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)
800 Connecticut Avenue, Norwalk, Connecticut 06854
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(Address of principal executive offices) (Zip code)
The Managers Funds LLC
800 Connecticut Avenue, Norwalk, Connecticut 06854
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(Name and address of agent for service)
Registrant's telephone number, including area code: (203) 299-3500
Date of fiscal year end: NOVEMBER 30
Date of reporting period: DECEMBER 1, 2003 - MAY 31, 2004
(Semi-Annual)
<Page>
Item 1. REPORT TO SHAREHOLDERS
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[Logo:] Managers
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SEMI-ANNUAL REPORT
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The Managers Funds
Money Market Fund
Dated May 31, 2004
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access to excellence
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MANAGERS MONEY MARKET FUND
==========================
Semi-Annual Report
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May 31,2004
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(unaudited)
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TABLE OF CONTENTS
Page
----
Letter to Shareholders 1
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Managers Performance 3
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Complete performance table for all of
The Managers Funds and Managers AMG
Funds as of June 30,2004
Financial Statements:
- ---------------------
Statement of Assets and Liabilities 7
Fund 's balance sheet
Statement of Operations 7
Detail of sources of income and Fund
expenses during the six months ended
May 31,2004
Statement of Changes in Net Assets 8
Detail of changes in Fund assets and
distributions to shareholders
during the past two periods
Financial Highlights 9
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Historical distributions,total returns,
expense ratios and net assets
Notes to Financial Statements 10
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Accounting and distribution policies,
details of agreements and transactions
with Fund management and affiliates.
Letter to Shareholders
======================
Dear Fellow Shareholder:
Throughout the six months ending May 2004,the financial markets
transitionedfrom a strong rally which began in mid-2003 into a
volatile trading range forstocks,and a relatively significant
correction for bonds.The equity rally was awelcome reprieve
from a three-year bear market and was the result of both a
strengthening economy and investors ' collective perception
that risks were diminishing.Although the economy continues to
strengthen and corporate profitsappear to be healthy,the stock
market corrected in mid-March and has remained directionless
since.One explanation is merely that stock valuations had
overreached reasonable levels.However,we think the reasons
are a bit morespecific.Continued turmoil in Iraq,which has
included mounting American casualties,and increased terrorist
activity around the globe has refocused investorson risk.In
addition,a combination of strong global growth and instability
inthe Middle East has driven the price of oil to an all time
high.This,along withother inflationary pressures typically
associated with strong growth has convinced most investors
that higher interest rates are inevitable.Even before the
Fed began what will likely be an extended period of gradual
tightening investorshad driven interest rates higher by 30
to 70 basis points between December andMay.Thus,while the
stock market has vacillated between celebrating strong
earnings growth and regretting higher risks and higher costs,
the bond marketreversed in April,suffering its worst
returns in a decade.
While returns have continued to be meager,money market
securities havebeen among the only safe haven for investors
over the recent months.We arepleased to report that the Fund
has continued to achieve its goal of providingstability of
capital and that it has again performed slightly better over
the lastsix months than its primary benchmark,the iMoneyNet
All Taxable Money FundAverage.For the six months ended May
31,2004,Managers Money MarketFund provided a total return of
0.27%.For the same period,the iMoneyNet AllTaxable Money Fund
Average return was 0.26%.Although these returns are extremely
low,they are within reasonable expectations given the level
of short-term rates throughout the period.While the Fed seems
likely to continue toraise short-term rates,it has communicated
that its intentions are to do so quitegradually,and only as
necessary.Thus,we would expect similarly low returnsfor the
remainder of the year.Typically the best estimate for the
prospective return of a money market fund is its current
yield.As of May 31,2004,the 7-day average annualized yield for
the Fund was 0.64%.
Effective May 14,2004,the Board of Trustees approved a
change to the Fund changed the primary vehicle that the
Fund had been investing in from the Institutional Class Shares
of the JPMorgan Prime Money Market Fund to the Institutional
Class Shares of JPMorgan Liquid Assets Money Market Fund,a
portfolio that is managed only slightly differently from the
former portfolio but with substantially the same investment
objective and policies as the Fund.As a result,the weighted
average maturity of the Fund rose to 63 days as of the end of
1
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Letter to Shareholders (continued)
=================================
the period,somewhat longer than it had recently been.The
sector allocation of the portfolio changed only slightly
so that the portfolio continues to be heavily invested in
commercial paper and certificates of deposit
Page 3 of this report contains a table with 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 the Fund or 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,
Peter M.Lebovitz Thomas G.Hoffman
President Director of Research
The Managers Funds The Managers Funds LLC
2
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The Managers Funds and
Managers AMG Funds Performance (unaudited)
All periods ended June 30,2004
==========================================
<Table>
Average Annual Total Returns (1)
--------------------------------
The Managers Funds:
- -------------------
Equity Funds: Year to 1 3 5 10 Since Inception
- ------------- Date Year Years Years Years Inception Date
------- ---- ----- ----- ----- --------- ---------
Value 4.76% 20.68% (0.41)% 1.51% 10.65% 11.76% Oct-84
Large-Cap(3) -Class A No Load(4) 2.49% 15.11% (4.88)% (11.39)% Jul-00
-Class A With Load (3.44)% 8.44% (6.75)% (12.70)% Jul-00
-Class B No Load(4) 2.20% 14.61% (5.38)% (11.87)% Jul-00
-Class B With Load (2.80)% 9.61% (6.34)% (12.54)% Jul-00
-Class C No Load(4) 2.20% 14.58% (5.37)% (11.83)% Jul-00
-Class C With Load 0.18% 12.52% (5.68)% (12.05)% Jul-00
-Class Y No Load 2.78% 15.65% (4.45)% (11.00)% Jul-00
Capital
Appreciation 0.43% 12.79% (6.84)% (5.75)% 10.18% 12.21% Jun-84
20 Fund(3) -Class A No Load(4) (3.28)% 20.45% (11.78)% (13.86)% (4.69)% Jan-98
-Class A With Load (8.78)% 13.49% (13.50)% (14.87)% (5.56)% Jan-98
-Class B No Load(4) (3.42)% 20.05% (12.24)% (14.29)% (6.97)% Feb-98
-Class B With Load (8.24)% 15.05% (13.12)% (14.53)% (6.97)% Feb-98
-Class C No Load(4) (3.40)% 19.95% (12.24)% (14.28)% (7.76)% Mar-98
-Class C With Load (5.26)% 17.85% (12.55)% (14.44)% (7.91)% Mar-98
-Class Y No Load (2.89)% 21.44% (11.30)% (13.39)% (7.72) Apr-98
Science &
Technology(3) -Class A No Load(4) (2.36)% 17.61% (19.31)% (32.60)% Jul-00
-Class A With Load (8.00)% 10.70% (20.88)% (33.60)% Jul-00
-Class B No Load(4) (2.39)% 17.24% (19.56)% (32.85)% Jul-00
-Class B With Load (7.27)% 12.24% (20.38)% (33.36)% Jul-00
-Class C No Load(4) (2.86)% 17.24% (19.50)% (32.85)% Jul-00
-Class C With Load (4.74)% 14.92% (19.77)% (33.02)% Jul-00
-Class Y No Load (2.30)% 18.44% (18.80)% (32.20)% Jul-00
Mid-Cap(3) -Class A No Load(4) 5.50% 25.63% 6.03% 10.54% 13.60% Jan-97
-Class A With Load (0.55)% 18.42% 3.96% 9.25% 12.70% Jan-97
-Class B No Load(4) 5.11% 24.88% 5.48% 10.02% 11.79% Jan-97
-Class B With Load 0.11% 19.88% 4.58% 9.81% 11.79% Jan-97
-Class C No Load(4) 5.11% 24.85% 5.52% 10.05% 10.66% Feb-98
-Class C With Load 3.07% 22.68% 5.16% 9.83% 10.49% Feb-98
-Class Y No Load 5.73% 26.15% 6.57% 11.13% 14.20% Jan-97
Special Equity 4.94% 32.30% 2.18% 7.57% 13.45% 13.89% Jun-84
Special Equity - I Shares - - - - - 4.42% May-04
Small Company(2) 6.09% 33.20% 3.67% - - (0.63)% Jun-00
International Equity 1.46% 25.96% 0.19% (1.40)% 5.33% 9.61% Dec-85
Emerging Markets Equity(2) 1.06% 32.48% 11.29% 7.29% - 6.64% Feb-98
</Table>
3
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The Managers Funds and
Managers AMG Funds Performance (unaudited)
All periods ended June 30,2004
==========================================
<Table>
Average Annual Total Returns (1)
--------------------------------
Year to 1 3 5 10 Since Inception
Date Year Years Years Years Inception Date
------- ---- ----- ----- ----- --------- ---------
The Managers Funds:
- -------------------
Hybrid
- ------
Balanced(3) -Class A No Load(4) 2.66% 13.81% 2.26% 6.19% 9.00% Jan-97
-Class A With Load (3.28)% 7.26% 0.26% 4.94% 8.15% Jan-97
-Class B No Load(4) 2.36% 13.17% 1.81% 5.70% 6.63% Feb-98
-Class B With Load (2.64)% 8.17% 0.84% 5.43% 6.63% Feb-98
-Class C No Load(4) 2.32% 13.13% 1.78% 5.69% 6.53% Feb-98
-Class C With Load 0.35% 10.95% 1.43% 5.47% 6.37% Feb-98
-Class Y No Load 2.91% 14.27% 2.78% 6.74% 9.55% Jan-97
Income Funds:
- -------------
Money Market(2) 0.28% 0.53% 1.22% 2.95% 4.03% 5.09% Jun-84
Short Duration Government(2) 0.31% 1.22% 3.36% 4.34% 5.03% 4.92% Mar-92
Intermediate Duration
Government(2) 0.33% 1.66% 5.60% 6.21% 6.87% 7.09% Mar-92
Total Return Bond (2) (0.26)% (0.78)% - - - 2.06% Dec-02
Fixed Income(3) -Class A No Load(4) (0.11)% 2.51% 6.15% 7.02% 6.68% Jan-97
-Class A With Load (5.14)% (2.65)% 4.34% 5.93% 5.95% Jan-97
-Class B No Load(4) (0.31)% 2.00% 5.62% 6.53% 5.79% Mar-98
-Class B With Load (5.19)% (2.88)% 4.71% 6.22% 5.79% Mar-98
-Class C No Load(4) (0.42)% 1.96% 5.64% 6.55% 5.99% Mar-98
-Class C With Load (2.41)% (0.06)% 5.29% 6.34% 5.82% Mar-98
-Class Y No Load 0.19% 3.08% 6.71% 7.62% 7.29% Jan-97
Bond (2) (0.67)% 1.31% 8.33% 7.76% 8.95% 9.91% Jun-84
Global Bond (1.26)% 5.58% 13.22% 5.87% 5.78% 5.66% Mar-94
High Yield(3) -Class A No Load(4) 1.53% 10.96% 10.91% 5.41% 5.97% Jan-98
-Class A With Load (4.35)% 4.61% 8.74% 4.17% 5.01% Jan-98
-Class B No Load(4) 1.21% 10.29% 10.37% 4.85% 4.76% Feb-98
-Class B With Load (3.65)% 5.29% 9.54% 4.58% 4.76% Feb-98
-Class C No Load(4) 1.21% 10.29% 10.37% 4.88% 4.75% Feb-98
-Class C With Load (0.71)% 8.21% 10.01% 4.67% 4.58% Feb-98
-Class Y No Load 1.82% 11.48% 11.50% 5.99% 5.81% Mar-98
Convertible
Securities(3) -Class A No Load(4) 1.58% 12.13% 5.20% 4.41% 8.60% Sep-98
-Class A With Load (4.28)% 5.65% 3.15% 3.18% 7.49% Sep-98
-Class B No Load(4) 1.40% 11.62% 4.71% 3.88% 8.07% Sep-98
-Class B With Load (3.44)% 6.62% 3.83% 3.60% 7.94% Sep-98
-Class C No Load(4) 1.39% 11.68% 4.72% 3.90% 8.09% Sep-98
-Class C With Load (0.61)% 9.55% 4.36% 3.69% 7.90% Sep-98
-Class Y No Load 1.85% 12.80% 5.75% 4.94% 9.16% Sep-98
4
</Table>
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The Managers Funds and
Managers AMG Funds Performance (unaudited)
All periods ended June 30,2004
==========================================
<Table>
Average Annual Total Returns (1)
--------------------------------
Year to 1 3 5 10 Since Inception
Date Year Years Years Years Inception Date
------- ---- ----- ----- ----- --------- ---------
Managers AMG Funds:
- -------------------
Essex Aggressive Growth
Institutional Class (0.75)% 12.00% - - - 4.66% Mar-02
Essex Aggressive Growth
Investor Class(2) (0.76)% 11.83% (6.28)% - - (1.84)% Nov-99
Essex Large Cap Growth (2) 1.25% 13.71% - - - 13.71% Jun-03
Rorer Large-Cap(2) (0.10)% 11.69% - - - (1.26)% Dec-01
Rorer Mid-Cap(2) 9.83% 22.62% - - - 10.04% Dec-01
Systematic Value(2) 3.45% 20.54% - - - 6.82% Apr-02
Burridge Small Cap Growth(2,5) 9.07% 44.48% 14.28% - - 16.81% Sep-00
- -----------------------------------------------------------------------------------------------------------
First Quadrant Tax-Managed Equity(2,6)
Before Taxes (0.81)% 14.30% (0.38)% - - (0.38)% Dec-00
After Taxes on Distributions (0.81)% 14.12% (0.54)% - - (0.51)%
After Taxes on Distributions
and Sale of Fund Shares (0.53)% 9.29% (0.42)% - - (0.41)%
</Table>
See the Notes to the Performance Table on the following page.
Past performance is not indicative of future results.
Current performance may be higher or lower than the
performance data quoted. 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 performance information through
the most recent month end, please call (800) 835-3879 or
visit our website at www.managersfunds.com.
Performance differences among the share classes are due
to differences in sales charge structures and class expenses.
Returns shown reflect maximum sales charge of 5.75% on
Class A (5.00% maximum for Managers Fixed Income Fund),
1% on Class C as well as the applicable contingent deferred
sales charge (CDSC) on both Class B and C shares. The
Class B shares' CDSC declines annually between years 1
through 6 according to the following schedule: 5, 4, 3, 3,
2, 1%. No sales charge is assessed after year 6. Class C
shares held for less than 1 year are subject to a 1% CDSC.
The Fund share classes differ with regard to sales charges
and Fund expenses. In choosing a Fund and class(es),
investors should consider the amount they plan to invest,
their investment objectives, the Fund's investment
objectives, risks, charges and expenses carefully before
investing, and how long they intend to keep their money
invested in the Fund and class(es). Each Fund's prospectus
contains information concerning the Fund's investment
objective, risks, charges and expenses and other information.
To obtain a prospectus, please call (800) 835-3879 or visit
our website at www.managersfunds.com. Please read the
Prospectus carefully before you invest in a Fund or send
money. Investors should discuss their goals and choices
with a registered financial professional in order to
determine which share class is appropriate for them.
Distributed by Managers Distributors, Inc., member NASD.
5
<Page>
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The Managers Funds and
Managers AMG Funds Performance (unaudited)
Notes to the Performnce Table
==========================================
(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) Formerly part of the Conseco Funds Group.
(4) Performance does not reflect the deduction of a
sales load, which, if reflected, would reduce the
performance reported.
(5) 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.
(6) 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.
6
<Page>
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Managers Money Market Fund
Statement of Assets and Liabilities
May 31,2004 (unaudited)
===================================
<Table>
Assets:
- -------
Investment in JPMorgan Liquid Assets
Money Market Fund, Institutional
Class Shares $35,881,033
Receivable for Fund shares sold 7,516
Dividends receivable 18,151
Prepaid expenses 17,461
Total assets 35,924,161
------------ ----------
Liabilities:
- ------------
Payable for Fund shares repurchased 1,626
Dividends payable to shareholders 3,787
Administration fee payable 3,771
Other accrued expenses 21,708
Total liabilities 30,892
----------------- ------
Net Assets $35,893,269
- ---------- -----------
Shares outstanding 35,893,269
Net asset value, offering and
redemption price per share $1.00
----------------------------- -----
Net Assets Represent:
Paid-in capital $35,893,269
- --------------------- ===========
</Table>
=================================================
Statement of Operations
For the six-months ended May 31, 2004 (unaudited)
=================================================
<Table>
Investment Income:
- ------------------
Dividend income $173,728
--------------- --------
Expenses:
- ---------
Administration fees $27,334
Transfer agent 26,407
Registration fees 10,845
Professional fees 8,519
Accounting fees 2,956
Reports to shareholders 1,936
Trustees' fees and expenses 947
Miscellaneous expenses 864
Total expenses before offsets 79,808
----------------------------- ------
Less: Expense reductions (10,012)
Total expenses 69,796
-------------- ------
Net Investment Income $103,932
- --------------------- --------
</Table>
The accompanying notes are an integral part
of these financial statements.
7
<Page>
==================================
Managers Money Market Fund
Statement of Changes in Net Assets
==================================
<Table
For the six
months ended For the fiscal
May 31, 2004 year ended
(unaudited) 2003
------------ --------------
Increase (Decrease) in Net Assets
From Operations:
- ---------------------------------
Net investment income $103,932 $260,750
--------------------- -------- --------
Distributions to Shareholders:
- ------------------------------
From net investment income (103,932) (260,750)
-------------------------- --------- ---------
From Capital Share Transactions
- -------------------------------
(at a constant $1.00 per share):
Proceeds from sale of shares 42,851,959 278,403,415
Reinvestment of dividends 94,866 233,524
Cost of shares repurchased (40,103,398) (283,211,640)
Net increase (decrease) from capital
share transactions 2,843,427 (4,574,701)
------------------------------------- --------- -----------
Total increase (decrease) in net assets 2,843,427 (4,574,701)
--------------------------------------- --------- -----------
Net Assets:
- -----------
Beginning of period 33,049,842 37,624,543
End of period $35,893,269 $33,049,842
------------- ----------- -----------
</Table>
The accompanying notes are an integral part
of these financial statements.
8
<Page>
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Managers Money Market Fund
Financial Highlights
For a share of capital stock outstanding
throughout each fiscal period
========================================
<Table>
For the six
months ended
May 31, 2004 Fiscal year ended November 30,
------------------------------------
(unaudited) 2003 2002 2001 2000 1999
------------ ---- ---- ---- ---- ----
Net Asset Value,
Beginning of Period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
- ---------------------- ------ ------ ------ ------ ------ ------
Income from Investment
Operations:
- ----------------------
Net investment income 0.003 0.007 0.014 0.042 0.059 0.047
- --------------------- ----- ----- ----- ----- ----- -----
Less Distributions to
Shareholders from:
- ---------------------
Net investment income (0.003) (0.007) (0.014) (0.042) (0.059) (0.047)
--------------------- ------- ------- ------- ------- ------- -------
Net Asset Value,
End of Period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
- --------------- ------ ------ ------ ------ ------ ------
Total Return 0.27% (a) 0.69%(b) 1.40%(b) 4.27% 6.05%(b)4.84%(b)
- ------------ --------- -------- -------- ----- ------- --------
Ratio of net expenses to
average net assets (c) 0.38%(d) 0.38% 0.37% 0.44% 0.49% 0.48%
Ratio of net investment
income to average net assets 0.57%(d) 0.69% 1.41% 4.18% 5.89% 4.74%
Net assets at end of period
(000's omitted) $35,893 $33,050 $37,625 $35,712 $66,593 $53,627
========================================================================================
Expense Waivers/Offsets (e)
- ---------------------------
Ratio of total expenses to
average net assets 0.44%(d) 0.43% 0.43% 0.44% 0.51% 0.63%
Ratio of net investment
income to average net assets 0.52%(d) 0.64% 1.35% 4.18% 5.87% 4.59%
========================================================================================
</Table>
(a)Not annualized. Prior to May 14, 2004 the Fund
invested all of its assets in the Institutional
Class Shares of the JPMorgan Prime Money Market Fund.
(See Notes to Finanacial Statements.)
(b)Total returns and net investment income would have
been lower had certain expenses not been reduced
during the year.
(c)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.
(d)Annualized.
(e)Ratio information assuming no reduction of Fund
expenses due to waivers, reimbursements or expense
offsets. (See Notes to Financial Statements.)
9
<Page>
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Managers Money Market Fund
Notes to Financial Statements
May 31,2004 (unaudited)
=============================
Managers Money Market Fund (the "Fund ")is a series of
The Managers Funds (the"Trust "),an 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 Liquid
Assets Money Market Fund (the "JPM Fund "),a separate
registered open-end management investment company with
substantially the same investment objective and
policies as the Fund.The JPM Fund is a series of the
J.P.Morgan Mutual Fund Trust,a business trust organized
under the laws of The Commonwealth of Massachusetts.The
investment advisor of the JPM Fund is J.P.Morgan
Investment Management Inc.("JPMIM ").The performance of
the Fund is directly affected by the performance of the
JPM Fund.Prior to May 14,2004,the Fund invested all
of its investable assets in the InstitutionalClass
Shares of the JPMorgan Prime Money Market Fund.
(1)Summary of Significant Accounting Policies
- ---------------------------------------------
The Fund 's financial statements are prepared in
accordance with accounting principlesgenerally
accepted in the United States of America,which
requires management to makeestimates 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
and are paid monthly.
(c)Investment Income and Expenses
- ---------------------------------
As a shareholder of the JPM Fund,the Fund receives 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
JPMIM.,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 six months ended May 31,2004,the transfer
agent expense was reduced under this arrangement by
$9,111.
(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
10
<Page>
=========================================
Notes to Financial Statements (continued)
=========================================
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.
(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
repurchasesof its capital stock on the trade date.
Dividends and distributions to shareholders are
recorded on the ex-dividend date.
At May 31,2004,there are no shareholders that hold
more than 10 %of the outstandingshares 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.Beginning May 14,2004 the Administra-
tor voluntarily agreed to waive 0.05%of the Fund 's
average daily net assets amounting to $901 at May 31,
2004.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.
Prior to April 1,2004,the aggregate annual fee paid to
each outside Trustee for serving as a Trustee of the Trust
was $20,000.In addition,the Trustees received in-person and
telephonic meeting fees of $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.
Effective April 1,2004,the aggregate annual retainer paid
to each outside Trustee will be $52,000,plus an additional
per meeting fee of $2,000 for each in-person or telephonic
meeting.The Trustees ' fees and expenses are allocated
based on relative net assets across all Funds in the
complex for which The Managers Funds,LLC serves as
the Investment Advisor.
(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
ndemnifications.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.
11
<Page>
========
MANAGERS
========
Administrator
-------------
The Managers Funds LLC
800 Connecticut Avenue
Norwalk, Connecticut 06854
(203) 299-3500 or (800) 835-3879
Distributor
-----------
Managers Distributors, Inc.
800 Connecticut Avenue
Norwalk, Connecticut 06854
(203) 299-3500 or (800) 835-3879
Custodian
---------
The Bank of New York
2 Hanson Place, 7th Floor
Brooklyn, NY 11217
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
John Kingston, III
Edward J. Kaier
Peter M. Lebovitz
Steven J. Paggioli
Eric Rakowski
Thomas R. Schneeweis
<Page>
<Table>
The Managers Funds The Managers Funds
Equity Funds: Income Funds:
================== ==================
VALUE FUND MONEY MARKET FUND
Armstrong Shaw Associates Inc. HIGH YIELD FUND
Osprey Partners Investment Mgmt., LLC J.P. Morgan Investment ManagementInc.
SHORT DURATION
CAPITAL APPRECIATION FUND GOVERNMENT FUND
Essex Investment Management Co., LLC
Bramwell Capital Management, Inc. INTERMEDIATE DURATION
GOVERNMENT FUND
SMALL COMPANY FUND Smith Breeden Associates,Inc.
Kalmar Investment Advisers, Inc.
TOTAL RETURN BOND FUND
SPECIAL EQUITY FUND Merganser Capital Management LP
Donald Smith & Co., Inc.
Essex Investment Management Co., LLC BOND FUND
Westport Asset Management, Inc.
Kern Capital Management LLC GLOBAL BOND FUND
Skyline Asset Management, L.P.
FIXED INCOME FUND
INTERNATIONAL EQUITY FUND Loomis, Sayles & Company L.P.
Lazard Asset Management, LLC
Bernstein Investment Research CONVERTIBLE SECURITIES FUND
and Management 40|86 Advisors,Inc.
Mastholm Asset Management, L.L.C.
EMERGING MARKETS EQUITY FUND
Rexiter Capital Management Limited Managers AMG Funds
Equity Funds
FIRST QUADRANT TAX-MANAGED ==================
EQUITY FUND
First Quadrant, L.P. ESSEX AGGRESSIVE GROWTH FUND
SCIENCE & TECHNOLOGY FUND ESSEX LARGE CAP GROWTH FUND
20 FUND Essex Investment Management Company,LLC
Oak Associates, ltd.
MID-CAP FUND RORER LARGE-CAP FUND
LARGE-CAP FUND RORER MID-CAP FUND
Chicago Equity Partners, LLC Rorer Asset Management,LLC
BALANCED FUND
Chicago Equity Partners, LLC SYSTEMATIC VALUE FUND
Loomis, Sayles & Company L.P. Systematic Financial Management, L.P.
BURRIDGE SMALL CAP GROWTH FUND
The Burridge Group LLC
</Table>
This report is prepared for the Fund's share-
holders. 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 or to
request additional information about the Fund
or other Managers Funds or Managers AMG Funds,
please contact us by calling 1-800-835-
3879 or by visiting our websites listed below.
Distributed by Managers Distributors, Inc.,
member NASD.
www.managersfunds.com
www.managersamg.com
<Page>
Item 2. CODE OF ETHICS
=======================================================================
Not applicable for the semi-annual report.
Item 3. AUDIT COMMITTEE FINANCIAL EXPERT
=======================================================================
Not applicable for the semi-annual report.
Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
=======================================================================
Not applicable for the semi-annual report.
Item 5. [RESERVED]
=======================================================================
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) Disclosure Controls and Procedures. The Principal Executive
and Financial Officers concluded that the Registrant's
Disclosure Controls and Procedures are effective based on
their evaluation of the Disclosure Controls and Procedures as
of a date within 90 days of the filing of this report.
(b) Internal Controls. There were no significant changes in the
Registrant's internal controls or in other factors that could
significantly affect these controls subsequent to the date of
our evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
Item 10. EXHIBITS
=======================================================================
(a) Certifications pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. Filed herewith.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. Filed herewith.
<Page>
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: August 3, 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: August 3, 2004
--------------
By: /s/ Galan G. Daukas
----------------------------------------
Galan G. Daukas, Chief Financial Officer
Date: August 3, 2004
--------------
<Page>