UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-3752
THE MANAGERS FUNDS
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(Exact name of registrant as specified in charter)
40 Richards Avenue, Norwalk, Connecticut 06854
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(Address of principal executive offices) (Zip code)
The Managers Funds LLC
40 Richards Avenue, Norwalk, Connecticut 06854
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(Name and address of agent for service)
Registrant's telephone number, including area code: (203) 857-5321
Date of fiscal year end: NOVEMBER 30
Date of reporting period: DECEMBER 1, 2002 - NOVEMBER 30, 2003
(Annual Shareholder Report)
Item 1. REPORT TO SHAREHOLDERS.
====================================================================
Managers
--------
Annual Report
[Managers Logo Omitted]
The Managers Funds
Money Market Fund
Dated November 30, 2003
Access to excellence
<Page>
MANAGERS MONEY MARKET FUND
--------------------------
Annual Report
-------------
November 30, 2003
-----------------
TABLE OF CONTENTS
<Page>
<Table>
Page
----
Letter to Shareholders 1
Managers Performance 3
Complete performance table for all of The Managers Funds
and Managers AMG Funds as of December 31, 2003
Financial Statements:
Statement of Assets and Liabilities 5
Fund's balance sheet
Statement of Operations 5
Detail of sources of income and Fund expenses during the
fiscal year
Statement of Changes in Net Assets 6
Detail of changes in Fund assets and distributions to
Shareholders during the past two years
Financial Highlights 7
Historical distributions, total returns, expense ratios
and net assets
Notes to Financial Statements 8
Accounting and distribution policies, details of agreements
And transactions with Fund management and affiliates
Report of Independent Auditors 10
Trustees and Officers 11
</Table>
<Page>
Letter to Shareholders
- -----------------------------------------------------------------
Dear Fellow Shareholder:
Globally, it has been a tumultuous year by any standard, and from
most perspectives, not one that we should want to repeat.
However, happily it has been a profitable year for most investors
as stock markets around the world rebounded from a three year
slump and the economies of many countries displayed solid
evidence that they are expanding. Furthermore, because inflation
seemed to remain tame, bond markets provided acceptable returns,
particularly in the credit sectors. One reason for this fortunate
trend is that investors, business managers and consumers have
become less risk averse, and this is most likely because their
perceived risks have been significantly reduced. Although the war
in Iraq lingers on, the swift initial success of the invasion
without the release of chemical weapons, the loss of thousands of
lives, the destruction of major oil fields or any major terrorist
retaliation, was a considerable relief. These were serious risks
that weighed on the economy and the financial markets before the
war that, while certainly not eliminated, were significantly
reduced by mid-year.
As we noted in this report last year, given the extremely low
prevailing interest rates at the beginning of 2003, it was very
unlikely that the Fund would be able to provide anything but a
meager return for the year. Interest rates remained low
throughout the entire year. In fact, the level and shape of the
US Treasury yield curves were very similar at the end of the
Fund's fiscal year, November 30, 2003, to what they had been a
year previous, except slightly lower in the shortest maturities
where the Fund is most active. Throughout the first half of the
year interest rates fell. This was culminated in late June when
the Federal Open Market Committee (FOMC) reduced the Fed Funds
target rate an additional quarter percent to a rate of 1.00%, the
FOMC's thirteenth straight reduction dating back to 2000, which
brought the Fed Funds rate down from a high of 6.5% to its
current 1% level. Although this has left little opportunity to
earn returns on short-term debt instruments it seems to have been
quite successful in stimulating the economy. As evidence mounted
that the economy was expanding, rates backed up somewhat in the
second half of the year, returning to whence they began.
While the return has been meager, we are pleased to report that
the Fund has achieved its goal of providing stability of capital
and that it has performed slightly better than its primary
benchmark, the iMoneyNet All Taxable Money Fund Average during
the past fiscal year. For the twelve months ended November 30,
2003, Managers Money Market Fund provided a return of 0.69%. For
the same period, the iMoneyNet All Taxable Money Fund Average
return was 0.66%. Although these returns are low, they are within
reasonable expectations given the level of short-term rates
throughout the year. Unless there is a significant change in the
interest rate environment we would expect similarly low returns
in the year to come. Typically the best estimate for the
prospective return of a money market fund is its current yield.
As of November 30, 2003, the 30-day average annualized yield for
the Fund was 0.37%.
1
<Page>
Letter to Shareholders (continued)
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The following report contains detailed financial statements for
the Fund as well as a table on page 3 of the performance of the
Fund over various trailing time periods along with performance of
all of the Funds within The Managers Funds family. As always, we
post any news or other pertinent information about the Funds as
soon as applicable on our website at www.managersfunds.com.
Should you have any questions about this report, please feel free
to contact us at 1-800-835-3879, or visit the website. We thank
you for your investment in The Managers Funds.
Sincerely,
/s/ Peter M. Lebovitz
- ---------------------
Peter M. Lebovitz
President
The Managers Funds
/s/ Thomas G. Hoffman
- ---------------------
Thomas G. Hoffman
Director of Research
The Managers Funds LLC
2
<Page>
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The Managers Funds and
Managers AMG Funds Performance (unaudited)
All periods ended December 31, 2003
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<Table>
Average Annual Total Returns (1)
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1 3 5 10 Since Inception
The Managers Funds: Year Years Years Years Inception Date
Equity Funds: ----- ----- ------- ----- --------- --------
Value 27.39% (0.03)% 2.70% 9.94% 11.81% Oct. '84
Capital Appreciation 25.05% (15.89)% (1.24)% 9.55% 12.52% Jun. '84
Small Company (2) 43.59% (0.36)% - - (2.36)% Jun. '00
Special Equity 42.50% 0.73% 8.94% 12.10% 13.99% Jun. '84
International Equity 33.21% (5.26)% (0.50)% 5.17% 9.80% Dec. '85
Emerging Markets
Equity (2) 51.20% 11.44% 14.03% - 7.03% Feb. '98
Income Funds:
Money Market (2) 0.64% 1.94% 3.35% 4.14% 5.23% Jun. '84
Bond (2) 10.77% 10.46% 8.86% 8.31% 10.22% Jun. '84
Global Bond 20.69% 11.22% 4.03% - 6.09% Mar. '94
Total Return Bond (2) 3.37% - - - 3.37% Dec. '02
Intermediate Duration
Government (2) 3.40% 6.71% 6.14% 6.53% 7.38% Mar. '92
Short Duration
Government (2) 2.47% 4.70% 4.63% 5.07% 5.11% Mar. '92
- ----------------------------------------------------------------------------------------------------
Managers AMG Funds:
Essex Aggressive Growth
Institutional Class 34.15% - - - 6.39% Mar. '02
Essex Aggressive Growth
Investor Class (2) 33.72% (13.06)% - - (1.88)% Nov. '99
Essex Large Cap
Growth (2,5) - - - - 12.30% Jun. '03
Rorer Large-Cap (2) 22.08% - - - (1.52)% Dec. '01
Rorer Mid-Cap (2) 31.37% - - - 7.57% Dec. '01
Systematic Value (2) 33.79% - - - 6.75% Apr. '02
Burridge Small Cap
Growth (2,3) 66.41% 19.68% - - 16.47% Sep. '00
- ----------------------------------------------------------------------------------------------------
First Quadrant Tax-
Managed Equity (2,4)
Before Taxes 29.29% (1.22)% - - (0.17)% Dec. '00
After Taxes on
Distributions 29.08% (1.38)% - - (0.33)%
After Taxes on
Distributions and
Sale of Fund Shares 19.02% (1.13)% - - (0.25)%
- -----------------------------------------------------------------------------------------------------
</Table>
See the Notes to the Performance Table on the following page.
3
<Page>
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The Managers Funds and
Managers AMG Funds Performance (continued)
Notes to the Performance Table
- -----------------------------------------------------------------
Past performance is not a guarantee of future results. The
investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be
worth more or less than the original cost. An investment in
Managers Money Market Fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government
agency.
Although the Money Market Fund seeks to preserve the value of
your investment at $1.00 per share, it is possible to lose money
by investing in the Fund. Additional risks are associated with
investing in international and emerging markets, and such
securities may be considered speculative. There are also risks
associated with investing in small-cap companies, such as
increased volatility. For more information regarding The Managers
Funds and Managers AMG Funds, including fees, expenses and risks,
please call (800)835-3879 or visit our website at
www.managersfunds.com for a Prospectus. Please read the
Prospectus carefully before you invest or send money. The
Prospectus is not an offer to sell shares in the Funds.
Distributed by Managers Distributors, Inc., member NASD.
(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. Year to date total returns
are based on calendar year.
(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 "Since Inception" return, and returns for all periods
beginning prior to 6/25/02, for the Burridge Small Cap Growth
Fund reflect performance linked with a "Predecessor Account"
which began operations on September 28, 2000. The Predecessor
Account's objectives, policies, guidelines and restrictions were,
in all material respects, the same as the Fund's. The Predecessor
Account was not registered as a mutual fund and therefore was not
subject to certain investment restrictions that are imposed upon
mutual funds. If the Predecessor Account had been registered as a
mutual fund, the Account's performance may have been adversely
affected. The performance of the Predecessor Account was
calculated according to the standardized SEC method.
(4) After-tax returns are calculated by Lipper using the
historical highest individual federal marginal income tax rates
and do not reflect the impact of state and local taxes. Actual
after-tax returns depend on an investor's tax situation and may
differ from those shown, and after-tax returns are not relevant
to investors who hold their Fund shares through tax-deferred
arrangements, such as 401(k)plans or individual retirement
accounts.
(5) The "Since Inception" return is for the period June 30, 2003
(commencement of operations) to December 31, 2003.
4
<Page>
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Managers Money Market Fund
Statement of Assets and Liabilities
November 30, 2003
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<Table>
Assets:
- -------
Investment in JPMorgan Prime Money Market Fund
Institutional Class Shares $33,039,508
Receivable for Fund shares sold 99,982
Prepaid expenses 1,553
-----------
Total assets 33,141,043
-----------
Liabilities:
- ------------
Payable for Fund shares repurchased 74,951
Dividends payable to shareholders 2,049
Administration fee payable 4,062
Other accrued expenses 10,139
-----------
Total liabilities 91,201
-----------
Net Assets $33,049,842
===========
Shares outstanding 33,049,842
-----------
Net asset value, offering and redemption
price per share $1.00
======
Net Assets Represent:
- ---------------------
Paid-in capital $33,049,842
===========
</Table>
- -----------------------------------------------------------------
Statement of Operations
For the fiscal year ended November 30, 2003
- -----------------------------------------------------------------
<Table>
Investment Income:
- ------------------
Dividend income $403,378
--------
Expenses:
- ---------
Administration fees $56,817
Transfer agent 55,139
Registration fees 17,983
Professional fees 15,359
Accounting fees 6,439
Trustees' fees and expenses 1,952
Miscellaneous expenses 7,878
-------
Total expenses before offsets 161,567
Less: Expense reductions (18,939)
-------
Total expenses 142,628
--------
Net Investment Income $260,750
--------
</Table>
The accompanying notes are an integral part of these financial
statements.
5
<Page>
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Managers Money Market Fund
Statement of Changes in Net Assets
For the fiscal year ended November 30,
- -----------------------------------------------------------------
<Table>
2003 2002
Increase (Decrease) in Net Assets --------- ----------
From Operations:
- ---------------------------------
Net investment income $ 260,750 $ 561,660
---------- ----------
Distributions to Shareholders:
- --------------------------------
From net investment income (260,750) (561,660)
---------- ----------
From Capital Share Transactions:
- --------------------------------
(at a constant $1.00 per share):
Proceeds from sale of shares 278,403,415 483,593,660
Reinvestment of dividends 233,524 511,496
Cost of shares repurchased (283,211,640) (482,192,556)
------------- -------------
Net increase (decrease)
from capital share
transactions (4,574,701) 1,912,600
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Total increase (decrease)
in net assets (4,574,701) 1,912,600
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Net Assets:
- -----------
Beginning of year 37,624,543 35,711,943
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End of year $ 33,049,842 $37,624,543
============= =============
</Table>
The accompanying notes are an integral part of these financial
statements.
6
<Page>
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Managers Money Market Fund
Financial Highlights
For a share of capital stock outstanding throughout each fiscal year
- -----------------------------------------------------------------
<Table>
Fiscal year ended November 30,
-----------------------------------------------------------------------
2003 2002 2001 2000 1999
-------- -------- -------- -------- -------
Net Asset Value,
Beginning of Year $1.000 $1.000 $1.000 $1.000 $1.000
-------- -------- -------- -------- -------
Income from Investment
Operations:
- ----------------------
Net investment income 0.007 0.014 0.042 0.059 0.047
-------- -------- -------- -------- -------
Less Distributions to
Shareholders from:
- ----------------------
Net investment income (0.007) (0.014) (0.042) (0.059) (0.047)
-------- -------- -------- -------- -------
Net Asset Value,
End of Year $1.000 $1.000 $1.000 $1.000 $1.000
======== ======== ======== ======== =======
Total Return 0.69% (a) 1.40% (a) 4.27% 6.05% (a) 4.84% (a)
Ratio of net expenses
to average net
assets (b) 0.38% 0.37% 0.44% 0.49% 0.48%
Ratio of net
investment income to
average net assets 0.69% 1.41% 4.18% 5.89% 4.74%
Net assets at end of year
(000's omitted) $33,050 $37,625 $35,712 $66,593 $53,627
================================================================================================
Expense Waivers/Offsets (c)
- ---------------------------
Ratio of total expenses to
average net assets 0.43% 0.43% 0.44% 0.51% 0.63%
Ratio of net investment
income to average
net assets 0.64% 1.35% 4.18% 5.87% 4.59%
================================================================================================
</Table>
(a) Total returns and net investment income would have been lower had certain
expenses not been reduced during the year.
(b) Prior to September 4, 2001 the Fund invested all of its investable assets
under a "Master-Feeder" arrangement under which expenses of the Master were
allocated to the Fund.
(c) Ratio information assuming no reduction of Fund expenses due to waivers,
reimbursements or expense offsets. (See Notes to Financial Statements.)
7
<Page>
- -----------------------------------------------------------------
Managers Money Market Fund
Notes to Financial Statements
November 30, 2003
- -----------------------------------------------------------------
Managers Money Market Fund (the "Fund") is a series of The
Managers Funds (the "Trust"), a no-load, open-end management
investment company, organized as a Massachusetts business trust,
and registered under the Investment Company Act of 1940, as
amended. Currently, the Trust is comprised of 9 investment
series, (collectively the "Funds").
The Fund invests all of its investable assets in the
Institutional Class Shares of the JPMorgan Prime Money Market
Fund (the "JPM Fund"), a separate registered investment company
with substantially the same investment objective and policies as
the Fund. The performance of the Fund is directly affected by the
performance of the JPM Fund.
(1) Summary of Significant Accounting Policies
----------------------------------------------
The Fund's financial statements are prepared in accordance with
accounting principles generally accepted in the United States of
America, which requires management to make estimates and
assumptions that affect the reported amount 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 reported period. Actual amounts
could differ from those estimates. The following is a summary of
significant accounting policies followed by the Fund in the
preparation of its financial statements:
(a) Valuation of Investments
----------------------------
The investment in the JPM Fund is valued at its end of day net
asset value per share. The JPM Fund's underlying investments are
valued at amortized cost which approximates market value. The
amortized cost method of valuation values a security at its cost
at the time of purchase and therefore assumes a constant
amortization to maturity of any discount or premium, regardless
of the impact of fluctuating interest rates on the market value
of the instruments.
(b) Security Transactions
-------------------------
Dividends declared by the JPM Fund accrue daily.
(c) Investment Income and Expenses
----------------------------------
As a shareholder of the JPM Fund, the Fund will receive its
proportionate share of the dividends paid by such class, which
takes into consideration the Fund's proportionate share of net
investment income and expenses of such class. Expenses incurred
by the Trust, which cannot be directly attributed to the Fund are
apportioned among the Fund and other affiliated funds based upon
their relative average net assets or number of shareholders.
The Fund has an "omnibus account" arrangement with J.P. Morgan
Fleming Asset Management (USA) Inc., the shareholder servicing
agent of the JPM Fund, whereby the Fund is credited with a factor
of 0.05% of the average daily assets invested in the JPM Fund.
This credit serves to reduce transfer agent expenses that would
otherwise be charged to the Fund. For the year ended November 30,
2003, the transfer agent expense was reduced under this
arrangement by $18,939.
(d) Dividends and Distributions
-------------------------------
Income dividends and capital gain distributions, if any, normally
will be declared daily and payable on the third to the last
business day of the month. Income and capital gain distributions
are determined in accordance with Federal income tax regulations,
which may differ from generally accepted accounting principles.
Permanent book and tax basis differences, if any, relating to
shareholder distributions will result in reclassifications to
paid-in capital.
8
<Page>
- -----------------------------------------------------------------
Notes to Financial Statements (continued)
- -----------------------------------------------------------------
(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.
(f) Capital Stock
-----------------
The Trust's Declaration of Trust authorizes for 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. Dividends and distributions to
shareholders are recorded on the ex-dividend date.
At November 30, 2003, there are no shareholders that hold more
than 10% of the out-standing shares of the Fund.
(2) Agreements and Transactions with Affiliates
-----------------------------------------------
The Trust has entered into an Administrative and Shareholder
Servicing Agreement under which The Managers Funds LLC (the
"Administrator"), a subsidiary of Affiliated Managers Group, Inc.
("AMG"), serves as the Fund's administrator and is responsible
for certain aspects of managing the Fund's operations, including
administration and shareholder services of the Fund. For these
services, the Fund is required to pay the Administrator 0.15% of
the Fund's average daily net assets per annum. The Fund is
distributed by Managers Distributors, Inc., ("MDI"), a wholly-
owned subsidiary of The Managers Funds LLC. Certain Trustees and
Officers of the Fund are Officers and/or Directors of the
Administrator, AMG and/or MDI.
The aggregate annual fee paid to each outside Trustee for serving
as a Trustee of the Trust is $20,000. In addition, the in-person
and telephonic meeting fees the Trustees receive are $1,000 and
$500 per meeting, respectively. The Trustees' fee expense shown
in the financial statements represents the Fund's allocated
portion of the total fees and expenses paid by the Fund and other
affiliated funds in the Trust and in the complex.
(3) 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 against the Fund that have not yet occurred. However,
based on experience, the Fund expects the risks of loss to be
remote.
9
<Page>
- -----------------------------------------------------------------
Report of Independent Auditors
- -----------------------------------------------------------------
To the Board of Trustees of The Managers Funds and the
Shareholders of Managers Money Market Fund:
In our opinion, the accompanying statement of assets and
liabilities and the related statements of operations and of
changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of
Managers Money Market Fund (the "Fund") at November 30, 2003, the
results of its operations, the changes in net assets and the
financial highlights for the periods indicated, in conformity
with accounting principles generally accepted in the United
States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements
in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform
the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits, which included
confirmation of securities at November 30, 2003 by correspondence
with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 20, 2004
10
<Page>
- -----------------------------------------------------------------
Trustees and Officers (unaudited)
- -----------------------------------------------------------------
The Trustees and Officers of the Trust, their business addresses,
principal occupations for the past five years and dates of birth
are listed below. Unless otherwise noted, the address of each
Trustee or Officer is the address of the Trust: 40 Richards
Avenue, Norwalk, Connecticut 06854.
The Trustees hold office without limit in time except that (a)
any Trustee may resign or retire; (b) any Trustee may be removed
with or without cause by at least two-thirds of the number of
Trustees remaining after such removal (provided that there shall
not be fewer than 3 remaining Trustees); (c) shareholders may
vote to remove a Trustee at a special meeting of shareholders
held at the written request of shareholders of 10% or more of the
outstanding shares of the Trust.
Independent Trustees
- --------------------
The following Trustees are not "interested persons" of the Trust
within the meaning of the 1940 Act:
<Table>
Name, Date of
Birth, Number of
Funds Overseen in Principal Occupation(s) During Past 5
Fund Complex* Years and Other Directorships Held by Trustee
- ---------------------------- --------------------------------------------------
Jack W. Aber, 9/9/1937 Professor of Finance, Boston University School of
* Trustee since 1999 Management (1972-Present); Trustee of Appleton
* Oversees 21 Funds in Growth Fund (1 portfolio); Trustee of Third Avenue
Fund Complex Trust (4 portfolios); Trustee of Third Avenue
Variable Series Trust (1 portfolio)
- ---------------------------- --------------------------------------------------
William E. Chapman, II, President and Owner, Longboat Retirement Planning
9/23/1941 Solutions (1998-Present); Hewitt Associates, LLC
* Trustee since 1999 (part time) provider of Retirement and Investment
* Oversees 21 Funds in Education Seminars); President Retirement Plans Group,
Fund Complex Kemper Funds (1990-1998); Trustee of Third Avenue
Trust (4 portfolios); Trustee of Third Avenue Variable
Series Trust (1 portfolio)
- ---------------------------- --------------------------------------------------
Edward J. Kaier, 9/23/1945 Partner, Hepburn Willcox, Hamilton & Putnam
* Trustee since 1999 (1977-Present); Trustee of Third Avenue Trust
* Oversees 21 Funds in (4 portfolios); Trustee of Third Avenue Variable
Fund Complex Series Trust (1 portfolio)
- ---------------------------- --------------------------------------------------
Madeline H. Member, Investment Committee, New Jersey Supreme
McWhinney, 3/11/22 Court (1990-Present); Member, Advisory Board on
* Trustee since 1987 Professional Ethics, New Jersey Supreme Court
* Oversees 13 Funds in (1983-1998); President, Dale, Elliott & Company, Inc.
Fund Complex (Management Consultant) (1977-1994); No other
directorships held by trustee.
- ---------------------------- --------------------------------------------------
</Table>
11
<Page>
- -------------------------------------------------------------------------------
Trustees and Officers
- -------------------------------------------------------------------------------
<Table>
Name, Date of
Birth, Number of
Funds Overseen in Principal Occupation(s) During Past 5
Fund Complex* Years and Other Directorships Held by Trustee
- ---------------------------- --------------------------------------------------
Steven J. Paggioli, 4/3/50 Private Investor; Executive Vice President, Secretary
* Trustee since 1993 and Director, Investment Company Administration, LLC
* Oversees 13 Funds in (1990-2001); Trustee, Professionally Managed Portfolios,
Fund Complex (1991-2001); Consultant, formerly Executive Vice
President and Director, The Wadsworth Group (1986-2001);
Vice President, Secretary and Director, First Fund
Distributors, Inc. (1991-2001); Trustee of
Professionally Managed Portfolios (19 portfolios)
- ---------------------------- --------------------------------------------------
Eric Rakowski, 6/5/1958 Professor, University of California at Berkeley
* Trustee since 1999 School of Law (1990-Present); Visiting Professor,
* Oversees 21 Funds in Harvard Law School (1998-1999); Trustee of Third
Fund Complex Avenue Trust (4 portfolios); Trustee of Third
Avenue Variable Series Trust (1 portfolio)
- ---------------------------- --------------------------------------------------
Thomas R. Schneeweis, 5/10/47 Professor of Finance, University of Massachusetts
* Trustee since 1987 (1985-Present); Managing Director, CISDM at the
* Oversees 13 Funds in Fund University of Massachusetts, (1994-Present); President
* Complex and Chief Executive Officer, Schneeweis Partners, LLC
(2001-Present); No other directorships held by trustee.
- ---------------------------- --------------------------------------------------
</Table>
* The Fund complex consists of Managers AMG Funds, The Managers
Funds, Managers Trust I and Managers Trust II.
Interested Trustees
- -------------------
The following Trustees are "interested persons" of the
Trust within the meaning of the 1940 Act. Mr. Healey is an
interested person of the Trust within the meaning of the 1940
Act by virtue of his positions with, and interest in securities
of, Affiliated Managers Group, Inc. Mr. Lebovitz is an
interested person of the Trust within the meaning of the 1940
Act by virtue of his positions with The Managers Funds LLC and
Managers Distributors, Inc.
12
<Page>
- ---------------------------------------------------------------
Trustees and Officers (continued)
- ---------------------------------------------------------------
<Table>
Name, Date of
Birth, Number of
Funds Overseen in Principal Occupation(s) During Past 5
Fund Complex* Years and Other Directorships Held by Trustee
- ---------------------------- --------------------------------------------------
Sean M. Healey, 5/9/1961 President and Chief Operating Officer, Affiliated
* Trustee since 1999 Managers Group, Inc. (1999-Present); Director,
* Oversees 21 Funds in Affiliated Managers Group, Inc. (2001-Present);
Fund Complex Executive Vice President, Affiliated Managers Group,
Inc. (1995-1999); Vice President, Goldman, Sachs &
Company (1987-1995); No other directorships held by
trustee.
- ---------------------------- --------------------------------------------------
Peter M. Lebovitz, 1/18/1955 President and Chief Executive Officer, The Managers
* Trustee since 1999 Funds LLC (1999-Present); President Managers
* Oversees 21 Funds in Distributors, Inc. (2000-Present); Director of
Fund Complex Marketing, The Managers Funds, LP (1994-1999);
Director of Marketing, Hyperion Capital Management,
Inc. (1993-1994); Senior Vice President, Greenwich
Asset Management, Inc. (1989-1993); No other
directorships held by trustee.
- ---------------------------- --------------------------------------------------
</Table>
* The Fund complex consists of Managers AMG Funds, The Managers
Funds, Managers Trust I and Managers Trust II.
Officers
- --------
<Table>
Name, Date of
Birth, Position(s)
Held With Fund &
Length of Time Served Principal Occupation(s) During Past 5 Years
- ---------------------------- --------------------------------------------------
Galan G. Daukas, 10/24/1963 Chief Operating Officer, The Managers Funds LLC,
* Chief Financial Officer (2002-Present); Chief Financial Officer,
since 2002 Managers AMG Funds, Managers Trust I and Managers
Trust II; Chief Operating Officer and Chairman of the
Management Committee, Harbor Capital Management Co.,
Inc. (2000-2002); Chief Operating Officer, Fleet
Investment Advisors (1992-2000)
- ---------------------------- --------------------------------------------------
Donald S. Rumery, 9/23/1958 Director, Finance and Planning, The Managers Funds
* Treasurer since 1995 LLC (1994-Present); Treasurer and Chief Financial
* Secretary since 1997 Officer, Managers Distributors, Inc. (2000-Present);
Treasurer and Secretary of Managers Trust I,
Managers Trust II and treasurer of Managers AMG Funds.
- ---------------------------- --------------------------------------------------
</Table>
13
<Page>
Managers
- --------
Administrator
- -------------
The Managers Funds LLC
40 Richards Avenue
Norwalk, Connecticut 06854-2325
(203) 857-5321 or (800) 835-3879
Distributor
- -----------
Managers Distributors, Inc.
40 Richards Avenue
Norwalk, Connecticut 06854-2325
(203) 857-5321 or (800) 835-3879
Custodian
- ---------
The Bank of New York
100 Church Street, 10th floor
New York, NY 10286
Legal Counsel
- -------------
Goodwin Procter LLP
Exchange Place
Boston, Massachusetts 02109-2881
Transfer Agent
- --------------
Boston Financial Data Services, Inc.
attn: The Managers Funds
P.O. Box 8517
Boston, Massachusetts 02266-8517
(800)252-0682
For ManagersChoice Only
- -----------------------
PFPC Brokerage Services, Inc.
P.O. Box 61487
King of Prussia, Pennsylvania 19406
(800)358-7668
Trustees
- --------
Jack W. Aber
William E. Chapman, II
Sean M. Healey
Edward J. Kaier
Peter M. Lebovitz
Madeline H. McWhinney
Steven J. Paggioli
Eric Rakowski
Thomas R. Schneeweis
<Page>
Managers
- --------
The Managers Funds
Equity Funds:
- ------------------
VALUE FUND
Armstrong Shaw Associates Inc.
Osprey Partners Investment Mgmt., LLC
CAPITAL APPRECIATION FUND
Essex Investment Management Co., LLC
Holt-Smith &Yates Advisors, Inc.
SMALL COMPANY FUND
Kalmar Investment Advisers, Inc.
SPECIAL EQUITY FUND
Donald Smith &Co., Inc.
Essex Investment Management Co., LLC
Kern Capital Management LLC
Skyline Asset Management, L.P.
Westport Asset Management, Inc.
INTERNATIONAL EQUITY FUND
Lazzard Asset Management, LLC
Bernstein Investment Research & Mgmt.
Mastholm Asset Management, L.L.C.
EMERGING MARKETS EQUITY FUND
Rexiter Capital Management Limited
FIRST QUADRANT TAX-MANAGED EQUITY FUND
First Quadrant, L.P.
Income Funds:
- -------------------
BOND FUND
Loomis, Sayles & Co. L.P.
GLOBAL BOND FUND
Loomis, Sayles & Co. L.P.
INTERMEDIATE DURATION GOVERNMENT FUND
Smith Breeden Associates, Inc.
TOTAL RETURN BOND FUND
Merganser Capital Management LP
SHORT DURATION GOVERNMENT FUND
Smith Breeden Associates, Inc.
MONEY MARKET FUND
J.P. Morgan Fleming Asset Management (USA), Inc.
Managers AMG Funds
Equity Funds:
- -------------------
ESSEX AGGRESSIVE GROWTH FUND
ESSEX LARGE CAP GROWTH FUND
Essex Investment Management Company, LLC
RORER LARGE-CAP FUND
RORER MID-CAP FUND
Rorer Asset Management, LLC
SYSTEMATIC VALUE FUND
Systematic Investment Management, LLP
BURRIDGE SMALL CAP GROWTH FUND
The Burridge Group LLC
This report is prepared for the information of shareholders. It
is authorized for distribution to prospective investors only when
preceded or accompanied by an effective prospectus, which is
available by calling 1-800-835-3879. Distributed by Managers
Distributors, Inc., member NASD.
www.managersfunds.com
www.managersamg.com
<Page>
Item 2. CODE OF ETHICS.
====================================================================
Registrant has adopted a Code of Ethics. See attached Exhibit 10(a).
Item 3. AUDIT COMMITTEE FINANCIAL EXPERT.
====================================================================
Registrant's Board of Trustees has determined that independent
Trustees Mr. Jack W. Aber and Steven J. Paggioli each qualify as the
Audit Committee Financial Expert. Mr. Aber and Mr. Paggioli are
"independent" as such term is defined in Form N-CSR.
Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
====================================================================
Not applicable.
Item 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
====================================================================
Not applicable.
Item 6. [RESERVED]
====================================================================
Item 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-
END MANAGEMENT INVESTMENT COMPANIES.
====================================================================
Not applicable.
Item 8. [RESERVED]
====================================================================
Item 9. CONTROLS AND PROCEDURES.
====================================================================
(a) The registrant's principal executive officer and principal
financial officer have evaluated the registrant's disclosure
controls and procedures within 90 days of this filing and have
concluded that the registrant's disclosure controls and procedures
were effective, as of that date, in ensuring that information
required to be disclosed by the registrant in this Form N-CSR was
recorded, processed, summarized, and reported timely.
(b) The registrant's principal executive officer and principal
financial officer are aware of no changes in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal half-year that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 10. EXHIBITS
====================================================================
(a) Any code of ethics or amendments hereto. Filed herewith.
(b) Certifications pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. Filed herewith.
(c) Certifications pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. Filed herewith.
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/ Peter M. Lebovitz
----------------------------
Peter M. Lebovitz, President
Date: January 30, 2004
----------------
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/ Peter M. Lebovitz
----------------------------
Peter M. Lebovitz, President
Date: January 30, 2004
----------------
By: /s/ Galan G. Daukas
----------------------------------------
Galan G. Daukas, Chief Financial Officer
Date: January 30, 2004
----------------
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