan) | 42,200 | 972,310 | ||||||
Compagnie Financiere Richemont SA (Switzerland) | 6,804 | 445,887 | ||||||
Compass Group PLC | 69,666 | 671,732 | ||||||
Cyrela Brazil Realty, S.A. (Brazil) | 23,800 | 227,531 | ||||||
Daimler AG (Germany) | 9,083 | 684,967 | ||||||
Esprit Holdings, Ltd. (Hong Kong) | 61,647 | 192,616 | ||||||
GKN PLC (United Kingdom) | 230,497 | 859,360 | ||||||
LG Electronics, Inc. (South Korea) | 3,370 | 262,762 | ||||||
Magna International, Inc. (Canada) | 10,700 | 578,573 | ||||||
Mazda Motor (Japan)* | 4,000 | 10,541 | ||||||
New World Department Store China, Ltd. (Hong Kong) | 16,000 | 12,603 | ||||||
Nissan Motor Co., Ltd. (Japan) | 76,600 | 805,006 | ||||||
Parkson Retail Group, Ltd. (China) | 32,500 | 2 | 47,694 | |||||
Pearson PLC (United Kingdom) | 48,056 | 909,091 | ||||||
Persimmon PLC | 50,600 | 392,033 | ||||||
Renault SA (France) | 12,800 | 759,433 | ||||||
Sekisui House, Ltd. (Japan) | 44,000 | 409,688 | ||||||
SES SA (Luxembourg) | 23,651 | 664,402 | ||||||
Sharp Corp. (Japan) | 56,000 | 2 | 511,058 | |||||
SJM Holdings, Ltd. (Hong Kong) | 226,000 | 537,627 | ||||||
Sony Corp. (Japan) | 29,500 | 778,365 | ||||||
Sumitomo Rubber Industries, Ltd. (Japan) | 17,300 | 209,349 | ||||||
Suzuki Motor Co., Ltd. (Japan) | 17,200 | 387,715 | ||||||
Toyota Motor Corp. (Japan) | 17,200 | 708,282 | ||||||
Vivendi Universal SA (France) | 34,726 | 967,922 | ||||||
Total Consumer Discretionary | 13,532,108 | |||||||
Consumer Staples - 6.4% | ||||||||
British American Tobacco PLC (United Kingdom) | 8,771 | 384,624 | ||||||
Delhaize Group (Belgium) | 4,993 | 374,655 | ||||||
Groupe Danone SA (France) | 6,271 | 468,153 | ||||||
Heineken N.V. (Netherlands) | 10,875 | 654,537 | ||||||
Henkel AG & Co., KGaA (Germany) | 6,702 | 466,047 | ||||||
Imperial Tobacco Group PLC (United Kingdom) | 10,003 | 333,026 | ||||||
Japan Tobacco, Inc. (Japan) | 227 | 876,235 | ||||||
Kirin Brewery Co., Ltd. (Japan) | 42,000 | 2 | 585,519 | |||||
Metro AG (Germany) | 3,348 | 202,749 |
Shares | Value | |||||||
Nestle SA, Registered (Switzerland) | 3,333 | $ | 207,408 | |||||
SABMiller PLC (United Kingdom) | 8,162 | 297,918 | ||||||
Seven & i Holdings Co., Ltd. (Japan) | 13,300 | 357,690 | ||||||
Tate & Lyle PLC (United Kingdom) | 37,235 | 368,276 | ||||||
Tingyi Cayman Islands Holding Corp. (China) | 10,000 | 30,959 | ||||||
Unilever PLC (United Kingdom) | 12,500 | 403,327 | ||||||
Uni-President Enterprises Corp. (Taiwan) | 138,706 | 201,486 | ||||||
Total Consumer Staples | 6,212,609 | |||||||
Energy - 9.7% | ||||||||
Cairn Energy PLC | 51,455 | 343,151 | ||||||
Canadian Natural Resources, Ltd. (Canada) | 12,200 | 511,427 | ||||||
Cenovus Energy, Inc. (Canada) | 13,868 | 523,402 | ||||||
China Shenhua Energy Co., Ltd. (China) | 118,000 | 565,447 | ||||||
EnCana Corp. (Canada) | 7,268 | 2 | 224,419 | |||||
Gazprom OAO, Sponsored ADR (Russia)* | 79,315 | 1,157,836 | ||||||
INPEX Corp. (Japan) | 71 | 524,916 | ||||||
Lukoil OAO, Sponsored ADR (Russia) | 3,688 | 234,935 | ||||||
Nexen, Inc. (Canada) | 27,360 | 616,731 | ||||||
Petrofac, Ltd. (United Kingdom) | 25,462 | 619,161 | ||||||
Petroleo Brasileiro, S.A., ADR (Brazil) | 8,425 | 258,479 | ||||||
Petroleo Brasileiro, S.A., Sponsored ADR (Brazil) | 7,000 | 237,020 | ||||||
Royal Dutch Shell PLC, Class A (Netherlands) | 36,984 | 1,313,262 | ||||||
Royal Dutch Shell PLC, Class B (Netherlands) | 26,142 | 932,906 | ||||||
Suncor Energy, Inc. (Canada) | 11,800 | 462,481 | ||||||
Technip-Coflexip, ADR (France) | 4,828 | 517,524 | ||||||
Woodside Petroleum, Ltd. (Australia) | 6,600 | 291,172 | ||||||
Total Energy | 9,334,269 | |||||||
Financials - 25.0% | ||||||||
Aegon (Netherlands)* | 75,100 | 511,736 | ||||||
AIA Group, Ltd. (Hong Kong)* | 252,800 | 880,004 | ||||||
Allianz SE (Germany) | 6,400 | 892,465 | ||||||
Banco do Brasil, S.A. (Brazil) | 22,200 | 395,735 | ||||||
Banco Santander, S.A. (Brazil) | 23,100 | 268,056 | ||||||
Bank of East Asia, Ltd. (Hong Kong) | 32,490 | 133,761 | ||||||
Bank of Yokohama, Ltd., The (Japan) | 84,000 | 419,920 | ||||||
Barclays PLC (United Kingdom) | 115,268 | 472,872 | ||||||
BNP Paribas SA (France) | 7,650 | 589,887 | ||||||
CapitaLand, Ltd. (Singapore) | 128,500 | 305,269 | ||||||
CapitaMalls Asia, Ltd. (Singapore) | 74,000 | 88,845 | ||||||
Cathay Financial Holding Co., Ltd. (Taiwan) | 121,415 | 188,432 |
The accompanying notes are an integral part of these financial statements. |
5 |
Table of Contents
Managers International Equity Fund Schedule of Portfolio Investments (continued) |
Shares | Value | |||||||
Financials - 25.0% (continued) |
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China Life Insurance Co., Ltd. (China) | 37,000 | $ | 127,751 | |||||
China Minsheng Banking Corp., Ltd. (China) | 29,100 | 26,911 | ||||||
China Overseas Land & Investment, Ltd. | 360,189 | 2 | 774,872 | |||||
Chinatrust Financial Holding Co., Ltd. (Taiwan) | 236,007 | 206,098 | ||||||
Chuo Mitsui Trust Holdings, Inc. (Japan) | 34,760 | 120,990 | ||||||
Credit Suisse Group AG (Switzerland)* | 14,291 | 556,952 | ||||||
Dai-ichi Mutual Life Insurance Co., The (Japan) | 406 | 569,349 | ||||||
Daiwa House Industry Co., Ltd. (Japan) | 19,000 | 239,755 | ||||||
Daiwa Securities Group, Inc. (Japan) | 17,000 | 74,900 | ||||||
DBS Group Holdings, Ltd. (Singapore) | 36,500 | 436,623 | ||||||
Deutsche Boerse AG (Germany) | 2,961 | 224,829 | ||||||
DnB Holding ASA (Norway) | 33,800 | 470,885 | ||||||
Evergrande Real Estate Group, Ltd. (China) | 174,000 | 2 | 113,947 | |||||
Hana Financial Group, Inc. (South Korea) | 7,000 | 245,629 | ||||||
Hang Lung Group, Ltd. (Hong Kong) | 4,900 | 31,113 | ||||||
Hang Lung Properties, Ltd. (Hong Kong) | 30,000 | 123,349 | ||||||
HDFC Bank, Ltd. (India) | 9,495 | 536,314 | ||||||
Henderson Land Development Co., Ltd. (Hong Kong) | 64,000 | 413,859 | ||||||
Hong Kong Exchanges and Clearing, Ltd. (Hong Kong) | 38,500 | 810,689 | ||||||
HSBC Holdings PLC (United Kingdom) | 87,310 | 865,658 | ||||||
Industrial and Commercial Bank of China, Ltd., Class H (China) | 221,915 | 169,265 | ||||||
ING Groep N.V. (Netherlands)* | 134,180 | 1,653,579 | ||||||
Itau Unibanco Holding, S.A. (Brazil) | 17,263 | 400,313 | ||||||
KB Financial Group, Inc. (South Korea) | 6,725 | 319,693 | ||||||
KBC Bank & Insurance Group, Inc. (Belgium) | 10,400 | 408,088 | ||||||
Lloyds TSB Group PLC (United Kingdom)* | 662,800 | 520,852 | ||||||
Mitsubishi Estate Co., Ltd. (Japan) | 37,000 | 649,348 | ||||||
Mitsubishi Tokyo Financial Group, Inc. (Japan) | 181,700 | 885,485 | ||||||
Mitsui Fudosan Co., Ltd. (Japan) | 14,000 | 241,121 | ||||||
Muenchener Rueckversicherungs AG (Germany) | 2,600 | 396,906 | ||||||
National Australia Bank, Ltd. (Australia) | 24,800 | 685,655 | ||||||
Nomura Holdings, Inc. (Japan) | 44,000 | 217,126 | ||||||
Oversea-Chinese Banking Corp., Ltd. (Singapore) | 69,000 | 527,046 | ||||||
Prudential PLC (United Kingdom) | 99,329 | 1,146,937 | ||||||
Societe Generale (France) | 18,295 | 1,083,547 | ||||||
Standard Chartered PLC (United Kingdom) | 17,235 | 452,725 | ||||||
Sumitomo Mitsui Financial Group, Inc. (Japan) | 11,000 | 339,182 |
Shares | Value | |||||||
Sumitomo Realty & Development Co., Ltd. (Japan) | 12,000 | $ | 268,196 | |||||
Sun Hung Kai Properties, Ltd. (Hong Kong) | 28,000 | 409,292 | ||||||
Swiss Re, Ltd. (Switzerland) | 2,700 | 151,611 | ||||||
T&D Holdings, Inc. (Japan) | 5,900 | 140,433 | ||||||
Turkiye Is Bankasi A.S. (Isbank) (Turkey) | 37,900 | 116,330 | ||||||
UniCredito Italiano S.p.A. (Italy) | 239,075 | 506,057 | ||||||
Zurich Financial Services AG (Switzerland)* | 1,332 | 337,049 | ||||||
Total Financials | 24,143,291 | |||||||
Health Care - 6.5% | ||||||||
Actelion, Ltd. (Switzerland)* | 7,031 | 346,936 | ||||||
AstraZeneca PLC (United Kingdom) | 23,500 | 1,174,564 | ||||||
Fresenius Medical Care AG (Germany) | 5,558 | 415,713 | ||||||
GlaxoSmithKline PLC (United Kingdom) | 19,244 | 412,482 | ||||||
Lonza Group AG (Switzerland)* | 1,722 | 134,907 | ||||||
Mindray Medical International, Ltd., Sponsored ADR (China)* | 10,700 | 2 | 300,135 | |||||
Novartis AG (Switzerland) | 30,691 | 1,880,962 | ||||||
Roche Holding AG (Switzerland) | 3,000 | 502,262 | ||||||
Sanofi-Aventis SA (France) | 11,183 | 899,573 | ||||||
Teva Pharmaceutical Industries, Ltd., Sponsored ADR (Israel) | 4,700 | 226,634 | ||||||
Total Health Care | 6,294,168 | |||||||
Industrials - 10.2% | ||||||||
ABB, Ltd. (Switzerland)* | 26,719 | 694,221 | ||||||
ABB, Ltd., ADR (Switzerland)* | 24,330 | 628,654 | ||||||
Asahi Glass Co., Ltd. (Japan) | 44,000 | 2 | 514,900 | |||||
Atlas Copco AB (Sweden) | 17,394 | 458,094 | ||||||
BAE Systems PLC (United Kingdom) | 100,900 | 516,172 | ||||||
Bouygues (France) | 19,700 | 866,296 | ||||||
China Merchants Holdings International Co., Ltd. (Hong Kong) | 112,000 | 434,598 | ||||||
FANUC, Ltd. (Japan) | 3,300 | 551,836 | ||||||
Far Eastern New Century Corp. (Taiwan) | 128,318 | 200,603 | ||||||
HOCHTIEF AG (Germany) | 633 | 52,895 | ||||||
Kajima Corp. (Japan) | 28,000 | 80,329 | ||||||
Mitsubishi Corp. (Japan) | 13,600 | 339,699 | ||||||
Mitsubishi Heavy Industries., Ltd. (Japan) | 64,700 | 304,234 | ||||||
Mitsui & Co., Ltd. (Japan) | 32,700 | 565,387 | ||||||
Safran SA (France) | 10,036 | 428,247 | ||||||
Schneider Electric SA (France) | 3,767 | 628,987 | ||||||
Shimizu Corp. (Japan) | 22,000 | 91,687 | ||||||
Siemens AG (Germany) | 10,397 | 1,428,773 | ||||||
Sumitomo Electric Industries, Ltd. (Japan) | 41,000 | 598,011 |
The accompanying notes are an integral part of these financial statements. |
6 |
Table of Contents
Managers International Equity Fund Schedule of Portfolio Investments (continued) |
Shares | Value | |||||||
Industrials - 10.2% (continued) |
| |||||||
Tostem Inax Holding Corp. (Japan) | 9,100 | $ | 234,716 | |||||
Yamato Transport Co., Ltd. (Japan) | 11,800 | 185,623 | ||||||
Total Industrials | 9,803,962 | |||||||
Information Technology - 5.7% | ||||||||
AIXTRON AG (Germany) | 12,986 | 2 | 443,234 | |||||
AU Optronics Corp., Sponsored ADR (Taiwan)* | 46,453 | 319,597 | ||||||
Autonomy Corp., PLC (United Kingdom)* | 7,747 | 212,207 | ||||||
Check Point Software Technologies, Ltd. (Israel)* | 6,500 | 369,525 | ||||||
Companhia Brasileira de Meios de Pagamentos (Brazil) | 4,220 | 104,645 | ||||||
Ericsson (LM), Class B (Sweden) | 35,870 | 516,367 | ||||||
Fujitsu, Ltd. (Japan) | 64,000 | 365,817 | ||||||
Gemalto N.V. (Netherlands) | 10,946 | 2 | 522,737 | |||||
LG Display Co., Ltd. | 6,700 | 187,008 | ||||||
Redecard, S.A. (Brazil) | 9,200 | 137,943 | ||||||
Samsung Electronics Co., Ltd. (South Korea) | 850 | 660,645 | ||||||
Samsung Electronics Co., Ltd., GDR | 1,132 | 439,334 | ||||||
SAP AG (Germany) | 4,270 | 258,884 | ||||||
Sumco Corp. (Japan)* | 9,000 | 152,374 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd., Sponsored ADR (Taiwan) | 33,720 | 2 | 425,209 | |||||
Toshiba Corp. (Japan) | 73,000 | 384,881 | ||||||
Total Information Technology | 5,500,407 | |||||||
Materials - 11.3% | ||||||||
Air Liquide SA (France) | 6,878 | 985,649 | ||||||
Anglo American PLC (United Kingdom) | 10,178 | 504,769 | ||||||
Barrick Gold Corp. (Canada) | 9,986 | 453,406 | ||||||
Gold Fields, Ltd. (South Africa) | 21,763 | 319,203 | ||||||
Goldcorp, Inc. (Canada) | 13,800 | 667,500 | ||||||
Harmony Gold Mining Co., Ltd. (South Africa) | 25,458 | 336,562 | ||||||
Impala Platinum Holdings, Ltd. (South Africa) | 6,100 | 163,541 | ||||||
Incitec Pivot, Ltd. (Australia) | 85,565 | 356,354 | ||||||
JFE Holdings, Inc. (Japan) | 16,400 | 451,027 | ||||||
Kinross Gold Corp. (Canada) | 22,981 | 363,100 | ||||||
Newcrest Mining, Ltd. (Australia) | 10,136 | 410,707 | ||||||
Rio Tinto PLC | 18,400 | 1,328,591 | ||||||
Syngenta AG (Switzerland)* | 3,382 | 1,142,948 | ||||||
Taiwan Fertilizer Co., Ltd. (Taiwan) | 65,900 | 203,165 | ||||||
Tata Steel, Ltd., Reg S, GDR (India) | 13,400 | 175,540 | ||||||
ThyssenKrupp AG (Germany) | 15,513 | 806,024 | ||||||
Toray Industries, Inc. (Japan) | 53,700 | 396,530 |
Shares | Value | |||||||
Vale, S.A., ADR (Brazil) | 26,500 | $ | 767,439 | |||||
Xstrata PLC (Switzerland) | 32,380 | 713,185 | ||||||
Yamana Gold, Inc. (Canada) | 28,459 | 2 | 332,260 | |||||
Total Materials | 10,877,500 | |||||||
Telecommunication Services - 5.1% | ||||||||
Bharti Tele-Ventures, Ltd. (India) | 14,514 | 128,507 | ||||||
Nippon Telegraph & Telephone Corp. (Japan) | 16,300 | 786,179 | ||||||
NTT DoCoMo, Inc. (Japan) | 330 | 589,361 | ||||||
Telecom Italia S.p.A. (Italy) | 351,300 | 488,658 | ||||||
Telecom Italia S.p.A., RSP (Italy) | 349,200 | 406,254 | ||||||
Telefonica, S.A. (Spain) | 25,341 | 618,926 | ||||||
Tim Participacoes, S.A., ADR (Brazil) | 11,300 | 2 | 556,073 | |||||
Vodafone Group PLC (United Kingdom) | 485,996 | 1,288,691 | ||||||
Total Telecommunication Services | 4,862,649 | |||||||
Utilities - 2.8% | ||||||||
E.ON AG (Germany) | 30,900 | 878,318 | ||||||
Eletricidade de Portugal, S.A. (Portugal) | 94,300 | 334,658 | ||||||
Gas Natural SDG, S.A. (Spain) | 20,100 | 421,001 | ||||||
Hong Kong and China Gas Co., Ltd., The | 247,470 | 562,971 | ||||||
National Grid PLC (United Kingdom) | 43,016 | 423,460 | ||||||
Tokyo Electric Power Company, Inc., The (Japan) | 30,700 | 124,278 | ||||||
Total Utilities | 2,744,686 | |||||||
Total Common Stocks | 93,305,649 | |||||||
Other Equities - 0.9% | ||||||||
SPDR Gold Shares (United States)* | 5,900 | 861,282 | ||||||
Participatory Note - 0.3% |
| |||||||
Credit Suisse, Hindalco Industries, Ltd. P-Note | 82,600 | 335,067 | ||||||
Short-Term Investments - 7.1%1 |
| |||||||
BNY Institutional Cash Reserves Fund, Series B*3,8 | 104,356 | 83,391 | ||||||
BNY Mellon Overnight Government Fund, 0.08%3 | 4,779,897 | 4,779,897 | ||||||
Dreyfus Cash Management Fund, Institutional | 1,988,437 | 1,988,437 | ||||||
Total Short-Term Investments | 6,851,725 | |||||||
Total Investments - 105.0% | 101,353,723 | |||||||
Other Assets, less Liabilities - (5.0)% |
| (4,857,250 | ) | |||||
Net Assets - 100.0% | $ | 96,496,473 |
The accompanying notes are an integral part of these financial statements. |
7 |
Table of Contents
Managers Emerging Markets Equity Fund Fund Snapshots June 30, 2011 (unaudited) |
Portfolio Breakdown
Industry | Managers Emerging Markets Equity Fund** | MSCI EM Index® | ||||||
Financials | 22.5 | % | 24.7 | % | ||||
Materials | 14.4 | % | 14.9 | % | ||||
Energy | 13.5 | % | 14.5 | % | ||||
Information Technology | 12.1 | % | 12.1 | % | ||||
Consumer Discretionary | 11.1 | % | 7.7 | % | ||||
Industrials | 6.2 | % | 7.5 | % | ||||
Telecommunication Services | 4.9 | % | 7.3 | % | ||||
Consumer Staples | 3.6 | % | 6.7 | % | ||||
Utilities | 1.8 | % | 3.6 | % | ||||
Health Care | 0.1 | % | 1.0 | % | ||||
Warrants | 0.9 | % | 0.0 | % | ||||
Other Assets and Liabilities | 8.9 | % | 0.0 | % | ||||
** As a percentage of net assets |
| |||||||
Top Ten Holdings | ||||||||
Security Name | Percentage of Net Assets | |||||||
Samsung Electronics Co., Ltd.* |
| 3.1 | % | |||||
Gazprom OAO, ADR* |
| 2.4 | ||||||
Hyundai Motor Co. |
| 2.0 | ||||||
Industrial and Commercial Bank of China, Ltd., Class H* |
| 2.0 | ||||||
Vale, S.A., Sponsored ADR* |
| 1.8 | ||||||
China Construction Bank Corp.* |
| 1.8 | ||||||
Ping An Insurance (Group) Co. of China, Ltd.* |
| 1.6 | ||||||
Itau Unibanco Holding, S.A., ADR* |
| 1.4 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. |
| 1.4 | ||||||
Hon Hai Precision Industry Co., Ltd. |
| 1.3 | ||||||
|
| |||||||
Top Ten as a Group |
| 18.8 | % | |||||
|
| |||||||
* Top Ten Holding at December 31, 2010 |
|
Any sectors, industries, or securities discussed should not be perceived as investment recommendations. Mention of a specific security should not be considered a recommendation to buy or solicitation to sell that security. Specific securities mentioned in this report may have been sold from the Fund’s portfolio of investments by the time you receive this report. |
8 |
Table of Contents
Managers Emerging Markets Equity Fund Fund Snapshots (continued) |
Summary of Investments by Country
Country | Managers Emerging Markets Equity Fund* | MSCI EM Index® | ||||||
Argentina | 0.1 | % | 0.0 | % | ||||
Bermuda | 0.0 | % | 0.6 | % | ||||
Brazil | 15.5 | % | 15.5 | % | ||||
Cayman Islands | 0.0 | % | 3.1 | % | ||||
Chile | 0.0 | % | 1.7 | % | ||||
China | 12.7 | % | 9.8 | % | ||||
Colombia | 0.0 | % | 0.8 | % | ||||
Czech Republic | 0.2 | % | 0.4 | % | ||||
Egypt | 0.2 | % | 0.3 | % | ||||
Hong Kong | 6.2 | % | 4.0 | % | ||||
Hungary | 1.7 | % | 0.4 | % | ||||
India | 5.5 | % | 7.4 | % | ||||
Indonesia | 1.3 | % | 2.6 | % | ||||
Kazakhstan | 0.1 | % | 0.0 | % | ||||
Luxembourg | 1.1 | % | 0.0 | % | ||||
Malaysia | 1.5 | % | 3.1 | % |
Country | Managers Emerging Markets Equity Fund* | MSCI EM Index® | ||||||
Mexico | 2.2 | % | 4.4 | % | ||||
Morocco | 0.0 | % | 0.1 | % | ||||
Panama | 0.9 | % | 0.0 | % | ||||
Peru | 0.3 | % | 0.0 | % | ||||
Philippines | 0.0 | % | 0.6 | % | ||||
Poland | 1.2 | % | 1.7 | % | ||||
Russia | 9.1 | % | 6.5 | % | ||||
South Africa | 5.0 | % | 7.3 | % | ||||
South Korea | 16.6 | % | 14.8 | % | ||||
Supranational & Other | 1.3 | % | 0.0 | % | ||||
Taiwan | 10.6 | % | 11.0 | % | ||||
Thailand | 3.1 | % | 1.7 | % | ||||
Turkey | 2.7 | % | 1.4 | % | ||||
United Kingdom | 0.9 | % | 0.0 | % | ||||
United States | 0.0 | % | 0.8 | % | ||||
|
|
|
| |||||
100.0 | % | 100.0 | % | |||||
|
|
|
|
* | As a percentage of total market value on June 30, 2011 |
9 |
Table of Contents
Managers Emerging Markets Equity Fund Schedule of Portfolio Investments June 30, 2011 (unaudited) |
Shares | Value | |||||
Common Stocks - 90.2% | ||||||
Consumer Discretionary - 11.1% | ||||||
Belle International Holdings, Ltd. (Hong Kong) | 280,000 | $ | 591,553 | |||
Cheil Communications, Inc. (South Korea) | 15,650 | 232,902 | ||||
Corporation Geo, S.A.B. de C.V., Series B | 17,700 | 40,816 | ||||
Ctrip.com International, Ltd. (China)* | 7,400 | 318,792 | ||||
Cyfrowy Polsat SA (Poland) | 12,885 | 77,513 | ||||
Dongfeng Motor Group Co., Ltd. (China) | 134,000 | 254,388 | ||||
Far Eastern Department Stores, Ltd. (Taiwan) | 128,000 | 257,190 | ||||
Genting Malaysia Berhad (Malaysia) | 105,700 | 393,693 | ||||
Hero Honda Motors, Ltd. (India) | 8,701 | 365,868 | ||||
Hyundai Department Store Co., Ltd. (South Korea) | 775 | 126,187 | ||||
Hyundai Mobis Co., Ltd. (South Korea) | 593 | 223,119 | ||||
Hyundai Motor Co. (South Korea) | 5,196 | 1,158,363 | ||||
Imperial Holdings, Ltd. (South Africa) | 6,705 | 120,332 | ||||
Kroton Educacional, S.A. (Brazil)* | 15,800 | 203,492 | ||||
LG Electronics, Inc. (South Korea) | 3,903 | 304,321 | ||||
Lojas Renner, S.A. (Brazil) | 10,900 | 415,634 | ||||
Magazine Luiza, S.A. (Brazil) | 6,800 | 69,802 | ||||
MGM China Holdings, Ltd. (Macau)* | 124,400 | 228,923 | ||||
Naspers, Ltd. (South Africa) | 2,634 | 148,753 | ||||
Parkson Retail Group, Ltd. (China) | 76,500 | 112,264 | ||||
PDG Realty S.A. Empreendimentos e Participacoes (Brazil) | 108,341 | 610,206 | ||||
Urbi Desarrollos Urbanos, S.A.B. de C.V. (Mexico)* | 107,730 | 236,466 | ||||
Total Consumer | 6,490,577 | |||||
Consumer Staples - 3.6% | ||||||
Anadolu Efes Biracilik ve Malt Sanayii A.S. (Turkey) | 33,747 | 456,406 | ||||
BRF - Brasil Foods, S.A., ADR (Brazil) | 4,800 | 83,184 | ||||
China Mengniu Dairy Co., Ltd. (Hong Kong) | 22,000 | 74,292 | ||||
Companhia de Bebidas das Americas, PR ADR (Brazil) | 3,100 | 104,563 | ||||
CP All PCL (Thailand) | 105,000 | 151,577 | ||||
E-Mart Co., Ltd. (South Korea)* | 320 | 73,282 | ||||
Hengan International Group Co. (China) | 51,000 | 458,595 | ||||
LG Household & Health Care, Ltd. (South Korea) | 563 | 242,043 | ||||
Shoprite Holdings, Ltd. (South Africa) | 5,877 | 88,481 | ||||
Wal-Mart de Mexico S.A.B. de C.V. (Mexico) | 70,500 | 209,239 | ||||
X5 Retail Group, N.V., GDR (Russia)* | 3,678 | 144,061 | ||||
Total Consumer Staples | 2,085,723 |
Shares | Value | |||||||
Energy - 13.5% | ||||||||
Banpu PCL, NVDR (Thailand) | 7,400 | $ | 172,938 | |||||
China Petroleum and Chemical Corp., Class H (China) | 210,000 | 213,170 | ||||||
China Shenhua Energy Co., Ltd. (China) | 72,000 | 345,019 | ||||||
China Suntien Green Energy Corp., Ltd. (China) | 113,000 | 29,696 | ||||||
CNOOC, Ltd. (Hong Kong) | 289,790 | 682,566 | ||||||
Gazprom OAO, ADR (Russia)* | 97,536 | 1,423,825 | ||||||
Lukoil OAO, Sponsored ADR (Russia) | 8,900 | 566,953 | ||||||
MOL Magyar Olaj-es Gazipari NyRt. (Hungary)* | 3,038 | 348,133 | ||||||
NovaTek OAO, Sponsored GDR (Russia) | 1,300 | 179,781 | ||||||
OGX Petroleo e Gas Participacoes, S.A. (Brazil)* | 39,800 | 371,057 | ||||||
Oil & Natural Gas Corp., Ltd. (India) | 44,169 | 271,476 | ||||||
PetroChina Co., Ltd. (China) | 114,000 | 167,442 | ||||||
Petroleo Brasileiro, S.A., ADR (Brazil) | 12,165 | 373,222 | ||||||
Petroleo Brasileiro, S.A., Sponsored ADR (Brazil) | 20,627 | 698,430 | ||||||
Polski Koncern Naftowy ORLEN SA (Poland)* | 4,332 | 81,778 | ||||||
PTT PCL, NVDR (Thailand) | 38,400 | 420,148 | ||||||
QGEP Participacoes, S.A. (Brazil) | 20,200 | 208,258 | ||||||
Reliance Industries, Ltd. (India) | 5,063 | 101,999 | ||||||
Rosneft Oil Co. OAO, GDR (Russia) (a)* | 30,566 | 238,415 | ||||||
Rosneft Oil Co. OAO, GDR (Russia) | 10,400 | 87,675 | ||||||
Sasol, Ltd. (South Africa) | 5,041 | 265,934 | ||||||
SK Energy Co., Ltd. (South Korea) | 1,158 | 218,647 | ||||||
Tupras Turkiye Petrol Rafine (Turkey) | 10,041 | 246,604 | ||||||
Ultrapar Participacoes, S.A. (Brazil) | 7,152 | 127,124 | ||||||
Ultrapar Participacoes, S.A., ADR (Brazil) | 3,300 | 59,829 | ||||||
Total Energy | 7,900,119 | |||||||
Financials - 22.5% | ||||||||
ABSA Group, Ltd. (South Africa) | 19,410 | 387,161 | ||||||
Banco Bradesco, S.A., ADR (Brazil) | 34,621 | 709,384 | ||||||
Bangkok Bank PCL (Thailand) | 54,500 | 282,038 | ||||||
Bank of China, Ltd., Class H (China) | 681,800 | 333,713 | ||||||
BR Malls Participacoes, S.A. (Brazil) | 11,600 | 130,594 | ||||||
BR Properties, S.A. (Brazil) | 40,300 | 454,477 | ||||||
Cathay Financial Holding Co., Ltd. (Taiwan) | 102,000 | 158,301 | ||||||
China Construction Bank Corp. (China) | 1,239,659 | 1,031,997 | ||||||
China Overseas Land & Investment, Ltd. (Hong Kong) | 96,000 | 206,524 | ||||||
Chinatrust Financial Holding Co., Ltd. (Taiwan) | 410,850 | 358,783 |
The accompanying notes are an integral part of these financial statements. |
10 |
Table of Contents
Managers Emerging Markets Equity Fund Schedule of Portfolio Investments (continued) |
Shares | Value | |||||||
Financials - 22.5% (continued) |
| |||||||
Compartamos, S.A.B de C.V. (Mexico) | 40,000 | $ | 72,597 | |||||
Credicorp, Ltd. (Peru) | 1,046 | 90,061 | ||||||
DGB Financial Group, Inc. | 9,730 | 147,638 | ||||||
EFG-Hermes (Egypt) | 24,988 | 84,184 | ||||||
FirstRand, Ltd. | 101,294 | 297,719 | ||||||
Franshion Properties | 316,000 | 80,636 | ||||||
Grupo Financiero Banorte, S.A.B. de C.V. (Mexico) | 14,900 | 67,650 | ||||||
Grupo Financiero Galicia, S.A., ADR (Argentina) | 5,400 | 73,116 | ||||||
Halyk Savings Bank of | 7,782 | 69,585 | ||||||
Hana Financial Group, Inc. (South Korea) | 4,820 | 169,133 | ||||||
HDFC Bank, Ltd. (India) | 8,411 | 475,085 | ||||||
Industrial and Commercial Bank of China, Ltd., Class H (China) | 1,500,556 | 1,144,543 | ||||||
Infrastructure Development Finance Co., Ltd. (India) | 116,888 | 344,360 | ||||||
Itau Unibanco Holding, S.A. (Brazil) | 6,696 | 155,274 | ||||||
Itau Unibanco Holding, S.A., ADR (Brazil) | 35,989 | 847,541 | ||||||
Kasikornbank PCL, NVDR (Thailand) | 66,100 | 265,720 | ||||||
OTP Bank NyRt. (Hungary) | 12,637 | 411,224 | ||||||
Ping An Insurance (Group) Co. of China, Ltd. (China) | 89,883 | 2 | 932,238 | |||||
PKO Bank Polski (Poland) | 9,382 | 143,586 | ||||||
Poly (Hong Kong) | 133,000 | 87,808 | ||||||
Powszechny Zaklad Ubezpieczen SA | 1,764 | 241,115 | ||||||
PT Bank Mandiri | 397,906 | 335,153 | ||||||
Public Bank Berhad (Malaysia) | 61,469 | 270,937 | ||||||
Public Bank Berhad, Foreign Market (Malaysia) | 29,500 | 129,637 | ||||||
Samsung Fire & Marine Insurance Co., Ltd. | 1,813 | 421,861 | ||||||
Shinhan Financial Group Co., Ltd. (South Korea) | 12,463 | 595,976 | ||||||
Siam Commercial Bank PCL (Thailand) | 102,500 | 371,702 | ||||||
Turkiye Garanti Bankasi A.S. (Turkey) | 51,989 | 235,916 | ||||||
Turkiye Halk Bankasi A.S. (Turkey) | 17,014 | 127,624 | ||||||
Turkiye Is Bankasi A.S. (Isbank) (Turkey) | 30,309 | 93,030 | ||||||
VTB Bank, GDR (Russia) | 45,817 | 282,924 | ||||||
Total Financials | 13,118,545 | |||||||
Health Care - 0.1% | ||||||||
Richter Gedeon Rt (Hungary) | 362 | 71,498 | ||||||
Industrials - 6.2% | ||||||||
Beijing Enterprises Holdings, Ltd. (Hong Kong) | 12,000 | 62,714 |
Shares | Value | |||||||
Changsha Zoomlion Heavy Industry Science and Technology Development Co., Ltd. (China) | 66,300 | $ | 126,945 | |||||
China Merchants Holdings International Co., Ltd. | 24,000 | 93,128 | ||||||
China Shipping Development Co., Ltd. (China) | 234,000 | 215,951 | ||||||
Companhia de Concessoes Rodoviarias (Brazil) | 7,562 | 225,215 | ||||||
Copa Holdings, S.A., Class A (Panama) | 7,000 | 467,181 | ||||||
COSCO Pacific, Ltd. (Hong Kong) | 212,000 | 374,259 | ||||||
Far Eastern New Century Corp. (Taiwan) | 64,340 | 100,584 | ||||||
Globaltrans Investment PLC, GDR (Russia)* | 4,406 | 81,811 | ||||||
Glovis Co., Ltd. | 866 | 140,078 | ||||||
GS Engineering & Construction Corp. (South Korea) | 1,821 | 222,762 | ||||||
Hyundai Heavy Industries Co., Ltd. (South Korea) | 512 | 213,688 | ||||||
Industries Qatar Q.S.C. (Qatar) | 4,910 | 184,183 | ||||||
Iochpe-Maxion, S.A. (Brazil) | 5,700 | 77,356 | ||||||
Korea Aerospace | 1,230 | 25,518 | ||||||
Larsen & Toubro, Ltd. (India) | 10,082 | 412,381 | ||||||
Murray & Roberts Holdings, Ltd. (South Africa) | 12,353 | 54,814 | ||||||
Samsung Heavy Industries | 9,271 | 415,478 | ||||||
SM Investments Corp. (Philippines) | 1 | 12 | ||||||
TAV Havalimanlari Holding A.S. (Turkey)* | 23,345 | 117,085 | ||||||
Total Industrials | 3,611,143 | |||||||
Information Technology - 12.1% |
| |||||||
Asustek Computer, Inc. (Taiwan) | 20,650 | 205,530 | ||||||
Asustek Computer, Inc., GDR (Taiwan)* | 2 | 98 | ||||||
Baidu.com, Inc. (China)* | 500 | 70,065 | ||||||
High Tech Computer Corp. (Taiwan) | 5,000 | 169,056 | ||||||
Hon Hai Precision Industry Co., Ltd. (Taiwan) | 227,724 | 784,007 | ||||||
Hon Hai Precision Industry Co., Ltd., ADR (Taiwan) | 21 | 143 | ||||||
Hynix Semiconductor, Inc. (South Korea) | 2,440 | 57,649 | ||||||
Infosys Technologies, Ltd. (India) | 2,082 | 135,831 | ||||||
Infosys Technologies, Ltd., Sponsored ADR (India) | 5,200 | 2 | 339,196 | |||||
Lenovo Group, Ltd. (United States) | 122,000 | 69,766 | ||||||
LG Display Co., Ltd. (South Korea) | 10,000 | 279,116 | ||||||
Mail.Ru Group, Ltd., Reg S, GDR (Russia)* | 7,397 | 246,162 | ||||||
MediaTek, Inc. (Taiwan) | 26,067 | 283,927 | ||||||
NCSoft Corp. (South Korea) | 1,215 | 331,945 | ||||||
Samsung Electronics Co., Ltd. (South Korea) | 2,305 | 1,791,515 | ||||||
Samsung Electronics Co., Ltd., GDR (South Korea) (a) | 120 | 46,573 |
The accompanying notes are an integral part of these financial statements. |
11 |
Table of Contents
Managers Emerging Markets Equity Fund Schedule of Portfolio Investments (continued) |
Shares | Value | |||||||
Information Technology - 12.1% (continued) |
| |||||||
Siliconware Precision Industries Co. (Taiwan) | 68,871 | $ | 87,949 | |||||
Siliconware Precision Industries Co., ADR (Taiwan) | 42,000 | 261,240 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. (Taiwan) | 323,584 | 815,516 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd., Sponsored ADR (Taiwan) | 27,500 | 2 | 346,775 | |||||
Tencent Holdings, Ltd. (China) | 6,400 | 174,671 | ||||||
Unimicron Technology Corp. (Taiwan) | 212,000 | 378,483 | ||||||
WPG Holdings, Ltd. (Taiwan) | 83,000 | 141,145 | ||||||
ZTE Corp., Class H (China) | 20,000 | 72,748 | ||||||
Total Information | 7,089,106 | |||||||
Materials - 14.4% | ||||||||
African Rainbow | 1,032 | 28,810 | ||||||
Anhui Conch Cement Co., Ltd. (China) | 110,808 | 521,455 | ||||||
China National Building Materials Co., Ltd. (China) | 112,000 | 221,114 | ||||||
China Steel Corp. (Taiwan) | 88,484 | 106,708 | ||||||
Compania de Minas Buenaventura SA (Peru) | 1,300 | 49,374 | ||||||
Evraz Group, S.A., GDR (Luxembourg)* | 6,451 | 2 | 200,840 | |||||
Gerdau, S.A., Sponsored ADR (Brazil) | 15,600 | 164,112 | ||||||
Gold Fields, Ltd. | 3,205 | 47,008 | ||||||
Impala Platinum | 18,216 | 491,547 | ||||||
KG Chemical Co., Ltd. | 1,596 | 733,438 | ||||||
KGHM Polska Miedz SA (Poland) | 1,244 | 89,347 | ||||||
LSR Group OJSC, GDR (Russia) | 15,279 | 120,733 | ||||||
Mechel OAO (Russia) | 144 | 3,440 | ||||||
MMC Norilsk Nickel, ADR (Russia)* | 15,943 | 417,769 | ||||||
MMX Mineracao e Metalicos, S.A. (Brazil)* | 60,100 | 321,555 | ||||||
Mongolian Mining Corp. (Mongolia)* | 231,500 | 286,853 | ||||||
Nan Ya Plastics Corp. (Taiwan) | 86,000 | 230,023 | ||||||
Novolipetsk Steel, GDR (Russia) | 1,130 | 44,064 | ||||||
POSCO (South Korea) | 1,175 | 510,486 | ||||||
Raspadskaya (Russia)* | 50,441 | 310,784 | ||||||
Severstal, GDR, Reg S (Russia) | 4,000 | 73,882 | ||||||
Taiwan Cement Corp. (Taiwan) | 193,216 | 288,635 | ||||||
Taiwan Fertilizer Co., Ltd. (Taiwan) | 120,000 | 369,951 | ||||||
Tata Steel, Ltd. (India) | 8,364 | 114,519 | ||||||
Tata Steel, Ltd., Reg S, GDR (India) | 26,035 | 2 | 341,058 | |||||
Ternium, S.A. (Luxembourg)* | 11,500 | 339,595 | ||||||
Uralkaliy OAO (Russia)* | 11,431 | 514,044 | ||||||
Vale, S.A., ADR (Brazil) | 14,899 | 431,475 | ||||||
Vale, S.A., Sponsored ADR (Brazil) | 32,867 | 1,050,101 | ||||||
Total Materials | 8,422,720 |
Shares | Value | |||||||
Telecommunication Services - 4.9% | ||||||||
America Movil, S.A.B. de C.V., Series L (Mexico) | 10,000 | $ | 538,800 | |||||
China Mobile, Ltd. (Hong Kong) | 79,500 | 740,128 | ||||||
Chunghwa Telecom Co., Ltd., ADR (Taiwan) | 4,420 | 152,711 | ||||||
KT Corp. (South Korea) | 3,500 | 133,450 | ||||||
Magyar Telekom Telecommunications PLC (Hungary) | 27,295 | 87,709 | ||||||
Mobile Telesystems OJSC, Sponsored ADR (Russia) | 6,200 | 117,924 | ||||||
MTN Group, Ltd. (South Africa) | 34,175 | 728,060 | ||||||
Taiwan Mobile Co., Ltd. (Taiwan) | 39,000 | 105,786 | ||||||
Telecomunicacoes de Sao Paulo, S.A., ADR (Brazil) | 4,512 | 134,006 | ||||||
Turk Telekomunikasyon A.S. (Turkey) | 26,983 | 142,646 | ||||||
Total Telecommunication Services | 2,881,220 | |||||||
Utilities - 1.8% | ||||||||
Ceske Energeticke Zavody (Czech Republic) | 2,083 | 107,238 | ||||||
China Gas Holdings, Ltd. (Hong Kong) | 562,000 | 226,032 | ||||||
China Resources Power Holdings Co. (Hong Kong) | 49,800 | 97,371 | ||||||
Companhia Energetica de Minas Gerais, Sponsored ADR (Brazil) | 11,990 | 247,474 | ||||||
Perusahaan Gas Negara (Persero) Tbk PT (Indonesia) | 770,500 | 362,391 | ||||||
Total Utilities | 1,040,506 | |||||||
Total Common Stocks | 52,711,157 | |||||||
Warrants - 0.9% | ||||||||
Sberbank of Russia Warrants, 02/28/18 (United Kingdom) | 135,032 | 483,415 | ||||||
Sberbank of Russia Warrants, 11/30/12 (Luxembourg) | 10,778 | 37,507 | ||||||
Total Warrants | 520,922 | |||||||
Short-Term Investments - 2.2%1 | ||||||||
BNY Institutional Cash Reserves Fund, Series B*3,8 | 110,742 | 88,495 | ||||||
BNY Mellon Overnight Government Fund, 0.08%3 | 1,182,683 | 1,182,683 | ||||||
Total Short-Term Investments | 1,271,178 | |||||||
Total Investments - 93.2% | 54,503,257 | |||||||
Other Assets, less Liabilities - 6.7% | 3,949,432 | |||||||
Net Assets - 100.0% | $ | 58,452,689 |
The accompanying notes are an integral part of these financial statements. |
12 |
Table of Contents
Managers Global Bond Fund Fund Snapshots June 30, 2011 (unaudited) |
Portfolio Breakdown
Category | Managers Global Bond Fund** | Barclays Capital Global Aggregate Bond Index | ||||||
Foreign Government Obligations | 56.4 | % | 51.7 | % | ||||
Corporate Bonds | 30.0 | % | 16.1 | % | ||||
U.S. Government Obligations | 9.9 | % | 14.8 | % | ||||
Asset-Backed Securities | 4.0 | % | 0.2 | % | ||||
Mortgage Backed Securities | 0.8 | % | 17.2 | % | ||||
Municipal Bonds | 0.5 | % | 0.0 | % | ||||
Other Assets and Liabilities | (1.6 | )% | 0.0 | % | ||||
** As a percentage of net assets |
| |||||||
Top Ten Holdings | ||||||||
Security Name | Percentage of Net Assets | |||||||
United States Treasury Notes, 1.375%, 02/15/12 |
| 7.7 | % | |||||
Japan Government Bonds, Series 299, 1.300%, 03/20/19* |
| 5.1 | ||||||
Japan Government Notes, Series 84, 0.700%, 06/20/14* |
| 3.7 | ||||||
Japan Finance Corporation for Municipal Enterprises Bonds, 1.550%, 02/21/12* |
| 2.4 | ||||||
Bundesrepublik Deutschland Bonds, 4.000%, 04/13/12 |
| 2.2 | ||||||
Netherlands Government Bonds, 4.500%, 07/15/17* |
| 2.2 | ||||||
Spain Government Bonds, 5.500%, 04/30/21 |
| 2.1 | ||||||
Italian Treasury Bonds, 4.000%, 09/01/20 |
| 2.0 | ||||||
Canadian Government Bonds, 3.000%, 12/01/15* |
| 2.0 | ||||||
Norway Government Bonds, 4.500%, 05/22/19* |
| 2.0 | ||||||
|
| |||||||
Top Ten as a Group |
| 31.4 | % | |||||
|
| |||||||
* Top Ten Holding at December 31, 2010 |
|
Any sectors, industries, or securities discussed should not be perceived as investment recommendations. Mention of a specific security should not be considered a recommendation to buy or solicitation to sell that security. Specific securities mentioned in this report may have been sold from the Fund’s portfolio of investments by the time you receive this report. |
13 |
Table of Contents
Schedule of Portfolio Investments June 30, 2011 (unaudited) |
Security Description | Principal Amount | Value | ||||||||
Foreign Government Obligations- 56.4% | ||||||||||
Australian Government Index Linked Bonds, Series 2009 25CI, 3.000%, | AUD | 180,000 | $ | 214,978 | ||||||
Banco Nacional de Desenvolvimento Economico e Social Bonds, | USD | 100,000 | 112,750 | |||||||
British Columbia Bonds, Series BCUSG-4, 2.850%, 06/15/15 | USD | 175,000 | 183,549 | |||||||
Bundesrepublik Deutschland Bonds, | ||||||||||
4.000%, 04/13/12 | EUR | 385,000 | 569,343 | |||||||
4.000%, 01/04/37 | EUR | 100,000 | 149,745 | |||||||
Canadian Government Bonds, 3.000%, 12/01/15 | CAD | 485,000 | 519,070 | |||||||
Denmark Government, | ||||||||||
Bonds, 4.000%, 11/15/15 | DKK | 1,300,000 | 269,434 | |||||||
Notes, Series EMTN, 1.750%, 10/05/15 | EUR | 55,000 | 77,745 | |||||||
Eksportfinans ASA Notes, Series GMTN, 1.875%, 04/02/13 | USD | 170,000 | 2 | 173,253 | ||||||
European Investment Bank, | ||||||||||
Bonds, 2.375%, 07/10/20 | CHF | 165,000 | 203,860 | |||||||
Notes, 6.909%, 04/24/13 (a)4 | IDR | 4,605,000,000 | 474,661 | |||||||
Export-Import Bank of Korea Notes, The, 4.000%, 11/26/15 (a) | PHP | 5,000,000 | 110,765 | |||||||
Finland Government Bonds, 3.875%, 09/15/17 | EUR | 305,000 | 467,403 | |||||||
Inter-American Development Bank Notes, | ||||||||||
4.750%, 01/10/14 | INR | 5,800,000 | 128,514 | |||||||
8.118%, 08/20/154 | IDR | 750,000,000 | 62,918 | |||||||
Italian Treasury Bonds, 4.000%, 09/01/20 | EUR | 380,000 | 524,890 | |||||||
Japan Finance Corporation for Municipal Enterprises Bonds, | ||||||||||
1.550%, 02/21/12 | JPY | 49,000,000 | 613,800 | |||||||
1.900%, 06/22/18 | JPY | 20,000,000 | 267,890 | |||||||
Series INTL, 1.350%, 11/26/13 | JPY | 20,000,000 | 254,613 | |||||||
Japan Government, | ||||||||||
Notes, Series 84, 0.700%, 06/20/14 | JPY | 76,500,000 | 963,152 | |||||||
Bonds, Series 299, 1.300%, 03/20/19 | JPY | 101,500,000 | 1,309,313 | |||||||
Bonds, Series 123, 2.100%, 12/20/30 | JPY | 20,000,000 | 257,077 | |||||||
Mexican Government Bonds, | ||||||||||
8.000%, 12/07/23 | MXN | 3,900,000 | 353,019 | |||||||
Series 2011 M, 6.500%, 06/10/21 | MXN | 3,500,000 | 287,304 | |||||||
Netherlands Government Bonds, 4.500%, 07/15/17 | EUR | 354,000 | 560,580 | |||||||
New South Wales Treasury Corp. Bonds, Series 2007 CIB1, 2.750%, 11/20/25 | AUD | 70,000 | 80,817 | |||||||
New Zealand Government Bonds, Series 413, 6.500%, 04/15/13 | NZD | 350,000 | 306,420 | |||||||
Norway Government Bonds, | ||||||||||
4.250%, 05/19/17 | NOK | 1,300,000 | 257,090 | |||||||
4.500%, 05/22/19 | NOK | 2,570,000 | 517,805 | |||||||
Ontario Notes, Province of, 2.950%, 02/05/15 | USD | 245,000 | 256,914 | |||||||
Poland Government, | ||||||||||
Bonds, Series 1013, 5.000%, 10/24/13 | PLN | 700,000 | 255,910 | |||||||
Notes, Series EMTN, 3.000%, 09/23/14 | CHF | 65,000 | 79,291 |
The accompanying notes are an integral part of these financial statements. |
14 |
Table of Contents
Managers Global Bond Fund Schedule of Portfolio Investments (continued) |
Security Description | Principal Amount | Value | ||||||||
Foreign Government Obligations - 56.4% (continued) | ||||||||||
Quebec Notes, Province of, | ||||||||||
EMTN, Series 2005, 3.625%, 02/10/15 | EUR | 200,000 | $ | 299,242 | ||||||
Series EMTN, 3.375%, 06/20/16 | EUR | 150,000 | 220,913 | |||||||
Republic of Argentina Bonds, Series NY, 8.280%, 12/31/33 | USD | 143,105 | 2 | 126,290 | ||||||
Saskatchewan Bonds, Province of, 7.375%, 07/15/13 | USD | 225,000 | 253,706 | |||||||
Singapore Government, | ||||||||||
Notes, 1.625%, 04/01/13 | SGD | 325,000 | 269,990 | |||||||
Bonds, 2.250%, 07/01/13 | SGD | 535,000 | 450,900 | |||||||
Spain Government Bonds, 5.500%, 04/30/21 | EUR | 375,000 | 546,539 | |||||||
Sweden Government Bonds, Series 1049, 4.500%, 08/12/15 | SEK | 1,500,000 | 2 | 255,269 | ||||||
U.K. Gilt Bonds, | ||||||||||
4.000%, 09/07/16 | GBP | 100,000 | 174,508 | |||||||
4.000%, 03/07/22 | GBP | 145,000 | 240,538 | |||||||
4.750%, 03/04/20 | GBP | 275,000 | 491,471 | |||||||
5.000%, 03/07/25 | GBP | 110,000 | 196,926 | |||||||
Uruguay Government International Bonds, | ||||||||||
3.700%, 06/26/37 | UYU | 800,000 | 57,847 | |||||||
5.000%, 09/14/18 | UYU | 1,000,000 | 86,455 | |||||||
Total Foreign Government Obligations (cost $13,638,174) | 14,534,467 | |||||||||
Corporate Bonds - 30.0% | ||||||||||
Financials - 14.2% | ||||||||||
ABB Treasury Center USA, Inc., 2.500%, 06/15/16 (a) | USD | 80,000 | 79,385 | |||||||
AXA SA, 7.125%, 12/15/20 | GBP | 100,000 | 172,876 | |||||||
Bank of America Corp., 4.750%, 05/06/19 6 | EUR | 100,000 | 133,662 | |||||||
Barclays Bank PLC, 6.050%, 12/04/17 | USD | 100,000 | 105,879 | |||||||
BBVA Bancomer SA, 6.500%, 03/10/21 (a) | USD | 100,000 | 102,000 | |||||||
BNP Paribas SA, Series BKNT, 5.000%, 01/15/21 | USD | 125,000 | 125,676 | |||||||
BNZ International Funding, Ltd., Series EMTN, 4.000%, 03/08/17 | EUR | 100,000 | 144,024 | |||||||
Caterpillar Financial Services Corp., Series MTN, 2.650%, 04/01/16 | USD | 100,000 | 102,206 | |||||||
Citigroup, Inc., 5.500%, 02/15/17 | USD | 85,000 | 89,395 | |||||||
Crown Castle Towers LLC, 6.113%, 01/15/20 (a) | USD | 100,000 | 109,112 | |||||||
Ford Motor Credit Co. LLC, 7.000%, 04/15/15 | USD | 100,000 | 108,016 | |||||||
Goldman Sachs Group, Inc., 4.750%, 01/28/14 | EUR | 85,000 | 126,804 | |||||||
HSBC Bank PLC, 4.125%, 08/12/20 (a) | USD | 100,000 | 96,800 | |||||||
JPMorgan Chase & Co., 4.400%, 07/22/20 | USD | 75,000 | 73,475 | |||||||
KfW Bankengruppe, 2.600%, 06/20/37 | JPY | 23,000,000 | 316,108 | |||||||
Lloyds TSB Bank PLC, 6.500%, 09/14/20 (a) | USD | 100,000 | 94,328 | |||||||
Morgan Stanley, | ||||||||||
5.500%, 07/24/20 | USD | 100,000 | 101,219 | |||||||
Series EMTN, 5.375%, 11/14/13 | GBP | 40,000 | 67,737 | |||||||
National Australia Bank, Ltd., Series GMTN, 4.750%, 07/15/16 | EUR | 100,000 | 151,833 | |||||||
Network Rail Infrastructure Finance PLC, Series EMTN, 3.500%, 06/17/13 | USD | 300,000 | 315,663 |
The accompanying notes are an integral part of these financial statements. |
15 |
Table of Contents
Managers Global Bond Fund Schedule of Portfolio Investments (continued) |
Security Description | Principal Amount | Value | ||||||||||
Financials - 14.2% (continued) | ||||||||||||
Rabobank Nederland, Series EMTN, 4.375%, 01/22/14 | EUR | 85,000 | $ | 128,437 | ||||||||
SLM Corp., 5.000%, 10/01/13 | USD | 150,000 | 156,000 | |||||||||
Societe Generale SA, 5.200%, 04/15/21 (a) | USD | 200,000 | 196,412 | |||||||||
Videotron, Ltee., 6.875%, 07/15/21 (a) | CAD | 65,000 | 66,826 | |||||||||
Wells Fargo & Co., 4.625%, 11/02/35 | GBP | 50,000 | 68,151 | |||||||||
White Mountains Insurance Group, Ltd., 6.375%, 03/20/17 (a) | USD | 140,000 | 145,167 | |||||||||
Zurich Finance USA, Inc., | ||||||||||||
Series EMTN, 4.500%, 06/15/256 | EUR | 100,000 | 142,273 | |||||||||
Series EMTN, 5.750%, 10/02/236 | EUR | 100,000 | 146,942 | |||||||||
Total Financials | 3,666,406 | |||||||||||
Industrials - 13.6% | ||||||||||||
Asciano Finance, Ltd., 4.625%, 09/23/20 (a) | USD | 125,000 | 119,271 | |||||||||
Avnet, Inc., 5.875%, 06/15/20 | USD | 60,000 | 63,356 | |||||||||
Axtel S.A.B. de C.V., 7.625%, 02/01/17 (a) | USD | 55,000 | 52,250 | |||||||||
Bell Aliant Regional Communications, 5.410%, 09/26/16 | CAD | 160,000 | 176,523 | |||||||||
Bell Canada, | ||||||||||||
6.100%, 03/16/35 (a) | CAD | 45,000 | 46,211 | |||||||||
6.550%, 05/01/29 (a) | CAD | 10,000 | 10,917 | |||||||||
7.300%, 02/23/32 (a) | CAD | 130,000 | 148,949 | |||||||||
British Telecommunications PLC, 5.750%, 12/07/28 | GBP | 100,000 | 155,575 | |||||||||
Cameron International Corp., 5.950%, 06/01/41 | USD | 35,000 | 35,164 | |||||||||
Citizens Communications Co., 6.625%, 03/15/15 | USD | 115,000 | 119,888 | |||||||||
Corus Entertainment, Inc., 7.250%, 02/10/17 (a) | CAD | 130,000 | 142,879 | |||||||||
Delta Air Lines, Inc., 8.021%, 08/10/22 | USD | 91,875 | 93,363 | |||||||||
Desarrolladora Homex, S.A. de C.V., 7.500%, 09/28/15 | USD | 190,000 | 2 | 194,275 | ||||||||
DP World, Ltd., 6.850%, 07/02/37 (a) | USD | 250,000 | 238,751 | |||||||||
Edcon Proprietary Ltd., 4.721%, 06/15/14 (09/15/11) (a)5 | EUR | 150,000 | 190,333 | |||||||||
ERAC USA Finance Co., 6.700%, 06/01/34 (a) | USD | 120,000 | 128,537 | |||||||||
Finmeccanica SpA, 4.875%, 03/24/25 | EUR | 100,000 | 139,329 | |||||||||
HCA, Inc., | ||||||||||||
6.375%, 01/15/15 | USD | 35,000 | 35,700 | |||||||||
6.625%, 02/15/16 | USD | 80,000 | 81,400 | |||||||||
7.580%, 09/15/25 | USD | 10,000 | 9,300 | |||||||||
7.690%, 06/15/25 | USD | 15,000 | 14,025 | |||||||||
Hologic, Inc., 2.000%, 12/15/37 (b)9 | USD | 70,000 | 67,900 | |||||||||
Lafarge SA, EMTN, Series 2010, 5.375%, 11/29/18 | EUR | 50,000 | 72,675 | |||||||||
Motorola Inc., 6.625%, 11/15/37 | USD | 21,000 | 23,357 | |||||||||
Nabors Industries, Inc., 6.150%, 02/15/18 | USD | 75,000 | 82,913 | |||||||||
Nextel Communications, Inc., 7.375%, 08/01/15 | USD | 65,000 | 65,000 | |||||||||
Odebrecht Drill VIII/IX, Ltd., 6.350%, 06/30/21 (a) | USD | 100,000 | 105,500 | |||||||||
Owens & Minor, Inc., 6.350%, 04/15/167 | USD | 105,000 | 110,228 |
The accompanying notes are an integral part of these financial statements. |
16 |
Table of Contents
Managers Global Bond Fund Schedule of Portfolio Investments (continued) |
Security Description | Principal Amount | Value | ||||||||||
Industrials - 13.6% (continued) | ||||||||||||
Qwest Corp., 7.250%, 10/15/35 | USD | 158,000 | $ | 156,420 | ||||||||
Rowan Companies, Inc., 5.000%, 09/01/17 | USD | 95,000 | 101,643 | |||||||||
Telecom Italia Capital S.A., | ||||||||||||
6.375%, 11/15/33 | USD | 45,000 | 40,128 | |||||||||
7.200%, 07/18/36 | USD | 20,000 | 18,856 | |||||||||
Telstra Corp., Ltd., 4.800%, 10/12/21 (a) | USD | 60,000 | 60,199 | |||||||||
Transport De Gas Del Sur, 7.875%, 05/14/17 (a) | USD | 245,000 | 237,650 | |||||||||
Valeant Pharmaceuticals International, Inc., 6.750%, 08/15/21 (a) | USD | 60,000 | 57,000 | |||||||||
Voto-Votorantim, Ltd., 6.750%, 04/05/21 (a) | USD | 100,000 | 106,000 | |||||||||
Total Industrials | 3,501,465 | |||||||||||
Utilities - 2.2% | ||||||||||||
Axtel S.A.B. de C.V.. 9.000%, 09/22/19 (a) | USD | 45,000 | 43,942 | |||||||||
Dubai Electricity & Water Authority, 6.375%, 10/21/16 (a) | USD | 100,000 | 103,750 | |||||||||
EDP Finance, B.V., Series EMTN, 4.750%, 09/26/16 | EUR | 50,000 | 64,135 | |||||||||
Emgesa SA ESP, 8.750%, 01/25/21 (a) | COP | 120,000,000 | 72,950 | |||||||||
Empresas Publicas de Medellin ESP, 8.375%, 02/02/21 (a) | COP | 180,000,000 | 106,209 | |||||||||
Iberdrola Finance Ireland, Ltd., 5.000%, 09/11/19 (a) | USD | 150,000 | 147,932 | |||||||||
IPALCO Enterprises, Inc., 7.250%, 04/01/16 (a) | USD | 30,000 | 33,256 | |||||||||
Total Utilities | 572,174 | |||||||||||
Total Corporate Bonds (cost $7,245,300) | 7,740,045 | |||||||||||
U.S. Government Obligations- 9.9% | ||||||||||||
USTN, 0.625%, 02/28/13 | USD | 415,000 | 416,605 | |||||||||
USTN, 1.375%, 02/15/12 | USD | 1,970,000 | 1,985,159 | |||||||||
USTN, 1.375%, 11/30/15 | USD | 150,000 | 149,262 | |||||||||
Total U.S. Government Obligations (cost $2,548,230) | 2,551,026 | |||||||||||
Asset-Backed Securities - 4.0% | ||||||||||||
Avis Budget Rental Car Funding LLC II, Series 2009 2A, Class A, 5.680%, | USD | 100,000 | 105,571 | |||||||||
COMET, Series 2004-B7, Class B7, 1.822%, 08/17/17 (07/19/11)5 | EUR | 100,000 | 138,809 | |||||||||
Hertz Vehicle Financing LLC, Series 2009 2A, Class A1, 4.260%, 03/25/16 (a) | USD | 100,000 | 104,494 | |||||||||
Hyundai Capital Auto Funding, Ltd., Series 2010 8A, Class A, 1.186%, 09/20/16 (07/19/11) (a)5 | USD | 200,000 | 198,692 | |||||||||
MBNA Credit Card Master Note Trust, Series 2005 B3, Class B3, 1.632%, 03/19/18 (07/19/11)5 | EUR | 100,000 | 134,968 | |||||||||
Santander Drive Auto Receivables Trust, Series 2011 S2A, Class D, 3.350%, 06/15/17 (a) | USD | 100,000 | 99,910 | |||||||||
Sierra Receivables Funding Company, Series 2009-3A, Class A1, 7.620%, | USD | 46,982 | 47,694 | |||||||||
Trinity Rail Leasing, L.P., Series 2010 1A, Class A, 5.194%, 10/16/40 (a) | USD | 97,704 | �� | 97,708 | ||||||||
World Financial Credit Card Master Trust, Series 2010-A, Class A, 3.960%, 06/15/15 | USD | 95,000 | 100,483 | |||||||||
Total Asset-Backed Securities (cost $969,738) | 1,028,329 | |||||||||||
Mortgage-Backed Securities - 0.8% | ||||||||||||
Extended Stay America Trust, Series 2010 ESHA, Class D, 5.498%, 11/05/27 (a) | USD | 135,000 | 134,773 | |||||||||
Greenwich Capital Commercial Funding, 5.444%, 10/03/39 | USD | 75,000 | 80,452 | |||||||||
Total Mortgage-Backed Securities (cost $215,847) | 215,225 |
The accompanying notes are an integral part of these financial statements. |
17 |
Table of Contents
Managers Global Bond Fund Schedule of Portfolio Investments (continued) |
Security Description | Principal Amount | Value | ||||||||||
Municipal Bonds - 0.5% | ||||||||||||
California Statewide Communities Development Authority Revenue, Series 2007 A, 4.750%, 04/01/33 | USD | 55,000 | $ | 49,846 | ||||||||
California Statewide Communities Development Authority Revenue, Sutter Health, Series 2008 B, 5.250%, 11/15/48 | USD | 65,000 | 61,255 | |||||||||
Rochester Health Care Facilities Revenue, Mayo Clinic, Series 2011 C, 4.500%, 11/15/38 (11/15/21)5 | USD | 20,000 | 21,634 | |||||||||
Total Municipal Bonds (cost $124,508) | 132,735 | |||||||||||
Shares | ||||||||||||
Short-Term Investments - 3.6%1 | ||||||||||||
BNY Institutional Cash Reserves Fund, Series B* 3,8 | 38,044 | 30,401 | ||||||||||
BNY Mellon Overnight Government Fund, 0.08% 3 | 692,956 | 692,956 | ||||||||||
Dreyfus Cash Management Fund, Institutional Class Shares, 0.10% | 192,561 | 192,561 | ||||||||||
Total Short-Term Investments (cost $923,561) | 915,918 | |||||||||||
Total Investments - 105.2% (cost $25,665,358) | 27,117,745 | |||||||||||
Other Assets, less Liabilities - (5.2)% | (1,343,756 | ) | ||||||||||
Net Assets - 100.0% | $ | 25,773,989 |
The accompanying notes are an integral part of these financial statements. |
18 |
Table of Contents
Notes to Schedules of Portfolio Investments (unaudited) |
The following footnotes and abbreviations should be read in conjunction with each of the Schedules of Portfolio Investments previously presented in this report.
At June 30, 2011, the cost of securities for Federal income tax purposes and the gross aggregate unrealized appreciation and/or depreciation based on tax cost were approximately:
Fund | Cost | Appreciation | Depreciation | Net | ||||||||||||
Managers International Equity Fund | $ | 94,228,973 | $ | 11,997,384 | ($ | 4,872,634 | ) | $ | 7,124,750 | |||||||
Managers Emerging Markets Equity Fund | 49,668,692 | 6,552,342 | (1,717,777 | ) | 4,834,565 | |||||||||||
Managers Global Bond Fund | 25,675,587 | 1,556,307 | (114,149 | ) | 1,442,158 |
* | Non-income-producing security. |
(a) | Security exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified buyers. At June 30, 2011, the value of these securities amounted to the following: |
Fund | Market Value | % of Net Assets | ||||||
Managers International Equity Fund | $ | 439,334 | 0.5 | % | ||||
Managers Emerging Markets Equity Fund | 284,988 | 0.5 | ||||||
Managers Global Bond Fund | 4,529,534 | 17.6 |
(b) | Step Bond. A debt instrument with either deferred interest payments or an interest rate that resets at specific times during its term. |
1 | Yield shown for each investment company represents the June 30, 2011, seven-day average yield, which refers to the sum of the previous seven days’ dividends paid, expressed as an annual percentage. |
2 | Some or all of these shares were out on loan to various brokers as of June 30, 2011, amounting to: |
Fund | Market Value | % of Net Assets | ||||||
Managers International Equity Fund | $ | 4,685,743 | 4.9 | % | ||||
Managers Emerging Markets Equity Fund | 1,259,494 | 2.2 | ||||||
Managers Global Bond Fund | 694,029 | 2.7 |
3 | Collateral received from brokers for securities lending was invested in these short-term investments. |
4 | Represents yield to maturity at June 30, 2011. |
5 | Floating Rate Security. The rate listed is as of June 30, 2011. Date in parentheses represents the security’s next coupon rate reset. |
6 | Variable Rate Security. The rate listed is as of June 30, 2011, and is periodically reset subject to terms and conditions set forth in the debenture. |
7 | Security is illiquid: A security not readily convertible into cash such as a stock, bond or commodity that is not actively traded, and would be difficult to sell in a current sale. The Fund may not invest more than 15% of its net assets in illiquid securities. All securities are valued on the basis of valuations provided by dealers or independent pricing services. Illiquid securities at June 30, 2011, for Managers Global Bond Fund amounted to $110,228, or 0.4% of net assets. |
8 | On September 12, 2008, The Bank of New York Mellon established a separate sleeve of the BNY Institutional Cash Reserves Fund (Series B) to hold certain Lehman Brothers floating rate notes. The Fund’s position in Series B is being fair valued daily. (See Note 4 in the Notes to the Financial Statements.) |
9 | Convertible Bond: A corporate bond, usually a junior debenture, that can be converted, at the option of the holder, for a specific number of shares of the company’s preferred stock or common stock. Convertible bonds at June 30, 2011, amounted to $67,900, or 0.3% of net assets. |
The accompanying notes are an integral part of these financial statements. |
19 |
Table of Contents
Notes to Schedules of Portfolio Investments (continued) |
The following table summarizes the inputs used to value the Funds’ net assets by the fair value hierarchy levels as of June 30, 2011: (See Note 1(a) in the Notes to Financial Statements.)
Quoted Prices in Active Markets for Identical Investments Level 1 | Significant Other Observable Inputs Level 2 | Significant Unobservable Inputs Level 3 | Total | |||||||||||||
Managers International Equity Fund |
| |||||||||||||||
Investments in Securities |
| |||||||||||||||
Common Stocks | ||||||||||||||||
Materials | $ | 2,922,786 | $ | 7,954,714 | — | $ | 10,877,500 | |||||||||
Energy | 2,833,959 | 6,500,310 | — | 9,334,269 | ||||||||||||
Information Technology | 1,356,919 | 4,143,488 | — | 5,500,407 | ||||||||||||
Financials | 1,215,715 | 22,927,576 | — | 24,143,291 | ||||||||||||
Consumer Discretionary | 806,104 | 12,726,004 | — | 13,532,108 | ||||||||||||
Telecommunication Services | 556,073 | 4,306,576 | — | 4,862,649 | ||||||||||||
Health Care | 526,769 | 5,767,399 | — | 6,294,168 | ||||||||||||
Industrials | — | 9,803,962 | — | 9,803,962 | ||||||||||||
Consumer Staples | — | 6,212,609 | — | 6,212,609 | ||||||||||||
Utilities | — | 2,744,686 | — | 2,744,686 | ||||||||||||
Other Equities | 861,282 | 335,067 | — | 1,196,349 | ||||||||||||
Short-Term Investments | 6,768,334 | 83,391 | — | 6,851,725 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments in Securities | $ | 17,847,941 | $ | 83,505,782 | — | $ | 101,353,723 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Derivatives†† | ||||||||||||||||
Equity Contracts | $ | 6,366 | — | — | $ | 6,366 | ||||||||||
Foreign Exchange Contracts | — | ($ | 9,399 | ) | — | (9,399 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Derivatives | $ | 6,366 | ($ | 9,399 | ) | — | ($ | 3,033 | ) | |||||||
|
|
|
|
|
|
|
|
Quoted Prices in Active Markets for Identical Investments Level 1 | Significant Other Observable Inputs Level 2 | Significant Unobservable Inputs Level 3 | Total | |||||||||||||
Managers Emerging Markets Equity Fund |
| |||||||||||||||
Investments in Securities |
| |||||||||||||||
Common Stocks | ||||||||||||||||
Financials | $ | 2,748,332 | $ | 10,370,213 | — | $ | 13,118,545 | |||||||||
Materials | 2,700,710 | 5,722,010 | — | 8,422,720 | ||||||||||||
Consumer Discretionary | 2,201,644 | 4,288,933 | — | 6,490,577 | ||||||||||||
Energy | 2,076,335 | 5,823,784 | — | 7,900,119 | ||||||||||||
Consumer Staples | 1,168,717 | 917,006 | — | 2,085,723 | ||||||||||||
Health Care | — | — | — | — | ||||||||||||
Information Technology | 1,087,140 | 6,001,966 | — | 7,089,106 | ||||||||||||
Telecommunication Services | 1,086,087 | 1,795,133 | — | 2,881,220 | ||||||||||||
Industrials | 912,355 | 2,698,788 | — | 3,611,143 | ||||||||||||
Utilities | 247,474 | 793,032 | — | 1,040,506 | ||||||||||||
Health Care | — | 71,498 | — | 71,498 | ||||||||||||
Other Equities | — | 520,922 | — | 520,922 | ||||||||||||
Short-Term Investments | 1,182,683 | 88,495 | — | 1,271,178 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments in Securities | $ | 15,411,477 | $ | 39,091,780 | — | $ | 54,503,257 | |||||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements. |
20 |
Table of Contents
Notes to Schedules of Portfolio Investments (continued) |
Quoted Prices in Active Markets for Identical Investments Level 1 | Significant Other Observable Inputs Level 2 | Significant Unobservable Inputs Level 3 | Total | |||||||||||||
Managers Global Bond Fund |
| |||||||||||||||
Investments in Securities | ||||||||||||||||
Corporate Bonds† | — | $ | 7,740,045 | — | $ | 7,740,045 | ||||||||||
Foreign Government Obligations | — | 14,534,467 | — | 14,534,467 | ||||||||||||
U.S. Government Obligations | — | 2,551,026 | — | 2,551,026 | ||||||||||||
Asset-Backed Securities | — | 1,028,329 | — | 1,028,329 | ||||||||||||
Mortgage-Backed Securities | — | 215,225 | — | 215,225 | ||||||||||||
Municipal Bonds | — | 132,735 | 132,735 | |||||||||||||
Short-Term Investments | $ | 885,517 | 30,401 | — | 915,918 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 885,517 | $ | 26,232,228 | — | $ | 27,117,745 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Derivatives†† | ||||||||||||||||
Foreign Exchange Contracts | — | ($ | 3,751 | ) | — | ($ | 3,751 | ) | ||||||||
|
|
|
|
|
|
|
|
† | All corporate bonds held in the Funds are Level 2 securities. For a detailed break-out of the corporate bonds by major industry classification, please refer to the Schedule of Portfolio Investments. |
†† | Derivative instruments, such as futures and foreign exchange contracts, are not reflected in the Schedules of Portfolio Investments, and are valued at the unrealized appreciation/depreciation of the instrument. |
As of June 30, 2011, the Funds’ had no significant transfers between Level 1 and Level 2 from the beginning of the reporting period.
The fair value of derivative instruments at June 30, 2011, for Managers International Equity Fund (“International Equity”) and Managers Global Bond Fund (“Global Bond”) were as follows:
| Asset Derivatives | Liability Derivatives | ||||||||||||
Fund | Derivatives not accounted for | Statement of Assets and Liabilities | Fair Value | Statement of Assets and Liabilities | Fair Value | |||||||||
International Equity | Equity contracts | Receivable for variation margin on futures | $ | 3,190 | Payable for variation margin on futures | — | ||||||||
Foreign exchange contracts | Unrealized appreciation of foreign currency contracts | — | Unrealized depreciation of foreign currency contracts | ($ | 6,086 | ) | ||||||||
|
|
|
| |||||||||||
Totals | $ | 3,190 | ($ | 6,086 | ) | |||||||||
|
|
|
| |||||||||||
Global Bond | Foreign exchange contracts | Unrealized appreciation of foreign currency contracts | $ | 24,364 | Unrealized depreciation of foreign currency contracts | $ | 28,115 | |||||||
|
|
|
|
The accompanying notes are an integral part of these financial statements. |
21 |
Table of Contents
Notes to Schedules of Portfolio Investments (continued) |
For the six months ended June 30, 2011, the effect of derivative instruments on the Statement of Operations for International Equity and Global Bond and the amount of realized gain/(loss) on derivatives recognized in income were as follows:
Fund | Derivatives not accounted for as hedging instruments | Futures | Forward Currency Contracts | Total | ||||||||||||
International Equity | Equity contracts | $ | 6,659 | — | $ | 6,659 | ||||||||||
Foreign exchange contracts | — | ($ | 24,832 | ) | (24,832 | ) | ||||||||||
|
|
|
|
|
| |||||||||||
Totals | $ | 6,659 | ($ | 24,832 | ) | ($ | 18,173 | ) | ||||||||
|
|
|
|
|
| |||||||||||
Global Bond | Interest Rate Contracts | �� | $ | 8,623 | — | $ | 8,623 | |||||||||
Foreign exchange contracts | — | $ | 22,936 | 22,936 | ||||||||||||
|
|
|
|
|
| |||||||||||
Totals | $ | 8,623 | $ | 22,936 | $ | 31,559 | ||||||||||
|
|
|
|
|
|
The change in unrealized gain/(loss) on derivatives recognized in income were as follows:
Fund | Derivatives not accounted for as hedging instruments | Futures | Forward Currency Contracts | Total | ||||||||||||
International Equity | Equity contracts | $ | 13,649 | — | $ | 13,649 | ||||||||||
Foreign exchange contracts | — | ($ | 6,086 | ) | (6,086 | ) | ||||||||||
|
|
|
|
|
| |||||||||||
Totals | $ | 13,649 | ($ | 6,086 | ) | $ | 7,563 | |||||||||
|
|
|
|
|
| |||||||||||
Global Bond | Interest Rate Contracts | ($ | 20,703 | ) | — | ($ | 20,703 | ) | ||||||||
Foreign exchange contracts | — | ($ | 15,300 | ) | (15,300 | ) | ||||||||||
|
|
|
|
|
| |||||||||||
Totals | ($ | 20,703 | ) | ($ | 15,300 | ) | ($ | 36,003 | ) | |||||||
|
|
|
|
|
|
The open forward foreign currency exchange contracts (in U.S. Dollars) at June 30, 2011, were as follows:
(See Note 7a in the Notes to Financial Statements.)
Forward Foreign Currency Exchange Contracts | Position | Settlement Date | Counterparty | Current Value (Receivable Amount) | Contract Value (Payable Amount) | Unrealized Gain/ (Loss) | ||||||||||||||||||
International Equity | ||||||||||||||||||||||||
Canadian Dollar | Long | 8/15/11 | BNYM | $ | 990,181 | $ | 996,267 | ($ | 6,086 | ) | ||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Global Bond | ||||||||||||||||||||||||
Australian Dollar | Short | 08/29/11 | CS | $ | 322,236 | $ | 329,858 | ($ | 7,622 | ) | ||||||||||||||
Canadian Dollar | Short | 09/07/11 | CS | 266,858 | 269,103 | (2,245 | ) | |||||||||||||||||
Pound Sterling | Short | 09/22/11 | UBS | 277,139 | 270,825 | 6,314 | ||||||||||||||||||
Pound Sterling | Short | 09/27/11 | BRC | 271,291 | 272,540 | (1,249 | ) | |||||||||||||||||
Swiss Franc | Short | 09/21/11 | MS | 275,129 | 273,720 | 1,409 | ||||||||||||||||||
Euro | Long | 09/22/11 | UBS | 274,859 | 277,139 | (2,280 | ) | |||||||||||||||||
Malaysian Ringgit | Long | 09/20/11 | MS | 279,757 | 278,634 | 1,123 | ||||||||||||||||||
New Turkish Lira | Long | 08/02/11 | CS | 244,912 | 259,634 | (14,722 | ) | |||||||||||||||||
South Korean Won | Long | 09/14/11 | CS | 158,473 | 155,906 | 2,567 | ||||||||||||||||||
South Korean Won | Long | 09/14/11 | UBS | 801,691 | 788,737 | 12,954 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Totals | $ | 3,172,345 | $ | 3,176,096 | ($ | 3,751 | ) | |||||||||||||||||
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements. |
22 |
Table of Contents
Notes to Schedules of Portfolio Investments (continued) |
All futures contracts are exchange traded unless otherwise noted. The open futures contracts as of June 30, 2011, were as follows:
(See Note 7b in the Notes to Financial Statements.)
Type | Currency | Number of Contracts | Position | Expiration Date | Unrealized Gain/(Loss) | |||||
International Equity | ||||||||||
DJ Euro Stoxx 50 | Euro | 10 | Long | 09/16/11 | $ 6,366 | |||||
|
Investments Definitions and Abbreviations:
ADR/GDR: ADR after the name of a holding stands for American Depositary Receipt, representing ownership of foreign securities on deposit with a domestic custodian bank; a GDR (Global Depositary Receipt) is comparable, but foreign securities are held on deposit in a non-U.S. bank. The value of the ADR/GDR securities is determined or significantly influenced by trading on exchanges not located in the United States or Canada. Sponsored ADR/GDRs are initiated by the underlying foreign company.
EMTN: | European Medium Term Note | Reg S: | Regulation S is a series of rules that clarifies the position of the Securities and Exchange Commission (“SEC”) that securities offered and sold outside of the United States do not need to be registered with the SEC. | |||
ESHA: | Extended Stay Hotels America | |||||
GMTN: | Global Multi-Currency Note | |||||
MTN: | Medium Term Note | |||||
NVDR: | Non-Voting Depository Receipt | USTN: | United States Treasury Note | |||
Abbreviations have been used throughout the portfolios to indicate amounts shown in currencies other than the U.S. Dollar (USD): |
AUD: | Australian Dollar | JPY: | Japanese Yen | |||
CAD: | Canadian Dollar | NOK: | Norwegian Krone | |||
CHF: | Swiss Franc | NZD: | New Zealand Dollar | |||
COP: | Colombian Peso | MXN: | Mexican Peso | |||
DKK: | Danish Krone | PHP: | Philippine Peso | |||
EUR: | euro | PLN: | Polish Zloty | |||
GBP: | British Pound | SEK: | Swedish Krona | |||
IDR: | Indonesian Rupiah | SGD: | Singapore Dollar | |||
INR: | Indian Rupee | UYU: | Uruguayan Peso |
Counterparty Abbreviations: | ||||||
BNYM: | The Bank of New York Mellon | |||||
BRC: | Barclays Bank | |||||
CS: | Credit Suisse | |||||
MS: | Morgan Stanley | |||||
UBS: | UBS Securities |
The accompanying notes are an integral part of these financial statements. |
23 |
Table of Contents
Statements of Assets and Liabilities Jine 30, 2011 (unaudited) |
Managers International Equity Fund | Managers Emerging Markets Equity Fund | Managers Global Bond Fund | ||||||||||
Assets: | ||||||||||||
Investments at value (including securities on loan valued at $4,685,743, $1,259,494 and $694,029, respectively)* | $ | 101,353,723 | $ | 54,503,257 | $ | 27,117,745 | ||||||
Cash collateral for futures | 53,067 | — | — | |||||||||
Foreign currency**1 | 373,867 | 177,056 | 683,863 | |||||||||
Receivable for investments sold | 773,824 | 278,462 | 561,557 | |||||||||
Receivable for Fund shares sold | 1,613,723 | 9,929,070 | 26,148 | |||||||||
Receivable from affiliate | 27,401 | 20,654 | 6,250 | |||||||||
Unrealized appreciation on foreign currency contracts | — | — | 24,364 | |||||||||
Receivable for variation margin on futures | 3,190 | — | — | |||||||||
Dividends, interest and other receivables | 348,103 | 245,745 | 295,587 | |||||||||
Prepaid expenses | 13,727 | 13,713 | 9,002 | |||||||||
Total assets | 104,560,625 | 65,167,957 | 28,724,516 | |||||||||
Liabilities: | ||||||||||||
Payable to affiliate | — | 4,761,074 | — | |||||||||
Payable to custodian | — | 23,237 | — | |||||||||
Payable for Fund shares repurchased | 2,710,550 | 35,538 | 1,350,283 | |||||||||
Payable upon return of securities loaned | 4,884,253 | 1,293,425 | 731,000 | |||||||||
Payable for investments purchased | 244,184 | 361,719 | 781,992 | |||||||||
Unrealized depreciation on foreign currency contracts | 6,086 | 674 | 28,115 | |||||||||
Accrued expenses: | ||||||||||||
Investment management and advisory fees | 70,923 | 50,351 | 15,509 | |||||||||
Administrative fees | 19,701 | 10,946 | 4,431 | |||||||||
Other | 128,455 | 178,304 | 39,197 | |||||||||
Total liabilities | 8,064,152 | 6,715,268 | 2,950,527 | |||||||||
Net Assets | $ | 96,496,473 | $ | 58,452,689 | $ | 25,773,989 | ||||||
Shares outstanding | 1,740,141 | 3,775,469 | 1,270,510 | |||||||||
Net asset value, offering and redemption price per share | $ | 55.45 | $ | 15.48 | $ | 20.29 | ||||||
Net Assets Represent: | ||||||||||||
Paid-in capital | $ | 150,374,889 | $ | 61,092,871 | $ | 27,464,939 | ||||||
Undistributed net investment income | 1,465,333 | 471,325 | 571,951 | |||||||||
Accumulated net realized loss from investments, futures and foreign currency transactions | (64,198,571 | ) | (9,611,475 | ) | (3,727,048 | ) | ||||||
Net unrealized appreciation of investments, futures and foreign currency translations | 8,854,822 | 6,499,968 | 1,464,147 | |||||||||
Net Assets | $ | 96,496,473 | $ | 58,452,689 | $ | 25,773,989 | ||||||
* Investments at cost | $ | 92,514,316 | $ | 48,004,381 | $ | 25,665,358 | ||||||
** Foreign currency at cost | $ | 374,674 | $ | 176,316 | $ | 671,178 |
1 | A portion of foreign currency is held as collateral for futures contracts in Managers International Equity Fund, amounting to a market value of $19,781, or 0.02% of net assets. |
The accompanying notes are an integral part of these financial statements. |
24 |
Table of Contents
For the six months ended June 30, 2011 (unaudited) |
Managers International Equity Fund | Managers Emerging Markets Equity Fund | Managers Global Bond Fund | ||||||||||
Investment Income: | ||||||||||||
Dividend income | $ | 1,849,197 | $ | 837,477 | $ | 182 | ||||||
Interest income | — | — | 466,996 | |||||||||
Foreign withholding tax | (170,270 | ) | (74,986 | ) | (3,285 | ) | ||||||
Securities lending fees | 82,058 | 2,613 | 464 | |||||||||
Total investment income | 1,760,985 | 765,104 | 464,357 | |||||||||
Expenses: | ||||||||||||
Investment management and advisory fees | 454,687 | 363,757 | 89,029 | |||||||||
Administrative fees | 126,302 | 79,078 | 25,437 | |||||||||
Transfer agent | 160,677 | 14,234 | 7,770 | |||||||||
Custodian | 72,274 | 157,386 | 17,180 | |||||||||
Professional fees | 23,660 | 34,015 | 17,781 | |||||||||
Registration fees | 13,842 | 14,825 | 15,778 | |||||||||
Reports to shareholders | 6,827 | 11,463 | 4,227 | |||||||||
Trustees fees and expenses | 3,870 | 3,140 | 950 | |||||||||
Miscellaneous | 1,837 | 2,988 | 507 | |||||||||
Total expenses before offsets | 863,976 | 680,886 | 178,659 | |||||||||
Expense reimbursements | (161,678 | ) | (129,142 | ) | (38,669 | ) | ||||||
Expense reductions | (259 | ) | (27 | ) | (11 | ) | ||||||
Net expenses | 702,039 | 551,717 | 139,979 | |||||||||
Net investment income | 1,058,946 | 213,387 | 324,378 | |||||||||
Net Realized and Unrealized Gain (Loss): | ||||||||||||
Net realized gain on investments | 5,413,201 | 6,681,443 | 381,672 | |||||||||
Net realized gain on futures contracts | 6,659 | — | 8,623 | |||||||||
Net realized gain (loss) on foreign currency transactions | (33,361 | ) | (22,555 | ) | 49,954 | |||||||
Net change in unrealized appreciation (depreciation) of investments | (1,652,725 | ) | (7,065,438 | ) | 491,158 | |||||||
Net change in unrealized appreciation (depreciation) of futures contracts | 13,649 | — | (20,703 | ) | ||||||||
Net change in unrealized depreciation on foreign currency translations | (17,696 | ) | (4,199 | ) | (8,402 | ) | ||||||
Net realized and unrealized gain (loss) | 3,729,727 | (410,749 | ) | 902,302 | ||||||||
Net increase (decrease) in net assets resulting from operations | $ | 4,788,673 | ($ | 197,362 | ) | $ | 1,226,680 |
The accompanying notes are an integral part of these financial statements. |
25 |
Table of Contents
Statements of Changes in Net Assets For the six months ended June 30, 2011 (unaudited) and for the year ended December 31, 2010 |
Managers International Equity Fund | ||||||||
2011 | 2010 | |||||||
Increase (Decrease) in Net Assets From Operations: | ||||||||
Net investment income | $ | 1,058,946 | $ | 990,773 | ||||
Net realized gain on investments, futures and foreign currency transactions | 5,386,499 | 7,334,174 | ||||||
Net change in unrealized depreciation of investments, futures and foreign currency contracts and translations | (1,656,772 | ) | (4,296,264 | ) | ||||
Net increase in net assets resulting from operations | 4,788,673 | 4,028,683 | ||||||
Distributions to Shareholders: | ||||||||
From net investment income | — | (1,000,087 | ) | |||||
From Capital Share Transactions: | ||||||||
Proceeds from sale of shares1 | 5,577,149 | 12,602,849 | ||||||
Reinvestment of dividends and distributions | — | 959,416 | ||||||
Cost of shares repurchased | (23,219,584 | ) | (34,035,935 | ) | ||||
Net decrease from capital share transactions | (17,642,435 | ) | (20,473,670 | ) | ||||
Total decrease in net assets | (12,853,762 | ) | (17,445,074 | ) | ||||
Net Assets: | ||||||||
Beginning of period | 109,350,235 | 126,795,309 | ||||||
End of period | $ | 96,496,473 | $ | 109,350,235 | ||||
End of period undistributed net investment income | $ | 1,465,333 | $ | 406,387 | ||||
|
|
|
| |||||
Share Transactions: | ||||||||
Sale of shares | 101,569 | 250,788 | ||||||
Reinvested shares | — | 18,274 | ||||||
Shares repurchased | (425,099 | ) | (678,900 | ) | ||||
Net decrease in shares | (323,530 | ) | (409,838 | ) |
1 | For the six months ended June 30, 2011 and the year ended 2010, the proceeds from the sale of shares for Managers International Equity includes the receipt of market timing settlements of $0 and $125,379, respectively. |
The accompanying notes are an integral part of these financial statements. |
26 |
Table of Contents
Statements of Changes in Net Assets For the six months ended June 30, 2011 (unaudited) and for the year ended December 31, 2010 |
Managers Emerging Markets Equity Fund | Managers Global Bond Fund | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Increase (Decrease) in Net Assets From Operations: | ||||||||||||||||
Net investment income | $ | 213,387 | $ | 257,830 | $ | 324,378 | $ | 653,878 | ||||||||
Net realized gain (loss) on investments, futures and foreign currency transactions | 6,658,888 | 13,322,407 | 440,249 | (781,117 | ) | |||||||||||
Net change in unrealized appreciation (depreciation) of investments, futures and foreign currency translations | (7,069,637 | ) | (2,629,270 | ) | 462,053 | 1,873,217 | ||||||||||
Net increase (decrease) in net assets resulting from operations | (197,362 | ) | 10,950,967 | 1,226,680 | 1,745,978 | |||||||||||
Distributions to Shareholders: | ||||||||||||||||
From net investment income | — | (114,817 | ) | — | (1,100,009 | ) | ||||||||||
From Capital Share Transactions: | ||||||||||||||||
Proceeds from sale of shares | 16,054,113 | 18,247,454 | 5,123,841 | 10,516,298 | ||||||||||||
Reinvestment of dividends and distributions | — | 96,956 | — | 1,002,689 | ||||||||||||
Cost of shares repurchased | (31,878,608 | ) | (50,993,858 | ) | (6,298,794 | ) | (12,588,977 | ) | ||||||||
Net decrease from capital share transactions | (15,824,495 | ) | (32,649,448 | ) | (1,174,953 | ) | (1,069,990 | ) | ||||||||
Total increase (decrease) in net assets | (16,021,857 | ) | (21,813,298 | ) | 51,727 | (424,021 | ) | |||||||||
Net Assets: | ||||||||||||||||
Beginning of period | 74,474,546 | 96,287,844 | 25,722,262 | 26,146,283 | ||||||||||||
End of period | $ | 58,452,689 | $ | 74,474,546 | $ | 25,773,989 | $ | 25,722,262 | ||||||||
End of period undistributed net investment income | $ | 471,325 | $ | 257,938 | $ | 571,951 | $ | 247,573 | ||||||||
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Share Transactions: | ||||||||||||||||
Sale of shares | 1,043,573 | 1,351,886 | 258,539 | 539,170 | ||||||||||||
Reinvested shares | — | 6,421 | — | 52,579 | ||||||||||||
Shares repurchased | (2,107,452 | ) | (3,630,681 | ) | (318,929 | ) | (649,900 | ) | ||||||||
Net decrease in shares | (1,063,879 | ) | (2,272,374 | ) | (60,390 | ) | (58,151 | ) |
The accompanying notes are an integral part of these financial statements. |
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Table of Contents
Financial Highlights For a share outstanding throughout each period |
For the six months ended June 30, 2011 (unaudited) | For the year ended December 31, | |||||||||||||||||||||||
Managers International Equity Fund | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 52.99 | $ | 51.26 | $ | 39.19 | $ | 77.13 | $ | 67.42 | $ | 53.76 | ||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||
Net investment income | 0.57 | 3 | 0.44 | 3 | 0.58 | 3 | 0.76 | 3 | 0.47 | 0.69 | ||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.89 | 3 | 1.77 | 3 | 11.84 | 3 | (38.52 | )3 | 9.60 | 14.15 | ||||||||||||||
Total from investment operations | 2.46 | 2.21 | 12.42 | (37.76 | ) | 10.07 | 14.84 | |||||||||||||||||
Less Distributions to Shareholders from: | ||||||||||||||||||||||||
Net investment income | — | (0.48 | ) | (0.35 | ) | (0.18 | ) | (0.36 | ) | (1.18 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 55.45 | $ | 52.99 | $ | 51.26 | $ | 39.19 | $ | 77.13 | $ | 67.42 | ||||||||||||
Total Return1 | 4.64 | %4,6 | 4.33 | %4 | 31.68 | % | (48.92 | )% | 14.94 | %4 | 27.63 | % | ||||||||||||
Ratio of net expenses to average net assets | 1.39 | %7 | 1.44 | % | 1.48 | % | 1.48 | % | 1.48 | % | 1.45 | % | ||||||||||||
Ratio of net investment income to average net assets1 | 2.10 | %7 | 0.89 | % | 1.34 | % | 1.24 | % | 0.60 | % | 0.70 | % | ||||||||||||
Portfolio turnover | 26 | %6 | 58 | % | 128 | % | 142 | % | 98 | % | 70 | % | ||||||||||||
Net assets at end of period (000’s omitted) | $ | 96,496 | $ | 109,350 | $ | 126,795 | $ | 127,984 | $ | 302,025 | $ | 230,916 | ||||||||||||
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Ratios absent expense offsets:2 | ||||||||||||||||||||||||
Ratio of total expenses to average net assets | 1.71 | %7 | 1.70 | % | 1.73 | % | 1.64 | % | 1.61 | % | 1.47 | % | ||||||||||||
Ratio of net investment income to average net assets | 1.78 | %7 | 0.63 | % | 1.09 | % | 1.08 | % | 0.46 | % | 0.68 | % | ||||||||||||
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For the six months ended June 30, 2011 (unaudited) | For the year ended December 31, | |||||||||||||||||||||||
Managers Emerging Markets Equity Fund | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 15.39 | $ | 13.54 | $ | 8.09 | $ | 26.80 | $ | 24.44 | $ | 20.10 | ||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||
Net investment income | 0.05 | 3 | 0.04 | 3 | 0.03 | 3 | 0.15 | 3 | 0.04 | 3 | 0.22 | |||||||||||||
Net realized and unrealized gain (loss) on investments | 0.04 | 3 | 1.83 | 3 | 5.45 | 3 | (15.02 | )3 | 7.20 | 3 | 6.66 | |||||||||||||
Total from investment operations | 0.09 | 1.87 | 5.48 | (14.87 | ) | 7.24 | 6.88 | |||||||||||||||||
Less Distributions to Shareholders from: | ||||||||||||||||||||||||
Net investment income | — | (0.02 | ) | (0.03 | ) | (0.19 | ) | — | (0.22 | ) | ||||||||||||||
Net realized gain on investments | — | — | — | (3.65 | ) | (4.88 | ) | (2.32 | ) | |||||||||||||||
Total distributions to shareholders | — | (0.02 | ) | (0.03 | ) | (3.84 | ) | (4.88 | ) | (2.54 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 15.48 | $ | 15.39 | $ | 13.54 | $ | 8.09 | $ | 26.80 | $ | 24.44 | ||||||||||||
Total Return1 | 0.58 | %6 | 13.84 | % | 67.94 | % | (54.87 | )%4 | 29.50 | %4 | 34.50 | % | ||||||||||||
Ratio of net expenses to average net assets | 1.74 | %7 | 1.76 | % | 1.77 | %5 | 1.77 | %5 | 1.78 | % | 1.76 | % | ||||||||||||
Ratio of net investment income to average net assets1 | 0.68 | %7 | 0.29 | % | 0.32 | %5 | 0.76 | %5 | 0.13 | % | 0.89 | % | ||||||||||||
Portfolio turnover | 28 | %6 | 69 | % | 103 | % | 49 | % | 62 | % | 41 | % | ||||||||||||
Net assets at end of period (000’s omitted) | $ | 58,453 | $ | 74,475 | $ | 96,288 | $ | 60,355 | $ | 198,235 | $ | 152,983 | ||||||||||||
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Ratios absent expense offsets:2 | ||||||||||||||||||||||||
Ratio of total expenses to average net assets | 2.15 | %7 | 2.07 | % | 2.13 | % | 2.03 | % | 1.93 | % | 1.76 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets | 0.27 | %7 | (0.02 | )% | (0.04 | )% | 0.50 | % | (0.02 | )% | 0.89 | % | ||||||||||||
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The accompanying notes are an integral part of these financial statements. |
28 |
Table of Contents
For a share outstanding throughout each period |
For the six months ended June 30, 2011 (unaudited) | For the year ended December 31, | |||||||||||||||||||||||
Managers Global Bond Fund | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 19.33 | $ | 18.82 | $ | 16.93 | $ | 21.31 | $ | 21.17 | $ | 20.19 | ||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||
Net investment income | 0.25 | 3 | 0.50 | 3 | 0.89 | 3 | 0.76 | 3 | 0.70 | 3 | 0.45 | |||||||||||||
Net realized and unrealized gain (loss) on investments | 0.71 | 3 | 0.87 | 3 | 3.22 | 3 | (2.93 | )3 | 0.88 | 3 | 1.05 | |||||||||||||
Total from investment operations | 0.96 | 1.37 | 4.11 | (2.17 | ) | 1.58 | 1.50 | |||||||||||||||||
Less Distributions to Shareholders from: | ||||||||||||||||||||||||
Net investment income | — | (0.86 | ) | (2.22 | ) | (2.18 | ) | (1.43 | ) | (0.49 | ) | |||||||||||||
Net realized gain on investments | — | — | — | (0.03 | ) | (0.01 | ) | (0.03 | ) | |||||||||||||||
Total distributions to shareholders | — | (0.86 | ) | (2.22 | ) | (2.21 | ) | (1.44 | ) | (0.52 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 20.29 | $ | 19.33 | $ | 18.82 | $ | 16.93 | $ | 21.31 | $ | 21.17 | ||||||||||||
Total Return1 | 4.97 | %6 | 7.27 | % | 24.27 | %4 | (10.07 | )%4 | 7.52 | %4 | 7.36 | % | ||||||||||||
Ratio of net expenses to average net assets | 1.10 | %7 | 1.10 | % | 1.10 | % | 1.10 | % | 1.19 | % | 1.19 | % | ||||||||||||
Ratio of net investment income to average net assets1 | 2.55 | %7 | 2.57 | % | 4.82 | % | 3.62 | % | 3.25 | % | 2.86 | % | ||||||||||||
Portfolio turnover | 46 | %6 | 131 | % | 102 | % | 56 | % | 152 | % | 56 | % | ||||||||||||
Net assets at end of period (000’s omitted) | $ | 25,774 | $ | 25,722 | $ | 26,146 | $ | 47,735 | $ | 92,124 | $ | 53,670 | ||||||||||||
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Ratios absent expense offsets:2 | ||||||||||||||||||||||||
Ratio of total expenses to average net assets | 1.40 | %7 | 1.43 | % | 1.32 | % | 1.25 | % | 1.25 | % | 1.27 | % | ||||||||||||
Ratio of net investment income to average net assets | 2.25 | %7 | 2.24 | % | 4.60 | % | 3.47 | % | 3.18 | % | 2.78 | % | ||||||||||||
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The following notes should be read in conjunction with the Financial Highlights of the Funds presented on this page and the preceding page.
1 | Total returns and net investment income would have been lower had certain expenses not been reduced. (See Note 1(c) to the Notes to Financial Statements.) |
2 | Excludes the impact of expense (reimbursement)/recoupment and expense reductions such as brokerage credits, but includes non-reimbursable expenses, if any, such as interest and taxes. (See Note 1(c) to the Notes to Financial Statements.) |
3 | Per share numbers have been calculated using average shares. |
4 | The Total Return is based on the Financial Statement Net Asset Values as shown above. |
5 | Excludes interest expense for the years ended December 31, 2009 and 2008, of 0.02% and 0.03%, respectively, for Emerging Markets Equity. (See Note 1(c) of Notes to Financial Statements.) |
6 | Not annualized. |
7 | Annualized. |
29 |
Table of Contents
June 30, 2011 (unaudited) |
1. | Summary of Significant Accounting Policies |
The Managers Funds (the “Trust”) is an open-end management investment company organized as a Massachusetts business trust, and registered under the Investment Company Act of 1940, as amended (the “1940 Act”). Currently, the Trust is comprised of a number of different funds, each having distinct investment management objectives, strategies, risks, and policies. Included in this report are: Managers International Equity Fund (“International Equity”), Managers Emerging Markets Equity Fund (“Emerging Markets Equity”), and Managers Global Bond Fund (“Global Bond”), each a “Fund” and collectively the “Funds.” The Funds’ financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates and such differences could be material. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements:
a. | Valuation of Investments |
Equity securities traded on a domestic or international securities exchange are valued at the last quoted sale price, or, lacking any sales, at the last quoted bid price. Over-the-counter securities are valued at the Nasdaq Official Closing Price, if one is available. Lacking any sales, over-the-counter securities are valued at the last quoted bid price. The Funds’ investments are generally valued based on market quotations provided by third-party pricing services approved by the Board of Trustees of the Funds (the “Board”). Under certain circumstances, the value of certain Fund investments may be based on an evaluation of fair value, pursuant to procedures established by and under the general supervision of the Board. Each Fund may use the fair value of a portfolio security to calculate its NAV when, for example, (1) market quotations are not readily available because a portfolio security is not traded in a public market or the principal market in which the security trades is closed, (2) trading in a portfolio security is suspended and has not resumed before the Fund calculates its NAV, (3) a significant event affecting the value of a portfolio security is determined to have occurred between the time of the market quotation provided for a portfolio security and the time as of which the Fund calculates its NAV, (4) a security’s price has remained unchanged over a period of time (often referred to as a “stale price”), or (5) Managers Investment Group LLC (the “Investment Manager”) determines that a market quotation is inaccurate. Portfolio investments that trade primarily on foreign markets are priced based upon the market quotation of such securities as of the close of their respective principal markets, as adjusted to reflect the Investment Manager’s determination of the impact of events occurring subsequent to the close of such
markets but prior to the time as of which the Fund calculates its NAV. In accordance with procedures approved by the Board, the Investment Manager relies upon recommendations of a third-party fair valuation service in adjusting the prices of such foreign portfolio investments. The Funds may invest in securities that may be thinly traded. The Board has adopted procedures to adjust prices when thinly traded securities are judged to be stale so that they reflect fair value. An investment valued on the basis of its fair value may be valued at a price higher or lower than available market quotations. An investment’s valuation may differ depending on the method used and the factors considered in determining value according to the Fund’s fair value procedures.
Fixed-income securities are valued based on valuations furnished by independent pricing services that utilize matrix systems, which reflect such factors as security prices, yields, maturities, and ratings, and are supplemented by dealer and exchange quotations. The valuations provided by the pricing services for fixed-income securities reflect the evaluated bid price of such securities. Futures contracts for which market quotations are readily available are valued at the settlement price as of the close of the futures exchange. Short-term investments having a remaining maturity of 60 days or less are valued at amortized cost, which approximates market value. Investments in other open-end regulated investment companies are valued at their end of day net asset value per share except iShares or other ETF’s, which are valued the same as equity securities. Investments in certain mortgage-backed and stripped mortgage-backed securities, preferred stocks, convertible securities, derivatives and other debt securities not traded on an organized securities market are valued on the basis of valuations provided by dealers or by a pricing service which uses information with respect to transactions in such securities and various relationships between securities and yield to maturity in determining value. Securities (including derivatives) for which market quotations are not readily available are valued at fair value, as determined in good faith, and pursuant to procedures adopted by the Board. The values assigned to fair value investments are based on available information and do not necessarily represent amounts that might ultimately be realized, since such amounts depend on future developments inherent in long-term investments. Further, because of the inherent uncertainty of valuation, those estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material.
U.S. GAAP defines fair value as the price that a Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP also establishes a framework for measuring fair value, and a three-level hierarchy for fair
30 |
Table of Contents
Notes to Financial Statements (continued) |
value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Funds. Unobservable inputs reflect the Funds’ own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation.
The three-tier hierarchy of inputs is summarized below:
Level 1 – inputs are quoted prices in active markets for identical investments (e.g., equity securities, open-end investment companies, futures contracts, options contracts)
Level 2 – other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs) (e.g., debt securities, government securities, swap contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing, broker-quoted securities, fair valued securities with observable inputs)
Level 3 – significant unobservable inputs (including the Fund’s own assumptions used to determine the fair value of investments) (e.g., fair valued securities )
The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments.
b. | Security Transactions |
Security transactions are accounted for as of trade date. Realized gains and losses on securities sold are determined on the basis of identified cost.
c. | Investment Income and Expenses |
Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed. These dividends are recorded as soon as the Trust is informed of the ex-dividend date. Dividend income on foreign securities is recorded net of any withholding tax. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned. Non-cash dividends included in dividend income, if any, are reported at the fair market value of the securities received. Other income and expenses are recorded on
an accrual basis. Expenses that cannot be directly attributed to a fund are apportioned among the Funds in the Trust and in some cases other affiliated funds based upon their relative average net assets or number of shareholders.
The following Funds had certain portfolio trades directed to various brokers, under a brokerage recapture program, which paid a portion of the Fund’s expenses. For the six months ended June 30, 2011, under these arrangements the amount by which the Funds’ expenses were reduced and the impact on the expense ratios were as follows: International Equity – $216 or 0.00%.
The Funds have a “balance credit” arrangement with The Bank of New York Mellon (“BNYM”), the Funds’ custodian, whereby each Fund is credited with an interest factor equal to 0.75% below the effective 90-day T-Bill rate for account balances left uninvested overnight. If the T-Bill rate falls below 0.75%, no credits will be earned. These credits serve to reduce custody expenses that would otherwise be charged to each Fund. For the six months ended June 30, 2011, the custodian expense was not reduced.
Overdrafts will cause a reduction of any earnings credits, computed at 2% above the effective Federal funds rate on the day of the overdraft. For the six months ended June 30, 2011, overdraft fees were as follows: International Equity – $15, Emerging Markets Equity – $62 and Global Bond Fund – $0.
The Trust also has a balance credit arrangement with its Transfer Agent, BNY Mellon Investment Servicing (US) Inc., (formerly PNC Global Investment Servicing (U.S.) Inc.), whereby earnings credits are used to offset banking charges and other out-of-pocket expenses. For the six months ended June 30, 2011, the transfer agent expense was reduced as follows: International Equity - $43; Emerging Markets Equity – $27 and Global Bond – $11.
Total returns and net investment income for the Funds would have been lower had certain expenses not been offset. Total expenses before offsets exclude the impact of expense reimbursements or fee waivers and expense reductions such as brokerage recapture credits but include non-reimbursable expenses, if any, such as interest and taxes.
d. | Dividends and Distributions |
Dividends resulting from net investment income and distributions of capital gains, if any, will be made annually in December and when required for Federal excise tax purposes. Income and capital gain distributions are determined in accordance with Federal income tax regulations, which may differ from U.S. GAAP. These differences are primarily due to differing treatments for losses deferred due to wash sales, equalization accounting for tax purposes, foreign currency, futures and market discount transactions. Permanent book and tax basis differences, if any, relating to shareholder distributions will result in reclassifications to paid-in capital.
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Table of Contents
Notes to Financial Statements (continued) |
e. | Federal Taxes |
Each Fund intends to comply with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, to distribute substantially all of their taxable income and gains to their shareholders and to meet certain diversification and income requirements with respect to investment companies. Therefore, no provision for Federal income or excise tax is included in the accompanying financial statements.
Additionally, based on each Fund’s understanding of the tax rules and rates related to income, gains and transactions for the foreign jurisdictions in which it invests, each Fund will provide for foreign taxes, and where appropriate, deferred foreign taxes.
Management has analyzed the Funds’ tax positions taken on federal income tax returns for all open tax years (tax years ended December 31, 2007-2010), and has concluded that no provision for federal income tax is required in the Funds’ financial statements. Additionally, the Funds are not aware of any tax position for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
f. | Capital Loss Carryovers |
As of June 30, 2011 the following Funds had accumulated net realized capital loss carryovers from securities transactions for Federal income tax purposes as shown in the following chart. These amounts may be used to offset realized capital gains, if any, through the expiration dates listed.
Fund | Capital Loss Carryover Amount | Expires December 31, | ||||
International Equity | $ | 16,170,119 | 2011 | |||
19,998,844 | 2016 | |||||
26,006,476 | 2017 | |||||
5,694,974 | 2018 | |||||
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Total | $ | 67,870,413 | ||||
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Emerging Markets Equity | $ | 14,606,052 | 2017 | |||
Global Bond * | $ | 906,645 | 2016 | |||
2,196,208 | 2017 | |||||
1,033,512 | 2018 | |||||
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Total | $ | 4,136,365 | ||||
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* | The Fund’s ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on results of share ownership activity. |
g. | Capital Stock |
The Trust’s Declaration of Trust authorizes for each series the issuance of an unlimited number of shares of beneficial interest, without par value. Each Fund records sales and repurchases of its capital stock on the trade date. The cost of securities contributed to the Funds in connection with the issuance of shares is based on the valuation of those securities in accordance with the Funds’ policy on investment valuation. Dividends and distributions to shareholders are recorded on the ex-dividend date.
At June 30, 2011, certain unaffiliated shareholders of record, specifically omnibus accounts, individually or collectively held greater than 10% of the outstanding shares of the following Funds: Emerging Markets Equity – two collectively own 32% and Global Bond – one owns 18%. Transactions by these shareholders may have a material impact on the Funds.
h. | Foreign Currency Translation |
The books and records of the Funds are maintained in U.S. dollars. The value of investments, assets and liabilities denominated in currencies other than U.S. dollars are translated into U.S. dollars based upon current foreign exchange rates. Purchases and sales of foreign investments, income and expenses are converted into U.S. dollars based on currency exchange rates prevailing on the respective dates of such transactions. Net realized and unrealized gain (loss) on foreign currency transactions represent: (1) foreign exchange gains and losses from the sale and holdings of foreign currencies; (2) gains and losses between trade date and settlement date on investment securities transactions and forward foreign currency exchange contracts; and (3) gains and losses from the difference between amounts of interest and dividends recorded and the amounts actually received.
The Funds do not isolate the net realized and unrealized gain or loss resulting from changes in exchange rates from the fluctuations in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
2. | Agreements and Transactions with Affiliates |
For each of the Funds, the Trust has entered into an Investment Management Agreement under which the Investment Manager, an independently managed subsidiary of Affiliated Managers Group, Inc. (“AMG”), serves as investment manager to the Funds and is responsible for the Funds’ overall administration. The Investment Manager selects subadvisors for the Funds (subject to Trustee approval) and monitors each subadvisor’s investment programs and results. Each Fund’s investment portfolio is managed by one or more portfolio managers who serve pursuant to a Subadvisory Agreement with the Investment Manager.
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Table of Contents
Notes to Financial Statements (continued) |
Investment management fees are paid directly by the Funds to the Investment Manager based on average daily net assets. For the six months ended June 30, 2011, the annual investment management fee rates, as a percentage of average daily net assets, were as follows: International Equity – 0.90%; Emerging Markets Equity – 1.15%; and Global Bond – 0.70%.
The Trust has entered into an Administration and Shareholder Servicing Agreement under which the Investment Manager serves as each Fund’s administrator (the “Administrator”) and is responsible for all aspects of managing the Funds’ operations, including administration and shareholder services to each Fund, its shareholders, and certain institutions, such as bank trust departments, broker-dealers and registered investment advisers, that advise or act as an intermediary with the Funds’ shareholders. Under the terms of the Administration Agreement, each of the Funds, except Global Bond, pay a fee to the Administrator at the rate of 0.25% per annum of the Funds’ average daily net assets. Global Bond pays a fee to the Administrator at the rate of 0.20% per annum of the Fund’s average daily net assets.
The Investment Manager for International Equity, Emerging Markets Equity and Global Bond has contractually agreed, through at least May 1, 2012, to waive management fees and/or reimburse Fund expenses in order to limit total annual operating expenses (exclusive of taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary items) to 1.39%, 1.74% and 1.10%, respectively, of the Fund’s average daily net assets.
Each Fund is obligated to repay the Investment Manager such amounts waived, paid or reimbursed in future years provided that the repayment occurs within thirty-six (36) months after the waiver or reimbursement occurs and that such repayment would not cause the Fund’s total operating expenses in any such future year to exceed that Fund’s respective expense cap. For the six months ended June 30, 2011, each Fund’s components of reimbursement are detailed in the following chart:
International Equity | Emerging Markets Equity | |||||||
Reimbursement Available - 12/31/10 | $ | 952,411 | $ | 864,105 | ||||
Additional Reimbursements | 161,678 | 129,142 | ||||||
Repayments | — | — | ||||||
Expired Reimbursements | (195,949 | ) | (170,308 | ) | ||||
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Reimbursement Available - 06/30/11 | $ | 918,140 | $ | 822,939 | ||||
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Global Bond | ||||
Reimbursement Available - 12/31/10 | $ | 176,253 | ||
Additional Reimbursements | 38,669 | |||
Repayments | — | |||
Expired Reimbursements | (15,509 | ) | ||
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Reimbursement Available - 06/30/11 | $ | 199,413 | ||
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Effective January 1, 2011, the aggregate annual retainer paid to each Independent Trustee of the Board is $80,000, plus $5,000 or $2,500 for each regular or special meeting attended, respectively. The Independent Chairman of the Trusts receives an additional payment of $20,000 per year. The Chairman of the Audit Committee receives an additional payment of $8,000 per year. (Prior to January 1, 2011, the aggregate annual retainer paid to each Independent Trustee of the Board was $65,000, plus $4,000 or $2,500 for each regular or special meeting attended, respectively. The Independent Chairman of the Trusts received an additional payment of $15,000 per year. The Chairman of the Audit Committee received an additional payment of $5,000 per year.) The Trustees’ fees and expenses are allocated among all of the funds for which the Investment Manager serves as the advisor (the “Managers Funds”) based on the relative net assets of such funds. The “Trustees fees and expenses” shown in the financial statements represents the Funds’ allocated portion of the total fees and expenses paid by the Managers Funds.
The Funds are distributed by Managers Distributors, Inc. (the “Distributor” or “MDI”), a wholly-owned subsidiary of the Investment Manager. MDI serves as the principal underwriter for each Fund and is a registered broker-dealer and member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Shares of each Fund will be continuously offered and will be sold by brokers, dealers or other financial intermediaries who have executed selling agreements with the Distributor. MDI bears all the expenses of providing services pursuant to the Underwriting Agreement, including the payment of the expenses relating to the distribution of Prospectuses for sales purposes and any advertising or sales literature. Certain Trustees and Officers of the Funds are Officers and/or Directors of the Investment Manager, AMG and/or the Distributor.
The Securities and Exchange Commission granted an exemptive order that permits the Funds to lend and borrow money for certain temporary purposes directly to and from other eligible Funds in the Managers Funds. Participation in this interfund lending program is voluntary for both borrowing and lending Funds, and an interfund loan is only made if it benefits each participating Fund. The Investment Manager administers the program according to procedures approved by the Board, and the Board monitors the operation of the program. An interfund loan must comply with certain conditions set out in the exemptive order, which are designed to assure fairness and protect all participating Funds. For the six months ended June 30, 2011, the following Funds either borrowed from or lent to other Managers Funds: Emerging Markets Equity borrowed varying amounts up to $4,761,210 for 13 days paying interest of $1,225; Global Bond borrowed varying amounts up to $822,854 for 1 day paying interest of $26. The interest amounts are included in the Statements of Operations in miscellaneous expense.
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Notes to Financial Statements (continued) |
3. | Purchases and Sales of Securities |
Purchases and sales of securities (excluding short-term securities and U.S. Government obligations) For the six months ended June 30, 2011, were as follows:
Long-Term Securities | U.S. Government Obligations | |||||||||||||||
Fund | Purchases | Sales | Purchases | Sales | ||||||||||||
International Equity | $ | 25,888,316 | $ | 42,738,066 | N/A | N/A | ||||||||||
Emerging Markets Equity | 17,383,037 | 36,026,309 | N/A | N/A | ||||||||||||
Global Bond | 7,717,278 | 9,397,859 | $ | 4,088,808 | $ | 1,940,366 |
4. | Portfolio Securities Loaned |
For the six months ended June 30, 2011, the Funds participated in a securities lending program offered by BNYM, providing for the lending of securities to qualified brokers. Securities lending fees include earnings of temporary cash investments, plus or minus any rebate to a borrower. These earnings (after any rebate) are then divided between BNYM, as a fee for its services under the program, and the Fund, according to agreed-upon rates. Collateral on all securities loaned is accepted in cash and/or government securities and is maintained at a minimum level of 102% (105% in the case of certain foreign securities) of the market value, plus interest, if applicable, of investments on loan. It is the Funds’ policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Funds if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. The Funds bear the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Collateral received in the form of cash is invested temporarily in the BNY Mellon Overnight Government Fund, formerly the BNY Institutional Cash Reserves Fund (the “ICRF”), or other short-term investments as defined in the Securities Lending Agreement with BNYM.
Effective August 2, 2010, the Trust, on behalf of each applicable Fund, entered into an agreement with The Bank of New York Mellon and the Bank of New York Mellon Corporation (“BNYMC”) with respect to each Fund’s position in the ICRF, pursuant to which (i) BNYMC will support the value of certain defaulted securities issued by Lehman Brothers Holdings, Inc. and held by ICRF, and (ii) if certain conditions are met, BNYMC will purchase the defaulted securities from each Fund in September 2011. Each applicable Fund is fair valuing its position
in the ICRF daily based on the agreement. Each Fund’s position in the separate sleeve of the ICRF is included in the Schedule of Portfolio Investments and the unrealized loss on such investment is included in Net Unrealized Appreciation on the Statement of Assets and Liabilities and the Statement of Operations.
5. | Commitments and Contingencies |
In the normal course of business, the Funds may enter into contracts and agreements that contain a variety of representations and warranties, which provide general indemnifications. The maximum exposure to the Funds under these arrangements is unknown, as this would involve future claims that may be made against a Fund that have not yet occurred. However, based on experience, the Funds expect the risks of loss to be remote.
6. | Forward Commitments |
Certain transactions, such as futures and forward transactions, dollar roll agreements, or purchases of when-issued or delayed delivery securities may have a similar effect on a Fund’s net asset value as if the Fund had created a degree of leverage in its portfolio. However, if a Fund enters into such a transaction, the Fund will establish a segregated account with its custodian in which it will maintain cash, U.S. government securities or other liquid securities equal in value to its obligations in respect to such transaction. Securities and other assets held in the segregated account may not be sold while the transaction is outstanding, unless other suitable assets are substituted.
7. | Derivative Instruments |
The following disclosures contain information on how and why the Funds use derivative instruments, the credit risk and how derivative instruments affect the Funds’ financial position, results of operations and cash flows. The location and fair value amounts of these instruments on the Statement of Assets and Liabilities and the realized and changes in unrealized gains and losses on the Statement of Operations, each categorized by type of derivative contract, are included in a table in the Notes to Schedules of Portfolio Investments. The derivative instruments outstanding as of year end as disclosed in the Statement of Assets and Liabilities and the realized and changes in unrealized gains and losses on derivative instruments during the period as disclosed in the Statement of Operations serve as indicators of the volume of derivative activity for the Funds.
a. | Forward Foreign Currency Contracts |
During the six months ended June 30, 2011, International Equity and Global Bond entered into forward foreign currency exchange contracts to facilitate transactions in foreign securities and to hedge against foreign currency exchange rate risk on its non-U.S. dollar denominated investment securities.
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Notes to Financial Statements (continued) |
A forward foreign currency exchange contract is an agreement between a Fund and another party to buy or sell a currency at a set price at a future date. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked-to-market daily, and the change in market value is recorded as an unrealized gain or loss. Gain or loss on the purchase or sale of contracts having the same settlement date, amount and counterparty is realized on the date of offset, otherwise gain or loss is realized on the settlement date.
Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar.
b. | Futures Contracts |
International Equity and Global Bond entered into futures contracts, including futures contracts on global equity and fixed-income securities, interest rate futures contracts, foreign currency futures contracts and futures contracts on security indices (including broad-based security indices). The Funds purchased or sold futures contracts to achieve a desired level of investment, whether to accommodate portfolio turnover or cash flows from capital shares transactions. There are certain risks associated with futures contracts. Prices may not move as expected or a Fund may not be able to close out the contract when it desires to do so, resulting in losses.
On entering into a futures contract, either cash or securities in an amount equal to a certain percentage of the contract value (initial margin) must be deposited with the futures broker. Subsequent payments (variation margin) are made or received each day. The variation margin payments equal the daily changes in the contract value and are recorded as unrealized gains or losses. The Funds recognize a realized gain or loss when the contract is closed or expires equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Futures are valued at their quoted daily settlement prices. The aggregate principal amounts of the contracts are not recorded in the financial statements. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures or forward currency contracts.
8. | New Accounting Standards |
In May 2011, the FASB issued ASU No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU 2011-04 requires common fair value measurement and disclosure requirements between U.S. GAAP and International Financial Reporting Standards. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU No. 2011-04 and its impact on the financial statements.
9. | Subsequent Events |
At a meeting held on June 9-10, 2011, the Board approved a new contractual expense limitation with respect to International Equity and Emerging Markets Equity. Effective July 1, 2011, Managers has contractually agreed, until at least May 1, 2013, to waive management fees and/or reimburse Fund expenses in order to limit total annual fund operating expenses after fee waiver and expense reimbursements (exclusive of taxes, interest (including interest incurred in connection with bank and custody overdrafts), brokerage commissions and other transaction costs, acquired fund fees and expenses and extraordinary expenses) of International Equity and Emerging Markets Equity to 1.34% and 1.64%, respectively, of each Fund’s average daily net assets. Immediately prior to July 1, 2011, the Funds had contractual expense limitations of 1.39% and 1.74%, respectively.
The Funds have determined that no material events or transactions occurred through the issuance date of the Funds’ financial statements which require additional disclosure in or adjustment of the Funds’ financial statements.
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Annual Renewal of Investment Advisory Agreements (unaudited) |
On June 9-10, 2011, the Board of Trustees, including a majority of the Trustees who are not “interested persons” of the Trust (the “Independent Trustees”), approved the Investment Management Agreement with the Investment Manager for each of the Funds identified below and the Subadvisory Agreement for each of the Subadvisors. The Independent Trustees were separately represented by independent counsel in connection with their consideration of the approval of these agreements. In considering the Investment Management and Subadvisory Agreements, the Trustees reviewed a variety of materials relating to each Fund, the Investment Manager and each Subadvisor, including comparative performance, fee and expense information for an appropriate peer group of similar mutual funds (each a “Peer Group”), performance information for relevant benchmark indices (each a “Fund Benchmark”) and, with respect to each Subadvisor, comparative performance information for an appropriate peer group of managed accounts, and, as to all other matters, other information provided to them on a periodic basis throughout the year, as well as information provided in connection with the meetings of June 9-10, 2011, regarding the nature, extent and quality of services provided by the Investment Manager and the Subadvisors under their respective agreements. Prior to voting, the Independent Trustees: (a) reviewed the foregoing information with their independent legal counsel and with management; (b) received materials from their independent legal counsel discussing the legal standards applicable to their consideration of the Investment Management Agreement and the Subadvisory Agreements; and (c) met with their independent legal counsel in private sessions at which no representatives of management were present.
Nature, extent and quality of services.
In considering the nature, extent and quality of the services provided by the Investment Manager, the Trustees reviewed information relating to the Investment Manager’s operations and personnel. Among other things, the Investment Manager provided financial information, biographical information on its supervisory and professional staff and descriptions of its organizational and management structure. The Trustees also took into account information provided periodically throughout the previous year by the Investment Manager relating to the performance of its duties with respect to the Funds and the Trustees’ familiarity with the Investment Manager’s management through Board meetings, discussions and reports. In the course of their deliberations regarding the Investment Management Agreement, the Trustees evaluated, among other things: (a) the extent and quality of the Investment Manager’s oversight of the operation and management of the Funds; (b) the quality of the search, selection and monitoring services performed by the Investment Manager in overseeing the portfolio management responsibilities of the Subadvisors; (c) the Investment Manager’s ability to supervise the Funds’ other service providers; and (d) the Investment Manager’s compliance programs. The Trustees also
took into account the financial condition of the Investment Manager with respect to its ability to provide the services required under the Investment Management Agreement and to maintain contractual expense limitations for the Funds. The Trustees also considered the Investment Manager’s risk management processes.
For each Fund, the Trustees also reviewed information relating to each Subadvisor’s operations and personnel and the investment philosophy, strategies and techniques (for each Subadvisor, its “Investment Strategy”) used in managing the Fund or the portion of the Fund for which the Subadvisor has portfolio management responsibility. Among other things, the Trustees reviewed biographical information on portfolio management and other professional staff, information regarding each Subadvisor’s organizational and management structure and each Subadvisor’s brokerage policies and practices. The Trustees considered specific information provided regarding the experience of the individual or individuals at each Subadvisor with portfolio management responsibility for the portion of the Fund managed by the Subadvisor, including the information set forth in the Fund’s prospectus and statement of additional information. With respect to those Funds managed with multiple Subadvisors, the Trustees also noted information provided by the Investment Manager regarding the manner in which each Subadvisor’s Investment Strategy complements those utilized by the Fund’s other Subadvisors. In the course of their deliberations, the Trustees evaluated, among other things: (a) the services rendered by each Subadvisor in the past; (b) the qualifications and experience of the Subadvisor’s personnel; and (c) the Subadvisor’s compliance programs. The Trustees also took into account the financial condition of each Subadvisor with respect to its ability to provide the services required under its Subadvisory Agreement. The Trustees also considered each Subadvisor’s risk management processes.
Performance.
As noted above, the Board considered each Fund’s net performance during relevant time periods as compared to the Fund’s Peer Group and Fund Benchmark and considered each Subadvisor’s performance as compared to an appropriate peer group of managed accounts and also considered the gross performance of the Fund or the portion of the Fund managed by each Subadvisor as compared to the Subadvisor’s relevant performance composite that utilizes the same investment strategy and approach and noted that the Board reviews on a quarterly basis detailed information about the Fund’s performance results, portfolio composition and Investment Strategies, including with respect to the portion of the Fund managed by each Subadvisor. The Board noted the Investment Manager’s expertise and resources in monitoring the performance, investment style and risk-adjusted performance of each Subadvisor. The Board also noted each Subadvisor’s performance record with respect to the Fund. The Board was mindful of the Investment Manager’s attention to monitoring each Subadvisor’s performance with respect to the Funds and its discussions with management regarding the factors that contributed to the performance of the Funds.
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Annual Renewal of Investment Advisory Agreements (continued) |
Advisory Fees and Profitability.
In considering the reasonableness of the advisory fee charged by the Investment Manager for managing each Fund, the Trustees noted that the Investment Manager, and not the Fund, is responsible for paying the fees charged by the Fund’s Subadvisor(s) and, therefore, that the fees paid to the Investment Manager cover the cost of providing portfolio management services as well as the cost of providing search, selection and monitoring services in operating a “manager-of-managers” complex of mutual funds. The Trustees concluded that, in light of the additional high quality supervisory services provided by the Investment Manager and the fact that the subadvisory fees are paid out of the advisory fee, the advisory fee payable by each Fund to the Investment Manager can reasonably be expected to exceed the median advisory fee for the Peer Group, which consists of many funds that do not operate with a manager-of-managers structure. In this regard, the Trustees also noted that the Investment Manager has undertaken to maintain expense limitations for the Funds.
In considering the reasonableness of the advisory fee payable to the Investment Manager, the Trustees also reviewed information provided by the Investment Manager setting forth all revenues and other benefits, both direct and indirect (including any so-called “fallout benefits” such as reputational value derived from the Investment Manager serving as Investment Manager to a Fund), received by the Investment Manager and its affiliates attributable to managing each Fund and all the mutual funds in the Managers Family of Funds, the cost of providing such services and the resulting profitability to the Investment Manager and its affiliates from these relationships. The Trustees also noted the current and potential asset levels of each Fund and the willingness of the Investment Manager to waive fees and pay expenses for all of the Funds from time to time as a means of limiting total expenses. The Trustees noted that the subadvisory fees are paid by the Investment Manager out of its advisory fee. The Trustees also considered management’s discussion of the current asset levels of the Funds, including the effect on assets attributable to the economic and market conditions since 2008, and considered the impact on profitability of the current asset levels and any future growth of assets of the Funds. The Board took into account management’s discussion of the current advisory fee structure. In this regard, the Trustees noted that, unlike a mutual fund that is managed by a single investment adviser, the Funds operate in a manager-of-managers structure. Based on the foregoing, the Trustees concluded that the profitability to the Investment Manager is reasonable and that the Investment Manager is not realizing material benefits from economies of scale that would warrant adjustments to the advisory fees for any Fund at this time. With respect to economies of scale, the Trustees also noted that as a Fund’s assets increase over time, the Fund may realize other economies of scale to the extent that the increase in assets is proportionally greater than the increase in certain other expenses.
Subadvisory Fees and Profitability.
In considering the reasonableness of the fee payable by the Investment Manager to each Subadvisor, the Trustees relied on the ability of the Investment Manager to negotiate the terms of the Subadvisory Agreement at arm’s length as part of the manager-of-managers structure, noting that the Subadvisors are not affiliated with the Investment Manager. In addition, the Trustees considered other potential benefits of the subadvisory relationship to a Subadvisor, including, among others, the indirect benefits that the Subadvisor may receive from the Subadvisor’s relationship with a Fund, including any so-called “fallout benefits” to the Subadvisor, such as reputational value derived from the Subadvisor serving as Subadvisor to the Fund. In addition, the Trustees noted that the subadvisory fees are paid by the Investment Manager out of its advisory fee. Accordingly, the cost of services to be provided by each Subadvisor and the profitability to each Subadvisor of its relationship with a Fund were not material factors in the Trustees’ deliberations. For similar reasons, and based on the current size of the portion of the Fund managed by each Subadvisor, the Trustees concluded that any economies of scale being realized by the Subadvisors was not a material factor in the Trustees’ deliberations at this time.
In addition to the foregoing, the Trustees considered the specific factors and related conclusions set forth below with respect to each Fund.
MANAGERS EMERGING MARKETS EQUITY FUND
Fund Performance.
Among other information relating to the Fund’s performance, the Trustees noted that the Fund’s performance for the 1-year, 3-year, 5-year and 10-year periods ended March 31, 2011 was below the median performance of the Peer Group and below the performance of the Fund Benchmark, the MSCI Emerging Markets Index. The Trustees took into account management’s discussion of the Fund’s performance, including the addition of a Subadvisor to the Fund in 2009 and noted that both the Fund’s Subadvisors continue to have strong longer-term performance records and that the Manager remains confident in the Subadvisors. The Trustees also took into account management’s discussion of the Fund’s performance, including the impact of the Fund’s short-term underperformance on its longer-term performance. The Trustees concluded that management has taken appropriate steps to address the Fund’s performance.
Advisory Fees.
The Trustees noted that the Fund’s advisory fees (which include both the advisory and administration fee) and total expenses (net of applicable expense waivers/reimbursements) as of March 31, 2011 were both higher than the average for the Peer Group. The Trustees took into account the fact that the Investment Manager
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Annual Renewal of Investment Advisory Agreements (continued) |
has contractually agreed to lower the Fund’s contractual expense limitation from 1.74% to 1.64% of the Fund’s net annual operating expenses (subject to certain excluded expenses) effective July 1, 2011 through at least May 1, 2013. The Trustees also took into account management’s discussion of the Fund’s expenses. The Board also took into account the current size of the Fund and the Peer Group in which it is placed. The Trustees concluded that, in light of the nature, extent and quality of the services provided by the Investment Manager and the Subadvisors, the foregoing expense limitation and the considerations noted above with respect to the Subadvisors and the Investment Manager, the Fund’s advisory fees, including subadvisory fees, are reasonable.
MANAGERS GLOBAL BOND FUND
Fund Performance.
Among other information relating to the Fund’s performance, the Trustees noted that the Fund’s performance for the 1-year, 3-year, 5-year and 10-year periods ended March 31, 2011 was above the median performance of the Peer Group and above the performance of the Fund Benchmark, the Barclays Capital Global Aggregate Bond Index. The Trustees took into account management’s discussion of the Fund’s more recent performance and that the Fund ranked in the top quartile of its Peer Group over the 10-year period. The Trustees concluded that the Fund’s performance has been satisfactory.
Advisory Fees.
The Trustees noted that the Fund’s advisory fees (which include both the advisory and administration fee) and total expenses (net of applicable expense waivers/reimbursements) as of March 31, 2011 were both higher than the average for the Peer Group. The Trustees took into account the fact that the Investment Manager has contractually agreed, through April 1, 2012, to limit the Fund’s net annual operating expenses (subject to certain excluded expenses) to 1.10%. The Board took into account management’s discussion of the Fund’s expenses and the current size of the Fund. The Trustees concluded that, in light of the nature, extent and quality of the services provided by the Investment Manager and the Subadvisor, the foregoing expense limitation and the considerations noted above with respect to the Subadvisor and the Investment Manager, the Fund’s advisory fees, including subadvisory fees, are reasonable.
MANAGERS INTERNATIONAL EQUITY FUND
Fund Performance.
Among other information relating to the Fund’s performance, the Trustees noted that the Fund’s performance for the 1-year, 3-year, 5-year and 10-year periods ended March 31, 2011 was below the median performance of the Peer Group and below the performance of the Fund Benchmark, the MSCI EAFE Index. The Trustees took into account management’s discussion of the Fund’s performance, including the impact of current market conditions on the Fund’s
performance and also noted the Fund’s more recent improved performance. The Trustees also took into account the fact that the Investment Manager added a new Subadvisor to the Fund at the end of the first quarter of 2009 to address performance challenges and noted that management remains confident in each Subadvisor’s ability to execute its investment strategy going forward and that management would continue to monitor the Fund’s performance. The Trustees concluded that management has taken appropriate steps to address the Fund’s performance.
Advisory Fees.
The Trustees noted that the Fund’s advisory fees (which include both the advisory and administration fee) and total expenses (net of applicable expense waivers/reimbursements) as of March 31, 2011 were both higher than the average for the Peer Group. The Trustees took into account the fact that the Investment Manager has contractually agreed to lower the Fund’s contractual expense limitation from 1.39% to 1.34% of the Fund’s net annual operating expenses (subject to certain excluded expenses) effective July 1, 2011 through at least May 1, 2013. The Board took into account management’s discussion of the Fund’s expenses and the current size of the Fund. The Trustees concluded that, in light of the nature, extent and quality of the services provided by the Investment Manager and the Subadvisors, the foregoing expense limitation and the considerations noted above with respect to the Subadvisors and the Investment Manager, the Fund’s advisory fees, including subadvisory fees, are reasonable.
* * * * *
After consideration of the foregoing, the Trustees also reached the following conclusions (in addition to the conclusions discussed above) regarding the Investment Management Agreement and each Subadvisory Agreement: (a) the Investment Manager and each Subadvisor have demonstrated that they possess the capability and resources to perform the duties required of them under the Investment Management Agreement and the applicable Subadvisory Agreements; (b) each Subadvisor’s Investment Strategy is appropriate for pursuing the applicable Fund’s investment objectives; and (c) the Investment Manager and each Subadvisor maintain appropriate compliance programs.
Based on all of the above-mentioned factors and related conclusions, with no single factor or conclusion being determinative and with each Trustee not necessarily attributing the same weight to each factor, the Trustees concluded that approval of the Investment Management Agreement and each Subadvisory Agreement would be in the best interests of the applicable Fund and its shareholders. Accordingly, on June 9-10, 2011, the Trustees, including a majority of the Independent Trustees, voted to approve the Investment Management Agreement and the Subadvisory Agreements (as applicable) for each Fund.
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Investment Manager and Administrator
Managers Investment Group
LLC 333 W. Wacker Drive
Suite 1200 Chicago, IL
60606 (800) 835-3879
Distributor
Managers Distributors, Inc.
333 W. Wacker Drive
Suite 1200
Chicago, IL 60606
(800) 835-3879
Custodian
The Bank of New York Mellon
2 Hanson Place
Brooklyn, NY | 11217 |
Legal Counsel
Ropes & Gray LLP
Prudential Tower, 800 Boylston Street
Boston, MA 02199-3600
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.*
Attn: Managers
P.O. Box 9769
Providence, RI 02940
(800) 548-4539
Trustees
Jack W. Aber
Christine C. Carsman
William E. Chapman, II
Edward J. Kaier
Steven J. Paggioli
Eric Rakowski
Thomas R. Schneeweis
John H. Streur
For Managers Choice Only
Managers
c/o BNY Mellon Investment Servicing (US) Inc.*
P.O. Box 9847
Providence, RI 02940-8047
(800) 358-7668
* | Formerly PNC Global Investment Servicing (U.S.) Inc. |
Table of Contents
MANAGERSAND MANAGERS AMG FUNDS
EQUITY FUNDS | BALANCED FUNDS | |||
CADENCE CAPITAL APPRECIATION | INTERNATIONAL EQUITY | CHICAGO EQUITY PARTNERS BALANCED | ||
CADENCE FOCUSED GROWTH CADENCE MID-CAP CADENCE EMERGING COMPANIES Cadence Capital Management, LLC
CHICAGO EQUITY PARTNERS MID-CAP Chicago Equity Partners, LLC
EMERGING MARKETS EQUITY Rexiter Capital Management Limited Schroder Investment Management North America Inc.
ESSEX SMALL/MICRO CAP GROWTH Essex Investment Management Co., LLC
FQ TAX-MANAGED U.S. EQUITY FQ U.S. EQUITY First Quadrant, L.P.
FRONTIER SMALL CAP GROWTH Frontier Capital Management Company, LLC
GW&K SMALL CAP EQUITY Gannett Welsh & Kotler, LLC
INSTITUTIONAL MICRO-CAP MICRO-CAP Lord, Abbett & Co. LLC WEDGE Capital Management L.L.P. Next Century Growth Investors LLC RBC Global Asset Management (U.S.) Inc. | AllianceBernstein L.P. Lazard Asset Management, LLC Martin Currie Inc.
REAL ESTATE SECURITIES Urdang Securities Management, Inc.
RENAISSANCE LARGE CAP GROWTH Renaissance Group LLC
SKYLINE SPECIAL EQUITIES PORTFOLIO Skyline Asset Management, L.P.
SPECIAL EQUITY Ranger Investment Management, L.P. Lord, Abbett & Co. LLC Smith Asset Management Group, L.P. Federated MDTA LLC
SYSTEMATIC VALUE SYSTEMATIC MID CAP VALUE Systematic Financial Management, L.P.
TIMESSQUARE MID CAP GROWTH TIMESSQUARE SMALL CAP GROWTH TSCM GROWTH EQUITY TimesSquare Capital Management, LLC
TRILOGY GLOBAL EQUITY TRILOGY EMERGING MARKETS EQUITY TRILOGY INTERNATIONAL SMALL CAP Trilogy Global Advisors, L.P.
| Chicago Equity Partners, LLC
ALTERNATIVE FUNDS FQ GLOBAL ALTERNATIVES FQ GLOBAL ESSENTIALS First Quadrant, L.P.
INCOME FUNDS BOND (MANAGERS) FIXED INCOME GLOBAL BOND Loomis, Sayles & Co., L.P.
BOND (MANAGERS PIMCO) Pacific Investment Management Co. LLC
CALIFORNIA INTERMEDIATE TAX-FREE Miller Tabak Asset Management LLC
GW&K MUNICIPAL BOND GW&K MUNICIPAL ENHANCED YIELD Gannett Welsh & Kotler, LLC
HIGH YIELD J.P. Morgan Investment Management LLC
INTERMEDIATE DURATION GOVERNMENT SHORT DURATION GOVERNMENT Smith Breeden Associates, Inc. | ||
This report is prepared for the Fund’s shareholders. It is authorized for distribution to prospective investors only when preceded or accompanied by an effective prospectus. To receive a free copy of the prospectus or Statement of Additional Information, which includes additional information about Fund Trustees, please contact us by calling 800.835.3879. Distributed by Managers Distributors, Inc., member FINRA.
A description of the policies and procedures each Fund uses to vote its proxies is available: (i) without charge, upon request, by calling 800.835.3879, or (ii) on the Securities and Exchange Commission’s (SEC) Web site at www.sec.gov. For information regarding each Fund’s proxy voting record for the 12-month period ended June 30, call 800.835.3879 or visit the SEC Web site at www.sec.gov.
The Fund files their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. A Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. To review a complete list of the Fund’s portfolio holdings, or to view the most recent quarterly holdings report, semiannual report, or annual report, please visit www.managersinvest.com.
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www.managersinvest.com
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SEMI-ANNUAL REPORT
Managers Funds
June 30, 2011
Managers Special Equity Fund
Table of Contents
Table of Contents
Managers Special Equity Fund Semi-Annual Report — June 30, 2011 (unaudited) |
Page | ||||
ABOUT YOUR FUND’S EXPENSES | 1 | |||
FUND PERFORMANCE | 2 | |||
FUND SNAPSHOTS AND SCHEDULE OF PORTFOLIO INVESTMENTS | 3 | |||
FINANCIAL STATEMENTS: | ||||
9 | ||||
Fund’s balance sheet, net asset value (NAV) per share computation and cumulative undistributed amount | ||||
10 | ||||
Detail of sources of income, Fund expenses, and realized and unrealized gains (losses) during the period | ||||
11 | ||||
Detail of changes in Fund assets for the past two periods | ||||
FINANCIAL HIGHLIGHTS | 12 | |||
Historical net asset values per share, distributions, total returns, expense ratios, turnover ratios and net assets | ||||
NOTES TO FINANCIAL STATEMENTS | 13 | |||
Accounting and distribution policies, details of agreements and transactions with Fund management and affiliates, and descriptions of certain investment risks | ||||
ANNUAL RENEWAL OF INVESTMENT ADVISORY AGREEMENT | 18 |
Nothing contained herein is to be considered an offer, sale or solicitation of an offer to buy shares of any series of the Managers Family of Funds. Such offering is made only by Prospectus, which includes details as to offering price and other material information.
Table of Contents
As a shareholder of a Fund, you may incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on $1,000 invested at the beginning of the period and held for the entire period as indicated below.
Actual Expenses
The first line of the following table provides information about the actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that 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 line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed annual rate of return of 5% before expenses, which 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 the Fund and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. |
Six Months Ended June 30, 2011 | Expense Ratio for the Period | Beginning Account Value 01/01/11 | Ending Account Value 06/30/11 | Expenses Paid During the Period* | ||||||||||||
Managers Special Equity Fund - Managers Class | ||||||||||||||||
Based on Actual Fund Return | 1.41 | % | $ | 1,000 | $ | 1,143 | $ | 7.49 | ||||||||
Based on Hypothetical 5% Annual Return | 1.41 | % | $ | 1,000 | $ | 1,018 | $ | 7.05 | ||||||||
Managers Special Equity Fund - Institutional Class | ||||||||||||||||
Based on Actual Fund Return | 1.16 | % | $ | 1,000 | $ | 1,144 | $ | 6.17 | ||||||||
Based on Hypothetical 5% Annual Return | 1.16 | % | $ | 1,000 | $ | 1,019 | $ | 5.81 |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181), then divided by 365. |
1 |
Table of Contents
Managers Special Equity Fund Performance
All periods ended June 30, 2011 (unaudited)
The table below shows the average annual total returns for the periods indicated for Managers Special Equity Fund and the Russell 2000® Growth Index.
Average Annual Total Returns1 | ||||||||||||||||||||
Managers Special Equity Fund2 | Six Months | One Year | Five Years | Ten Years | Inception Date | |||||||||||||||
Managers Class | 14.29 | % | 55.86 | % | 3.42 | % | 4.24 | % | 06/01/1984 | |||||||||||
Institutional Class | 14.43 | % | 56.25 | % | 3.65 | % | — | 05/03/2004 | ||||||||||||
Russell 2000® Growth Index | 8.59 | % | 43.50 | % | 5.79 | % | 4.63 | % | 06/01/1984 | † |
The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. The investment return and the 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. For performance information through the most recent month end please call (800) 835-3879 or visit our Web site at www.managersinvest.com.
In choosing a Fund, investors should carefully consider the amount they plan to invest, their investment objectives, the Fund’s investment objectives, risks, charges and expenses before investing. For this and other information, please call (800) 835-3879 or visit www.managersinvest.com for a free prospectus. Read it carefully before investing or sending money. Funds are distributed by Managers Distributors, Inc., a member of FINRA.
The Fund is subject to risks associated with investments in small-capitalization companies, such as erratic earnings patterns, competitive conditions, limited earnings history, and a reliance on one or a limited number of products.
The Russell 2000® Growth Index measures the performance of the Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. Unlike the Fund, the Index is unmanaged, is not available for investment, and does not incur expenses.
The Russell 2000® Growth Index is a trademark of Russell Investments. Russell® is a trademark of Russell Investments.
† | The date reflects the inception date of the Fund, not the index. |
1 | Total return equals income yield plus share price change and assumes reinvestment of all dividends and capital gain distributions. Returns are net of fees and may reflect offsets of Fund expenses as described in the Prospectus. No adjustment has been made for taxes payable by shareholders on their reinvested dividends and capital gain distributions. Returns for periods greater than one year are annualized. The listed returns on the Fund are net of expenses and based on the published NAV as of June 30, 2011. All returns are in U.S. dollars($). |
2 | From time to time, the Fund’s advisor has waived its fees and/or absorbed Fund expenses, which has resulted in higher returns. |
Not FDIC insured, nor bank guaranteed. May lose value.
2
Table of Contents
Fund Snapshots June 30, 2011 (unaudited) |
Portfolio Breakdown
Industry | Managers Special Equity Fund** | Russell 2000® Growth Index | ||||||
Information Technology | 22.2 | % | 24.6 | % | ||||
Consumer Discretionary | 19.4 | % | 14.8 | % | ||||
Industrials | 16.9 | % | 15.6 | % | ||||
Health Care | 16.3 | % | 19.2 | % | ||||
Financials | 8.4 | % | 7.3 | % | ||||
Energy | 7.9 | % | 8.7 | % | ||||
Materials | 5.5 | % | 4.6 | % | ||||
Consumer Staples | 2.2 | % | 3.8 | % | ||||
Telecommunication Services | 0.4 | % | 1.3 | % | ||||
Utilities | 0.0 | % | 0.1 | % | ||||
Other Assets and Liabilities | 0.8 | % | 0.0 | % | ||||
** As a percentage of net assets |
| |||||||
Top Ten Holdings | ||||||||
Security Name | Percentage of Net Assets | |||||||
SXC Health Solutions Corp.* |
| 2.0 | % | |||||
Rosetta Resources, Inc. |
| 1.6 | ||||||
Signature Bank |
| 1.3 | ||||||
Sourcefire, Inc. |
| 1.2 | ||||||
IPG Photonics Corp. |
| 1.2 | ||||||
BE Aerospace, Inc.* |
| 1.2 | ||||||
Acacia Research Corp. |
| 1.1 | ||||||
Polypore International, Inc. |
| 1.1 | ||||||
Wolverine World Wide, Inc. |
| 1.1 | ||||||
Steven Madden, Ltd.* |
| 1.1 | ||||||
|
| |||||||
Top Ten as a Group |
| 12.9 | % | |||||
|
|
* | Top Ten Holding at December 31, 2010 |
Any sectors, industries, or securities discussed should not be perceived as investment recommendations. Mention of a specific security should not be considered a recommendation to buy or solicitation to sell that security. Specific securities mentioned in this report may have been sold from the Fund’s portfolio of investments by the time you receive this report. |
3 |
Table of Contents
Managers Special Equity Fund Schedule of Portfolio Investments June 30, 2011 (unaudited) |
Shares | Value | |||||||
Common Stocks - 99.2% |
| |||||||
Consumer Discretionary - 19.4% | ||||||||
Aeropostale, Inc.* | 35,141 | $ | 614,968 | |||||
America’s Car-Mart, Inc.* | 41,547 | 1,371,051 | ||||||
Ameristar Casinos, Inc. | 42,200 | 1,000,562 | ||||||
AnnTaylor Stores Corp.* | 42,762 | 1,116,088 | ||||||
Ascena Retail Group, Inc.* | 34,500 | 1,174,725 | ||||||
Biglari Holdings, Inc.* | 1,117 | 436,803 | ||||||
BJ’s Restaurants, Inc.* | 48,872 | 2,558,937 | ||||||
Bravo Brio Restaurant Group, Inc.* | 58,318 | 1,424,709 | ||||||
Bridgepoint Education, Inc.* | 7,620 | 2 | 190,500 | |||||
Brunswick Corp. | 10,169 | 207,448 | ||||||
Buckle, Inc., The | 17,130 | 2 | 731,451 | |||||
Carter’s, Inc.* | 1,698 | 52,230 | ||||||
Cato Corporation, The, Class A | 22,730 | 654,624 | ||||||
Cheesecake Factory, Inc., The* | 15,890 | 498,469 | ||||||
Children’s Place Retail Stores, Inc., The* | 3,263 | 145,171 | ||||||
Coinstar, Inc.* | 8,785 | 2 | 479,134 | |||||
Collective Brands, Inc.* | 2,294 | 33,699 | ||||||
Cracker Barrel Old Country Store, Inc. | 12,738 | 628,111 | ||||||
Crocs, Inc.* | 69,218 | 1,782,364 | ||||||
Dana Holding Corp.* | 33,920 | 2 | 620,736 | |||||
Deckers Outdoor Corp.* | 18,525 | 1,632,794 | ||||||
Dick’s Sporting Goods, Inc.* | 23,968 | 921,570 | ||||||
DSW, Inc.* | 13,307 | 2 | 673,467 | |||||
Eastman Kodak Co.* | 4,241 | 2 | 15,183 | |||||
Express, Inc.* | 34,866 | 760,079 | ||||||
Finish Line, Inc., The, Class A | 95,045 | 2,033,962 | ||||||
Fossil, Inc.* | 10,909 | 1,284,207 | ||||||
G-III Apparel Group, Ltd.* | 51,220 | 1,766,066 | ||||||
Global Sources, Ltd.* | 34,870 | 320,455 | ||||||
Group 1 Automotive, Inc. | 41,197 | 1,696,492 | ||||||
HomeAway, Inc.* | 1,500 | 58,050 | ||||||
IMAX Corp.* | 34,031 | 1,103,625 | ||||||
iRobot Corp.* | 29,235 | 1,031,703 | ||||||
Jos. A. Bank Clothiers, Inc.* | 21,409 | 1,070,664 | ||||||
K12, Inc.* | 32,556 | 1,078,906 | ||||||
Lions Gate Entertainment Corp.* | 86,300 | 571,306 | ||||||
Lululemon Athletica, Inc.* | 15,191 | 2 | 1,698,658 | |||||
Oxford Industries, Inc. | 42,920 | 1,448,979 | ||||||
Panera Bread Co., Class A* | 11,700 | 1,470,222 |
Shares | Value | |||||||
Peet’s Coffee & Tea, Inc.* | 8,694 | $ | 501,644 | |||||
Penske Automotive Group, Inc.* | 37,090 | 2 | 843,427 | |||||
Pier 1 Imports, Inc.* | 248,245 | 2,872,195 | ||||||
Polaris Industries, Inc. | 11,010 | 1,223,982 | ||||||
Saks, Inc.* | 24,869 | 2 | 277,787 | |||||
Sally Beauty Holdings, Inc.* | 52,449 | 896,878 | ||||||
Select Comfort Corp.* | 56,970 | 1,024,321 | ||||||
Shoe Carnival, Inc.* | 50,740 | 1,529,811 | ||||||
Shutterfly, Inc.* | 18,838 | 1,081,678 | ||||||
Sodastream International, Ltd.* | 17,523 | 2 | 1,065,574 | |||||
Steven Madden, Ltd.* | 106,301 | 3,987,350 | ||||||
Strayer Education, Inc. | 3,111 | 2 | 393,199 | |||||
Tempur-Pedic International, Inc.* | 40,112 | 2 | 2,720,395 | |||||
Tenneco Automotive, Inc.* | 26,061 | 1,148,508 | ||||||
Texas Roadhouse, Inc., | 101,480 | 1,779,452 | ||||||
Tractor Supply Co. | 21,118 | 1,412,372 | ||||||
Tupperware Brands Corp. | 16,830 | 1,135,184 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc.* | 32,981 | 2,129,912 | ||||||
Under Armour, Inc., Class A* | 12,067 | 2 | 932,900 | |||||
Vera Bradley, Inc.* | 10,621 | 2 | 405,722 | |||||
Vitamin Shoppe, Inc.* | 19,230 | 879,965 | ||||||
Warnaco Group, Inc., The* | 27,080 | 1,414,930 | ||||||
Wolverine World Wide, Inc. | 96,698 | 2 | 4,037,141 | |||||
Total Consumer Discretionary | 70,052,495 | |||||||
Consumer Staples - 2.2% | ||||||||
B&G Foods, Inc. | 33,102 | 2 | 682,563 | |||||
Casey’s General Stores, Inc. | 3,207 | 2 | 141,108 | |||||
Coca-Cola Bottling Co. Consolidated | 1,800 | 121,788 | ||||||
Diamond Foods, Inc. | 13,516 | 1,031,811 | ||||||
Nu Skin Enterprises, Inc., Class A | 39,687 | 1,490,247 | ||||||
Revlon, Inc., Class A* | 47,800 | 803,040 | ||||||
TreeHouse Foods, Inc.* | 67,970 | 3,711,842 | ||||||
Total Consumer Staples | 7,982,399 | |||||||
Energy - 7.9% | ||||||||
Approach Resources, Inc.* | 151,120 | 3,425,890 | ||||||
Berry Petroleum Co., Class A | 17,865 | 949,167 | ||||||
CARBO Ceramics, Inc. | 18,891 | 3,078,288 | ||||||
Clayton Williams Energy, Inc.* | 12,191 | 732,070 | ||||||
Complete Production Services, Inc.* | 22,059 | 735,888 | ||||||
CVR Energy, Inc.* | 36,614 | 901,437 | ||||||
ION Geophysical Corp.* | 82,343 | 778,965 |
The accompanying notes are an integral part of these financial statements. |
4 |
Table of Contents
Managers Special Equity Fund Schedule of Portfolio Investments (continued) |
Shares | Value | |||||||
Energy - 7.9% (continued) |
| |||||||
Kodiak Oil & Gas Corp.* | 161,020 | $ | 929,085 | |||||
Lufkin Industries, Inc. | 10,594 | 911,614 | ||||||
Oasis Petroleum, Inc.* | 41,667 | 2 | 1,236,677 | |||||
OYO Geospace Corp.* | 5,560 | 556,000 | ||||||
Rosetta Resources, Inc.* | 110,690 | 5,704,962 | ||||||
RPC, Inc. | 74,265 | 2 | 1,822,463 | |||||
Stone Energy Corp.* | 35,727 | 1,085,744 | ||||||
Superior Energy Services, Inc.* | 93,550 | 3,474,447 | ||||||
Tesco Corp.* | 34,000 | 659,940 | ||||||
Venoco, Inc.* | 27,800 | 354,172 | ||||||
W&T Offshore, Inc. | 48,366 | 1,263,320 | ||||||
Total Energy | 28,600,129 | |||||||
Financials - 8.4% |
| |||||||
Advance America, Cash Advance Centers, Inc. | 83,300 | 573,937 | ||||||
Altisource Portfolio Solutions S.A.* | 31,640 | 1,164,352 | ||||||
Calamos Asset Management, Inc., Class A | 50,459 | 732,665 | ||||||
Cohen & Steers, Inc. | 10,760 | 356,694 | ||||||
Credit Acceptance Corp.* | 7,706 | 650,926 | ||||||
eSpeed, Inc., Class A | 27,430 | 212,034 | ||||||
Financial Engines, Inc.* | 58,505 | 1,516,450 | ||||||
GAMCO Investors, Inc., Class A | 6,599 | 2 | 305,468 | |||||
Green Dot Corp., Class A* | 4,261 | 2 | 144,789 | |||||
Home Bancshares, Inc. | 115,250 | 2 | 2,724,510 | |||||
Horace Mann Educators Corp. | 9,990 | 155,944 | ||||||
MarketAxess Holdings, Inc. | 101,345 | 2 | 2,539,706 | |||||
Noah Holdings, Ltd., Sponsored ADR* | 6,542 | 73,532 | ||||||
Ocwen Financial Corp.* | 56,576 | 721,910 | ||||||
Portfolio Recovery Associates, Inc.* | 13,581 | 1,151,533 | ||||||
PrivateBancorp, Inc. | 197,210 | 2,721,498 | ||||||
Prosperity Bancshares, Inc. | 74,801 | 2 | 3,277,779 | |||||
Signature Bank* | 84,435 | 2 | 4,829,681 | |||||
SVB Financial Group* | 39,769 | 2,374,607 | ||||||
Texas Capital Bancshares, Inc.* | 51,505 | 2 | 1,330,374 | |||||
Washington Banking Co. | 89,500 | 2 | 1,183,190 | |||||
World Acceptance Corp.* | 24,064 | 1,577,876 | ||||||
Total Financials | 30,319,455 | |||||||
Health Care - 16.3% |
| |||||||
Abiomed, Inc.* | 8,400 | 136,080 | ||||||
Affymetrix, Inc.* | 89,000 | 705,770 |
Shares | Value | |||||||
Air Methods Corp.* | 9,757 | $ | 729,238 | |||||
Align Technology, Inc.* | 59,160 | 1,348,848 | ||||||
Amarin Corp. PLC, Sponsored ADR* | 81,575 | 1,180,390 | ||||||
Amedisys, Inc.* | 629 | 16,750 | ||||||
AMERIGROUP Corp.* | 31,800 | 2,240,946 | ||||||
Ariad Pharmaceuticals, Inc.* | 19,614 | 2 | 222,227 | |||||
Arqule, Inc.* | 50,540 | 315,875 | ||||||
Array BioPharma, Inc.* | 55,880 | 125,171 | ||||||
ArthroCare Corp.* | 10,600 | 354,782 | ||||||
athenahealth, Inc.* | 18,851 | 774,776 | ||||||
Auxilium Pharmaceuticals, Inc.* | 4,420 | 86,632 | ||||||
AVEO Pharmaceuticals, Inc.* | 11,100 | 228,771 | ||||||
BioCryst Pharmaceuticals, Inc.* | 34,600 | 132,172 | ||||||
BioMarin Pharmaceutical, Inc.* | 21,792 | 592,960 | ||||||
Cantel Medical Corp. | 17,130 | 460,968 | ||||||
Catalyst Health Solutions, Inc.* | 57,014 | 3,182,521 | ||||||
Centene Corp.* | 58,565 | 2,080,814 | ||||||
Cepheid* | 43,855 | 1,519,137 | ||||||
Chemed Corp. | 16,229 | 1,063,324 | ||||||
Codexis, Inc.* | 13,600 | 130,968 | ||||||
Computer Programs & Systems, Inc. | 36,220 | 2,299,246 | ||||||
CorVel Corp.* | 46,935 | 2,201,252 | ||||||
Cubist Pharmaceuticals, Inc.* | 37,341 | 1,343,903 | ||||||
DexCom, Inc.* | 61,937 | 897,467 | ||||||
Endologix, Inc.* | 167,658 | 1,559,219 | ||||||
Epocrates, Inc.* | 24,490 | 2 | 451,596 | |||||
Genomic Health, Inc.* | 10,980 | 306,452 | ||||||
Geron Corp.* | 43,910 | 2 | 176,079 | |||||
HealthSpring, Inc.* | 25,114 | 1,158,007 | ||||||
HMS Holdings Corp.* | 32,675 | 2,511,727 | ||||||
Human Genome Sciences, Inc.* | 8,747 | 214,651 | ||||||
ICU Medical, Inc.* | 16,800 | 734,160 | ||||||
Impax Laboratories, Inc.* | 93,166 | 2,030,087 | ||||||
Incyte Genomics, Inc.* | 59,683 | 2 | 1,130,396 | |||||
Insulet Corp.* | 44,245 | 980,912 | ||||||
InterMune, Inc.* | 12,240 | 2 | 438,804 | |||||
Invacare Corp. | 4,665 | 154,831 | ||||||
IPC The Hospitalist Co., Inc.* | 54,890 | 2,544,153 | ||||||
Jazz Pharmaceuticals, Inc.* | 29,749 | 2 | 992,129 | |||||
Kensey Nash Corp.* | 16,680 | 420,836 | ||||||
Ligand Pharmaceuticals, Inc.* | 14,100 | 168,495 |
The accompanying notes are an integral part of these financial statements. |
5 |
Table of Contents
Managers Special Equity Fund Schedule of Portfolio Investments (continued) |
Shares | Value | |||||||
Health Care - 16.3% (continued) |
| |||||||
Masimo Corp. | 16,090 | $ | 477,551 | |||||
Medicis Pharmaceutical Corp., Class A | 73,592 | 2,809,007 | ||||||
Nabi Biopharmaceuticals* | 36,840 | 198,199 | ||||||
National Research | 6,110 | 223,198 | ||||||
Neurocrine Biosciences, Inc.* | 30,900 | 248,745 | ||||||
Novavax, Inc.* | 103,900 | 209,878 | ||||||
NxStage Medical, Inc.* | 5,337 | 111,116 | ||||||
Onyx Pharmaceuticals, Inc.* | 23,179 | 818,219 | ||||||
Pacific Biosciences of California, Inc.* | 20,832 | 2 | 243,734 | |||||
Providence Service Corp.* | 22,560 | 285,384 | ||||||
PSS World Medical, Inc.* | 22,952 | 2 | 642,886 | |||||
Quality Systems, Inc. | 16,270 | 2 | 1,420,371 | |||||
Rigel Pharmaceuticals, Inc.* | 30,700 | 281,519 | ||||||
Spectrum Brands Holdings* | 14,200 | 2 | 131,563 | |||||
SXC Health Solutions Corp.* | 124,066 | 7,309,970 | ||||||
Targacept, Inc.* | 8,400 | 176,988 | ||||||
Tornier, N.V.* | 19,063 | 513,748 | ||||||
U.S. Physical Therapy, Inc. | 14,550 | 359,822 | ||||||
Vanda Pharmaceuticals, Inc.* | 20,410 | 145,727 | ||||||
WellCare Health Plans, Inc.* | 1,654 | 85,032 | ||||||
Zoll Medical Corp.* | 29,555 | 1,674,586 | ||||||
Total Health Care | 58,710,765 | |||||||
Industrials - 16.9% | ||||||||
Acacia Research Corp.* | 110,776 | 4,064,371 | ||||||
Actuant Corp., Class A | 18,033 | 483,825 | ||||||
Acuity Brands, Inc. | 20,103 | 1,121,345 | ||||||
Applied Industrial Technologies, Inc. | 31,401 | 1,118,190 | ||||||
Avis Budget Group, Inc.* | 32,391 | 553,562 | ||||||
Barnes Group, Inc. | 14,303 | 2 | 354,857 | |||||
BE Aerospace, Inc.* | 101,869 | 4,157,274 | ||||||
Belden CDT, Inc. | 10,689 | 2 | 372,619 | |||||
Brink’s Co., The | 32,362 | 965,358 | ||||||
Chart Industries, Inc.* | 65,391 | 3,529,806 | ||||||
Clean Harbors, Inc.* | 11,534 | 2 | 1,190,886 | |||||
Consolidated Graphics, Inc.* | 4,500 | 247,275 | ||||||
CoStar Group, Inc.* | 15,777 | 935,261 | ||||||
Cubic Corp. | 17,470 | 890,795 | ||||||
Deluxe Corp. | 39,469 | 975,279 | ||||||
EMCOR Group, Inc.* | 9,380 | 274,928 | ||||||
EnerSys* | 90,125 | 3,102,102 | ||||||
Exponent, Inc.* | 16,700 | 726,617 |
Shares | Value | |||||||
Forward Air Corp. | 7,497 | $ | 253,324 | |||||
Genesee & Wyoming, Inc., Class A* | 20,922 | 1,226,866 | ||||||
HEICO Corp. | 16,813 | 2 | 920,344 | |||||
Hexcel Corp.* | 62,398 | 1,365,892 | ||||||
Higher One Holdings, Inc.* | 47,168 | 2 | 892,419 | |||||
HNI Corp. | 11,059 | 277,802 | ||||||
Hub Group, Inc.* | 51,155 | 1,926,497 | ||||||
II-VI, Inc.* | 25,176 | 644,506 | ||||||
Insperity, Inc. | 21,400 | 633,654 | ||||||
Interface, Inc., Class A | 25,241 | 488,918 | ||||||
Kaydon Corp. | 16,960 | 632,947 | ||||||
Knoll, Inc. | 31,836 | 638,949 | ||||||
Meritor, Inc.* | 18,641 | 299,002 | ||||||
Middleby Corp., The* | 8,179 | 769,153 | ||||||
Mueller Industries, Inc. | 6,462 | 244,974 | ||||||
MYR Group, Inc.* | 34,671 | 811,301 | ||||||
NACCO Industries, Inc., Class A | 7,016 | 2 | 679,289 | |||||
Nordson Corp. | 39,836 | 2,185,005 | ||||||
Old Dominion Freight Line, Inc.* | 34,107 | 1,272,191 | ||||||
Park-Ohio Holdings Corp.* | 18,760 | 396,586 | ||||||
Polypore International, Inc.* | 59,546 | 4,039,601 | ||||||
RBC Bearings, Inc.* | 23,137 | 873,653 | ||||||
Robbins & Myers, Inc. | 33,164 | 1,752,717 | ||||||
Sauer-Danfoss, Inc.* | 13,940 | 702,437 | ||||||
Textainer Group Holdings, Ltd. | 17,306 | 531,986 | ||||||
Tredegar Corp. | 22,600 | 414,710 | ||||||
Triumph Group, Inc. | 39,385 | 3,921,958 | ||||||
Twin Disc, Inc. | 20,920 | 808,140 | ||||||
United Rentals, Inc.* | 30,897 | 784,784 | ||||||
UTI Worldwide, Inc. | 65,895 | 1,297,473 | ||||||
Wabtec Corp. | 29,765 | 1,956,156 | ||||||
Watsco, Inc. | 12,222 | 830,974 | ||||||
Westport Innovations, Inc.* | 33,816 | 812,260 | ||||||
Woodward Governor Co. | 13,580 | 473,399 | ||||||
Zipcar, Inc.* | 11,600 | 2 | 236,756 | |||||
Total Industrials | 61,060,973 | |||||||
Information Technology - 22.2% |
| |||||||
ACI Worldwide, Inc.* | 21,200 | 715,924 | ||||||
Acme Packet, Inc.* | 11,030 | 773,534 | ||||||
Allot Communications, Ltd.* | 164,180 | 3,002,852 | ||||||
Amkor Technology, Inc.* | 8,354 | 51,544 | ||||||
Ancestry.com, Inc.* | 53,728 | 2 | 2,223,802 |
The accompanying notes are an integral part of these financial statements. |
6 |
Table of Contents
Managers Special Equity Fund Schedule of Portfolio Investments (continued) |
Shares | Value | |||||||
Information Technology - 22.2% (continued) | ||||||||
Anixter International, Inc. | 21,908 | $ | 1,431,469 | |||||
Applied Micro Circuits Corp.* | 10,005 | 88,644 | ||||||
Ariba, Inc.* | 110,317 | 2 | 3,802,627 | |||||
Aruba Networks, Inc.* | 115,024 | 3,398,959 | ||||||
Axcelis Technologies, Inc.* | 228,230 | 374,297 | ||||||
Bankrate, Inc.* | 54,016 | 2 | 895,585 | |||||
CACI International, Inc., Class A* | 18,834 | 1,188,049 | ||||||
Cavium, Inc.* | 20,169 | 2 | 879,167 | |||||
Ceva, Inc.* | 52,266 | 1,592,022 | ||||||
Cognex Corp. | 54,155 | 1,918,712 | ||||||
Coherent, Inc.* | 18,346 | 1,013,983 | ||||||
CommVault Systems, Inc.* | 8,729 | 388,004 | ||||||
Concur Technologies, Inc.* | 4,748 | 237,732 | ||||||
Constant Contact, Inc.* | 15,042 | 381,766 | ||||||
Cornerstone OnDemand, Inc.* | 27,356 | 2 | 482,833 | |||||
FARO Technologies, Inc.* | 29,467 | 1,290,655 | ||||||
Fortinet, Inc.* | 119,130 | 3,251,059 | ||||||
Fusion-io, Inc.* | 16,847 | 2 | 506,926 | |||||
GT Solar International, Inc.* | 51,018 | 2 | 826,492 | |||||
Inphi Corp.* | 66,197 | 1,151,828 | ||||||
IPG Photonics Corp.* | 57,359 | 2 | 4,170,574 | |||||
Kenexa Corp.* | 71,365 | 1,711,333 | ||||||
Lattice Semiconductor Corp.* | 134,300 | 875,636 | ||||||
Littelfuse, Inc. | 24,114 | 1,415,974 | ||||||
Manhattan Associates, Inc.* | 34,827 | 1,199,442 | ||||||
MAXIMUS, Inc. | 35,510 | 2,937,742 | ||||||
Maxwell Technologies, Inc.* | 35,486 | 574,518 | ||||||
MercadoLibre, Inc.* | 7,400 | 2 | 587,116 | |||||
MoneyGram International, Inc.* | 158,800 | 527,216 | ||||||
Monotype Imaging Holdings, Inc.* | 13,000 | 183,690 | ||||||
NeoPhotonics Corp.* | 1,778 | 12,304 | ||||||
Net 1 UEPS Technologies, Inc.* | 27,030 | 234,620 | ||||||
NetLogic Microsystems, Inc.* | 23,539 | 951,446 | ||||||
NetSuite, Inc.* | 52,642 | 2,063,566 | ||||||
Newport Corp.* | 47,497 | 863,020 | ||||||
OPNET Technologies, Inc. | 36,965 | 1,513,347 | ||||||
OSI Systems, Inc.* | 3,100 | 133,300 | ||||||
Parametric Technology Corp.* | 29,181 | 669,120 | ||||||
Plantronics, Inc. | 15,590 | 569,503 | ||||||
Quest Software, Inc.* | 36,875 | 838,169 |
Shares | Value | |||||||
Rackspace Hosting, Inc.* | 16,802 | $ | 718,117 | |||||
Renaissance Learning, Inc. | 24,280 | 304,471 | ||||||
Responsys, Inc.* | 37,730 | 668,953 | ||||||
RF Micro Devices, Inc.* | 72,060 | 441,007 | ||||||
RightNow Technologies, Inc.* | 42,225 | 1,368,090 | ||||||
Riverbed Technology, Inc.* | 35,313 | 1,398,042 | ||||||
ServiceSource International, Inc.* | 36,948 | 820,985 | ||||||
Sourcefire, Inc.* | 146,731 | 2 | 4,360,846 | |||||
SS&C Technologies Holdings, Inc.* | 37,120 | 737,574 | ||||||
SuccessFactors, Inc.* | 3,227 | 94,874 | ||||||
Synchronoss Technologies, Inc.* | 93,246 | 2,958,696 | ||||||
Taleo Corp.* | 39,040 | 1,445,651 | ||||||
TeleNav, Inc.* | 32,300 | 572,679 | ||||||
TIBCO Software, Inc.* | 65,602 | 1,903,770 | ||||||
Travelzoo, Inc.* | 8,909 | 2 | 575,878 | |||||
Unisys Corp.* | 21,806 | 560,414 | ||||||
ValueClick, Inc.* | 52,825 | 876,895 | ||||||
Veeco Instruments, Inc.* | 11,983 | 2 | 580,097 | |||||
VeriFone Holdings, Inc.* | 45,469 | 2,016,550 | ||||||
Vocus, Inc.* | 4,414 | 135,113 | ||||||
Volterra Semiconductor Corp.* | 81,270 | 2,004,118 | ||||||
Websense, Inc.* | 23,801 | 618,112 | ||||||
Wright Express Corp.* | 20,771 | 1,081,546 | ||||||
Total Information Technology | 80,142,579 | |||||||
Materials - 5.5% | ||||||||
Buckeye Technologies, Inc. | 12,677 | 342,025 | ||||||
Century Aluminum Co.* | 23,931 | 374,520 | ||||||
Globe Specialty Metals, Inc. | 43,115 | 966,638 | ||||||
Koppers Holdings, Inc. | 14,746 | 559,316 | ||||||
Kraton Performance Polymers, Inc.* | 81,002 | 3,172,848 | ||||||
LSB Industries, Inc.* | 18,392 | 789,385 | ||||||
Materion Corp.* | 21,553 | 796,814 | ||||||
Minerals Technologies, Inc. | 10,680 | 707,977 | ||||||
NewMarket Corp. | 9,061 | 2 | 1,546,803 | |||||
Olin Corp. | 53,751 | 1,217,998 | ||||||
PolyOne, Corp. | 43,570 | 674,028 | ||||||
Rock-Tenn Co., Class A | 9,677 | 641,972 | ||||||
Rockwood Holdings, Inc.* | 62,557 | 3,458,777 | ||||||
TPC Group, Inc.* | 89,430 | 3,507,446 | ||||||
Worthington Industries, Inc. | 47,082 | 1,087,594 | ||||||
Total Materials | 19,844,141 |
The accompanying notes are an integral part of these financial statements. |
7 |
Table of Contents
Managers Special Equity Fund Schedule of Portfolio Investments (continued) |
Shares | Value | |||||||
Telecommunication Services - 0.4% | ||||||||
Leap Wireless International, Inc.* | 70,531 | 2 | $ | 1,144,718 | ||||
Vonage Holdings Corp.* | 93,210 | 411,056 | ||||||
Total Telecommunication Services | 1,555,774 | |||||||
Total Common Stocks | 358,268,710 | |||||||
Short-Term Investments - 8.3% | ||||||||
BNY Institutional Cash Reserves Fund, Series B*3,8 | 2,499,559 | 1,997,405 |
Shares | Value | |||||||
BNY Mellon Overnight | 21,305,652 | $ | 21,305,652 | |||||
Dreyfus Cash Management Fund, Institutional Class Shares, 0.10% | 6,822,371 | 6,822,371 | ||||||
Total Short-Term Investments | 30,125,428 | |||||||
Total Investments - 107.5% | 388,394,138 | |||||||
Other Assets, less Liabilities - (7.5)% | (27,251,182 | ) | ||||||
Net Assets - 100.0% | $ | 361,142,956 |
The following footnotes and abbreviations should be read in conjunction with the Schedule of Portfolio Investments.
Based on the cost of investments of $315,063,712 for Federal income tax purposes at June 30, 2011, the aggregate gross unrealized appreciation and depreciation were approximately $77,673,487 and $4,343,061, respectively, resulting in net unrealized appreciation of investments of $73,330,426.
* | Non-income producing security. |
# | Rounds to less than 0.1% |
1 | Yield shown for an investment company represents the June 30, 2011, seven-day average yield, which refers to the sum of the previous seven days’ dividends paid, expressed as an annual percentage. |
2 | Some or all of these shares were out on loan to various brokers as of June 30, 2011, amounting to a market value of $23,348,820, or approximately 6.5% of net assets. |
3 | Collateral received from brokers for securities lending was invested in this short-term investment. |
4 | On September 12, 2008, The Bank of New York Mellon established a separate sleeve of the BNY Institutional Cash Reserves Fund (Series B) to hold certain Lehman Brothers floating rate notes. The Fund’s position in Series B is being fair valued daily. (See Note 4 in the Notes to the Financial Statements.) |
The following table summarizes the inputs used to value the Fund’s net assets by the above fair value hierarchy levels as of June 30, 2011: (See Note 1(a) in the Notes to Financial Statements.)
Quoted Prices in Active Markets for Identical Investments Level 1 | Significant Other Observable Inputs Level 2 | Significant Unobservable Inputs Level 3 | Total | |||||||||||||
Managers Special Equity Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks† | $ | 358,268,710 | — | — | $ | 358,268,710 | ||||||||||
Short-Term Investments | 28,128,023 | $ | 1,997,405 | — | 30,125,428 | |||||||||||
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Total Investments in Securities | $ | 386,396,733 | $ | 1,997,405 | — | $ | 388,394,138 | |||||||||
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† | All common stocks held in the Fund are Level 1 securities. For a detailed break-out of the common stocks by major industry classification, please refer to the Schedule of Portfolio Investments. |
As of June 30, 2011, the Fund had no significant transfers between Level 1 and Level 2 from the beginning of the reporting period.
Investments Definitions and Abbreviations:
ADR: ADR after the name of a holding stands for American Depositary Receipt, representing ownership of foreign securities on deposit with a domestic custodian bank. The value of the ADR security is determined or significantly influenced by trading on exchanges not located in the United States or Canada. Sponsored ADRs are initiated by the underlying foreign company.
The accompanying notes are an integral part of these financial statements. |
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Table of Contents
Managers Special Equity Fund Statement of Assets and Liabilities June 30, 2011 (unaudited) |
Assets: | ||||
Investments at value (including securities on loan valued at $23,348,820)* | $ | 388,394,138 | ||
Receivable for investments sold | 3,552,926 | |||
Receivable for Fund shares sold | 2,083,708 | |||
Receivable from affiliate | 32,416 | |||
Dividends, interest and other receivables | 88,770 | |||
Prepaid expenses | 44,183 | |||
Total assets | 394,196,141 | |||
Liabilities: | ||||
Payable to Custodian | 52,980 | |||
Payable upon return of securities loaned | 23,805,211 | |||
Payable for investments purchased | 2,515,671 | |||
Payable for Fund shares repurchased | 6,148,463 | |||
Accrued expenses: | ||||
Investment advisory and management fees | 260,601 | |||
Administrative fees | 72,389 | |||
Other | 197,870 | |||
Total liabilities | 33,053,185 | |||
Net Assets | $ | 361,142,956 | ||
Managers Shares: | ||||
Net Assets | $ | 356,596,167 | ||
Shares outstanding | 5,919,625 | |||
Net asset value, offering and redemption price per share | $ | 60.24 | ||
Institutional Class Shares: | ||||
Net Assets | $ | 4,546,789 | ||
Shares outstanding | 74,366 | |||
Net asset value, offering and redemption price per share | $ | 61.14 | ||
Net Assets Represent: | ||||
Paid-in capital | $ | 541,492,792 | ||
Undistributed net investment loss | (1,745,449 | ) | ||
Accumulated net realized loss from investments | (254,359,992 | ) | ||
Net unrealized appreciation of investments | 75,755,605 | |||
Net Assets | $ | 361,142,956 | ||
* Investments at cost | $ | 312,638,533 |
The accompanying notes are an integral part of these financial statements. |
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Table of Contents
Managers Special Equity Fund For the six months ended June 30, 2011 (unaudited) |
Investment Income: | ||||
Dividend income | $ | 541,587 | ||
Securities lending fees | 61,382 | |||
Interest income | 154 | |||
Total investment income | 603,123 | |||
Expenses: | ||||
Investment management and advisory fees | 1,509,340 | |||
Transfer agent | 456,085 | |||
Administrative fees | 419,264 | |||
Custodian | 50,017 | |||
Professional fees | 24,014 | |||
Registration fees | 21,874 | |||
Reports to shareholders | 15,277 | |||
Trustees fees and expenses | 10,224 | |||
Miscellaneous | 5,258 | |||
Total expenses before offsets | 2,511,353 | |||
Expense reimbursements | (146,340 | ) | ||
Expense reductions | (16,441 | ) | ||
Net expenses | 2,348,572 | |||
Net investment loss | (1,745,449 | ) | ||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain on investments | 28,771,980 | |||
Net change in unrealized appreciation of investments | 14,967,622 | |||
Net realized and unrealized gain | 43,739,602 | |||
Net increase in net assets resulting from operations | $ | 41,994,153 |
The accompanying notes are an integral part of these financial statements. |
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Table of Contents
Managers Special Equity Fund Statement of Changes in Net Assets For the six months ended June 30, 2011 (unaudited) and for the year ended December 31, 2010 |
2011 | 2010 | |||||||
Increase (Decrease) in Net Assets From Operations: | ||||||||
Net investment loss | ($ | 1,745,449 | ) | ($ | 2,007,981 | ) | ||
Net realized gain on investments | 28,771,980 | 53,728,169 | ||||||
Net change in unrealized appreciation of investments | 14,967,622 | 8,739,851 | ||||||
Net increase in net assets resulting from operations | 41,994,153 | 60,460,039 | ||||||
From Capital Share Transactions: | ||||||||
Managers Class: | ||||||||
Proceeds from sale of shares | 105,239,879 | 72,554,710 | ||||||
Cost of shares repurchased | (68,809,862 | ) | (74,147,024 | ) | ||||
Net increase (decrease) from Managers Class share transactions | 36,430,017 | (1,592,314 | ) | |||||
Institutional Class: | ||||||||
Proceeds from sale of shares | 1,028,668 | 641,061 | ||||||
Cost of shares repurchased | (1,800,014 | ) | (5,205,756 | ) | ||||
Net decrease from Institutional Class share transactions | (771,346 | ) | (4,564,695 | ) | ||||
Net increase (decrease) from capital share transactions | 35,658,671 | (6,157,009 | ) | |||||
Total increase in net assets | 77,652,824 | 54,303,030 | ||||||
Net Assets: | ||||||||
Beginning of period | 283,490,132 | 229,187,102 | ||||||
End of period | $ | 361,142,956 | $ | 283,490,132 | ||||
End of period undistributed net investment income (loss) | ($ | 1,745,449 | ) | — | ||||
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Share Transactions: | ||||||||
Managers Class: | ||||||||
Sale of shares | 1,832,955 | 1,453,344 | ||||||
Shares repurchased | (1,200,893 | ) | (1,750,832 | ) | ||||
Net increase (decrease) in shares | 632,062 | (297,488 | ) | |||||
Institutional Class: | ||||||||
Sale of shares | 17,619 | 14,182 | ||||||
Shares repurchased | (32,835 | ) | (125,107 | ) | ||||
Net decrease in shares | (15,216 | ) | (110,925 | ) |
The accompanying notes are an integral part of these financial statements. |
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Table of Contents
Managers Special Equity Fund For a share outstanding throughout each period |
Managers Class: | For the six months ended June 30, 2011 (unaudited) | For the year ended December 31, | ||||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 52.71 | $ | 39.60 | $ | 30.28 | $ | 64.27 | $ | 82.96 | $ | 86.78 | ||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||
Net investment loss | (0.30 | )3 | (0.41 | )3 | (0.34 | )3 | (0.28 | )3 | (0.51 | )3 | (0.14 | )3 | ||||||||||||
Net realized and unrealized gain (loss) on investments | 7.83 | 3 | 13.52 | 3 | 9.66 | 3 | (27.93 | )3 | 0.55 | 3 | 9.88 | 3 | ||||||||||||
Total from investment operations | 7.53 | 13.11 | 9.32 | (28.21 | ) | 0.04 | 9.74 | |||||||||||||||||
Less Distributions to Shareholders from: | ||||||||||||||||||||||||
Net realized gain on investments | — | — | — | (5.78 | ) | (18.73 | ) | (13.56 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 60.24 | $ | 52.71 | $ | 39.60 | $ | 30.28 | $ | 64.27 | $ | 82.96 | ||||||||||||
Total Return1 | 14.29 | %5 | 33.11 | % | 30.78 | % | (43.49 | )% | (0.60 | )% | 11.28 | % | ||||||||||||
Ratio of net expenses to average net assets | 1.40 | %6 | 1.48 | % | 1.58 | % | 1.48 | % | 1.43 | % | 1.42 | % | ||||||||||||
Ratio of net investment loss to average net assets1 | (1.04 | )%6 | (0.95 | )% | (1.08 | )% | (0.52 | )% | (0.59 | )% | (0.15 | )% | ||||||||||||
Portfolio turnover | 55 | %5 | 138 | % | 186 | % | 138 | % | 67 | % | 76 | % | ||||||||||||
Net assets at end of period (000’s omitted) | $ | 356,596 | $ | 278,701 | $ | 221,159 | $ | 352,106 | $ | 1,668,031 | $ | 2,551,703 | ||||||||||||
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Ratios absent expense offsets:2 | ||||||||||||||||||||||||
Ratio of total expenses to average net assets | 1.50 | %6 | 1.55 | % | 1.61 | % | 1.51 | % | 1.46 | % | 1.47 | % | ||||||||||||
Ratio of net investment loss to average net assets | (1.14 | )%6 | (1.02 | )% | (1.11 | )% | (0.55 | )% | (0.62 | )% | (0.20 | )% | ||||||||||||
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Institutional Class: | For the six months ended June 30, 2011 (unaudited) | For the year ended December 31, | ||||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 53.43 | $ | 40.04 | $ | 30.56 | $ | 64.71 | $ | 83.56 | $ | 87.09 | ||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||
Net investment income (loss) | (0.23 | )3 | (0.30 | )3 | (0.26 | )3 | (0.15 | )3 | (0.32 | )3 | 0.10 | 3 | ||||||||||||
Net realized and unrealized gain (loss) on investments | 7.94 | 3 | 13.69 | 3 | 9.74 | 3 | (28.16 | )3 | 0.52 | 3 | 9.93 | 3 | ||||||||||||
Total from investment operations | 7.71 | 13.39 | 9.48 | (28.31 | ) | 0.20 | 10.03 | |||||||||||||||||
Less Distributions to Shareholders from: | ||||||||||||||||||||||||
Net realized gain on investments | — | — | — | (5.84 | ) | (19.05 | ) | (13.56 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 61.14 | $ | 53.43 | $ | 40.04 | $ | 30.56 | $ | 64.71 | $ | 83.56 | ||||||||||||
Total Return1 | 14.43 | %5 | 33.44 | %4 | 31.02 | %4 | (43.35 | )% | (0.39 | )% | 11.56 | %4 | ||||||||||||
Ratio of net expenses to average net assets | 1.15 | %6 | 1.23 | % | 1.33 | % | 1.23 | % | 1.20 | % | 1.18 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets1 | (0.79 | )%6 | (0.70 | )% | (0.83 | )% | (0.29 | )% | (0.36 | )% | 0.09 | % | ||||||||||||
Portfolio turnover | 55 | %5 | 138 | % | 186 | % | 138 | % | 67 | % | 76 | % | ||||||||||||
Net assets at end of period (000’s omitted) | $ | 4,547 | $ | 4,786 | $ | 8,028 | $ | 92,439 | $ | 247,396 | $ | 561,994 | ||||||||||||
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Ratios absent expense offsets:2 | ||||||||||||||||||||||||
Ratio of total expenses to average net assets | 1.25 | %6 | 1.30 | % | 1.36 | % | 1.26 | % | 1.23 | % | 1.23 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets | (0.89 | )%6 | (0.77 | )% | (0.86 | )% | (0.32 | )% | (0.39 | )% | 0.04 | % | ||||||||||||
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1 | Total returns and net investment income would have been lower had certain expenses not been reduced. (See Note 1(c) of Notes to Financial Statements.) |
2 | Excludes the impact of fee waivers and expense offsets such as brokerage credits, but includes non-reimbursable expenses, if any, such as interest and taxes. (See Note 1(c) to the Notes to Financial Statements.) |
3 | Per share numbers have been calculated using average shares. |
4 | The Total Return is based on the Financial Statement Net Asset Values as shown above. |
5 | Not annualized. |
6 | Annualized. |
12 |
Table of Contents
Managers Special Equity Fund June 30, 2011 (unaudited) |
1. | Summary of Significant Accounting Policies |
The Managers Funds (the “Trust”) is an open-end management investment company organized as a Massachusetts business trust and registered under the Investment Company Act of 1940, as amended (the “1940 Act”). Currently, the Trust is comprised of a number of different funds, each having distinct investment management objectives, strategies, risks and policies. Included in this report is the Managers Special Equity Fund (“Special Equity” or the “Fund”).
The Fund offers both Managers Class shares and Institutional Class shares. The Institutional Class shares, which are designed primarily for institutional investors that meet certain administrative and servicing criteria, have a minimum investment of $2,500,000. Managers Class shares are offered to all other investors. Each class represents an interest in the same assets of the Fund and the classes are identical except for class specific expenses related to shareholder activity. Each class has equal voting privileges except that each class has exclusive voting rights with respect to its services and/or distribution plan. Please refer to a current prospectus for additional information on each share class.
The Fund’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, (“U.S. GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting periods. Actual results could differ from those estimates and such differences could be material. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements:
a. | Valuation of Investments |
Equity securities traded on a domestic or international securities exchange are valued at the last quoted sale price, or, lacking any sales, at the last quoted bid price. Over-the-counter securities are valued at the Nasdaq Official Closing Price, if one is available. Lacking any sales, over-the-counter securities are valued at the last quoted bid price. The Fund’s investments are generally valued based on market quotations provided by third-party pricing services approved by the Board of Trustees of the Funds (the “Board”). Under certain circumstances, the value of certain Fund investments may be based on an evaluation of fair value, pursuant to procedures established by and under the general supervision of the Board of the Fund. The Fund may use the fair value of a portfolio security to calculate its NAV when, for example, (1) market quotations are not readily available because a portfolio security is not traded in a
public market or the principal market in which the security trades is closed, (2) trading in a portfolio security is suspended and has not resumed before the Fund calculates its NAV, (3) a significant event affecting the value of a portfolio security is determined to have occurred between the time of the market quotation provided for a portfolio security and the time as of which the Fund calculates its NAV, (4) a security’s price has remained unchanged over a period of time (often referred to as a “stale price”), or (5) Managers Investment Group LLC (the “Investment Manager”) determines that a market quotation is inaccurate. Portfolio investments that trade primarily on foreign markets are priced based upon the market quotation of such securities as of the close of their respective principal markets, as adjusted to reflect the Investment Manager’s determination of the impact of events occurring subsequent to the close of such markets but prior to the time as of which the Fund calculates its NAV. In accordance with procedures approved by the Board, the Investment Manager relies upon recommendations of a third-party fair valuation service in adjusting the prices of such foreign portfolio investments. The Fund may invest in securities that may be thinly traded. The Board has adopted procedures to adjust prices when thinly traded securities are judged to be stale so that they reflect fair value. An investment valued on the basis of its fair value may be valued at a price higher or lower than available market quotations. An investment’s valuation may differ depending on the method used and the factors considered in determining value according to the Fund’s fair value procedures.
Short-term investments having a remaining maturity of 60 days or less are valued at amortized cost, which approximates market value. Investments in other open-end regulated investment companies are valued at their end of day net asset value per share except iShares or other ETF’s, which are valued the same as equity securities. Investments in certain mortgage-backed and stripped mortgage-backed securities, preferred stocks, convertible securities, derivatives and other debt securities not traded on an organized securities market are valued on the basis of valuations provided by dealers or by a pricing service which uses information with respect to transactions in such securities and various relationships between securities and yield to maturity in determining value. Securities (including derivatives) for which market quotations are not readily available are valued at fair value, as determined in good faith, and pursuant to procedures adopted by the Board. The values assigned to fair value investments are based on available information and do not necessarily represent amounts that might ultimately be realized, since such amounts depend on future developments inherent in long-term investments. Further, because of the inherent uncertainty of valuation, those estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material.
13 |
Table of Contents
Managers Special Equity Fund Notes to Financial Statements (continued) |
U.S. GAAP define fair value as the price that a Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP also establish a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation.
The three-tier hierarchy of inputs is summarized below:
Level 1 – inputs are quoted prices in active markets for identical investments (e.g., equity securities, open-end investment companies, futures contracts, options contracts)
Level 2 – other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs) (e.g., debt securities, government securities, swap contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing, broker-quoted securities)
Level 3 – significant unobservable inputs (including the Fund’s own assumptions used to determine the fair value of investments) (e.g., fair valued securities)
The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments.
b. | Security Transactions |
Security transactions are accounted for as of trade date. Realized gains and losses on securities sold are determined on the basis of identified cost.
c. | Investment Income and Expenses |
Dividend income is recorded on the ex-dividend date except certain dividends from foreign securities where the ex-dividend date may have passed. These dividends are recorded as soon as the Trust is informed of the ex-dividend date. Dividend income on foreign securities is recorded net of any withholding tax. Interest income,
which includes amortization of premium and accretion of discount on debt securities, is accrued as earned. Non-cash dividends included in dividend income, if any, are reported at the fair market value of the securities received. Other income and expenses are recorded on an accrual basis. Expenses that cannot be directly attributed to a fund are apportioned among the Funds in the Trust and in some cases other affiliated funds based upon their relative average net assets or number of shareholders. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund and certain Fund level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund.
The Fund had certain portfolio trades directed to various brokers, under a brokerage recapture program, which paid a portion of the Fund’s expenses. For the six months ended June 30, 2011, under these arrangements the amount by which the Fund’s expenses were reduced and the impact on the expense ratio was as follows: $16,293 or 0.01% annualized.
The Fund has a “balance credit” arrangement with The Bank of New York Mellon (“BNYM”), the Fund’s custodian, whereby the Fund is credited with an interest factor equal to 0.75% below the effective 90-day T-Bill rate for account balances left uninvested overnight. If the T-Bill rate falls below 0.75%, no credits will be earned. These credits serve to reduce custody expenses that would otherwise be charged to the Fund. For the six months ended June 30, 2011, the custodian expense was not reduced.
Overdrafts will cause a reduction of any earnings credits, computed at 2% above the effective Federal Funds rate on the day of the overdraft. For the six months ended June 30, 2011, the Fund incurred overdraft fees of $2.
The Trust also has a balance credit arrangement with its Transfer Agent, BNY Mellon Investment Servicing (US) Inc., (formerly PNC Global Investment Servicing (U.S.) Inc.), whereby earnings credits are used to offset banking charges and other out-of-pocket expenses. For the six months ended June 30, 2011, the transfer agent expense was reduced by $148.
Total returns and net investment income for the Funds would have been lower had certain expenses not been offset. Total expenses before offsets exclude the impact of expense reimbursements or fee waivers and expense offsets such as brokerage recapture credits, but include non-reimburseable expenses, if any, such as interest and taxes.
d. | Dividends and Distributions |
Dividends resulting from net investment income and distributions of capital gains, if any, normally will be declared and paid annually in December and when required for Federal excise tax purposes. Distributions are recorded on the ex-dividend date and are declared separately for each class. Income and capital gain distributions are determined in accordance with Federal income tax regulations,
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Managers Special Equity Fund Notes to Financial Statements (continued) |
which may differ from U.S. GAAP. These differences are primarily due to differing treatments for losses deferred due to wash sales, REITs, equalization accounting for tax purposes and market discount transactions. Permanent book and tax basis differences, if any, relating to shareholder distributions will result in reclassifications to paid-in capital.
e. | Federal Taxes |
The Fund intends to comply with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, to distribute substantially all of its taxable income and gains to its shareholders and to meet certain diversification and income requirements with respect to investment companies. Therefore, no provision for Federal income or excise tax is included in the accompanying financial statements.
Additionally, based on the Fund’s understanding of the tax rules and rates related to income, gains and transactions for the foreign jurisdictions in which it invests, the Fund will provide for foreign taxes, and where appropriate, deferred foreign taxes.
Management has analyzed the Fund’s tax positions taken on federal income tax returns for all open tax years (tax years ended December 31, 2007-2010), and has concluded that no provision for federal income tax is required in the Fund’s financial statements. Additionally, the Fund is not aware of any tax position for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
f. | Capital Loss Carryovers |
As of June 30, 2011, the Fund had accumulated net realized capital loss carryover from securities transactions for Federal income tax purposes as shown in the following chart. These amounts may be used to offset realized capital gains, if any, through the expiration dates listed.
Fund | Capital Loss Carryover Amount | Expires December 31, | ||||||||||
Special Equity | $ | 97,085,016 | 2016 | |||||||||
183,621,777 | 2017 | |||||||||||
|
| |||||||||||
Total | $ | 280,706,793 | ||||||||||
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g. | Capital Stock |
The Trust’s Declaration of Trust authorizes for each series the issuance of an unlimited number of shares of beneficial interest, without par value. The Fund records sales and repurchases of its capital stock on the trade date. The cost of securities contributed to the Fund in connection with the issuance of shares is based on the valuation of those securities in accordance with the Fund’s policy on investment valuation. Dividends and distributions to shareholders are recorded on the ex-dividend date.
At June 30, 2011, certain unaffiliated shareholders of record, specifically omnibus accounts, individually or collectively held greater than 10% of the outstanding shares of the Fund as follows: two collectively own 58%. Transactions by these shareholders may have a material impact on the Fund.
2. | Agreements and Transactions with Affiliates |
The Trust has entered into an Investment Management Agreement under which the Investment Manager, an independently managed subsidiary of Affiliated Managers Group, Inc. (“AMG”), serves as investment manager to the Fund and is responsible for the Fund’s overall administration. The Investment Manager selects subadvisors for the Fund (subject to Trustee approval) and monitors each subadvisor’s investment programs and results. The Fund’s investment portfolio is managed by portfolio managers who serve pursuant to a Subadvisory Agreement with the Investment Manager.
Investment management fees are paid directly by the Fund to the Investment Manager based on average daily net assets. The annual investment management fee rate, as a percentage of average daily net assets, is 0.90%.
The Trust has entered into an Administration and Shareholder Servicing Agreement under which the Investment Manager serves as the Fund’s administrator (the “Administrator”) and is responsible for all aspects of managing the Fund’s operations, including administration and shareholder services to the Fund, its shareholders, and certain institutions, such as bank trust departments, broker-dealers and registered investment advisers, that advise or act as an intermediary with the Fund’s shareholders. The Fund pays a fee to the Administrator at the rate of 0.25% per annum of the Fund’s average daily net assets for this service.
At a meeting held on March 3-4, 2011, the Board approved a new contractual expense limitation with respect to the Managers and Institutional classes. Effective April 1, 2011, Managers has contrac-
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Managers Special Equity Fund Notes to Financial Statements (continued) |
tually agreed, until at least May 1, 2012, to limit total annual operating expenses (exclusive of taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary items) of both the Managers and Institutional classes to 1.39% and 1.14%, respectively, of the Fund’s average daily net assets. Immediately prior to April 1, 2011, the Fund’s classes had contractual expense limitations of 1.44% and 1.19%, respectively.
The Fund is obligated to repay the Investment Manager such amounts waived, paid or reimbursed in future years provided that the repayment occurs within thirty-six (36) months after the waiver or reimbursement and that such repayment would not cause the Fund’s total operating expenses in any such future year to exceed that Fund’s respective expense cap. For the six months ended June 30, 2011, the Fund made no such repayments to the Investment Manager. For the six months ended June 30, 2011, the Fund’s components of reimbursement are detailed in the following chart:
Reimbursement Available - 12/31/10 | $ | 108,681 | ||
Additional Reimbursements | 146,340 | |||
Repayments | — | |||
Expired Reimbursements | — | |||
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| |||
Reimbursement Available - 06/30/11 | $ | 255,021 | ||
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|
Effective January 1, 2011, the aggregate annual retainer paid to each Independent Trustee of the Board is $80,000, plus $5,000 or $2,500 for each regular or special meeting attended, respectively. The Independent Chairman of the Trusts receives an additional payment of $20,000 per year. The Chairman of the Audit Committee receives an additional payment of $8,000 per year. (Prior to January 1, 2011, the aggregate annual retainer paid to each Independent Trustee of the Board was $65,000, plus $4,000 or $2,500 for each regular or special meeting attended, respectively. The Independent Chairman of the Trusts received an additional payment of $15,000 per year. The Chairman of the Audit Committee received an additional payment of $5,000 per year.) The Trustees’ fees and expenses are allocated among all of the funds for which the Investment Manager serves as the advisor (the “Managers Funds”) based on the relative net assets of such funds. The “Trustees fees and expenses” shown in the financial statements represents the Funds’ allocated portion of the total fees and expenses paid by the Managers Funds.
The Fund is distributed by Managers Distributors, Inc. (the “Distributor” or “MDI”), a wholly-owned subsidiary of the Investment Manager. MDI serves as the principal underwriter for the Fund and is a registered broker-dealer and member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Shares of the Fund will be continuously offered and will be sold by brokers, dealers or other financial intermediaries who have executed selling agreements with MDI. MDI bears all the expenses of providing services pursuant to the Underwriting Agreement, including the payment of the expenses relating to the distribution of Prospectuses for sales purposes and any advertising or sales literature. Certain Trustees and Officers of the Fund are Officers and/or Directors of the Investment Manager, AMG and/or the Distributor.
The Securities and Exchange Commission granted an exemptive order that permits the Fund to lend and borrow money for certain temporary purposes directly to and from other eligible Managers Funds. Participation in this interfund lending program is voluntary for both borrowing and lending Funds, and an interfund loan is only made if it benefits each participating Fund. The Investment Manager administers the program according to procedures approved by the Board, and the Board monitors the operation of the program. An interfund loan must comply with certain conditions set out in the exemptive order, which are designed to assure fairness and protect all participating Funds. For the six months ended June 30, 2011, the Fund lent to other Managers Funds varying amounts up to $1,708,614 over 4 days earning interest of $131. The interest amounts are presented in the Statement of Operations in interest income. For the same period, the Fund did not borrow from any of the Managers Funds.
3. | Purchases and Sales of Securities |
Purchases and sales of securities, excluding short-term securities and U.S. Government obligations, for the six months ended June 30, 2011, were $225,791,136 and 180,997,087, respectively. There were no purchases or sales of U.S. government obligations.
4. | Portfolio Securities Loaned |
For the six months ended June 30, 2011, the Fund participated in a securities lending program offered by BNYM, providing for the lending of securities to qualified brokers. Securities lending fees include earnings of such temporary cash investments, plus or minus any rebate to a borrower. These earnings (after any rebate) are then divided between BNYM, as a fee for its services under the program, and the Fund, according to agreed-upon rates. Collateral on all securities loaned is accepted in cash and/or government securities and is maintained at a minimum level of 102% (105% in the case
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Managers Special Equity Fund Notes to Financial Statements (continued) |
of certain foreign securities) of the market value, plus interest, if applicable, of investments on loan. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Collateral received in the form of cash is invested temporarily in the BNY Mellon Overnight Government Fund, formerly the BNY Institutional Cash Reserves Fund (the “ICRF”), or other short-term investments as defined in the Securities Lending Agreement with BNYM.
Effective August 2, 2010, the Trust, on behalf of the Fund, entered into an agreement with The Bank of New York Mellon and the Bank of New York Mellon Corporation (“BNYMC”) with respect to the Fund’s position in the ICRF, pursuant to which (i) BNYMC will support the value of certain defaulted securities issued by Lehman Brothers Holdings, Inc. and held by ICRF, and (ii) if certain conditions are met, BNYMC will purchase the defaulted securities from the Fund in September 2011. The Fund is fair valuing its position in the ICRF daily based on the agreement. The Fund’s position in the separate sleeve of the ICRF Fund is included in the Schedule of Portfolio Investments and the unrealized loss on such investment is included in Net Unrealized Appreciation on the Statement of Assets and Liabilities and the Statement of Operations.
5. | Commitments and Contingencies |
In the normal course of business, the Fund may enter into contracts and agreements that contain a variety of representations and warranties, which provide general indemnifications. The maximum exposure to the Fund under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote.
6. | New Accounting Standards |
In May 2011, the FASB issued ASU No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU 2011-04 requires common fair value measurement and disclosure requirements between U.S. GAAP and International Financial Reporting Standards. The new and revised disclosures are effective for
interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU No. 2011-04 and its impact on the financial statements.
7. | Subsequent Events |
At a meeting held on June 9-10, 2011, the Board approved a new contractual expense limitation with respect to the Managers and Institutional Classes. Effective July 1, 2011, Managers has contractually agreed, until at least May 1, 2013, to waive management fees and/or reimburse Fund expenses, in order to limit total annual Fund operating expenses after fee waiver and expense reimbursements (exclusive of taxes, interest (including interest incurred in connection with bank and custody overdrafts), shareholder servicing fees, brokerage commissions and other transaction costs, acquired fund fees and expenses, and extraordinary expenses) of both the Managers and Institutional Classes to 1.36% and 1.11%, respectively, of the Fund’s average daily net assets. Immediately prior to July 1, 2011, the Fund had contractual expense limitations of 1.39% and 1.14%, respectively.
The Fund has determined that no material events or transactions occurred through the issuance date of the Fund’s financial statements which require additional disclosure in or adjustment of the Fund’s financial statements.
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Annual Renewal of Investment Advisory Agreement (unaudited) |
On June 9-10, 2011, the Board of Trustees, including a majority of the Trustees who are not “interested persons” of the Trust (the “Independent Trustees”), approved the Investment Management Agreement with the Investment Manager for the Managers Special Equity Fund (the “Fund”) and the Subadvisory Agreement for each Subadvisor of the Fund. The Independent Trustees were separately represented by independent counsel in connection with their consideration of the approval of these agreements. In considering the Investment Management and Subadvisory Agreements, the Trustees reviewed a variety of materials relating to the Fund, the Investment Manager and each Subadvisor, including comparative performance, fee and expense information for an appropriate peer group of similar mutual funds (the “Peer Group”), performance information for the relevant benchmark index (the “Fund Benchmark”) and, with respect to each Subadvisor, comparative performance information for an appropriate peer group of managed accounts, and, as to all other matters, other information provided to them on a periodic basis throughout the year, as well as information provided in connection with the meetings of June 9-10, 2011, regarding the nature, extent and quality of services provided by the Investment Manager and the Subadvisors under their respective agreements. Prior to voting, the Independent Trustees: (a) reviewed the foregoing information with their independent legal counsel and with management; (b) received materials from their independent legal counsel discussing the legal standards applicable to their consideration of the Investment Management Agreement and the Subadvisory Agreements; and (c) met with their independent legal counsel in private sessions at which no representatives of management were present.
Nature, extent and quality of services.
In considering the nature, extent and quality of the services provided by the Investment Manager, the Trustees reviewed information relating to the Investment Manager’s operations and personnel. Among other things, the Investment Manager provided financial information, biographical information on its supervisory and professional staff and descriptions of its organizational and management structure. The Trustees also took into account information provided periodically throughout the previous year by the Investment Manager relating to the performance of its duties with respect to the Fund and the Trustees’ familiarity with the Investment Manager’s management through Board meetings, discussions and reports. In the course of their deliberations regarding the Investment Management Agreement, the Trustees evaluated, among other things: (a) the extent and quality of the Investment Manager’s oversight of the operation and management of the Fund; (b) the quality of the search, selection and monitoring services performed by the Investment Manager in overseeing the portfolio management responsibilities of the Subadvisors; (c) the Investment Manager’s ability to supervise the Fund’s other service providers; and (d) the Investment Manager’s compliance programs. The Trustees also took into account the financial condition of the Investment Manager with respect to its ability to provide the services required under the Investment Management Agreement and to maintain a contractual expense limitation for the Fund. The Trustees also considered the Investment Manager’s risk management processes.
The Trustees also reviewed information relating to each Subadvisor’s operations and personnel and the investment philosophy, strategies
and techniques (for each Subadvisor, its “Investment Strategy”) used in managing the portion of the Fund for which the Subadvisor has portfolio management responsibility. Among other things, the Trustees reviewed biographical information on portfolio management and other professional staff, information regarding each Subadvisor’s organizational and management structure and each Subadvisor’s brokerage policies and practices. The Trustees considered specific information provided regarding the experience of the individual or individuals at each Subadvisor with portfolio management responsibility for the portion of the Fund managed by the Subadvisor, including the information set forth in the Fund’s prospectus and statement of additional information. The Trustees also noted information provided by the Investment Manager regarding the manner in which each Subadvisor’s Investment Strategy complements those utilized by the Fund’s other Subadvisors. In the course of their deliberations, the Trustees evaluated, among other things: (a) the services rendered by each Subadvisor in the past; (b) the qualifications and experience of the Subadvisor’s personnel; and (c) the Subadvisor’s compliance programs. The Trustees also took into account the financial condition of each Subadvisor with respect to its ability to provide the services required under its Subadvisory Agreement. The Trustees also considered each Subadvisor’s risk management processes.
Performance.
Among other information relating to the Fund’s performance, the Trustees noted that the Fund’s performance for Managers Class shares for the 1-year, 3-year, 5-year and 10-year periods ended March 31, 2011 was above, above, below and below, respectively, the median performance of the Peer Group and above, below, below and below, respectively, the performance of the Fund Benchmark, the Russell 2000 Growth Index. The Trustees noted the replacement of certain Subadvisors in 2009. The Trustees took into account management’s discussion of the Fund’s more recent performance, including the fact that the Fund ranked in the top decile of the Peer Group over the 1-year period. The Trustees also noted that the Fund’s longer-term performance is improving as a result of the Fund’s recent strong performance. The Trustees concluded that the Fund’s performance is being addressed.
As noted above, the Board considered the Fund’s net performance during relevant time periods as compared to the Fund’s Peer Group and Fund Benchmark and considered each Subadvisor’s performance as compared to an appropriate peer group of managed accounts and also considered the gross performance of the portion of the Fund managed by each Subadvisor as compared to the Subadvisor’s relevant performance composite that utilizes the same investment strategy and approach and noted that the Board reviews on a quarterly basis detailed information about the Fund’s performance results, portfolio composition and Investment Strategies, including with respect to the portion of the Fund managed by each Subadvisor. The Board noted the Investment Manager’s expertise and resources in monitoring the performance, investment style and risk-adjusted performance of each Subadvisor. The Board also noted each Subadvisor’s performance record with respect to the Fund. The Board was mindful of the Investment Manager’s attention to monitoring each Subadvisor’s performance with respect to the Fund and its discussions with management regarding the factors that contributed to the performance of the Fund.
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Annual Renewal of Investment Advisory Agreement (continued) |
Advisory and Subadvisory Fees and Profitability.
In considering the reasonableness of the advisory fee charged by the Investment Manager for managing the Fund, the Trustees noted that the Investment Manager, and not the Fund, is responsible for paying the fees charged by the Fund’s Subadvisors and, therefore, that the fees paid to the Investment Manager cover the cost of providing portfolio management services as well as the cost of providing search, selection and monitoring services in operating a “manager-of-managers” complex of mutual funds. The Trustees concluded that, in light of the additional high quality supervisory services provided by the Investment Manager and the fact that the subadvisory fees are paid out of the advisory fee, the advisory fee payable by the Fund to the Investment Manager can reasonably be expected to exceed the median advisory fee for the Peer Group, which consists of many funds that do not operate with a manager-of-managers structure. In this regard, the Trustees also noted that the Investment Manager has undertaken to maintain an expense limitation for the Fund.
In considering the reasonableness of the advisory fee payable to the Investment Manager, the Trustees also reviewed information provided by the Investment Manager setting forth all revenues and other benefits, both direct and indirect (including any so-called “fallout benefits” such as reputational value derived from the Investment Manager serving as Investment Manager to the Fund), received by the Investment Manager and its affiliates attributable to managing the Fund and all the mutual funds in the Managers Family of Funds, the cost of providing such services and the resulting profitability to the Investment Manager and its affiliates from these relationships. The Trustees noted that the subadvisory fees are paid by the Investment Manager out of its advisory fee. The Trustees also noted the current and potential asset levels of the Fund and the willingness of the Investment Manager to waive fees and pay expenses for the Fund from time to time as a means of limiting the total expenses of the Fund. The Trustees also considered management’s discussion of the current asset levels of the Fund, including the effect on assets attributable to the economic and market conditions since 2008, and considered the impact on profitability of the current asset levels and any future growth of assets of the Fund. The Board took into account management’s discussion of the advisory fee structure. In this regard, the Trustees noted that the Fund currently has four Subadvisors, each managing a portion of the Fund’s portfolio. Based on the foregoing, the Trustees concluded that the profitability to the Investment Manager is reasonable and that the Investment Manager is not realizing material benefits from economies of scale that would warrant adjustments to the advisory fee at this time. With respect to economies of scale, the Trustees also noted that as the Fund’s assets increase over time, the Fund may realize other economies of scale to the extent that the increase in assets is proportionally greater than the increase in certain other expenses.
In considering the reasonableness of the fee payable by the Investment Manager to each Subadvisor, the Trustees relied on the ability of the Investment Manager to negotiate the terms of each Subadvisory Agreement at arm’s length as part of the manager-of-managers structure, noting that the Investment Manager is
not affiliated with these Subadvisors. In addition, the Trustees considered other potential benefits of the subadvisory relationship to a Subadvisor, including, among others, the indirect benefits that the Subadvisor may receive from the Subadvisor’s relationship with the Fund, including any so-called “fallout benefits” to the Subadvisor, such as reputational value derived from the Subadvisor serving as Subadvisor to the Fund. In addition, the Trustees noted that the subadvisory fees are paid by the Investment Manager out of its advisory fee. Accordingly, the cost of services to be provided by each Subadvisor and the profitability to each Subadvisor of its relationship with the Fund were not material factors in the Trustees’ deliberations. For similar reasons, and based on the current size of the portion of the Fund managed by each Subadvisor, the Trustees concluded that the effect of any economies of scale being realized by the Subadvisors was not a material factor in the Trustees’ deliberations at this time.
The Trustees noted that the Fund’s advisory fees (which include both the advisory and administration fee) and total expenses (net of applicable expense waivers/reimbursements) as of March 31, 2011 were higher and lower, respectively, than the average for the Fund’s Peer Group. The Trustees took into account the fact that the Investment Manager has contractually agreed to lower the Fund’s contractual expense limitation from 1.14% to 1.11% of the Fund’s net annual operating expenses (subject to certain excluded expenses) effective July 1, 2011 through at least May 1, 2013. The Trustees took into account management’s discussion of the Fund’s expenses. The Trustees concluded that, in light of the nature, extent and quality of the services provided by the Investment Manager and the Subadvisors, the foregoing expense limitation and the considerations noted above with respect to the Subadvisors and the Investment Manager, the Fund’s advisory fees, including subadvisory fees, are reasonable.
* * * * *
After consideration of the foregoing, the Trustees also reached the following conclusions (in addition to the conclusions discussed above) regarding the Investment Management Agreement and the Subadvisory Agreements with each of the Subadvisors: (a) the Investment Manager and each Subadvisor have demonstrated that they possess the capability and resources to perform the duties required of them under the Investment Management Agreement and the applicable Subadvisory Agreement; (b) each Subadvisor’s Investment Strategy is appropriate for pursuing the Fund’s investment objectives; and (c) the Investment Manager and each Subadvisor maintain appropriate compliance programs.
Based on all of the above-mentioned factors and their related conclusions, with no single factor or conclusion being determinative and with each Trustee not necessarily attributing the same weight to each factor, the Trustees concluded that approval of the Investment Management Agreement and each Subadvisory Agreement would be in the best interests of the Fund and its shareholders. Accordingly, on June 9-10, 2011, the Trustees, including a majority of the Independent Trustees, voted to approve the Investment Management Agreement and the Subadvisory Agreements for the Fund.
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Table of Contents
Investment Manager and Administrator
Managers Investment Group LLC
333W. Wacker Drive
Suite 1200
Chicago, IL 60606
(800) 835-3879
Distributor
Managers Distributors, Inc.
333W. Wacker Drive
Suite 1200
Chicago, IL 60606
(800) 835-3879
Custodian
The Bank of New York Mellon
2 Hanson Place
Brooklyn, NY 11217
Legal Counsel
Ropes & Gray LLP
Prudential Tower, 800 Boylston Street
Boston, MA 02199-3600
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.*
Attn: Managers
P.O. Box 9769
Providence, RI 02940
(800) 548-4539
Trustees
Jack W. Aber
Christine C. Carsman
William E. Chapman, II
Edward J. Kaier
Steven J. Paggioli
Eric Rakowski
Thomas R. Schneeweis
John H. Streur
For Managers Choice Only
Managers
c/o BNY Mellon Investment Servicing (US) Inc.*
P.O. Box 9847
Providence, RI 02940-8047
(800) 358-7668
* | Formerly PNC Global Investment Servicing (U.S.) Inc. |
Table of Contents
MANAGERSAND MANAGERS AMG FUNDS
EQUITY FUNDS | BALANCED FUNDS | |||
CADENCE CAPITAL APPRECIATION CADENCE FOCUSED GROWTH CADENCE MID-CAP CADENCE EMERGING COMPANIES Cadence Capital Management, LLC
CHICAGO EQUITY PARTNERS MID-CAP Chicago Equity Partners, LLC
EMERGING MARKETS EQUITY Rexiter Capital Management Limited Schroder Investment Management North America Inc.
ESSEX SMALL/MICRO CAP GROWTH Essex Investment Management Co., LLC
FQ TAX-MANAGED U.S. EQUITY FQ U.S. EQUITY First Quadrant, L.P.
FRONTIER SMALL CAP GROWTH Frontier Capital Management Company, LLC
GW&K SMALL CAP EQUITY Gannett Welsh & Kotler, LLC
INSTITUTIONAL MICRO-CAP MICRO-CAP Lord, Abbett & Co. LLC WEDGE Capital Management L.L.P. Next Century Growth Investors LLC RBC Global Asset Management (U.S.) Inc. | INTERNATIONAL EQUITY AllianceBernstein L.P. Lazard Asset Management, LLC Martin Currie Inc.
REAL ESTATE SECURITIES Urdang Securities Management, Inc.
RENAISSANCE LARGE CAP GROWTH Renaissance Group LLC
SKYLINE SPECIAL EQUITIES PORTFOLIO Skyline Asset Management, L.P.
SPECIAL EQUITY Ranger Investment Management, L.P. Lord, Abbett & Co. LLC Smith Asset Management Group, L.P. Federated MDTA LLC
SYSTEMATIC VALUE SYSTEMATIC MID CAP VALUE Systematic Financial Management, L.P.
TIMESSQUARE MID CAP GROWTH TIMESSQUARE SMALL CAP GROWTH TSCM GROWTH EQUITY TimesSquare Capital Management, LLC
TRILOGY GLOBAL EQUITY TRILOGY EMERGING MARKETS EQUITY TRILOGY INTERNATIONAL SMALL CAP Trilogy Global Advisors, L.P. | CHICAGO EQUITY PARTNERS BALANCED Chicago Equity Partners, LLC
ALTERNATIVE FUNDS FQ GLOBAL ALTERNATIVES FQ GLOBAL ESSENTIALS First Quadrant, L.P.
INCOME FUNDS BOND (MANAGERS) FIXED INCOME GLOBAL BOND Loomis, Sayles & Co., L.P.
BOND (MANAGERS PIMCO) Pacific Investment Management Co. LLC
CALIFORNIA INTERMEDIATE TAX-FREE Miller Tabak Asset Management LLC
GW&K MUNICIPAL BOND GW&K MUNICIPAL ENHANCED YIELD Gannett Welsh & Kotler, LLC
HIGH YIELD J.P. Morgan Investment Management LLC
INTERMEDIATE DURATION GOVERNMENT SHORT DURATION GOVERNMENT Smith Breeden Associates, Inc. | ||
This report is prepared for the Fund’s shareholders. It is authorized for distribution to prospective investors only when preceded or accompanied by an effective prospectus. To receive a free copy of the prospectus or Statement of Additional Information, which includes additional information about Fund Trustees, please contact us by calling 800.835.3879. Distributed by Managers Distributors, Inc., member FINRA.
A description of the policies and procedures each Fund uses to vote its proxies is available: (i) without charge, upon request, by calling 800.835.3879, or (ii) on the Securities and Exchange Commission’s (SEC) Web site at www.sec.gov. For information regarding each Fund’s proxy voting record for the 12-month period ended June 30, call 800.835.3879 or visit the SEC Web site at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. A Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. To review a complete list of the Fund’s portfolio holdings, or to view the most recent quarterly holdings report, semiannual report, or annual report, please visit www.managersinvest.com.
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www.managersinvest.com
Table of Contents
SEMI-ANNUAL REPOR T
Managers Funds
June 30, 2011
Managers Bond Fund
Table of Contents
Table of Contents
Managers Bond Fund
Semi-Annual Report – June 30, 2011 (unaudited)
Page | ||||
1 | ||||
2 | ||||
3 | ||||
FINANCIAL STATEMENTS: | ||||
14 | ||||
Fund’s balance sheet, net asset value (NAV) per share computation and cumulative undistributed amounts | ||||
15 | ||||
Detail of sources of income, Fund expenses, and realized and unrealized gains (losses) during the period | ||||
16 | ||||
Detail of changes in Fund assets for the past two periods | ||||
17 | ||||
Historical net asset values per share, distributions, total returns, expense ratios, turnover ratios and net assets | ||||
18 | ||||
Accounting and distribution policies, details of agreements and transactions with Fund management and affiliates, and descriptions of certain investment risks | ||||
22 |
Nothing contained herein is to be considered an offer, sale or solicitation of an offer to buy shares of any series of the Managers Family of Funds. Such offering is made only by Prospectus, which includes details as to offering price and other material information.
Table of Contents
As a shareholder of a Fund, you may incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on $1,000 invested at the beginning of the period and held for the entire period as indicated below.
Actual Expenses
The first line of the following table provides information about the actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that 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 line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed annual rate of return of 5% before expenses, which 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 the Fund and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. |
Six Months Ended June 30, 2011 | Expense Ratio for the Period | Beginning Account Value 01/01/2011 | Ending Account Value 06/30/2011 | Expenses Paid During the Period* | ||||||||||||
Managers Bond Fund | ||||||||||||||||
Based on Actual Fund Return | 0.99 | % | $ | 1,000 | $ | 1,050 | $ | 5.03 | ||||||||
Based on Hypothetical 5% Annual Return | 0.99 | % | $ | 1,000 | $ | 1,020 | $ | 4.96 |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181),then divided by 365. |
1 |
Table of Contents
Managers Bond Fund Performance All periods ended June 30, 2011 (unaudited) |
The table below shows the average annual total returns for the periods indicated for the Managers Bond Fund and the Barclays Capital U.S. Government / Credit Bond Index.
Average Annual Total Returns1 | Six Months | One Year | Five Years | Ten Years | Inception Date | |||||||||||||||
Managers Bond Fund 2,3,4,5 | 5.00 | % | 9.64 | % | 7.97 | % | 7.30 | % | 6/1/1984 | |||||||||||
Barclays Capital U.S. Government/Credit Bond Index 6 | 2.61 | % | 3.68 | % | 6.35 | % | 5.74 | % |
The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. For performance information through the most recent month end, please call (800) 835-3879 or visit our Web site at www.managersinvest.com.
In choosing a Fund, investors should carefully consider the amount they plan to invest, their investment objectives, the Fund’s investment objectives, risks, charges and expenses before investing. For this and other information, please call (800) 835-3879 or visit www.managersinvest.com for a free prospectus. Read it carefully before investing or sending money. Distributed by Managers Distributors, Inc., member FINRA.
1 | Total return equals income yield plus share price change and assumes reinvestment of all dividends and capital gain distributions. Returns are net of fees and may reflect offsets of Fund expenses as described in the Prospectus. No adjustment has been made for taxes payable by shareholders on their reinvested dividends and capital gain distributions. Returns for periods greater than one year are annualized. The listed returns on the Fund are net of expenses and based on the published NAV as of June 30, 2011. All returns are in U.S. dollars($). |
2 | From time to time, the Fund’s advisor has waived its fees and/or absorbed Fund expenses, which has resulted in higher returns. |
3 | The Fund is subject to the risks associated with investments in debt securities, such as default risk, fluctuations in debtor’s perceived ability to pay its creditors. Changing interest rates may adversely affect the value of an investment. An increase in interest rates typically causes the value of bonds and other fixed-income securities to fall. |
4 | Investments in international securities are subject to certain risks of overseas investing including currency fluctuations and changes in political and economic conditions, which could result in significant market fluctuations. These risks are magnified in emerging markets. |
5 | High yield bonds (also known as “junk bonds”) are subject to additional risks such as the risk of default. |
6 | The Barclays Capital U.S. Government/Credit Bond Index is an index of investment-grade government and corporate bonds with a maturity rate of more than one year. Unlike the Fund, the Barclays Capital U.S. Government/Credit Bond Index is unmanaged, is not available for investment, and does not incur expenses. |
Not FDIC insured, nor bank guaranteed. May lose value.
2 |
Table of Contents
Managers Bond Fund
June 30, 2011 (unaudited)
Portfolio Breakdown
Category | Managers Bond Fund** | Barclays Capital U.S. Gov’t./ Credit Bond Index | ||||||
Corporate Bonds | 70.2 | % | 30.9 | % | ||||
Foreign Government Obligations | 4.6 | % | 8.1 | % | ||||
U.S. Government and Agency Obligations | 4.3 | % | 61.0 | % | ||||
Asset-Backed Securities | 4.3 | % | 0.0 | % | ||||
Municipal Bonds | 1.5 | % | 0.0 | % | ||||
Mortgage-Backed Securities | 1.2 | % | 0.0 | % | ||||
Preferred Stocks | 1.0 | % | 0.0 | % | ||||
Other Assets and Liabilities | 12.9 | % | 0.0 | % |
** | As a percentage of net assets |
Top Ten Holdings
Security Name | Percentage of Net Assets | |||
Springleaf Finance Corp., Medium Term Notes, Series J, 6.900%, 12/15/17 | 2.6 | % | ||
Kinder Morgan Energy Partners, L.P., 5.950%, 02/15/18* | 2.4 | |||
Southwestern Electric Power Co., 6.450%, 01/15/19* | 2.2 | |||
Equitable Resources, Inc., 6.500%, 04/01/18* | 2.0 | |||
Merrill Lynch & Co., Inc., 6.110%, 01/29/37* | 1.7 | |||
Dun & Bradstreet Corp., The, 6.000%, 04/01/13* | 1.7 | |||
Nisource Finance Corp., 6.400%, 03/15/18* | 1.5 | |||
Panhandle Eastern Pipe Line Company, L.P., 7.000%, 06/15/18* | 1.5 | |||
Ameren Illinois Co., 6.250%, 04/01/18 | 1.4 | |||
Morgan Stanley, 5.500%, 07/24/20 | 1.4 | |||
|
| |||
Top Ten as a Group | 18.4 | % | ||
|
|
* | Top Ten Holding at December 31, 2010 |
Any sectors, industries, or securities discussed should not be perceived as investment recommendations. Mention of a specific security should not be considered a recommendation to buy or solicitation to sell that security. Specific securities mentioned in this report may have been sold from the Fund’s portfolio of investments by the time you receive this report. |
3
Table of Contents
Managers Bond Fund Schedule of Portfolio Investments June 30, 2011 (unaudited) |
Security Description | Principal Amount† | Value | ||||||||
Corporate Bonds - 70.2% | ||||||||||
Financials - 24.6% | ||||||||||
Alta Wind Holdings LLC, 7.000%, 06/30/35 (a) | $ | 8,377,956 | $ | 8,890,100 | ||||||
American General Finance Corp., 5.400%, 12/01/15 | 5,000,000 | 4,575,000 | ||||||||
American International Group, Inc., | ||||||||||
MTN, Series G, 5.850%, 01/16/18 | 1,940,000 | 2,029,969 | ||||||||
MTN, Series MP, 5.450%, 05/18/17 | 485,000 | 506,541 | ||||||||
Bank of America Capital Trust VI, 5.625%, 03/08/35 | 3,085,000 | 2,657,823 | ||||||||
Camden Property Trust, 5.700%, 05/15/17 | 5,205,000 | 5,733,240 | ||||||||
Cantor Fitzgerald L.P., | ||||||||||
6.375%, 06/26/15 (a) | 8,710,000 | 9,168,677 | ||||||||
7.875%, 10/15/19 (a) 5 | 10,805,000 | 11,801,945 | ||||||||
Citigroup, Inc., | ||||||||||
5.500%, 10/15/14 | 21,385,000 | 23,255,824 | ||||||||
6.125%, 08/25/36 | 10,760,000 | 10,340,930 | ||||||||
Crown Castle Towers LLC, 6.113%, 01/15/20 (a) | 13,725,000 | 14,975,608 | ||||||||
Duke Realty, L.P., | ||||||||||
5.950%, 02/15/17 | 2,210,000 | 2,424,122 | ||||||||
6.500%, 01/15/18 | 5,000,000 | 5,560,540 | ||||||||
Equity One, Inc., 6.000%, 09/15/17 | 5,915,000 | 6,290,579 | ||||||||
ERP Operating, L.P., | ||||||||||
5.125%, 03/15/16 | 600,000 | 654,111 | ||||||||
5.750%, 06/15/17 | 1,450,000 | 1,607,522 | ||||||||
Export-Import Bank of Korea, The, 8.300%, 03/15/14 (a) | IDR | 1,400,000,000 | 166,717 | |||||||
First Industrial L.P., 5.950%, 05/15/17 | 15,000,000 | 14,970,735 | ||||||||
GE Capital Australia Funding Pty., Ltd., Series EMTN, 8.000%, 02/13/12 | AUD | 3,965,000 | 4,310,919 | |||||||
General Electric Capital Corp., | ||||||||||
2.960%, 05/18/12 | SGD | 4,400,000 | 3,640,773 | |||||||
3.485%, 03/08/12 | SGD | 16,500,000 | 13,652,779 | |||||||
6.500%, 09/28/15 | NZD | 15,265,000 | 13,239,093 | |||||||
6.750%, 09/26/16 | NZD | 6,390,000 | 5,539,008 | |||||||
Series GMTN, 7.625%, 12/10/14 | NZD | 9,365,000 | 8,382,847 | |||||||
GMAC, Inc., 8.000%, 11/01/31 | 1,427,000 | 2 | 1,544,728 | |||||||
Hanover Insurance Group, Inc., The, 7.500%, 03/01/20 | 6,475,000 | 6,982,867 | ||||||||
Highwoods Realty, L.P., | ||||||||||
5.850%, 03/15/17 | 3,680,000 | 4,015,642 | ||||||||
7.500%, 04/15/18 | 2,405,000 | 2,790,408 | ||||||||
ICICI Bank, Ltd., 6.375%, 04/30/22 (a) 7 | 900,000 | 877,500 | ||||||||
Institut de Credito Oficial, Series MTN, 5.500%, 10/11/12 | AUD | 3,735,000 | 3,929,614 | |||||||
iStar Financial, Inc., | ||||||||||
5.700%, 03/01/14 | 15,000 | 13,762 | ||||||||
5.850%, 03/15/17 | 325,000 | 278,688 | ||||||||
5.875%, 03/15/16 | 1,340,000 | 2 | 1,155,750 | |||||||
6.050%, 04/15/15 | 620,000 | 561,100 | ||||||||
JPMorgan Chase & Co., | ||||||||||
6.744%, 04/12/12(a) 4 | IDR | 40,733,437,680 | 4,507,824 | |||||||
7.700%, 06/01/16 (a) | IDR | 19,000,000,000 | 2,204,536 |
The accompanying notes are an integral part of these financial statements. |
4 |
Table of Contents
Managers Bond Fund Schedule of Portfolio Investments (continued) |
Security Description | Principal Amount† | Value | ||||||||
Financials - 24.6% (continued) | ||||||||||
Lloyds TSB Bank PLC, 6.500%, 09/14/20 (a) | $ | 17,940,000 | 2 | $ | 16,922,515 | |||||
Marsh & McLennan Companies, Inc., | ||||||||||
5.375%, 07/15/14 | 4,390,000 | 4,762,162 | ||||||||
5.875%, 08/01/33 | 10,360,000 | 10,278,508 | ||||||||
MBIA Insurance Corp., 14.000%, 01/15/33 (a) 7 | 525,000 | 312,375 | ||||||||
Merrill Lynch & Co., Inc., | ||||||||||
4.625%, 09/14/18 | EUR | 1,750,000 | 2,351,783 | |||||||
6.110%, 01/29/37 | 38,050,000 | 35,675,604 | ||||||||
10.710%, 03/08/17 | BRL | 2,500,000 | 1,605,901 | |||||||
MTN, Series C, 6.050%, 06/01/34 | 22,100,000 | 21,487,985 | ||||||||
Morgan Stanley, | ||||||||||
4.750%, 04/01/14 | 10,715,000 | 11,169,166 | ||||||||
5.500%, 07/24/20 | 28,600,000 | 28,948,663 | ||||||||
6.625%, 04/01/18 | 3,095,000 | 3,409,430 | ||||||||
GMTN, Series F, 5.625%, 09/23/19 | 6,700,000 | 2 | 6,875,198 | |||||||
Mutual of Omaha Insurance Co., 6.800%, 06/15/36 (a) | 13,925,000 | 14,161,502 | ||||||||
National City Bank of Indiana, 4.250%, 07/01/18 | 6,310,000 | 6,379,158 | ||||||||
National City Corp., 6.875%, 05/15/19 | 1,905,000 | 2,195,312 | ||||||||
National Life Insurance Co., 10.500%, 09/15/39 (a) | 5,000,000 | 6,445,935 | ||||||||
Nationwide Mutual Insurance Co., 6.600%, 04/15/34 (a) | 3,325,000 | 3,113,680 | ||||||||
Old Republic International Corp., 3.750%, 03/15/18 9 | 9,220,000 | 2 | 9,127,800 | |||||||
Penn Mutual Life Insurance Co., The, 7.625%, 06/15/40 (a) | 8,885,000 | 9,783,789 | ||||||||
PF Export Rec Master Trust, 6.436%, 06/01/15 (a) | 322,782 | 343,763 | ||||||||
ProLogis, L.P., | ||||||||||
5.625%, 11/15/15 | 345,000 | 364,784 | ||||||||
5.750%, 04/01/16 | 280,000 | 302,544 | ||||||||
Realty Income Corp., | ||||||||||
5.750%, 01/15/21 | 1,435,000 | 1,537,644 | ||||||||
6.750%, 08/15/19 | 6,240,000 | 7,134,055 | ||||||||
Simon Property Group, L.P., 5.750%, 12/01/15 | 445,000 | 2 | 499,521 | |||||||
SLM Corp., | ||||||||||
5.000%, 04/15/15 | 50,000 | 50,250 | ||||||||
5.375%, 05/15/14 | 300,000 | 312,339 | ||||||||
8.450%, 06/15/18 | 18,665,000 | 20,486,947 | ||||||||
Springleaf Finance Corp., MTN, Series J, 6.900%, 12/15/17 | 57,315,000 | 52,586,512 | ||||||||
WEA Finance LLC / WT Finance Australia, 6.750%, 09/02/19 (a) | 8,325,000 | 9,440,492 | ||||||||
White Mountains Insurance Group, Ltd., 6.375%, 03/20/17 (a) | 4,555,000 | 4,723,120 | ||||||||
Willis North America, Inc., | ||||||||||
6.200%, 03/28/17 | 5,685,000 | 6,198,577 | ||||||||
7.000%, 09/29/19 | 2,860,000 | 3,169,017 | ||||||||
Total Financials | 505,393,852 | |||||||||
Industrials - 35.1% | ||||||||||
Agilent Technologies, Inc., 6.500%, 11/01/17 | 6,945,000 | 7,998,890 | ||||||||
Albertson’s, Inc., | ||||||||||
6.625%, 06/01/28 | 1,015,000 | 768,862 | ||||||||
7.450%, 08/01/29 | 3,195,000 | 2,643,862 | ||||||||
7.750%, 06/15/26 | 915,000 | 805,200 |
The accompanying notes are an integral part of these financial statements. |
5 |
Table of Contents
Managers Bond Fund Schedule of Portfolio Investments (continued) |
Security Description | Principal Amount† | Value | ||||||
Industrials - 35.1% (continued) | ||||||||
American President, Ltd., 8.000%, 01/15/245 | $ | 250,000 | $ | 165,000 | ||||
Anadarko Petroleum Corp., 6.450%, 09/15/36 | 6,020,000 | 2 | 6,281,545 | |||||
AT&T Corp., 6.500%, 03/15/29 | 6,415,000 | 6,819,594 | ||||||
Bell Atlantic Pennsylvania, Inc., 6.000%, 12/01/28 | 1,335,000 | 1,311,033 | ||||||
BellSouth Corp., 6.000%, 11/15/34 | 2,370,000 | 2,393,930 | ||||||
Canadian Pacific Railway Co., 5.750%, 03/15/33 | 195,000 | 195,727 | ||||||
CenturyLink, Inc., 6.450%, 06/15/21 | 8,905,000 | 8,803,207 | ||||||
CenturyTel, Series P, 7.600%, 09/15/39 | 9,335,000 | 8,979,150 | ||||||
Choice Hotels International, Inc., 5.700%, 08/28/20 | 11,900,000 | 2 | 12,146,294 | |||||
CIGNA Corp., 6.150%, 11/15/36 | 6,830,000 | 7,117,905 | ||||||
Comcast Corp., 5.650%, 06/15/35 | 3,820,000 | 3,741,828 | ||||||
Continental Airlines, Inc., | ||||||||
5.983%, 04/19/22 | 17,174,152 | 17,667,050 | ||||||
6.795%, 08/02/20 | 28,000 | 27,683 | ||||||
Series 00A1, 8.048%, 11/01/20 | 85,125 | 91,084 | ||||||
Series B, 6.903%, 04/19/22 | 5,444,205 | 5,457,815 | ||||||
Corn Products International, Inc., 6.625%, 04/15/37 | 4,055,000 | 4,385,430 | ||||||
Corning, Inc., | ||||||||
6.850%, 03/01/29 | 9,142,000 | 10,097,376 | ||||||
7.250%, 08/15/36 | 1,185,000 | 1,378,808 | ||||||
Cummins Engine Co., Inc., | ||||||||
5.650%, 03/01/98 | 11,235,000 | 9,249,820 | ||||||
6.750%, 02/15/27 | 2,853,000 | 2 | 3,077,999 | |||||
7.125%, 03/01/28 | 50,000 | 56,058 | ||||||
Cytec Industries, Inc., 6.000%, 10/01/15 | 875,000 | 968,838 | ||||||
Darden Restaurants, Inc., 6.000%, 08/15/35 | 2,635,000 | 2,651,896 | ||||||
Delta Air Lines, Inc., | ||||||||
8.021%, 08/10/22 | 12,215,621 | 12,413,514 | ||||||
Pass Through Certificate, Series 2010-1A, 6.200%, 07/02/18 | 5,114,412 | 2 | 5,328,808 | |||||
Dillards, Inc., 7.000%, 12/01/28 | 225,000 | 207,000 | ||||||
DP World, Ltd., 6.850%, 07/02/37 (a) | 28,350,000 | 27,074,250 | ||||||
Duke Energy Field Services LLC, 6.450%, 11/03/36 (a) | 2,615,000 | 2,742,772 | ||||||
Dun & Bradstreet Corp., The, 6.000%, 04/01/13 | 32,120,000 | 34,524,214 | ||||||
El Paso Corp., 6.950%, 06/01/28 | 1,030,000 | 1,113,620 | ||||||
Energy Transfer Partners, L.P., | ||||||||
6.125%, 02/15/17 | 700,000 | 779,721 | ||||||
6.625%, 10/15/36 | 1,805,000 | 1,862,446 | ||||||
Enterprise Products Operating L.P., 6.300%, 09/15/17 | 8,440,000 | 9,680,537 | ||||||
Equifax, Inc., 7.000%, 07/01/37 | 4,421,000 | 4,743,335 | ||||||
Equitable Resources, Inc., 6.500%, 04/01/18 | 35,420,000 | 40,136,031 | ||||||
ERAC USA Finance Co., | ||||||||
6.375%, 10/15/17 (a) | 4,910,000 | 5,646,716 | ||||||
6.700%, 06/01/34 (a) | 1,250,000 | 1,338,929 | ||||||
7.000%, 10/15/37 (a) | 19,033,000 | 20,942,524 | ||||||
Foot Locker, Inc., 8.500%, 01/15/22 | 570,000 | 582,825 | ||||||
Ford Motor Co., 6.375%, 02/01/29 | 1,990,000 | 2 | 1,900,191 |
The accompanying notes are an integral part of these financial statements. |
6 |
Table of Contents
Managers Bond Fund Schedule of Portfolio Investments (continued) |
Security Description | Principal Amount† | Value | ||||||
Industrials - 35.1% (continued) | ||||||||
GTE Corp., 6.940%, 04/15/28 | $ | 130,000 | $ | 149,253 | ||||
Intel Corp., | ||||||||
2.950%, 12/15/359 | 6,230,000 | 6,440,262 | ||||||
3.250%, 08/01/399 | 15,000,000 | 2 | 18,300,000 | |||||
Intuit, Inc., 5.750%, 03/15/17 | 3,560,000 | 3,995,879 | ||||||
Kinder Morgan Energy Partners, L.P., | ||||||||
5.800%, 03/15/35 | 3,360,000 | 3,250,948 | ||||||
5.950%, 02/15/18 | 44,630,000 | 49,725,631 | ||||||
Lowe’s Companies, Inc., 6.875%, 02/15/28 | 500,000 | 588,678 | ||||||
Lucent Technologies, Inc., | ||||||||
6.450%, 03/15/29 | 4,335,000 | 3,901,500 | ||||||
6.500%, 01/15/28 | 305,000 | 273,738 | ||||||
Marks & Spencer Group PLC, 7.125%, 12/01/37 (a) | 4,725,000 | 4,672,467 | ||||||
Masco Corp., | ||||||||
5.850%, 03/15/17 | 8,150,000 | 8,109,111 | ||||||
6.500%, 08/15/32 | 955,000 | 856,071 | ||||||
7.125%, 03/15/20 | 9,065,000 | 9,279,260 | ||||||
7.750%, 08/01/29 | 820,000 | 814,500 | ||||||
Mead Corp., 7.550%, 03/01/47 | 970,000 | 967,947 | ||||||
Methanex Corp., 6.000%, 08/15/15 | 3,825,000 | 3,891,834 | ||||||
Missouri Pacific Railroad Co., 5.000%, 01/01/455 | 825,000 | 626,464 | ||||||
New England Telephone & Telegraph Co., 7.875%, 11/15/29 | 2,390,000 | 2,747,735 | ||||||
NGPL Pipeco LLC, 7.119%, 12/15/17 (a) | 21,980,000 | 2 | 24,623,843 | |||||
Northwest Airlines, Inc., 8.028%, 11/01/17 | 6,084,086 | 6,084,086 | ||||||
ONEOK Partners, L.P., 6.650%, 10/01/36 | 2,650,000 | 2,876,193 | ||||||
ONEOK, Inc., 6.000%, 06/15/35 | 9,210,000 | 2 | 9,129,891 | |||||
Owens & Minor, Inc., 6.350%, 04/15/165 | 1,355,000 | 1,422,461 | ||||||
Owens Corning, Inc., | ||||||||
6.500%, 12/01/16 | 4,560,000 | 4,961,654 | ||||||
7.000%, 12/01/36 | 9,175,000 | 9,295,523 | ||||||
Panhandle Eastern Pipe Line Co., L.P., | ||||||||
6.200%, 11/01/17 | 5,520,000 | 6,301,974 | ||||||
7.000%, 06/15/18 | 26,505,000 | 31,180,483 | ||||||
Plains All American Pipeline L.P., | ||||||||
6.125%, 01/15/17 | 2,770,000 | 3,099,666 | ||||||
6.500%, 05/01/18 | 8,975,000 | 10,165,794 | ||||||
6.650%, 01/15/37 | 5,960,000 | 6,294,284 | ||||||
Pulte Homes, Inc., | ||||||||
6.000%, 02/15/35 | 10,320,000 | 8,049,600 | ||||||
6.375%, 05/15/33 | 4,670,000 | 3,852,750 | ||||||
Qwest Capital Funding, Inc., | ||||||||
6.500%, 11/15/18 | 620,000 | 629,300 | ||||||
6.875%, 07/15/28 | 1,190,000 | 1,136,450 | ||||||
7.625%, 08/03/21 | 2,135,000 | 2,284,625 |
The accompanying notes are an integral part of these financial statements. |
7 |
Table of Contents
Managers Bond Fund Schedule of Portfolio Investments (continued) |
Security Description | Principal Amount† | Value | ||||||
Industrials - 35.1% (continued) | ||||||||
Qwest Corp., | ||||||||
6.875%, 09/15/33 | $ | 7,209,000 | $ | 6,947,674 | ||||
7.200%, 11/10/26 | 435,000 | 426,300 | ||||||
7.250%, 09/15/25 | 1,185,000 | 1,226,475 | ||||||
7.250%, 10/15/35 | 2,165,000 | 2,143,350 | ||||||
7.500%, 06/15/23 | 739,000 | 739,924 | ||||||
Reynolds American, Inc., | ||||||||
6.750%, 06/15/17 | 8,170,000 | 9,432,894 | ||||||
7.250%, 06/15/37 | 2,000,000 | 2,155,336 | ||||||
Rowan Cos., Inc., 7.875%, 08/01/19 | 4,710,000 | 5,597,119 | ||||||
Samsung Electronics Co., Ltd., 7.700%, 10/01/27 (a) | 3,740,000 | 4,472,064 | ||||||
Telecom Italia Capital S.p.A., | ||||||||
6.000%, 09/30/34 | 3,210,000 | 2,724,221 | ||||||
6.375%, 11/15/33 | 3,170,000 | 2,826,825 | ||||||
Telekom Malaysia Berhad, 7.875%, 08/01/25 (a) | 250,000 | 321,744 | ||||||
Texas Eastern Transmission, L.P., 6.000%, 09/15/17 (a) | 3,000,000 | 3,460,881 | ||||||
Toro Co., The, 6.625%, 05/01/375 | 6,810,000 | 6,783,278 | ||||||
Transocean, Inc., 7.375%, 04/15/18 | 500,000 | 582,209 | ||||||
U.S. Steel Corp., | ||||||||
6.650%, 06/01/37 | 3,595,000 | 3,154,612 | ||||||
7.000%, 02/01/18 | 7,310,000 | 7,383,100 | ||||||
United Airlines, Inc., 6.636%, 07/02/22 | 15,810,047 | 15,889,097 | ||||||
UnitedHealth Group, Inc., | ||||||||
5.800%, 03/15/36 | 13,506,000 | 13,630,579 | ||||||
6.500%, 06/15/37 | 310,000 | 338,954 | ||||||
6.625%, 11/15/37 | 1,540,000 | 1,708,359 | ||||||
US Airways Group, Inc., Series 2011 A, 7.125%, 04/22/25 | 3,843,000 | 3,843,000 | ||||||
USG Corp., 6.300%, 11/15/16 | 1,410,000 | 1,240,800 | ||||||
V.F. Corp., 6.450%, 11/01/37 | 9,334,000 | 2 | 10,489,755 | |||||
Vale Overseas Ltd., 6.875%, 11/01/36 | 3,665,000 | 3,979,406 | ||||||
Verizon Maryland, Inc., 5.125%, 06/15/33 | 1,055,000 | 983,415 | ||||||
Verizon New York, Inc., Series B, 7.375%, 04/01/32 | 1,155,000 | 1,328,452 | ||||||
Weatherford International, Inc., 6.500%, 08/01/36 | 1,110,000 | 1,144,985 | ||||||
Wellpoint, Inc., 6.375%, 06/15/37 | 11,710,000 | 2 | 12,758,361 | |||||
Western Union Co., The, | ||||||||
6.200%, 11/17/36 | 7,495,000 | 7,620,586 | ||||||
6.200%, 06/21/40 | 130,000 | 130,536 | ||||||
Weyerhaeuser Co., | ||||||||
6.875%, 12/15/33 | 12,890,000 | 12,971,594 | ||||||
7.375%, 10/01/19 | 3,915,000 | 4,434,842 | ||||||
7.375%, 03/15/32 | 1,930,000 | 2,008,418 | ||||||
White Pine Hydro LLC, | ||||||||
6.310%, 07/10/17 (a)5 | 1,700,000 | 1,804,431 | ||||||
6.960%, 07/10/37 (a)5 | 1,645,000 | 1,569,215 |
The accompanying notes are an integral part of these financial statements. |
8 |
Table of Contents
Managers Bond Fund Schedule of Portfolio Investments (continued) |
Security Description | Principal Amount† | Value | ||||||||
Industrials - 35.1% (continued) | ||||||||||
Wyndham Worldwide Corp., | ||||||||||
5.750%, 02/01/18 | $ | 950,000 | $ | 980,961 | ||||||
6.000%, 12/01/16 | 6,430,000 | 2 | 6,828,525 | |||||||
7.375%, 03/01/20 | 7,220,000 | 8,006,099 | ||||||||
Total Industrials | 720,347,548 | |||||||||
Utilities - 10.5% | ||||||||||
Abu Dhabi National Energy Co., 7.250%, 08/01/18 (a) | 21,130,000 | 23,797,662 | ||||||||
Ameren Energy Generating Co., 7.000%, 04/15/18 | 22,700,000 | 2 | 23,238,648 | |||||||
Ameren Illinois Co., 6.250%, 04/01/18 | 26,000,000 | 29,003,442 | ||||||||
Baltimore Gas & Electric Co., 5.200%, 06/15/33 | 1,470,000 | 1,401,729 | ||||||||
Bruce Mansfield Unit 1 2, 6.850%, 06/01/34 | 10,477,605 | 11,232,695 | ||||||||
Cleveland Electric Illuminating Co., The, 5.950%, 12/15/36 | 15,155,000 | 14,922,007 | ||||||||
Empresa Nacional de Electricidad, 7.875%, 02/01/27 | 2,900,000 | 2 | 3,280,819 | |||||||
ITC Holdings Corp., | ||||||||||
5.875%, 09/30/16 (a) | 2,410,000 | 2,741,014 | ||||||||
6.375%, 09/30/36 (a) | 3,605,000 | 3,843,182 | ||||||||
Mackinaw Power LLC, 6.296%, 10/31/23 (a) | 8,657,445 | 9,227,365 | ||||||||
Nisource Finance Corp., | ||||||||||
6.400%, 03/15/18 | 27,910,000 | 31,617,536 | ||||||||
6.800%, 01/15/19 | 11,625,000 | 13,491,789 | ||||||||
Southwestern Electric Power Co., 6.450%, 01/15/19 | 39,195,000 | 2 | 44,407,270 | |||||||
Tenaga Nasional Berhad, 7.500%, 11/01/25 (a) | 2,000,000 | 2,469,924 | ||||||||
Total Utilities | 214,675,082 | |||||||||
Total Corporate Bonds (cost $1,317,395,532) | 1,440,416,482 | |||||||||
Foreign Government Obligations - 4.6% | ||||||||||
Alberta Notes, Province of, 5.930%, 09/16/16 | CAD | 113,088 | 128,479 | |||||||
Brazil Bonds, Republic of, | ||||||||||
10.250%, 01/10/28 | BRL | 5,750,000 | 4,015,955 | |||||||
12.500%, 01/05/22 | BRL | 5,160,000 | 2 | 4,132,893 | ||||||
Canadian Government Bonds, | ||||||||||
1.000%, 09/01/11 | CAD | 510,000 | 528,820 | |||||||
1.250%, 12/01/11 | CAD | 400,000 | 415,080 | |||||||
3.500%, 06/01/13 | CAD | 5,964,000 | 6,406,824 | |||||||
European Bank for Reconstruction & Development Notes, 9.250%, 09/10/12 | BRL | 2,000,000 | 1,287,669 | |||||||
European Investment Bank, | ||||||||||
Bonds, 6.802%, 03/10/214 | AUD | 5,000,000 | 2,803,901 | |||||||
Notes, 6.909%, 04/24/13 (a)4 | IDR | 50,074,770,000 | 5,161,459 | |||||||
Notes, 7.000%, 01/18/12 | NZD | 5,508,000 | 4,656,195 | |||||||
Notes, 11.250%, 02/14/13 | BRL | 13,490,000 | 9,019,841 | |||||||
Inter-American Development Bank, | ||||||||||
Bonds, 6.000%, 12/15/17 | NZD | 4,215,000 | 3,665,377 | |||||||
Notes, 6.641%, 05/20/134 | IDR | 45,580,000,000 | 4,698,054 | |||||||
Notes, Series EMTN, 9.063%, 09/23/134 | IDR | 33,430,000,000 | 3,343,975 | |||||||
International Bank for Reconstruction & Development Notes, Series GDIF, 1.430%, 03/05/14 | SGD | 5,800,000 | 4,785,909 | |||||||
Manitoba Bonds, Province of, 6.360%, 09/01/15 | NZD | 5,450,000 | 4,789,155 |
The accompanying notes are an integral part of these financial statements. |
9 |
Table of Contents
Managers Bond Fund Schedule of Portfolio Investments (continued) |
Security Description | Principal Amount† | Value | ||||||||
Foreign Government Obligations - 4.6% (continued) | ||||||||||
Mexican Government Bonds, | ||||||||||
8.000%, 12/07/23 | MXN | 141,360,000 | $ | 12,795,587 | ||||||
9.000%, 12/20/12 | MXN | 26,900,000 | 2,425,577 | |||||||
Series M 10, 7.250%, 12/15/16 | MXN | 31,000,000 | 2,760,802 | |||||||
New Zealand Government Bonds, Series 413, 6.500%, 04/15/13 | NZD | 11,870,000 | 10,392,003 | |||||||
Queensland Treasury Corp. Bonds, 7.125%, 09/18/17 (a) | NZD | 7,500,000 | 6,803,848 | |||||||
Total Foreign Government Obligations (cost $79,786,344) | 95,017,403 | |||||||||
U.S. Government and Agency Obligations - 4.3% | ||||||||||
U.S. Government Obligations - 0.7% | ||||||||||
USTN, 1.000%, 08/31/11 | $ | 13,530,000 | 13,551,134 | |||||||
Federal Home Loan Bank Corporation - 0.8% | ||||||||||
FHLB, 1.875%, 06/21/13 | 16,600,000 | 17,045,760 | ||||||||
Federal Home Loan Mortgage Corporation - 2.1% | ||||||||||
FHLMC, 1.625%, 04/15/13 | 16,595,000 | 2 | 16,937,637 | |||||||
FHLMC, 2.125%, 09/21/12 | 24,895,000 | 25,429,670 | ||||||||
FHLMC, Gold, 5.000%, 12/01/31 | 105,605 | 113,007 | ||||||||
Total Federal Home Loan Mortgage Corporation | 42,480,314 | |||||||||
Federal National Mortgage Association - 0.7% | ||||||||||
FNMA, 1.875%, 04/20/12 | 10,325,000 | 10,454,692 | ||||||||
FNMA, 4.000%, 10/01/18 | 3,726,303 | 3,943,106 | ||||||||
FNMA, 6.000%, 07/01/29 | 8,231 | 9,131 | ||||||||
Total Federal National Mortgage Association | 14,406,929 | |||||||||
Total U.S. Government and Agency Obligations (cost $86,149,726) | 87,484,137 | |||||||||
Asset-Backed Securities - 4.3% | ||||||||||
Chase Issuance Trust, Series 2007-B1, Class B1, 0.437%, 04/15/19 (07/15/11)6 | 17,040,000 | 16,612,919 | ||||||||
CIT Equipment Collateral, Series 2008-VT1, Class A3, 6.590%, 12/22/14 | 2,174,510 | 2,191,272 | ||||||||
Citibank Credit Card Issuance Trust, Series 2008-C6, Class C6, 6.300%, 06/20/14 | 8,945,000 | 9,381,987 | ||||||||
Marriott Vacation Club Owner Trust, Series 2009-2A, Class A, 4.809%, | 11,337,262 | 11,700,544 | ||||||||
MBNA, Series 2002-C1, Class C1, 6.800%, 07/15/14 | 6,911,000 | 7,162,494 | ||||||||
Merrill Auto Trust Securitization, Series 2008-1, Class B, 6.750%, 04/15/15 | 4,035,000 | 4,204,307 | ||||||||
Sierra Receivables Funding Company, Series 2010-2A, Class A, 3.840%, | 15,019,655 | 15,293,590 | ||||||||
Trinity Rail Leasing LP, Series 2009-1A, Class A, 6.657%, 11/16/39 (a) | 4,692,750 | 4,841,312 | ||||||||
Trip Rail Master Funding LLC, Series 2011-1A, Class A1A, 4.370%, | 14,900,000 | 14,900,000 | ||||||||
World Financial Network Credit Card Master Note Trust, Series 2010-A, 6.750%, 04/15/19 | 1,000,000 | 1,099,081 | ||||||||
Total Asset-Backed Securities (cost $83,077,528) | 87,387,506 | |||||||||
Municipal Bonds - 1.5% | ||||||||||
Buckeye Tobacco Settlement Financing Authority, Series 2007 A-2, 5.875%, | 5,035,000 | 3,664,624 | ||||||||
Chicago Illinois O’Hare International Airport Revenue Bond, Series 2008 A, 4.500%, 01/01/38, (AGM Insured) | 315,000 | 268,852 | ||||||||
Illinois State General Obligation, Series 2003, 5.100%, 06/01/33 | 2,880,000 | 2,450,074 | ||||||||
Michigan Tobacco Settlement Financial Authority, Series 2006 A, 7.309%, | 2,985,000 | 2,168,423 | ||||||||
San Jose California Redevelopment Agency Tax Allocation, Series 2006 C, 3.750%, 08/01/28, (BHAC Insured) | 280,000 | 221,721 | ||||||||
San Jose California Redevelopment Agency Tax Allocation, Series 2006 C, 3.750%, 08/01/28, (NATL-RE Insured) | 765,000 | 523,069 | ||||||||
State of California, 4.500%, 08/01/27, (AMBAC Insured) | 950,000 | 915,211 | ||||||||
State of California, 4.500%, 10/01/29 | 2,655,000 | 2,457,654 |
The accompanying notes are an integral part of these financial statements. |
10 |
Table of Contents
Managers Bond Fund Schedule of Portfolio Investments (continued) |
Security Description | Principal Amount† | Value | ||||||
Municipal Bonds - 1.5% (continued) | ||||||||
State of California, 4.500%, 08/01/30 | $ | 730,000 | $ | 667,169 | ||||
State of California, 4.500%, 08/01/30, (AMBAC Insured) | 770,000 | 703,726 | ||||||
State of California, Variable Purpose Bond, 3.250%, 12/01/27, (NATL-RE Insured) | 495,000 | 395,010 | ||||||
State of California, Variable Purpose Bond, 4.500%, 12/01/33, (AMBAC Insured) | 2,330,000 | 2,089,963 | ||||||
Virginia Tobacco Settlement Financing Corp., 6.706%, 06/01/465 | 21,620,000 | 14,441,295 | ||||||
Total Municipal Bonds (cost $39,577,046) | 30,966,791 | |||||||
Mortgage-Backed Securities - 1.2% | ||||||||
Bank of America-First Union, Series 2001, 5.464%, 04/11/37 | 176,149 | 176,059 | ||||||
Community Program Loan Trust, Series 87-A, Class A5, 4.500%, 04/01/29 | 3,325,000 | 3,185,340 | ||||||
Credit Suisse Mortgage Capital, Series 2007-C5, Class A4, 5.695%, 09/15/407 | 1,704,000 | 1,806,323 | ||||||
Extended Stay America Trust, Series 2010 ESHA, Class C, 4.860%, 11/05/27 (a) | 19,090,000 | 19,057,585 | ||||||
JP Morgan Chase Commercial Mortgage Securities Corp., Series 2007-LD11, Class A4, 6.005%, 06/15/497 | 305,000 | 328,942 | ||||||
Total Mortgage-Backed Securities (cost $23,272,558) | 24,554,249 | |||||||
Preferred Stocks - 1.0% | Shares | |||||||
Consumer Discretionary - 0.5% | ||||||||
Comcast Corp. Series B, 7.000% | 207,547 | 5,271,694 | ||||||
Newell Financial Trust I, 5.250%9 | 90,628 | 4,259,516 | ||||||
Total Consumer Discretionary | 9,531,210 | |||||||
Financials - 0.5% | ||||||||
Bank of America Corp., 6.375% | 20,000 | 456,200 | ||||||
Bank of America Corp., Series L, 7.250%9 | 7,808 | 7,817,370 | ||||||
SLM Corp., 6.000% | 41,250 | 912,862 | ||||||
Sovereign Capital Trust IV, 4.375%9 | 34,236 | 1,694,682 | ||||||
Total Financials | 10,881,114 | |||||||
Utilities - 0.0%# | ||||||||
Entergy New Orleans, Inc., 4.750% | 482 | 38,455 | ||||||
Entergy New Orleans, Inc., 5.560% | 100 | 9,109 | ||||||
Wisconsin Electric Power Co., 3.600% | 3,946 | 264,382 | ||||||
Total Utilities | 311,946 | |||||||
Total Preferred Stocks (cost $18,122,043) | 20,724,270 | |||||||
Short-Term Investments - 14.7%1 | ||||||||
BNY Institutional Cash Reserves Fund, Series B* 3,8 | 1,652,054 | 1,320,162 | ||||||
BNY Mellon Overnight Government Fund, 0.08%3 | 56,529,147 | 56,529,147 | ||||||
Dreyfus Cash Management Fund, Institutional Class Shares, 0.10% | 169,600,834 | 169,600,834 | ||||||
JPMorgan Liquid Assets Money Market Fund, Capital Shares, 0.09% | 75,000,000 | 75,000,000 | ||||||
Total Short-Term Investments (cost $302,782,035) | 302,450,143 | |||||||
Total Investments - 101.8% (cost $1,950,162,812) | 2,089,000,981 | |||||||
Other Assets, less Liabilities - (1.8)% | (36,885,652 | ) | ||||||
Net Assets - 100.0% | $ | 2,052,115,329 |
The accompanying notes are an integral part of these financial statements. |
11 |
Table of Contents
Notes to Schedule of Portfolio Investments (unaudited) |
The following footnotes and abbreviations should be read in conjunction with the Schedule of Portfolio Investments previously presented in this report.
Based on the approximate cost of investments of $1,950,904,833 for Federal income tax purposes at June 30, 2011, the aggregate gross unrealized appreciation and depreciation were $156,807,489 and $18,711,341, respectively, resulting in a net unrealized appreciation of investments of $138,096,148.
* Non-income-producing security.
† Principal Amount stated in U.S. dollars unless otherwise noted.
# Rounds to less than 0.1%.
(a) | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified buyers. At June 30, 2011, the value of these securities amounted to $336,347,399, or 16.4% of net assets. |
1 | Yield shown for an investment company represents the June 30, 2011, seven-day average yield, which refers to the sum of the previous seven days’ dividends paid, expressed as an annual percentage. |
2 | Some or all of these shares were out on loan to various brokers as of June 30, 2011, amounting to $56,046,697, or 2.7% of net assets. |
3 | Collateral received from brokers for securities lending was invested in these short-term investments. |
4 | Represents yield to maturity at June 30, 2011. |
5 | Security is illiquid: A security not readily convertible into cash such as a stock, bond or commodity that is not actively traded, and would be difficult to sell in a current sale. The Fund may not invest more than 15% of its net assets in illiquid securities. All securities are valued by an independent pricing agent or broker. Illiquid securities at June 30, 2011, amounted to $44,447,136, or 2.2% of net assets. |
6 | Floating Rate Security. The rate listed is as of June 30, 2011. Date in parentheses represents the security’s next coupon rate reset. |
7 | Variable Rate Security. The rate listed is as of June 30, 2011, and is periodically reset subject to terms and conditions set forth in the debenture. |
8 | On September 12, 2008, The Bank of New York Mellon established a separate sleeve of the BNY Institutional Cash Reserves Fund (Series B) to hold certain Lehman Brothers floating rate notes. The Fund’s position in Series B is being fair valued daily. (See Note 4 in the Notes to the Financial Statements.) |
9 | Convertible Security. A corporate bond or preferred stock, usually a junior debenture, that can be converted, at the option of the holder, for a specific number of shares of the company’s preferred stock or common stock. Convertible Bonds and Convertible Preferred Stocks at June 30, 2011, amounted to $33,868,062, or 1.7% of net assets, and $13,771,568, or 0.7% of net assets, respectively. |
The following table summarizes the inputs used to value the Fund’s net assets by the above fair value hierarchy levels as of June 30, 2011: (See Note 1(a) in the Notes to Financial Statements.)
Quoted Prices in Active Markets for Identical Investments | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Managers Bond Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Corporate Bonds† | — | $ | 1,440,416,482 | — | $ | 1,440,416,482 | ||||||||||
Foreign Government Obligations | — | 95,017,403 | — | 95,017,403 | ||||||||||||
Municipal Bonds | — | 30,966,791 | — | 30,966,791 | ||||||||||||
Asset-Backed Securities | — | 87,387,506 | — | 87,387,506 | ||||||||||||
U.S. Government and Agency | ||||||||||||||||
Obligations†† | — | 87,484,137 | — | 87,484,137 | ||||||||||||
Mortgage-Backed Securities | — | 24,554,249 | — | 24,554,249 | ||||||||||||
Preferred Stocks* | $ | 20,724,270 | — | — | 20,724,270 | |||||||||||
Short-Term Investments | 301,129,981 | 1,320,162 | — | 302,450,143 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 321,854,251 | $ | 1,767,146,730 | — | $ | 2,089,000,981 | |||||||||
|
|
|
|
|
|
|
|
† | All corporate bonds held in the Fund are Level 2 securities. For a detailed break-out of the corporate bonds by major industry classification, please refer to the Schedule of Portfolio Investments. |
†† | All U.S. Government and Agency Obligations held in the Fund are Level 2 securities. For a detailed break-out of these securities, please refer to the Schedule of Portfolio Investments. |
* | All Preferred Stocks held in the Fund are Level 1 securities. For a detailed break-out of these securities, please refer to the Schedule of Portfolio Investments. |
As of June 30, 2011, the Fund had no significant transfers between Level 1 and Level 2 from the beginning of the reporting period.
The accompanying notes are an integral part of these financial statements. |
12 |
Table of Contents
Notes to Schedule of Portfolio Investments (continued) |
Investments Definitions and Abbreviations:
| ||
AGM: | Assured Guaranty Municipal Corp. | |
AMBAC: | American Municipal Bond Assurance Corp. | |
BHAC: | Berkshire Hathaway Assurance Corp. | |
EMTN: | European Medium Term Note | |
FHLB: | Federal Home Loan Bank | |
FHLMC: | Federal Home Loan Mortgage Corp. | |
FNMA: | Federal National Mortgage Association | |
GDIF: | Global Debt Insurance Facility | |
GMAC: | General Motors Acceptance Corp. | |
GMTN: | Global Multi-Currency Notes | |
MBIA: | MBIA Insurance Corp. | |
MTN: | Medium Term Note | |
NATL-RE: | National Public Finance Guarantee | |
Corporation | ||
USTN: | United States Treasury Notes |
Abbreviations have been used throughout the portfolios to indicate amounts shown in currencies other than the U.S. Dollar (USD):
AUD: | Australian Dollar | |
BRL: | Brazilian Real | |
CAD: | Canadian Dollar | |
EUR: | euro | |
IDR: | Indonesian Rupiah | |
MXN: | Mexican Peso | |
NZD: | New Zealand Dollar | |
SGD: | Singapore Dollar |
The accompanying notes are an integral part of these financial statements. |
13 |
Table of Contents
Managers Bond Fund Statement of Assets and Liabilities June 30, 2011 (unaudited) |
Assets: | ||||
Investments at value (including securities on loan valued at $56,046,697)* | $ | 2,089,000,981 | ||
Foreign currency** | 11,459,059 | |||
Receivable for investments sold | 2,544,387 | |||
Receivable for Fund shares sold | 7,418,081 | |||
Receivable from affiliate | 97,871 | |||
Dividends, interest and other receivables | 24,185,585 | |||
Prepaid expenses | 76,382 | |||
Total assets | 2,134,782,346 | |||
Liabilities: | ||||
Payable for Fund shares repurchased | 7,459,672 | |||
Payable upon return of securities loaned | 58,181,201 | |||
Payable for investments purchased | 14,900,000 | |||
Accrued expenses: | ||||
Investment advisory and management fees | 958,522 | |||
Administrative fees | 422,557 | |||
Other | 745,065 | |||
Total liabilities | 82,667,017 | |||
Net Assets | $ | 2,052,115,329 | ||
Shares outstanding | 78,125,227 | |||
Net asset value, offering and redemption price per share | $ | 26.27 | ||
Net Assets Represent: | ||||
Paid-in capital | $ | 1,986,632,212 | ||
Undistributed net investment income | 69,613 | |||
Accumulated net realized loss from investments and foreign currency transactions | (74,284,077 | ) | ||
Net unrealized appreciation of investments and foreign currency translations | 139,697,581 | |||
Net Assets | $ | 2,052,115,329 | ||
* Investments at cost | $ | 1,950,162,812 | ||
** Foreign currency at cost | $ | 10,676,632 |
The accompanying notes are an integral part of these financial statements. |
14 |
Table of Contents
Managers Bond Fund For the six months ended June 30, 2011 (unaudited) |
Investment Income: | ||||
Interest income | $ | 53,945,732 | ||
Dividend income | 740,489 | |||
Securities lending fees | 130,529 | |||
Total investment income | 54,816,750 | |||
Expenses: | ||||
Investment management and advisory fees | 6,184,105 | |||
Administrative fees | 2,473,642 | |||
Transfer agent | 1,174,209 | |||
Custodian | 152,060 | |||
Reports to shareholders | 135,073 | |||
Professional fees | 122,609 | |||
Trustees fees and expenses | 73,073 | |||
Registration fees | 61,385 | |||
Miscellaneous | 40,275 | |||
Total expenses before offsets | 10,416,431 | |||
Expense reimbursements | (619,895 | ) | ||
Fee waivers | (1,973 | ) | ||
Expense reductions | (863 | ) | ||
Net expenses | 9,793,700 | |||
Net investment income | 45,023,050 | |||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain on investments | 10,886,789 | |||
Net realized gain on foreign currency transactions | 533,241 | |||
Net change in unrealized appreciation of investments | 40,052,850 | |||
Net change in unrealized appreciation of foreign currency translations | 359,417 | |||
Net realized and unrealized gain | 51,832,297 | |||
Net increase in net assets resulting from operations | $ | 96,855,347 |
The accompanying notes are an integral part of these financial statements. |
15 |
Table of Contents
Managers Bond Fund Statement of Changes in Net Assets For the six months ended June 30, 2011 (unaudited) and for the year ended December 31, 2010 |
2011 | 2010 | |||||||
Increase (Decrease) in Net Assets From Operations: | ||||||||
Net investment income | $ | 45,023,050 | $ | 99,436,805 | ||||
Net realized gain (loss) on investments and foreign currency transactions | 11,420,030 | (10,720,652 | ) | |||||
Net change in unrealized appreciation of investments and foreign currency translations | 40,412,267 | 128,628,663 | ||||||
Net increase in net assets resulting from operations | 96,855,347 | 217,344,816 | ||||||
Distributions to Shareholders: | ||||||||
From net investment income | (46,634,094 | ) | (100,016,927 | ) | ||||
From Capital Share Transactions: | ||||||||
Proceeds from sale of shares | 297,136,356 | 514,097,164 | ||||||
Reinvestment of dividends and distributions | 42,692,688 | 92,243,870 | ||||||
Cost of shares repurchased | (324,310,792 | ) | (930,994,796 | ) | ||||
Net increase (decrease) from capital share transactions | 15,518,252 | (324,653,762 | ) | |||||
Total increase (decrease) in net assets | 65,739,505 | (207,325,873 | ) | |||||
Net Assets: | ||||||||
Beginning of period | 1,986,375,824 | 2,193,701,697 | ||||||
End of period | $ | 2,052,115,329 | $ | 1,986,375,824 | ||||
End of period undistributed net investment income | $ | 69,613 | $ | 1,680,657 | ||||
Share Transactions: | ||||||||
Sale of shares | 11,408,828 | 20,305,382 | ||||||
Reinvested shares | 1,640,257 | 3,644,161 | ||||||
Shares repurchased | (12,498,270 | ) | (36,671,325 | ) | ||||
Net increase (decrease) in shares | 550,815 | (12,721,782 | ) |
The accompanying notes are an integral part of these financial statements. |
16 |
Table of Contents
For a share outstanding throughout each period |
For the six | For the year ended December 31, | |||||||||||||||||||||||
Managers Bond Fund | (unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 25.61 | $ | 24.29 | $ | 19.65 | $ | 25.34 | $ | 24.84 | $ | 24.11 | ||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||
Net investment income | 0.59 | 5 | 1.16 | 5 | 1.30 | 5 | 1.42 | 5 | 1.22 | 5 | 1.08 | |||||||||||||
Net realized and unrealized gain (loss) on investments | 0.68 | 5 | 1.34 | 5 | 4.62 | 5 | (5.42 | )5 | 0.49 | 5 | 0.75 | |||||||||||||
Total from investment operations | 1.27 | 2.50 | 5.92 | (4.00 | ) | 1.71 | 1.83 | |||||||||||||||||
Less Distributions to Shareholders from: | ||||||||||||||||||||||||
Net investment income | (0.61 | ) | (1.18 | ) | (1.28 | ) | (1.41 | ) | (1.21 | ) | (1.10 | ) | ||||||||||||
Net realized gain on investments | — | — | — | (0.28 | ) | (0.00 | )4 | — | ||||||||||||||||
Total distributions to shareholders | (0.61 | ) | (1.18 | ) | (1.28 | ) | (1.69 | ) | (1.21 | ) | (1.10 | ) | ||||||||||||
Net Asset Value, End of Period | $ | 26.27 | $ | 25.61 | $ | 24.29 | $ | 19.65 | $ | 25.34 | $ | 24.84 | ||||||||||||
Total Return 1 | 5.00 | 3,6 | 10.47 | %3 | 31.12 | %3 | (16.31 | )% | 7.06 | % | 7.79 | %3 | ||||||||||||
Ratio of net expenses to average net assets | 0.99 | %7 | 0.99 | % | 0.99 | % | 0.99 | % | 0.99 | % | 0.99 | % | ||||||||||||
Ratio of net investment income to average net assets 1 | 4.55 | %7 | 4.59 | % | 5.93 | % | 6.10 | % | 4.91 | % | 4.52 | % | ||||||||||||
Portfolio turnover | 2 | %6 | 17 | % | 23 | % | 39 | % | 21 | % | 46 | % | ||||||||||||
Net assets at end of period (000’s omitted) | $ | 2,052,115 | $ | 1,986,376 | $ | 2,193,702 | $ | 1,888,919 | $ | 2,022,891 | $ | 906,776 | ||||||||||||
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Ratios absent expense offsets:2 | ||||||||||||||||||||||||
Ratio of total expenses to average net assets | 1.05 | %7 | 1.06 | % | 1.10 | % | 1.10 | % | 0.99 | % | 1.02 | % | ||||||||||||
Ratio of net investment income to average net assets | 4.49 | %7 | 4.52 | % | 5.82 | % | 5.99 | % | 4.91 | % | 4.49 | % | ||||||||||||
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1 | Total returns and net investment income would have been lower had certain expenses not been reduced. (See Note 1(c) to the Notes to Financial Statements.) |
2 | Excludes the impact of expense reimbursement and expense offsets such as brokerage credits, but includes non-reimbursable expenses, if any, such as interest and taxes. (See Note 1(c) to the Notes to Financial Statements.) |
3 | The Total Return is based on the Financial Statement Net Asset Values as shown above. |
4 | Rounds to less than $0.01. |
5 | Per share numbers have been calculated using average shares. |
6 | Not annualized |
7 | Annualized |
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Table of Contents
June 30, 2011 (unaudited) |
1. | Summary of Significant Accounting Policies |
The Managers Funds (the “Trust”) is an open-end management investment company organized as a Massachusetts business trust and registered under the Investment Company Act of 1940, as amended (the “1940 Act”). Currently, the Trust is comprised of a number of different funds, each having distinct investment management objectives, strategies, risks and policies. Included in this report is the Managers Bond Fund (“the Fund”).
The Fund’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, (“U.S. GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting periods. Actual results could differ from those estimates and such differences could be material. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements:
a. | Valuation of Investments |
Fixed-income securities are valued based on valuations furnished by independent pricing services that utilize matrix systems, which reflect such factors as security prices, yields, maturities, and ratings, and are supplemented by dealer and exchange quotations. Short-term investments having a remaining maturity of 60 days or less are valued at amortized cost, which approximates market value. Investments in other open-end regulated investment companies are valued at their end of day net asset value per share. Investments in certain mortgage-backed and stripped mortgage-backed securities, preferred stocks, convertible securities, derivatives and other debt securities not traded on an organized securities market are valued on the basis of valuations provided by dealers or by a pricing service which uses information with respect to transactions in such securities and various relationships between securities and yield to maturity in determining value. Securities (including derivatives) for which market quotations are not readily available are valued at fair value, as determined in good faith, and pursuant to procedures adopted by the Board. The values assigned to fair value investments are based on available information and do not necessarily represent amounts that might ultimately be realized, since such amounts depend on future developments inherent in long-term investments. Further, because of the inherent uncertainty of valuation, those estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material.
U.S. GAAP define fair value as the price that a Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP also establish a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may
be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation.
The three-tier hierarchy of inputs is summarized below:
Level 1 – inputs are quoted prices in active markets for identical investments (e.g., equity securities, open-end investment companies, futures contracts, options contracts)
Level 2 – other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs) (e.g., debt securities, government securities, swap contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing, broker-quoted securities, fair valued securities with observable inputs)
Level 3 – significant unobservable inputs (including the Fund’s own assumptions used to determine the fair value of investments) (e.g., fair valued securities with unobservable inputs)
The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments.
b. | Security Transactions |
Security transactions are accounted for as of trade date. Realized gains and losses on securities sold are determined on the basis of identified cost.
c. | Investment Income and Expenses |
Dividend income is recorded on the ex-dividend date except certain dividends from foreign securities where the ex-dividend date may have passed. These dividends are recorded as soon as the Trust is informed of the ex-dividend date. Dividend income on foreign securities is recorded net of any withholding tax. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned. Non-cash dividends included in dividend income, if any, are reported at the fair market value of the securities received. Other income and expenses are recorded on an accrual basis. Expenses that cannot be directly attributed to a fund are apportioned among the Funds in the Trust and in some cases other affiliated funds based upon their relative average net assets or number of shareholders.
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Notes to Financial Statements (continued) |
The Fund has a “balance credit” arrangement with The Bank of New York Mellon (“BNYM”), the Fund’s custodian, whereby the Fund is credited with an interest factor equal to 0.75% below the effective 90-day T-Bill rate for account balances left uninvested overnight. If the T-Bill rate falls below 0.75%, no credits will be earned. These credits serve to reduce custody expenses that would otherwise be charged to the Fund. For the six months ended June 30, 2011, the custodian expense was not reduced.
Overdrafts will cause a reduction of any earnings credits, computed at 2% above the effective Federal Funds rate on the day of the overdraft. For the six months ended June 30, 2011, the Fund had no overdraft fees.
The Trust also has a balance credit arrangement with its Transfer Agent, BNY Mellon Investment Servicing (US) Inc., (formerly PNC Global Investment Servicing (U.S.) Inc.), whereby earnings credits are used to offset banking charges and other out-of-pocket expenses. For the six months ended June 30, 2011, the transfer agent expense was reduced by $863.
The Investment Manager has agreed to waive a portion of its management fee in consideration of shareholder servicing fees that it has received from JPMorgan Distribution Services, Inc., with respect to short-term cash investments the Fund has made in JPMorgan Liquid Assets Money Market Fund, Capital Shares. For the six months ended June 30, 2011, the management fee was reduced by $1,973.
Total returns and net investment income for the Fund would have been lower had certain expenses not been offset. Total expenses before offsets exclude the impact of expense reimbursements or fee waivers and expense offsets such as brokerage recapture credits, but include non-reimbursable expenses if any, such as interest and taxes.
d. | Dividends and Distributions |
Dividends resulting from net investment income, if any, normally will be declared and paid monthly. Distributions of capital gains, if any, will be made annually in December and when required for Federal excise tax purposes. Income and capital gain distributions are determined in accordance with Federal income tax regulations, which may differ from U.S. GAAP. These differences are primarily due to differing treatments for losses deferred due to wash sales, equalization accounting for tax purposes, foreign currency, options, futures and market discount transactions. Permanent book and tax basis differences, if any, relating to shareholder distributions will result in reclassifications to paid-in capital.
e. | Federal Taxes |
The Fund intends to comply with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, to distribute substantially all of its taxable income and gains to its shareholders and to meet certain diversification and income requirements with respect to investment companies. Therefore, no provision for Federal income or excise tax is included in the accompanying financial statements.
Additionally, based on the Fund’s understanding of the tax rules and rates related to income, gains and transactions for the foreign jurisdictions in which it invests, the Fund will provide for foreign taxes, and where appropriate, deferred foreign taxes.
Management has analyzed the Fund’s tax positions taken on federal income tax returns for all open tax years (tax years ended December 31, 2007-2010), and has concluded that no provision for federal income tax is required in the Fund’s financial statements. Additionally, the Fund is not aware of any tax position for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
f. | Capital Loss Carryovers |
As of June 30, 2011, the Fund had accumulated net realized capital loss carryover from securities transactions for Federal income tax purposes as shown in the following chart. These amounts may be used to offset realized capital gains, if any, through the expiration dates listed.
Fund | Capital Loss Carryover Amount | Expires December 31, | ||||
Bond Fund | $ | 69,964,824 | 2017 | |||
15,307,296 | 2018 | |||||
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Total | $ | 85,272,120 | ||||
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g. | Capital Stock |
The Trust’s Declaration of Trust authorizes for each series the issuance of an unlimited number of shares of beneficial interest, without par value. The Fund records sales and repurchases of its capital stock on the trade date. The cost of securities contributed to the Fund in connection with the issuance of shares is based on the valuation of those securities in accordance with the Fund’s policy on investment valuation. Dividends and distributions to shareholders are recorded on the ex-dividend date.
At June 30, 2011, certain unaffiliated shareholders of record, specifically omnibus accounts, individually held greater than 10% of the outstanding shares of the Fund as follows: three collectively own 64%. Transactions by these shareholders may have a material impact on the Fund.
h. | Foreign Currency Translation |
The books and records of the Fund are maintained in U.S. dollars. The value of investments, assets and liabilities denominated in currencies other than U.S. dollars are translated into U.S. dollars based upon current foreign exchange rates. Purchases and sales of foreign investments, income and expenses are converted into U.S. dollars based on currency exchange rates prevailing on the respective dates of such transactions. Net realized and unrealized gain (loss) on foreign currency transactions represent: (1) foreign exchange gains and losses from the sale and holdings of foreign currencies; (2) gains and losses between trade date and settlement date on investment securities transactions and forward foreign currency exchange contracts; and (3) gains and losses from the difference between amounts of interest and dividends recorded and the amounts actually received.
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Notes to Financial Statements (continued) |
The Fund does not isolate the net realized and unrealized gain or loss resulting from changes in exchange rates from the fluctuations in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
2. | Agreements and Transactions with Affiliates |
The Trust has entered into an Investment Management Agreement under which the Investment Manager, an independently managed subsidiary of Affiliated Managers Group, Inc. (“AMG”), serves as investment manager to the Fund and is responsible for the Fund’s overall administration. The Investment Manager selects subadvisors for the Fund (subject to Trustee approval) and monitors each subadvisor’s investment programs and results. The Fund’s investment portfolio is managed by a portfolio manager who serves pursuant to a Subadvisory Agreement with the Investment Manager.
Investment management fees are paid directly by the Fund to the Investment Manager based on average daily net assets. For the six months ended June 30, 2011, the annual investment management fee rate, as a percentage of average daily net assets, was 0.625%.
The Trust has entered into an Administration and Shareholder Servicing Agreement under which the Investment Manager serves as the Fund’s administrator (the “Administrator”) and is responsible for all aspects of managing the Fund’s operations, including administration and shareholder services to the Fund, its shareholders, and certain institutions, such as bank trust departments, broker-dealers and registered investment advisers, that advise or act as an intermediary with the Fund’s shareholders. The Fund pays a fee to the Administrator at the rate of 0.25% per annum of the Fund’s average daily net assets for this service.
The Investment Manager has contractually agreed, through at least May 1, 2012, to waive fees and pay or reimburse expenses to the extent that the total annual operating expenses (exclusive of taxes, interest, brokerage costs, acquired fund expenses, and extraordinary expenses) of the Fund exceed 0.99% of the Fund’s average daily net assets.
The Fund is obligated to repay the Investment Manager such amounts waived, paid or reimbursed in future years provided that the repayment occurs within thirty-six (36) months after the waiver or reimbursement and that such repayment would not cause the Fund’s total operating expenses in any such future year to exceed that Fund’s respective expense cap. For the six months ended June 30, 2011, the Fund made no such repayments to the Investment Manager. For the six months ended June 30, 2011, the Fund’s components of reimbursement are detailed in the following chart:
Reimbursement Available - 12/31/10 | $ | 6,378,875 | ||
Additional Reimbursements | 619,895 | |||
Repayments | — | |||
Expired Reimbursements | (986,076 | ) | ||
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Reimbursement Available - 06/30/11 | $ | 6,012,694 | ||
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Effective January 1, 2011, the aggregate annual retainer paid to each Independent Trustee of the Board is $80,000, plus $5,000 or $2,500 for each regular or special meeting attended, respectively. The Independent Chairman of the Trusts receives an additional payment of $20,000 per year. The Chairman of the Audit Committee receives an additional payment of $8,000 per year. (Prior to January 1, 2011, the aggregate annual retainer paid to each Independent Trustee of the Board was $65,000, plus $4,000 or $2,500 for each regular or special meeting attended, respectively. The Independent Chairman of the Trusts received an additional payment of $15,000 per year. The Chairman of the Audit Committee received an additional payment of $5,000 per year.) The Trustees’ fees and expenses are allocated among all of the funds for which the Investment Manager serves as the advisor (the “Managers Funds”) based on the relative net assets of such funds. The “Trustees fees and expenses” shown in the financial statements represents the Funds’ allocated portion of the total fees and expenses paid by the Managers Funds.
The Fund is distributed by Managers Distributors, Inc. (the “Distributor” or “MDI”), a wholly-owned subsidiary of the Investment Manager. MDI serves as the principal underwriter for the Fund and is a registered broker-dealer and member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Shares of the Fund will be continuously offered and will be sold by brokers, dealers or other financial intermediaries who have executed selling agreements with the Distributor. MDI bears all the expenses of providing services pursuant to the Underwriting Agreement, including the payment of the expenses relating to the distribution of Prospectuses for sales purposes and any advertising or sales literature. Certain Trustees and Officers of the Fund are Officers and/or Directors of the Investment Manager, AMG and/or the Distributor.
The Securities and Exchange Commission granted an exemptive order that permits the Fund to lend and borrow money for certain temporary purposes directly to and from other eligible Managers Funds. Participation in this interfund lending program is voluntary for both borrowing and lending Funds, and an interfund loan is only made if it benefits each participating Fund. The Investment Manager administers the program according to procedures approved by the Board, and the Board monitors the operation of the program. An interfund loan must comply with certain conditions set out in the exemptive order, which are designed to assure fairness and protect all participating Funds. For the six months ended June 30, 2011, the Fund lent to other Managers Funds varying amounts up to $2,921,344 for 1 day earning interest of $183. The interest amounts are included in the Statement of Operations in interest income. For the same period, the Fund did not borrow from any of the Managers Funds.
3. | Purchases and Sales of Securities |
Purchases and sales of securities (excluding short-term securities and U.S. government obligations) for the six months ended June 30, 2011, were $62,046,312 and $155,524,625, respectively. Purchases and sales of U.S. government obligations for the six months ended June 30, 2011, were $0 and $73,551,998, respectively.
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Notes to Financial Statements (continued) |
4. | Portfolio Securities Loaned |
For the six months ended June 30, 2011, the Fund participated in a securities lending program offered by BNYM, providing for the lending of securities to qualified brokers. Securities lending fees include earnings of such temporary cash investments, plus or minus any rebate to a borrower. These earnings (after any rebate) are then divided between BNYM, as a fee for its services under the program, and the Fund, according to agreed-upon rates. Collateral on all securities loaned is accepted in cash and/or government securities and is maintained at a minimum level of 102% (105% in the case of certain foreign securities) of the market value, plus interest, if applicable, of investments on loan. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Collateral received in the form of cash is invested temporarily in the BNY Mellon Overnight Government Fund, formerly the BNY Institutional Cash Reserves Fund (the “ICRF”), or other short-term investments as defined in the Securities Lending Agreement with BNYM.
Effective August 2, 2010, the Trust, on behalf of the Fund, entered into an agreement with The Bank of New York Mellon and the Bank of New York Mellon Corporation (“BNYMC”) with respect to the Fund’s position in the ICRF, pursuant to which (i) BNYMC will support the value of certain defaulted securities issued by Lehman Brothers Holdings, Inc. and held by ICRF, and (ii) if certain conditions are met, BNYMC will purchase the defaulted securities from the Fund in September 2011. The Fund is fair valuing its position in the ICRF daily based on the agreement. The Fund’s position in the separate sleeve of the ICRF is included in the Schedule of Portfolio Investments and the unrealized loss on such investment is included in Net Unrealized Appreciation on the Statement of Assets and Liabilities and the Statement of Operations.
5. | Commitments and Contingencies |
In the normal course of business, the Fund enters into contracts and agreements that contain a variety of representations and warranties, which provide general indemnifications. The maximum exposure to the Fund under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote.
6. | Risks Associated with High Yield Securities |
Investing in high yield securities involves greater risks and considerations not typically associated with U.S. Government and other high quality/investment grade securities. High Yield securities are generally below investment grade securities and do not have an established retail secondary market. Economic downturns may disrupt the high yield market and impair the issuer’s ability to repay principal and interest. Also, an increase in interest rates would likely have an adverse impact on the value of such obligations and could cause the securities to become less liquid.
7. | Forward Commitments |
Certain transactions, such as futures and forward transactions, dollar roll agreements, or purchases of when-issued or delayed delivery securities may have a similar effect on the Fund’s net asset value as if the Fund had created a degree of leverage in its portfolio. For the six months ended June 30, 2011, the Fund did not enter any Forward Commitments. However, if the Fund enters into such a transaction, the Fund will establish a segregated account with its custodian in which it will maintain cash, U.S. government securities or other liquid securities equal in value to its obligations in respect to such transaction. Securities and other assets held in the segregated account may not be sold while the transaction is outstanding, unless other suitable assets are substituted.
8. | New Accounting Standards |
In April 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-03 “Reconsideration of Effective Control for Repurchase Agreements.” ASU 2011-03 changes the assessment of effective control for repurchase agreements including dollar roll transactions. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU No. 2011-03 and its impact on the financial statements.
In May 2011, the FASB issued ASU No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU 2011-04 requires common fair value measurement and disclosure requirements between U.S. GAAP and International Financial Reporting Standards. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU No. 2011-04 and its impact on the financial statements.
9. | Subsequent Events |
The Fund has determined that no material events or transactions occurred through the issuance date of the Fund’s financial statements which require additional disclosure in or adjustment of the Fund’s financial statements.
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Annual Renewal of Investment Advisory Agreement (unaudited) |
On June 9-10, 2011, the Board of Trustees, including a majority of the Trustees who are not “interested persons” of the Trust (the “Independent Trustees”), approved the Investment Management Agreement with the Investment Manager for the Managers Bond Fund (the “Fund”) and the Subadvisory Agreement for the Subadvisor of the Fund. The Independent Trustees were separately represented by independent counsel in connection with their consideration of the approval of these agreements. In considering the Investment Management and Subadvisory Agreements, the Trustees reviewed a variety of materials relating to the Fund, the Investment Manager and the Subadvisor, including comparative performance, fee and expense information for an appropriate peer group of similar mutual funds (the “Peer Group”), performance information for the relevant benchmark index (the “Fund Benchmark”) and, with respect to the Subadvisor, comparative performance information for an appropriate peer group of managed accounts, and, as to all other matters, other information provided to them on a periodic basis throughout the year, as well as information provided in connection with the meetings of June 9-10, 2011, regarding the nature, extent and quality of services provided by the Investment Manager and the Subadvisor under their respective agreements. Prior to voting, the Independent Trustees: (a) reviewed the foregoing information with their independent legal counsel and with management; (b) received materials from their independent legal counsel discussing the legal standards applicable to their consideration of the Investment Management Agreement and the Subadvisory Agreement; and (c) met with their independent legal counsel in private sessions at which no representatives of management were present.
Nature, extent and quality of services.
In considering the nature, extent and quality of the services provided by the Investment Manager, the Trustees reviewed information relating to the Investment Manager’s operations and personnel. Among other things, the Investment Manager provided financial information, biographical information on its supervisory and professional staff and descriptions of its organizational and management structure. The Trustees also took into account information provided periodically throughout the previous year by the Investment Manager relating to the performance of its duties with respect to the Fund and the Trustees’ familiarity with the Investment Manager’s management through Board meetings, discussions and reports. In the course of their deliberations regarding the Investment Management Agreement, the Trustees evaluated, among other things: (a) the extent and quality of the Investment Manager’s oversight of the operation and management of the Fund; (b) the quality of the search, selection and monitoring services performed by the Investment Manager in overseeing the portfolio management responsibilities of the Subadvisor; (c) the Investment Manager’s ability to supervise the Fund’s other service providers; and (d) the Investment Manager’s compliance programs. The Trustees also took into account the financial condition of the Investment Manager with respect to its ability to provide the services required under the
Investment Management Agreement and to maintain a contractual expense limitation for the Fund. The Trustees also considered the Investment Manager’s risk management processes.
The Trustees also reviewed information relating to the Subadvisor’s operations and personnel and the investment philosophy, strategies and techniques (the “Investment Strategy”) used in managing the Fund. Among other things, the Trustees reviewed biographical information on portfolio management and other professional staff, information regarding the Subadvisor’s organizational and management structure and the Subadvisor’s brokerage policies and practices. The Trustees considered specific information provided regarding the experience of the individual or individuals at the Subadvisor with portfolio management responsibility for the Fund, including the information set forth in the Fund’s prospectus and statement of additional information. In the course of their deliberations, the Trustees evaluated, among other things: (a) the services rendered by the Subadvisor in the past; (b) the qualifications and experience of the Subadvisor’s personnel; and (c) the Subadvisor’s compliance programs. The Trustees also took into account the financial condition of the Subadvisor with respect to its ability to provide the services required under the Subadvisory Agreement. The Trustees also considered the Subadvisor’s risk management processes.
Performance.
Among other information relating to the Fund’s performance, the Trustees noted that the Fund’s performance for the 1-year, 3-year, 5-year and 10-year periods ended March 31, 2011 was above the median performance of the Peer Group and above the performance of the Fund Benchmark, the Barclays Capital U.S. Government/Credit Bond Index. The Board took into account management’s discussion of the Fund’s performance, including the fact that the Fund has been in the top quartile relative to the Peer Group over all relevant time periods. The Trustees concluded that the Fund’s performance has been satisfactory.
As noted above, the Board considered the Fund’s net performance during relevant time periods as compared to the Fund’s Peer Group and Fund Benchmark and considered the Subadvisor’s performance as compared to an appropriate peer group of managed accounts and also considered the gross performance of the Fund as compared to the Subadvisor’s relevant performance composite that utilizes the same investment strategy and approach and noted that the Board reviews on a quarterly basis detailed information about the Fund’s performance results, portfolio composition and Investment Strategies. The Board noted the Investment Manager’s expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadvisor. The Board was mindful of the Investment Manager’s attention to monitoring the Subadvisor’s performance with respect to the Fund and its discussions with management regarding the factors that contributed to the performance of the Fund.
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Annual Renewal of Investment Advisory Agreement (continued) |
Advisory and Subadvisory Fees and Profitability.
In considering the reasonableness of the advisory fee charged by the Investment Manager for managing the Fund, the Trustees noted that the Investment Manager, and not the Fund, is responsible for paying the fees charged by the Fund’s Subadvisor and, therefore, that the fees paid to the Investment Manager cover the cost of providing portfolio management services as well as the cost of providing search, selection and monitoring services in operating a “manager-of-managers” complex of mutual funds. The Trustees concluded that, in light of the additional high quality supervisory services provided by the Investment Manager and the fact that the subadvisory fees are paid out of the advisory fee, the advisory fee payable by the Fund to the Investment Manager can reasonably be expected to exceed the median advisory fee for the Peer Group, which consists of many funds that do not operate with a manager-of-managers structure. In this regard, the Trustees also noted that the Investment Manager has undertaken to maintain an expense limitation for the Fund.
In considering the reasonableness of the advisory fee payable to the Investment Manager, the Trustees also reviewed information provided by the Investment Manager setting forth all revenues and other benefits, both direct and indirect (including any so-called “fallout benefits” such as reputational value derived from the Investment Manager serving as Investment Manager to the Fund), received by the Investment Manager and its affiliates attributable to managing the Fund and all the mutual funds in the Managers Family of Funds, the cost of providing such services and the resulting profitability to the Investment Manager and its affiliates from these relationships. The Trustees also noted the current and potential asset levels of the Fund and the willingness of the Investment Manager to waive fees and pay expenses for the Fund from time to time as a means of limiting the total expenses of the Fund. The Trustees also considered management’s discussion of the current asset level of the Fund, including the effect on assets attributable to the economic and market conditions since 2008, and considered the impact on profitability of the current asset level and any future growth of assets of the Fund. The Board took into account management’s discussion of the current advisory fee structure. The Trustees also noted that the subadvisory fees are paid by the Investment Manager out of its advisory fee. Based on the foregoing, the Trustees concluded that the profitability to the Investment Manager is reasonable and that the Investment Manager is not realizing material benefits from economies of scale that would warrant adjustments to the advisory fees for the Fund at this time. With respect to economies of scale, the Trustees also noted that as the Fund’s assets increase over time, the Fund may realize other economies of scale to the extent that the increase in assets is proportionally greater than the increase in certain other expenses.
In considering the reasonableness of the fee payable by the Investment Manager to the Subadvisor, the Trustees relied on the ability of the Investment Manager to negotiate the terms of the Subadvisory Agreement at arm’s length as part of the manager-
of-managers structure, noting that the Subadvisor is not affiliated with the Investment Manager. In addition, the Trustees considered other potential benefits of the subadvisory relationship to the Subadvisor, including, among others, the indirect benefits that the Subadvisor may receive from the Subadvisor’s relationship with the Fund, including any so-called “fallout benefits” to the Subadvisor, such as reputational value derived from the Subadvisor serving as Subadvisor to the Fund. In addition, the Trustees noted that the subadvisory fees are paid by the Investment Manager out of its advisory fee. Accordingly, the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the Fund were not material factors in the Trustees’ deliberations. For similar reasons, and based on the current size of the portion of the Fund managed by the Subadvisor, the Trustees concluded that any economies of scale being realized by the Subadvisor was not a material factor in the Trustees’ deliberations at this time.
The Trustees noted that the Fund’s advisory fees (which include both the advisory and administration fee) and total expenses (net of applicable expense waivers/reimbursements) as of March 31, 2011 were both higher than the average for the Peer Group. The Trustees took into account the fact that the Investment Manager has contractually agreed, through May 1, 2012, to limit the Fund’s net annual operating expenses (subject to certain excluded expenses) to 0.99%. The Trustees took into account management’s discussion of the Fund’s expenses. The Trustees concluded that, in light of the nature, extent and quality of the services provided by the Investment Manager and the Subadvisor, the Fund’s performance, the foregoing expense limitation and the considerations noted above with respect to the Subadvisor and the Investment Manager, the Fund’s advisory fees, including subadvisory fees, are reasonable.
* * * *
After consideration of the foregoing, the Trustees also reached the following conclusions (in addition to the conclusions discussed above) regarding the Investment Management Agreement and the Subadvisory Agreement: (a) the Investment Manager and the Subadvisor have demonstrated that they possess the capability and resources to perform the duties required of them under the Investment Management Agreement and the Subadvisory Agreement; (b) the Subadvisor’s Investment Strategy is appropriate for pursuing the Fund’s investment objectives; and (c) the Investment Manager and the Subadvisor maintain appropriate compliance programs.
Based on all of the above-mentioned factors and related conclusions, with no single factor or conclusion being determinative and with each Trustee not necessarily attributing the same weight to each factor, the Trustees concluded that approval of the Investment Management Agreement and the Subadvisory Agreement would be in the best interests of the Fund and its shareholders. Accordingly, on June 9-10, 2011, the Trustees, including a majority of the Independent Trustees, voted to approve the Investment Management Agreement and the Subadvisory Agreement for the Fund.
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Investment Manager and Administrator
Managers Investment Group LLC
333 W. Wacker Drive
Suite 1200
Chicago, IL 60606
(800) 835-3879
Distributor
Managers Distributors, Inc.
333 W. Wacker Drive
Suite 1200
Chicago, IL 60606
(800) 835-3879
Custodian
The Bank of New York Mellon
2 Hanson Place
Brooklyn, NY 11217
Legal Counsel
Ropes & Gray LLP
Prudential Tower, 800 Boylston Street
Boston, MA 02199-3600
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.*
Attn: Managers
P.O. Box 9769
Providence, RI 02940
(800) 548-4539
Trustees
Jack W. Aber
Christine C. Carsman
William E. Chapman, II
Edward J. Kaier
Steven J. Paggioli
Eric Rakowski
Thomas R. Schneeweis
John H. Streur
For Managers Choice Only
Managers
c/o BNY Mellon Investment Servicing (US) Inc.*
P.O. Box 9847
Providence, RI 02940-8047
(800) 358-7668
* | Formerly PNC Global Investment Servicing (U.S.) Inc. |
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MANAGERSAND MANAGERS AMG FUNDS
EQUITY FUNDS | BALANCED FUNDS | |||
CADENCE CAPITAL APPRECIATION | INTERNATIONAL EQUITY | CHICAGO EQUITY PARTNERS BALANCED | ||
CADENCE FOCUSED GROWTH CADENCE MID-CAP CADENCE EMERGING COMPANIES Cadence Capital Management, LLC
CHICAGO EQUITY PARTNERS MID-CAP Chicago Equity Partners, LLC
EMERGING MARKETS EQUITY Rexiter Capital Management Limited Schroder Investment Management North America Inc.
ESSEX SMALL/MICRO CAP GROWTH Essex Investment Management Co., LLC
FQ TAX-MANAGED U.S. EQUITY FQ U.S. EQUITY First Quadrant, L.P.
FRONTIER SMALL CAP GROWTH Frontier Capital Management Company, LLC
GW&K SMALL CAP EQUITY Gannett Welsh & Kotler, LLC
INSTITUTIONAL MICRO-CAP MICRO-CAP Lord, Abbett & Co. LLC WEDGE Capital Management L.L.P. Next Century Growth Investors LLC RBC Global Asset Management (U.S.) Inc. | AllianceBernstein L.P. Lazard Asset Management, LLC Martin Currie Inc.
REAL ESTATE SECURITIES Urdang Securities Management, Inc.
RENAISSANCE LARGE CAP GROWTH Renaissance Group LLC
SKYLINE SPECIAL EQUITIES PORTFOLIO Skyline Asset Management, L.P.
SPECIAL EQUITY Ranger Investment Management, L.P. Lord, Abbett & Co. LLC Smith Asset Management Group, L.P. Federated MDTA LLC
SYSTEMATIC VALUE SYSTEMATIC MID CAP VALUE Systematic Financial Management, L.P.
TIMESSQUARE MID CAP GROWTH TIMESSQUARE SMALL CAP GROWTH TSCM GROWTH EQUITY TimesSquare Capital Management, LLC
TRILOGY GLOBAL EQUITY TRILOGY EMERGING MARKETS EQUITY TRILOGY INTERNATIONAL SMALL CAP Trilogy Global Advisors, L.P. | Chicago Equity Partners, LLC
ALTERNATIVE FUNDS FQ GLOBAL ALTERNATIVES FQ GLOBAL ESSENTIALS First Quadrant, L.P.
INCOME FUNDS BOND (MANAGERS) FIXED INCOME GLOBAL BOND Loomis, Sayles & Co., L.P.
BOND (MANAGERS PIMCO) Pacific Investment Management Co. LLC
CALIFORNIA INTERMEDIATE TAX-FREE Miller Tabak Asset Management LLC
GW&K MUNICIPAL BOND GW&K MUNICIPAL ENHANCED YIELD Gannett Welsh & Kotler, LLC
HIGH YIELD J.P. Morgan Investment Management LLC
INTERMEDIATE DURATION GOVERNMENT SHORT DURATION GOVERNMENT Smith Breeden Associates, Inc. | ||
This report is prepared for the Fund’s shareholders. It is authorized for distribution to prospective investors only when preceded or accompanied by an effective prospectus. To receive a free copy of the prospectus or Statement of Additional Information, which includes additional information about Fund Trustees, please contact us by calling 800.835.3879. Distributed by Managers Distributors, Inc., member FINRA.
A description of the policies and procedures each Fund uses to vote its proxies is available: (i) without charge, upon request, by calling 800.835.3879, or (ii) on the Securities and Exchange Commission’s (SEC) Web site at www.sec.gov. For information regarding each Fund’s proxy voting record for the 12-month period ended June 30, call 800.835.3879 or visit the SEC Web site at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. A Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. To review a complete list of the Fund’s portfolio holdings, or to view the most recent quarterly holdings report, semiannual report, or annual report, please visit www.managersinvest.com
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. www.managersinvest.com
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Item 2. | CODE OF ETHICS |
Not applicable for the semi-annual shareholder report.
Item 3. | AUDIT COMMITTEE FINANCIAL EXPERT |
Not applicable for the semi-annual shareholder report.
Item 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Not applicable for the semi-annual shareholder report.
Item 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS |
Not applicable.
Item 6. | SCHEDULE OF INVESTMENTS |
The schedule of investments in unaffiliated issuers as of the close of the reporting period is included as part of the shareholder report contained in Item 1 hereof.
Item 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES |
Not applicable.
Item 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES |
Not applicable.
Item 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANIES AND AFFILIATED PURCHASERS |
Not applicable.
Item 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
Not applicable.
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Item 11. | CONTROLS AND PROCEDURES |
(a) | The registrant’s principal executive and principal financial officers have concluded, based on their evaluation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the registrant’s disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the registrant’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. |
(b) | There were no changes in the registrant’s internal control over financial reporting during the registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting. |
Item 12. | EXHIBITS |
(a)(1) | Not applicable. | |||
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 – Filed herewith. | |||
(a)(3) | Not applicable. | |||
(b) | Certifications pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 – Filed herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
THE MANAGERS FUNDS
By: | /s/ John H. Streur | |
John H. Streur, President | ||
Date: | September 2, 2011 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ John H. Streur | |
John H. Streur, President | ||
Date: | September 2, 2011 |
By: | /s/ Donald S. Rumery | |
Donald S. Rumery, Chief Financial Officer | ||
Date: | September 2, 2011 |