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: DECEMBER 31
Date of reporting period: JANUARY 1, 2004 - JUNE 30, 2004
(Semi-Annual Shareholder Report)
<Page>
Item 1. REPORT TO SHAREHOLDERS.
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[Logo:] Managers
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SEMI-ANNUAL REPORT
The Managers Funds:
Value Fund * Capital Appreciation Fund * Small Company Fund *
Special Equity Fund * International Equity Fund * Emerging Markets *
Equity Fund Bond Fund * Global Bond Fund
Dated June 30, 2004
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access to excellence
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<Page>
Table of Contents
Letter to Shareholders .................................1
The Managers Funds Performance .........................3
Complete performance table for The Managers Funds
and Managers AMG Funds as of June 30, 2004
Fund Snapshots..........................................5
Equity funds' top ten holdings, industry weightings
and country breakdown at June 30, 2004
Schedules of Portfolio Investments .....................8
Detailed portfolio listings by security type
and industry sector, as valued at June 30, 2004
Financial Statements
Statements of Assets and Liabilities ................29
Funds' balance sheet, net asset value (NAV)
per share computation and composition of net
assets
Statements of Operations ..............................31
Detail of sources of income, Fund expenses, and
realized and unrealized gains (losses) during
the period
Statements of Changes in Net Assets ...................33
Detail of changes in Fund assets for the past two
periods
Financial Highlights ..................................37
Historical net asset values per share, distributions,
total returns, expense ratios, turnover ratios
and net assets for each Fund
Notes to Financial Statements .........................42
Accounting and distribution policies, details of
agreements and transactions with Fund management
and description of certain investment risks
Nothing contained herein is to be considered an offer or sale or a
solicitation of an offer to buy shares of The Managers Funds. Such
offering is made only by Prospectus, which includes details as to
offer-ing price and other material information.
Founded in 1983, The Managers Funds offers individual and institutional
investors the experience and discipline of some of the world's most
highly regarded investment professionals.
<Page>
Letter to Shareholders
- ----------------------
Dear Fellow Shareholder:
Throughout the six months ending June 2004, the financial markets
transitioned from a strong rally which had begun in mid-2003 into a
volatile trading range for stocks, and a relatively significant
correction for bonds. The equity rally was a welcome reprieve from a
three-year bear market and was the result of both a strengthening
economy and investors' collec-tive perception that risks were
diminishing. Although the economy continues to strengthen and corporate
profits appear 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 more specific. Continued turmoil in Iraq, which
has included mounting American casualties, and increased terrorist
activity around the globe has re-awakened investors' awareness of risk.
In addition, a combination of strong global growth and instability in
the middle-east has driven the price of oil to an all-time high. This,
along with other 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 investors had driven interest
rates higher by 30 to 90 basis points between Decem-ber and June. Thus,
while the stock market has vacillated between celebrating strong
earnings growth and regretting higher risks and higher costs, the bond
market reversed in April, suffering its worst returns in a decade.
The result was that most stock indices rose modestly for the six-month
period, while bond indices were mixed. In general, small- and mid-cap
stocks outperformed large-cap stocks and value styles outperformed
growth, although in all of these cases the differences were much more
moderate than they have been in the recent past. For example, the
Russell 1000 in-dex rose 3.33% for the six-month period, while the
Russell 1000 Value rose 3.94% and the Russell 1000 Growth rose 2.74%.
Meanwhile, the Russell 2000 index (small caps) returned 6.76% while the
value and growth counterparts rose 7.83% and 5.68%, respectively. With
a few exceptions, credit yield spreads remained basically stable from
December to June so that investment grade corporate bonds performed as
poorly as treasuries did for the six months. Mortgage-backed
securities, however, bucked the trend and finished with a positive
return, as did high yield securities which outperformed primarily due
to their higher yields. The Lehman Brothers Government/Credit Index
returned -0.19% while the Lehman Brothers Ag-gregate Index, which is
similar except that it also includes mortgage-backed and asset-backed
securities, returned +0.15%.
The Funds included within this report provided equally mixed returns.
On a nominal basis, each of the equity Funds provided a positive return
for the six months ended June 30, 2004, while both of the bond Funds
fell slightly. Managers Small Company Fund provided the highest return,
rising 6.09% although this was slightly behind its primary benchmark,
the Russell 2000 index, which rose 6.76%. From a relative perspective,
Managers Value performed well by returning 4.76%, while its benchmark,
the S&P 500, returned 3.44%. Similarly, Managers Emerging Markets
Equity returned 1.06% while its benchmark fell by 0.76%. Each of the
other Funds within the report lagged its respective benchmark for the
period. While we would prefer to always beat our benchmarks during
every measurable period, short-term and long-term, this is unrealis-tic
in the short-term, yet it remains our primary focus in the long-term.
In each of these cases we believe that the six-month performance is
within reasonable expectations relative to the benchmark. The majority
of these Funds are beating their benchmarks over longer periods of
time. The table on page 3 lists each of the Funds' returns over various
trailing periods.
We are also pleased to relate a few notable happenings at Managers this
spring. In April, we were awarded, by share-holders, the contracts to
manage several mutual funds formerly managed by Conseco Funds Group. As
a result, we have changed the names of these Funds to be consistent
with The Managers Funds family. As is typical for us, these are all
sub-advised by one or more independent investment management firms. Due
to personnel changes within one of these organi-zations, we have
already made subadvisor changes. For more detail on these Funds, please
visit our website.
Beginning in May we instituted expense caps on several of our Funds
which have effectively lowered their respective costs to shareholders.
These include Managers Value, now capped at 1.19% per year, Managers
Capital Appreciation, now capped at 1.29% per year, Managers
International Equity, now capped at 1.55% per year, Managers Emerging
Markets Equi-ty, now capped at 1.79% per year, and Managers Global
Bond, now capped at 1.19% per year. In a similar effort to reduce
costs, we have commenced operation of a new share class of Managers
Special Equity (I-Class) which by virtue of a high minimum investment
($250,000) will be lower cost than the original share class.
In July, we announced our agreement to acquire assets managed by
Fremont Investment Advisors, and with shareholder approval we expect to
integrate this $2.8 billion family of Funds into our family before the
end of 2004. These Funds also utilize a subadvisor structure. We
believe that a key advantage to shareholders of both families of funds
will be a broader array of asset classes, investment styles and
intelligence diversification available within one group of funds.
Offerings either recently added or expected to be added as a result of
acquisitions include, high yield bonds, convertible securities, mid-cap
equities, micro-cap equities, real estate securities and municipal
bonds.
Finally, we are very pleased to note that the Managers family of Funds
celebrated its 20th anniversary in June as Managers Capital
Appreciation, Managers Special Equity and Managers Bond Funds eclipsed
their 20th year since inception. Both
1
<Page>
Letter to Shareholders (continued)
- ----------------------------------
Special Equity and Bond have outperformed their benchmarks over the 20-
year period. We wish to thank all of our share-holders, some of whom
have been investing with us since inception, for their confidence in
us. We hope we have served you well, and we will endeavor to continue
to do so going forward.
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 any of our Funds 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, CFA
President & CEO Director of Research
The Managers Funds LLC The Managers Funds LLC
2
<Page>
The Managers Funds and
Managers AMG Funds Performance (unaudited)
All periods ended June 30, 2004
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Average Annual Total Returns (1)
================================
<Table>
<c>
Six 1 3 5 10 Since Inception
Months Year Years Years Years Inception Date
-----------------------------------------------------------------
The Managers Funds:
Equity Funds:
Value(2) 4.76% 20.68% (0.41)% 1.51% 10.65% 11.76% Oct. '84
Capital Appreciation(2) 0.43% 12.79% (6.84)%(5.75)% 10.18% 12.21% Jun. '84
Small Company(2) 6.09% 33.20% 3.67% - - (0.63)% Jun. '00
Special Equity 4.94% 32.30% 2.18% 7.57% 13.45% 13.89% Jun. '84
Special Equity - I Class - - - - - 4.42% May '04
International Equity(2) 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
Income Funds:
Money Market(2) 0.28% 0.53% 1.22% 2.95% 4.03% 5.09% Jun. '84
Bond (2) (0.67)% 1.31% 8.33% 7.76% 8.95% 9.91% Jun. '84
Global Bond (2) (1.26)% 5.58% 13.22% 5.87% 5.78% 5.66% Mar. '94
Intermediate Duration
Government(2) 0.33% 1.66% 5.60% 6.21% 6.87% 7.09% Mar. '92
Short Duration
Government(2) 0.31% 1.22% 3.36% 4.34% 5.03% 4.92% Mar. '92
Total Return Bond(2) (0.26)% (0.78)% - - - 2.06% Dec. '02
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(2,3) 9.07% 44.48% 14.28% - - 16.81% Sep. '00
First Quadrant Tax-Managed Equity(2,4)
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>
The performance data shown represents past performance, which is not
a guarantee of future results. From time to time the Funds' advisor
has waived fees or reimbursed expenses, which may have resulted in
higher returns. 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. For
performance information through the most recent month end
please call (800) 835-3879 or visit our web site at
www.managersfunds.com.
In choosing a Fund, 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. Each
Fund's prospectus contains information concerning the Fund's investment
objective, risks, charges and expenses and other information. An
investment in Managers Money Market Fund is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government
agency. Although Managers Money Market Fund seeks to preserve the value
of your investmentat $1.00 per share, it is possible to lose money by
investing in the Fund. Additional risks are associated with investing
in internationaland emerging markets, and such securities may be
considered speculative. There are also risks are associated with
investing in small-cap companies, such as increased volatility, and
bonds, such as rising interest rates. More specifically, the value of
debt instruments held in bond funds declines when interest rates rise
and longer-term bonds are more vulnerable to interest rate risk. To
obtain aprospectus, 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. Distributed by Managers Distributors,
Inc., member NASD.
3
<Page>
The Managers Funds and
Managers AMG Funds Performance (unaudited)
Notes to the Performance 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)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)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 PredecessorAccount 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 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.
4
<Page>
Fund Snapshots (unaudited)
As of June 30, 2004
==========================
Managers Value Fund
-------------------
<Table>
Top Ten Holdings (out of 77 securities) % Fund Industry Weightings
- -------------------------------------------------------------------------------------------
Citigroup, Inc.* 4.2% Financials 34.8%
ChevronTexaco Corp.* 2.2 Consumer Discretionary 16.8
Fannie Mae 1.9 Health Care 15.9
Hewlett-Packard Co. 1.9 Energy 9.8
ConocoPhillips Co.* 1.9 Industrials 9.7
Comcast Corp., Special Class A 1.8 Consumer Staples 4.5
Merck & Co., Inc.* 1.8 Information Technology 3.0
Bank of America Corp. 1.7 Utilities 2.8
WellPoint Health Networks, Inc.* 1.7 Telecommunication Services 2.4
CVS Corp. 1.7 Materials 1.5
--- ---
Top Ten as a Group 20.8%
=====
Managers Capital Appreciation Fund
----------------------------------
Top Ten Holdings (out of 113 securities)% Fund Industry Weightings
- --------------------------------------------------------------------------------------------
Schlumberger, Ltd.* 2.0% Information Technology 24.0%
Teva Pharmaceutical Industries, Ltd.,
Sponsored ADR 1.8 Health Care 18.3
3M Co.* 1.7 Industrials 13.7
Forest Laboratories, Inc.* 1.7 Consumer Discretionary 12.2
Wal-Mart Stores, Inc.* 1.6 Consumer Staples 9.0
Microsoft Corp.* 1.6 Financials 8.5
Dell, Inc.* 1.6 Energy 8.2
Best Buy Co., Inc. 1.5 Materials 2.0
Intel Corp.* 1.5 Other 4.1
Resmed, Inc. 1.5
---
Top Ten as a Group 16.5%
=====
Managers Small Company Fund
---------------------------
Top Ten Holdings (out of 82 securities)% Fund Industry Weightings
- -----------------------------------------------------------------------------------
Pentair, Inc.* 3.1% Information Technology 28.3%
Ultra Petroleum Corp. 2.5 Industrials 25.1
Acxiom Corp. 2.4 Consumer Discretionary 22.0
Aeroflex, Inc. 2.2 Health Care 10.9
Avocent Corp.* 2.2 Energy 6.4
Insight Enterprises, Inc.* 2.2 Materials 1.7
Covance, Inc. 2.2 Financials 1.0
Rogers Corp. 2.1 Other 4.6
Respironics, Inc. 2.1
PEP Boys- Manny Moe & Jack, Inc. 2.0
---
Top Ten as a Group 23.0%
=====
</Table>
*Top Ten Holding at December 31, 2003
5
<Page>
Managers Special Equity Fund
----------------------------
<Table>
Top Ten Holdings (out of 343 securities) % Fund Industry Weightings
- --------------------------------------------------------------------------------------
Reliant Resources, Inc.* 1.9% Consumer Discretionary 22.4%
Visteon Corp.* 1.5 Information Technology 16.8
United States Steel Corp.* 1.4 Industrials 15.6
Toys "R" Us, Inc.* 1.4 Financials 12.7
Dillard's, Inc., Class A* 1.4 Health Care 10.2
ITT Educational Services, Inc.* 1.3 Materials 5.9
FelCor Lodging Trust, Inc.* 1.0 Energy 3.8
Kerzner International, Ltd. 1.0 Utilities 3.5
Meristar Hospitality Corp.* 1.0 Consumer Staples 1.1
AK Steel Holding Corp. 0.9 Telecommunication Services 0.3
--- Other 7.7
Top Ten as a Group 12.8%
=====
Managers International Equity Fund
----------------------------------
Top Ten Holdings (out of 194 securities) % Fund Industry Weightings
- --------------------------------------------------------------------------------------
Nissan Motor Co., Ltd.* 1.8% Financials 20.3%
Canon, Inc.* 1.6 Consumer Discretionary 18.9
Assurances Generales de France* 1.5 Materials 14.9
Talisman Energy, Inc. 1.4 Information Technology 9.4
Honda Motor Co., Ltd. 1.4 Energy 9.0
Arcelor* 1.4 Industrials 8.6
Tesco PLC 1.4 Consumer Staples 6.7
GlaxoSmithKline PLC* 1.2 Health Care 5.7
Continental AG 1.2 Telecommunication Services 3.5
British Sky Broadcasting PLC 1.2 Utilities 1.9
--- Other 1.1
Top Ten as a Group 14.1%
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Managers Emerging Markets Equity Fund
-------------------------------------
Top Ten Holdings (out of 50 securities) % Fund Industry Weightings
- ---------------------------------------------------------------------------------------
Samsung Electronics, Ltd.,
GDR representing 1/2 voting shares * 3.4% Telecommunication Services 25.6%
Sanlam, Ltd.* 3.0 Financials 18.1
Hankook Tire Co., Ltd. 2.9 Consumer Discretionary 12.1
China Telecom Corp., Ltd., Class H 2.8 Materials 10.5
Hyundai Motor Co., Ltd.* 2.7 Information Technology 9.4
China Oilfield Services, Ltd.* 2.7 Energy 6.6
Terkcell Iletisim Hizmetleri A.S. 2.6 Consumer Staples 6.2
Anglo American PLC 2.6 Industrials 6.2
China Mobile Ltd. 2.5 Health Care 3.6
Kookman Bank, ADR 2.5 Other 1.7
---
Top Ten as a Group 27.7%
=====
</Table>
*Top Ten Holding at December 31, 2003
6
<Page>
Fund Snapshots (continued)
==========================
<Table>
Summary of Investments by Country Summary of Investments by Country
Country Managers International MSCI EAFE Country Managers International MSCI EAFE
Equity Fund* Index Equity Fund* Index
- ----------------------------------------------------------------------------------------------------------
Japan 25.1% 24.0% South Korea 15.0% 18.9%
United Kingdom 18.9 24.8 Taiwan 13.6 12.0
France 10.0 9.4 Mexico 10.0 6.3
Germany 7.9 6.8 Malaysia 8.5 4.6
Canada 5.9 0.0 Russia 5.5 4.5
Switzerland 4.6 7.1 China 5.4 8.5
South Korea 3.3 0.0 Turkey 4.9 1.5
Hong Kong 3.0 1.6 Brazil 4.3 8.1
Sweden 2.8 2.4 India 4.2 5.0
Netherlands 2.7 4.8 Indonesia 4.1 1.7
United States 2.2 0.0 Thailand 3.3 2.8
Spain 1.6 3.6 South Africa 2.9 14.4
South Africa 1.4 0.0 United States 2.7 0.0
Italy 1.4 3.8 United Kingdom 2.6 0.0
Singapore 1.4 0.8 Hong Kong 2.5 0.0
Taiwan 1.0 0.0 Hungary 2.4 1.3
Brazil 0.9 0.0 Venezuela 2.2 0.2
Belgium 0.7 1.2 Poland 2.1 1.4
Peru 0.6 0.0 Argentina 1.9 0.5
Russia 0.6 0.0 Supranational&Other1.9 0.0
Mexico 0.4 0.0 Chile 0.0 1.9
Finland 0.4 1.4 Colombia 0.0 0.1
Ireland 0.4 0.8 Czech Republic 0.0 0.7
China 0.3 0.0 Egypt 0.0 0.3
Australia 0.3 4.8 Israel 0.0 3.7
Norway 0.3 0.5 Jordan 0.0 0.2
Portugal 0.2 0.4 Morocco 0.0 0.2
Denmark 0.1 0.8 Pakistan 0.0 0.2
Austria 0.0 0.3 Peru 0.0 0.5
Greece 0.0 0.5 Philippines 0.0 0.5
New Zealand 0.0 0.2
Cash 1.6 0.0
</Table>
* As a percent of total market value of common stocks on June 30, 2004.
7
<Page>
Managers Value Fund
June 30, 2004
===================
Value
=====
Schedule of Portfolio Investments(unaudited)
- --------------------------------------------
<Table>
Security Description Shares Value
- -----------------------------------------------------
Common Stocks - 101.2%
Consumer Discretionary - 16.8%
Brinker International, Inc.* 26,500(2) $ 904,180
Clear Channel Communications, Inc.38,100(2) 1,407,795
Comcast Corp., Special Class A* 73,400(2) 2,026,574
Darden Restaurants, Inc. 62,800(2) 1,290,540
Dollar Tree Stores, Inc.* 44,300(2) 1,215,149
Gannett Co., Inc. 16,650 1,412,753
Jones Apparel Group, Inc. 31,500 1,243,620
Liberty Media Corp.* 145,400 1,307,146
Mattel, Inc. 84,400 1,540,300
Office Depot, Inc.* 100,700(2) 1,803,537
Rent-A Center, Inc.* 25,500 763,215
Time Warner Co., Inc.* 96,300(2) 1,692,954
Whirlpool Corp. 7,440(2) 510,384
Yum! Brands, Inc.* 46,600 1,734,452
Total Consumer Discretionary 18,852,599
Consumer Staples - 4.5%
Constellation Brands, Inc.* 31,900(2) 1,184,447
CVS Corp. 44,900 1,886,698
Pepsi Bottling Group, Inc. 18,700 571,098
Supervalu, Inc. 19,100(2) 584,651
Unilever NV 11,400(2) 781,014
Total Consumer Staples 5,007,907
Energy - 9.8%
BP, PLC. Sponsored ADR 25,900(2) 1,387,463
ChevronTexaco Corp. 37,800 3,557,358
ConocoPhillips Co. 27,498 2,097,822
Devon Energy Corp. 21,900 1,445,400
Kerr-McGee Corp. 21,400(2) 1,150,678
Transocean, Inc.* 45,100(2) 1,305,194
Total Energy 10,943,915
Financials - 34.8%
ACE, Ltd. 35,300(2) 1,492,484
Allstate Corp., The 51,600 2,401,980
American Express Co. 32,500(2) 1,669,850
American International
Group, Inc. 20,200 1,439,856
Bank of America Corp. 36,754 3,110,123
Chubb Corp. 25,400(2) 1,731,772
Citigroup, Inc. 100,868 4,690,362
Fannie Mae Co. 54,600 3,896,256
Goldman Sachs Group, Inc. 16,900 1,591,304
Hartford Financial
Services Group, Inc. 26,800(2) 1,842,232
MBIA, Inc. 28,500(2) 1,627,920
MBNA Corp. 60,307 1,555,318
Merrill Lynch & Co., Inc. 46,200(2) 2,493,876
MGIC Investment Corp. 15,400(2) 1,168,244
Morgan Stanley Co. 28,000(2) 1,477,560
Regions Financial Corp. 48,300(2) 1,765,365
St. Paul Travelers
Companies, Inc., The 21,378(2) 866,664
Washington Mutual, Inc. 33,800(2) 1,306,032
Wells Fargo & Co. 30,449 1,742,596
XL Capital, Ltd. 15,300(2) 1,154,538
Total Financials 39,024,332
Health Care - 15.9%
Abbott Laboratories Co. 41,300 1,683,388
AmerisourceBergen Corp. 18,500(2) 1,105,930
Anthem, Inc.* 20,100(2) 1,800,156
GlaxoSmithKline PLC,
Sponsored ADR 42,400(2) 1,757,904
HCA, Inc. 36,500(2) 1,518,035
Laboratory Corp. of America
Holdings* 21,200(2) 841,640
McKesson Corp. 33,400(2) 1,146,622
Merck & Co., Inc. 66,000 3,135,000
Pfizer, Inc. 52,400 1,796,272
Quest Diagnostics, Inc.* 13,600(2) 1,155,320
WellPoint Health Networks, Inc.* 16,900 1,892,969
Total Health Care 17,833,236
Industrials - 9.7%
Cendant Corp.* 73,430(2) 1,797,566
Emerson Electric Co. 28,600 1,817,530
General Dynamics Corp. 12,200(2) 1,211,460
General Electric Co. 52,200 1,691,280
Honeywell International, Inc. 30,900 1,131,867
Pitney Bowes, Inc. 39,200 1,734,600
United Technologies Corp. 16,400 1,500,272
Total Industrials 10,884,575
Information Technology - 3.0%
Hewlett-Packard Co. 101,526 2,142,199
Xerox Corp.* 83,100(2) 1,204,950
Total Information Technology 3,347,149
Materials - 1.5%
E.I. du Pont de
Nemours & Co., Inc. 39,250 1,743,485
Telecommunication Services - 2.4%
Centurytel, Inc. 10,500(2) 315,420
Nextel Communications, Inc.* 32,800 874,448
Verizon Communications, Inc. 42,685 1,544,770
Total Telecommunication Services 2,734,638
Utilities - 2.8%
Exelon Corp. 52,100 1,734,409
FirstEnergy Corp. 38,000(2) 1,421,580
Total Utilities 3,155,989
Total Common Stocks
(cost $95,630,443) 113,527,826
Other Investment Companies - 33.5%
Bank of New York
Institutional Cash
Reserves Fund, 1.25%(1,3) 32,988,445 32,998,445
JPMorgan Prime Money
Market Fund,
Institutional Class Shares,
1.03%(1) 4,529,687 4,529,687
Total Other Investment Companies
(cost $37,528,132) 37,528,132
Total Investments - 134.7%
(cost $133,158,575) 151,055,958
Other Assets,
less Liabilities - (34.7)% (38,902,166)
Net Assets - 100.0% $112,153,792
</Table>
The accompanying notes are an integral part of these financial
statements.
8
<Page>
Managers Capital Appreciation Fund
June 30, 2004
==================================
Capital Appreciation
====================
Schedule of Portfolio Investments(unaudited)
- --------------------------------------------
<Table>
Security Description Shares Value
- -----------------------------------------------------
Common Stocks - 95.9%
Consumer Discretionary - 12.2%
Applebee's International, Inc. 22,500 $ 517,950
Bed Bath & Beyond, Inc.* 26,500 1,018,925
Best Buy Co., Inc. 49,900(2) 2,531,926
Cheesecake Factory, Inc., The* 11,000(2) 437,690
Coach, Inc.* 4,000 180,760
eBay, Inc.* 11,400(2) 1,048,230
Harley-Davidson, Inc. 4,000 247,760
JC Penney Co., Inc., Holding Co. 23,000(2) 868,480
Lowe's Co., Inc. 8,000(2) 420,400
McDonald's Corp. 40,000 1,040,000
PETsMART, Inc. 5,000(2) 162,250
Staples, Inc.* 50,000(2) 1,465,500
The Walt Disney Co. 54,200(2) 1,381,558
Tiffany & Co. 13,000 479,050
TJX Cos., Inc. 29,500(2) 712,130
Total Consumer Discretionary 12,512,609
Consumer Staples - 9.0%
Coca-Cola Co., The 22,600 1,140,848
Colgate-Palmolive Co. 26,200 1,531,390
Estee Lauder Co., Class A 3,500 170,730
Procter & Gamble Co. 20,000 1,088,800
Sysco Corp. 21,000 753,270
Walgreen Co. 15,000(2) 543,150
Wal-Mart Stores, Inc. 51,300(2) 2,706,588
Wrigley, Wm. Jr. Co. 19,300(2) 1,216,865
Total Consumer Staples 9,151,641
Energy - 8.2%
Anadarko Petroleum Corp. 10,200 597,720
Apache Corp. 20,190 879,275
BJ Services Co.* 28,400(2) 1,301,856
Devon Energy Corp. 10,000(2) 660,000
EOG Resources, Inc. 9,700(2) 579,187
Nabors Industries, Ltd.* 24,400(2) 1,103,368
Patterson-UTI Energy, Inc.* 17,500 584,675
Schlumberger, Ltd. 42,500(2) 2,699,175
Total Energy 8,405,256
Financials - 8.5%
American Express Co. 12,000(2) 616,560
American International Group, Inc.25,200 1,796,256
Citigroup, Inc. 42,300 1,966,950
Goldman Sachs Group, Inc. 10,700(2) 1,007,512
JPMorgan Chase & Co. 15,000 581,550
Merrill Lynch & Co., Inc. 19,400 1,047,212
U.S. Bancorp 20,000 551,200
Wells Fargo & Co. 19,400 1,110,262
Total Financials 8,677,502
Health Care - 18.3%
Amgen, Inc.* 19,000 1,036,830
Anthem, Inc.* 6,000(2) 537,360
Caremark Rx, Inc.* 15,800 520,452
Forest Laboratories, Inc.* 31,400(2) 1,778,182
Genentech, Inc.* 24,800(2) 1,393,760
Gilead Sciences, Inc.* 19,100 1,279,700
Kyphon, Inc.* 10,000 281,800
Martek Biosciences Corp.* 8,500(2) 477,445
Medtronic, Inc. 45,900 2,236,248
Novartis AG 31,700 1,410,650
Pfizer, Inc. 30,000 1,028,400
Resmed, Inc.* 29,400(2) 1,498,224
Stryker Corp. 12,000(2) 660,000
Teva Pharmaceutical Industries,
Ltd., Sponsored ADR 28,000(2) 1,884,120
UnitedHealth Group, Inc. 14,000(2) 871,500
WellPoint Health Networks, Inc.* 4,500 504,045
Zimmer Holdings, Inc.* 15,000 1,323,000
Total Health Care 18,721,716
Industrials - 13.7%
3M Co. 33,400 3,006,334
Apollo Group Inc* 5,600(2) 494,424
Caterpillar, Inc. 10,000(2) 794,400
Cintas Corp. 11,000 524,370
Cummins, Inc. 21,600(2) 1,350,000
Deere & Co. 4,000(2) 280,560
Emerson Electric Co. 15,000 953,250
FedEx Corp. 16,200 1,323,378
General Electric Co. 35,000 1,134,000
Illinois Tool Works 10,000(2) 958,900
J.B. Hunt Transport
Services, Inc.* 21,500 829,470
Robert Half International, Inc.* 18,000(2) 535,860
United Parcel Service, Inc.,
Class B 23,700(2) 1,781,529
Total Industrials 13,966,475
Information Technology - 24.0%
Analog Devices, Inc.* 20,000(2) 941,600
Applied Materials, Inc.* 35,000 686,700
Autodesk, Inc. 7,000(2) 299,670
Broadcom Corp., Class A* 12,000 561,240
Cisco Systems, Inc.* 75,000 1,777,500
Dell, Inc.* 73,100 2,618,442
Diebold, Inc. 14,000(2) 740,180
EMC Corp.* 97,400 1,110,360
Flextronics International, Ltd.* 30,000(2) 478,500
Intel Corp. 93,000 2,566,800
International Business
Machines Corp. 12,000 1,057,800
Kla-Tencor Corp.* 16,000(2) 790,080
Lexmark International, Inc.* 10,900 1,052,177
Linear Technology Corp. 15,000(2) 592,050
Maxim Integrated Products, Inc. 22,000(2) 1,153,240
Microsoft Corp. 75,200 2,147,712
Molex, Inc. 27,000(2) 736,560
Novell, Inc.* 102,700 861,653
SAP-AG (Systeme Anwendungen
Produkte in der
Datenverarbeitung) 15,000 627,150
Taiwan Semiconductor
Manufacturing Co., Ltd.* 62,747 521,427
Texas Instruments, Inc. 32,000 773,760
</Table>
The accompanying notes are an integral part of these financial
statements.
9
<Page>
Managers Capital Appreciation Fund
June 30, 2004
==================================
Capital Appreciation
====================
Schedule of Portfolio Investments(continued)
- --------------------------------------------
<Table>
Security Description Shares Value
- -----------------------------------------------------
Information Technology(continued)
Yahoo!, Inc.* 32,800(2) $ 1,191,624
Zebra Technologies, Corp.* 15,000(2) 1,305,000
Total Information Technology 24,591,225
Materials - 2.0%
Freeport McMoran Copper
& Gold, Inc., Class B 12,000(2) 397,800
Inco, Ltd.* 14,000(2) 483,840
Phelps Dodge Corp.* 6,000 465,060
Praxair, Inc. 18,000 718,380
Total Materials 2,065,080
Total Common Stocks
(cost $85,120,191) 98,091,504
Other Investment Companies - 32.2%
Bank of New York Institutional
Cash Reserves
Fund, 1.24%(1,3) 29,309,016 29,309,016
JPMorgan Prime Money Market
Fund, Institutional Class
Shares, 1.03%(1) 3,591,345 3,591,345
Total Other Investment Companies
(cost $32,900,361) 32,900,361
Total Investments - 128.1%
(cost $118,020,552) 130,991,865
Other Assets,
less Liabilities - (28.1)% (28,709,348)
Net Assets - 100.0% $102,282,517
</Table>
The accompanying notes are an integral part of these financial
statements.
10
<Page>
Managers Small Company Fund
June 30, 2004
===========================
Small Company
=============
Schedule of Portfolio Investments(unaudited)
- --------------------------------------------
<Table>
Security Description Shares Value
- -----------------------------------------------------
Common Stocks - 95.4%
Consumer Discretionary - 22.0%
Christopher & Banks Corp. 12,737(2) $ 225,572
Coldwater Creek, Inc.* 7,900 209,113
Cost Plus, Inc.* 6,750(2) 219,038
Fred's, Inc. 10,645(2) 235,148
GameStop Corp.* 19,100 290,702
Gentex Corp. 9,150(2) 363,072
Getty Images, Inc.* 3,050(2) 183,000
Harman International
Industries, Inc. 2,150 195,650
Insight Enterprises, Inc.* 27,275 484,403
Michaels Stores, Inc. 4,375(2) 240,625
O'Reilly Automotive, Inc.* 3,300 149,160
PEP Boys-Manny Moe & Jack, Inc. 16,925(2) 429,049
PETsMART, Inc. 12,725 412,926
Radio One, Inc.* 13,000(2) 208,130
Red Robin Gourmet Burgers, Inc.* 7,550 206,644
Ruby Tuesday, Inc. 11,200 307,440
Select Comfort Corp.* 6,550 186,020
TBC Corp.* 11,150 265,370
Total Consumer Discretionary 4,811,062
Energy - 6.4%
Delta Petroleum Corp.* 9,600(2) 129,120
Evergreen Resources, Inc.* 5,050 204,020
Niko Resources, Ltd. 5,325 153,307
Ultra Petroleum Corp.* 14,450(2) 539,418
Whiting Petroleum Corp.* 5,450 137,068
XTO Energy, Inc. 7,695(2) 229,234
Total Energy 1,392,167
Financials - 1.0%
Asta Funding, Inc. 7,000 121,800
Boston Private Financial
Holdings, Inc. 3,975(2) 92,061
Total Financials 213,861
Health Care - 10.9%
America Service Group, Inc.* 3,150 109,463
Barr Laboratories, Inc.* 9,862 332,349
Community Health Systems, Inc.* 5,900 157,943
Covance, Inc.* 12,150 468,747
Luminex Corp.* 10,775(2) 108,397
PSS World Medical, Inc.* 13,450(2) 150,640
Resmed, Inc.* 5,650 287,924
Respironics, Inc.* 7,675 450,905
Select Medical Corp. 11,700 157,014
Sonosite, Inc.* 6,750 161,393
Total Health Care 2,384,775
Industrials - 25.1%
Actuant Corp., Class A* 6,585 256,749
Aeroflex, Inc. * 34,100 488,653
Carlisle Co., Inc. 3,675 228,769
CDI Corp. 6,850 237,010
Chicago Bridge & Iron Co. N.V. 7,625 212,356
ChoicePoint, Inc.* 8,625 393,818
DeVry, Inc.* 15,075(2) 413,357
Donaldson Co., Inc. 6,100(2) 178,730
ElkCorp. 10,675 255,560
Hewitt Associates, Inc.,
Class A* 10,450 287,375
Laureate Education, Inc.* 9,900 378,576
Mobile Mini, Inc.* 8,300 235,803
MSC Industrial Direct Co.,
Class A 12,825 421,173
Navigant Consulting, Inc.* 12,150 260,496
NCI Building Systems, Inc.* 9,700(2) 315,735
Pentair, Inc. 19,825 666,912
Providence Service Corp.* 3,175 59,658
UTI Worldwide, Inc. 3,625 191,001
Total Industrials 5,481,731
Information Technology - 28.3%
Acxiom Corp. 20,800(2) 516,464
Alliance Data Systems Corp.* 7,800 329,550
ATMI, Inc.* 7,700(2) 210,287
Avocent Corp.* 13,275 487,723
Benchmark Electronics, Inc.* 12,150 353,565
Ceridian Corp.* 18,650 419,625
Digitas, Inc.* 16,900(2) 186,407
Emulex Corp.* 10,600(2) 151,686
Excel Technology, Inc.* 6,700 222,775
Fair Isaac Corp. 10,368(2) 346,084
FEI Co.* 9,900(2) 236,709
International Rectifier Corp.* 6,500 269,230
Lionbridge Technologies, Inc.* 14,000 107,100
MAXIMUS, Inc.* 5,150 182,619
Modem Media, Inc.* 11,275 59,307
MPS Group, Inc.* 20,475 248,157
OPNET Technologies, Inc.* 6,550 85,805
Pinnacle Systems, Inc.* 16,700 119,405
Polycom, Inc.* 6,050 135,581
Progress Software Corp.* 9,475 205,323
Radisys Corp.* 4,450(2) 82,637
Rogers Corp.* 6,650(2) 464,834
StarTek, Inc. 3,125 111,875
Symantec Corp.* 1,750(2) 76,615
Technitrol, Inc.* 8,250 180,675
Tekelec* 14,950(2) 271,642
Tollgrade Communications, Inc.* 10,300 109,386
Total Information Technology 6,171,066
Materials - 1.7%
MacDermid, Inc. 10,850(2) 367,273
Total Common Stocks
(cost $15,056,239) 20,821,935
Other Investment Companies - 28.9%
Bank of New York Institutional Cash
Reserves Fund, 1.25%(1,3) 4,918,110 4,918,110
JPMorgan Prime Money Market Fund,
Institutional Class
Shares, 1.03%(1) 1,398,184 1,398,184
Total Other Investment Companies
(cost $6,316,294) 6,316,294
Total Investments - 124.3%
(cost $21,372,533) 27,138,229
Other Assets, less Liabilities - (24.3)% (5,308,870)
Net Assets - 100.0% $21,829,359
</Table>
The accompanying notes are an integral part of these financial
statements.
11
<Page>
Managers Special Equity Fund
June 30, 2004
============================
Special Equity
==============
Schedule of Portfolio Investments(unaudited)
- --------------------------------------------
<Table>
Security Description Shares Value
- -----------------------------------------------------
Common Stocks - 92.3%
Consumer Discretionary - 22.4%
Action Performance
Companies, Inc. 321,300(2) $ 4,841,991
Applebee's International, Inc. 388,125(2) 8,934,638
Beasley Broadcasting
Group, Inc.* 237,000 3,545,520
Big Lots, Inc.* 757,152(2) 10,948,418
Borders Group, Inc. 483,500(2) 11,333,240
CBRL Group, Inc. 450,530(2) 13,898,851
Coldwater Creek, Inc.* 152,400(2) 4,034,028
Copart, Inc.* 3 18,100(2) 8,493,270
COX Radio, Inc., Class A* 368,600(2) 6,406,268
Cumulus Media, Inc., Class A* 446,900(2) 7,512,389
Design Within Reach, Inc. 39,120 469,440
Dillard's, Inc., Class A 2,101,200 46,856,760
Duckwall-ALCO Stores, Inc.* 247,800 4,160,314
Electronics Boutique Holdings
Corp.* 128,000(2) 3,371,520
Emmis Communications Corp.,
Class A* 1,203,600(2) 25,251,528
Furniture Brands
International, Inc. 1,012,600(2) 25,365,630
GameStop Corp.* 727,300(2) 11,069,506
Gaylord Entertainment Co.,
Class A* 226,233(2) 7,101,454
Getty Images, Inc.* 243,200(2) 14,592,000
Gildan Activewear, Inc.,
Class A* 234,100(2) 6,718,670
Goody's Family Clothing, Inc. 304,900(2) 3,161,813
Gymboree Corp.* 755,500 11,604,480
Hartmarx Corp.* 49,400 311,220
Hughes Supply, Inc. 191,600(2) 11,290,988
IMPCO Technologies, Inc.* 100,800(2) 638,064
Insight Communications Co., Inc.,
Class A* 698,400(2) 6,467,184
Insight Enterprises, Inc.* 488,980 8,684,285
International Speedway Corp.,
Class A 213,000(2) 10,360,320
J. Jill Group, Inc., The* 572,700(2) 13,509,993
Journal Communications, Inc. 361,500 6,807,045
Kerzner International, Ltd.* 727,300(2) 34,590,388
La Quinta Corp.* 845,000 7,098,000
La-Z-Boy, Inc. 732,500(2) 13,170,350
Leapfrog Enterprises, Inc.* 1,060,800(2) 21,099,312
Linens 'N Things, Inc.* 369,800(2) 10,838,838
M. D. C. Holdings, Inc. 116,400(2) 7,404,204
Nautilus Group, Inc. 504,200(2) 9,836,942
NetFlix, Inc.* 220,500(2) 7,926,975
P.F. Chang's China Bistro, Inc.* 135,300(2) 5,567,595
Panera Bread Co., Class A* 636,800(2) 22,848,384
Pier 1 Imports, Inc. 436,300 7,718,147
Polaris Industries, Inc. 184,600(2) 8,860,800
Priceline.com, Inc.* 365,600(2) 9,845,608
Prime Hospitality Corp.* 1,017,300 10,803,726
Proquest Co.* 3 48,000(2) 9,483,000
Quiksilver, Inc.* 307,000 7,309,670
Rare Hospitality
International, Inc.* 300,400 7,479,960
Ross Stores, Inc. 780,000(2) 20,872,800
Ruby Tuesday, Inc. 735,000(2) 20,175,750
Saks, Inc.* 1,023,000(2) 15,345,000
Salem Communications Corp.,
Class A* 482,900 13,101,077
School Specialty, Inc.* 323,565(2) 11,748,645
Source Interlink
Companies, Inc.* 433,700 4,822,744
Stage Stores, Inc.* 79,100(2) 2,978,906
Standard-Pacific Corp. 178,000 8,775,400
Talbots, Inc. 379,100 14,841,765
TJX Cos., Inc. 160,000(2) 3,862,400
Too, Inc.* 671,000(2) 11,205,700
Toro Co. 144,700(2) 10,139,129
Toys "R"Us, Inc.* 3,100,000(2) 49,383,000
Tweeter Home Entertainment
Group, Inc.* 618,800(2) 3,341,520
United Rentals, Inc.* 664,400(2) 11,886,116
Urban Outfitters, Inc.* 130,800(2) 7,967,028
Visteon Corp. 4,395,300(2) 51,293,150
WMS Industries, Inc.* 293,900(2) 8,758,220
Young Broadcasting, Inc.* 230,000 3,024,500
Total Consumer Discretionary 773,145,576
Consumer Staples - 1.1%
Central Garden & Pet Co.* 230,700 8,252,139
Del Monte Foods Co.* 824,300 8,374,888
Duane Reade, Inc.* 589,200(2) 9,621,636
NBTY, Inc.* 3 81,400 11,209,346
Total Consumer Staples 37,458,009
Energy - 3.8%
Global Industries, Ltd.* 1,320,400 7,552,688
Grant Prideco, Inc.* 326,900(2) 6,034,574
Houston Exploration Co.* 189,400(2) 9,818,496
Key Energy Services, Inc.* 648,300(2) 6,119,952
Maverick Tube Corp.* 260,000(2) 6,827,600
Newfield Exploration Co.* 186,700 10,406,658
OMI Corp.* 499,000(2) 5,938,100
Overseas Shipholding Group, Inc. 469,800 20,732,274
Pogo Producing Co. 484,200 23,919,480
Stone Energy Corp.* 184,800 8,441,664
Veritas DGC, Inc.* 1,140,800(2) 26,409,520
Total Energy 132,201,006
Financials - 12.7%
Alabama National Bancorp 64,400(2) 3,572,268
American Financial Group, Inc. 155,300(2) 4,747,521
American National Insurance Co. 68,950(2) 6,366,154
AmerUs Group, Co. 213,300(2) 8,830,620
Assured Guaranty, Ltd. 464,300 7,869,885
Banknorth Group, Inc. 355,482 11,546,055
Banner Corp. 217,740 6,327,524
Brown & Brown, Inc. 265,100(2) 11,425,810
Charter One Financial, Inc. 227,946 10,072,934
Chittenden Corp. 396,500(2) 13,936,975
Clark, Inc.* 285,400 5,294,170
Commerce Bancshares, Inc. 289,315(2) 13,292,578
Conseco, Inc.* 361,600(2) 7,195,840
</Table>
The accompanying notes are an integral part of these financial
statements.
12
<Page>
Managers Special Equity Fund
June 30, 2004
============================
Special Equity
==============
Schedule of Portfolio Investments(continued)
- --------------------------------------------
<Table>
Security Description Shares Value
- -----------------------------------------------------
Delphi Financial Group, Inc.,
Class A 334,100(2) $ 14,867,450
Direct General Corp. 229,400 7,400,444
Downey Financial Corp. 393,380(2) 20,947,485
Equity Inns, Inc. 572,800 5,321,312
F.N.B. Corp. 116,000 2,366,400
FelCor Lodging Trust, Inc.* 2,900,000(2) 35,090,000
First National Bankshares
of Florida* 647,870(2) 12,277,137
Harbor Florida Bancshares, Inc. 224,900 6,186,999
HCC Insurance Holdings, Inc. 250,100(2) 8,355,841
Hibernia Corp., Class A 866,500 21,055,950
Hilb, Rogal & Hamilton Co. 305,500(2) 10,900,240
Infinity Property &
Casualty Corp. 277,300 9,150,900
Investment Technology
Group, Inc.* 620,200(2) 7,932,358
Investors Financial
Services Corp. 124,300(2) 5,416,994
iStar Financial, Inc. 303,300 12,132,000
MCG Capital Corp. 537,478 8,266,412
Meristar Hospitality Corp.* 5,024,600 34,368,264
National Western
Life Insurance Co., Class A* 12,000 1,842,600
Net Bank, Inc. 547,300(2) 5,981,989
Prime Group Realty Trust* 786,800(2) 4,154,304
Reinsurance Group of America 171,700 6,979,605
Scottish Annuity & Life
Holdings, Ltd. 418,000(2) 9,718,500
Seacoast Financial Services Corp.327,500 11,331,500
Selective Insurance Group, Inc. 182,396 7,273,952
St. Joe Co., The 111,500(2) 4,426,550
Sterling Financial Corp.* 432,551(2) 13,785,400
Triad Guaranty, Inc.* 97,082(2) 5,650,172
U.S.I. Holdings Corp.* 536,701(2) 8,479,876
Webster Financial Corp. 279,800(2) 13,156,196
Westcorp 236,600 10,753,470
Wrigley, Wm. Jr. Co. 128,300 3,242,141
Total Financials 439,290,775
Health Care - 10.2%
Adolor Corporation* 223,875(2) 2,838,735
Advanced Neuromodulation
Systems, Inc.* 99,450(2) 3,261,960
American Healthways, Inc.* 365,300(2) 9,724,286
American Medical Systems
Holdings, Inc.* 192,300(2) 6,480,510
Apria Healthcare Group, Inc.* 259,000(2) 7,433,300
Arthrocare Corp.* 627,200(2) 18,238,976
Atherogenics, Inc.* 180,400(2) 3,433,012
Centene Corp.* 217,900(2) 8,400,045
Charles River Laboratories
International, Inc.* 302,900(2) 14,802,723
CTI Molecular Imaging, Inc.* 242,500(2) 3,438,650
CV Therapeutics, Inc.* 324,300(2) 5,435,268
Cytyc Corp.* 361,000 9,158,570
DaVita, Inc.* 528,600 16,296,738
Dendreon Corp.* 265,100(2) 3,247,475
Digene Corp.* 178,600(2) 6,524,258
Digirad Corp. 108,600(2) 1,080,570
Discovery Laboratories, Inc.* 348,600(2) 3,343,074
DJ Orthopedics, Inc.* 169,100 3,889,300
Dyax Corp.* 275,000 3,231,250
Eclipsys Corp.* 950,200(2) 14,500,052
Endocardial Solutions, Inc.* 167,300(2) 1,731,555
EPIX Medical, Inc.* 353,500(2) 7,458,850
Eresearch Technology, Inc.* 271,350(2) 7,597,800
Exact Sciences Corp.* 371,900 2,287,185
Exelixis, Inc.* 822,400(2) 8,298,016
Genesis HealthCare Corp. 357,200 10,373,088
Gen-Probe, Inc.* 359,000 16,987,880
Harvard Bioscience, Inc.* 915,200 4,100,096
I-Flow Corp.* 260,900(2) 3,094,274
IMS Health, Inc. 820,081(2) 19,222,699
Inveresk Research Group, Inc.* 199,200(2) 6,143,328
Lincare Holdings, Inc.* 212,100(2) 6,969,606
Martek Biosciences Corp.* 104,300(2) 5,858,531
Medicines Co.* 213,660(2) 6,518,767
NeoPharm, Inc.* 380,000(2) 3,925,400
Nuvelo, Inc.* 329,900 3,173,638
Owens & Minor, Inc. 213,300 5,524,470
Par Pharmaceutical Co., Inc. * 241,100(2) 8,489,131
Penwest Pharmaceuticals Co.* 440,700 5,645,367
Priority Healthcare Corp.,
Class B* 229,122(2) 5,258,350
Protein Design Labs, Inc.* 384,900(2) 7,363,137
PSS World Medical, Inc.* 292,100(2) 3,271,520
Quidel Corp.* 488,300(2) 2,876,087
Rigel Pharmaceuticals, Inc. * 209,100(2) 2,971,311
Santarus, Inc.* 315,900(2) 4,659,525
Symbion, Inc. 341,520(2) 5,962,939
Telik, Inc.* 320,900 7,659,883
Triad Hospitals, Inc.* 711,364(2) 26,484,081
Universal Health Services, Inc.,
Class B 170,000(2) 7,801,300
Total Health Care 352,466,566
Industrials - 15.6%
AAR Corp. 259,200(2) 2,941,920
Acuity Brands, Inc. 274,600(2) 7,414,200
Administaff Inc.* 425,200(2) 7,058,320
Aeroflex, Inc.* 637,700 9,138,241
Air France 948,178 15,938,872
Airtran Holdings, Inc.* 938,200(2) 13,266,148
Alaska Airgroup, Inc.* 615,000(2) 14,680,050
Albany International Corp. 275,000(2) 9,229,000
Ametek, Inc. 321,500(2) 9,934,350
Asset Acceptance Capital Corp.* 437,700(2) 7,440,900
Axsys Technologies, Inc.* 452,900 10,013,619
BHA Group Holdings, Inc.,
Class A 154,900 5,862,965
Brink's Co., The 420,241 14,393,254
CDI Corp. 182,000 6,297,200
CNF, Inc. 105,600 4,388,736
Corinthian Colleges, Inc.* 795,500(2) 19,680,670
Corporate Executive Board Co.* 270,700 15,643,753
</Table>
The accompanying notes are an integral part of these financial
statements.
13
<Page>
Managers Special Equity Fund
June 30, 2004
============================
Special Equity
==============
Schedule of Portfolio Investments(continued)
- --------------------------------------------
<Table>
Security Description Shares Value
- -----------------------------------------------------
CoStar Group, Inc.* 465,200 $ 21,366,636
Crane Co. 337,000(2) 10,578,430
Curtiss-Wright Corp. 187,200(2) 10,518,768
DeVry, Inc.* 658,200(2) 18,047,844
EGL, Inc.* 163,500(2) 4,349,100
Flowserve Corp.* 381,500(2) 9,514,610
IDEX Corp. 340,650(2) 11,701,328
Interpool, Inc. 340,600(2) 5,705,050
Ionics, Inc.* 368,800(2) 10,418,600
ITT Educational
Services, Inc.* 1,139,700(2) 43,331,393
Jacuzzi Brands, Inc.* 746,600 6,017,596
J.B. Hunt Transport
Services, Inc.* 357,200 13,780,776
JLG Industries, Inc. 388,600(2) 5,397,654
Kennametal, Inc. 170,700(2) 7,818,060
Laidlaw International, Inc.* 559,200(2) 7,247,232
Lydall, Inc.* 234,000 2,286,180
MSC Industrial Direct Co.,
Class A 222,900(2) 7,320,036
Old Dominion Freight Line, Inc.* 152,500 4,495,700
Orbital Sciences Corp.* 546,200(2) 7,543,022
Overnite Corp.* 216,850 6,375,390
Pentair, Inc. 419,200 14,101,888
Precision Castparts Corp. 47,100 2,575,899
RemedyTemp, Inc., Class A* 86,600 1,060,850
Ryder System, Inc. 200,300 8,026,021
Sea Containers, Ltd., Class A 795,900(2) 13,952,127
Sea Containers, Ltd., Class B* 13,890 245,575
Sequa Corp., Class A* 99,600 5,823,612
Sequa Corp., Class B* 38,300 2,288,425
Shaw Group Inc., The* 797,300(2) 8,076,649
Sirva, Inc.* 379,200(2) 8,721,600
Stewart & Stevenson
Services, Inc. 537,400 9,630,208
Tecumseh Products Co., Class B 101,000 4,285,430
Thomas & Betts Corp. 653,500 17,794,805
United Stationers, Inc.* 206,300(2) 8,194,236
Volt Information Sciences, Inc.* 69,350 2,185,219
Wabash National Corp.* 267,100(2) 7,358,605
Waste Connections, Inc.* 374,250(2) 11,100,255
Watson Wyatt & Co.* 306,900 8,178,885
Werner Enterprises, Inc. 356,047 7,512,592
York International Corp. 272,300 11,183,361
Total Industrials 539,431,845
Information Technology - 16.8%
ADC Telecommunications, Inc.* 1,385,500(2) 3,934,820
Advanced Micro Devices, Inc.* 1,000,000(2) 15,900,000
Alliance Data Systems Corp.* 342,400(2) 14,466,400
Alvarion, Ltd.* 231,800 3,078,304
Anaren Microwave, Inc.* 1,057,900(2) 17,286,086
Applied Films Corp.* 202,800(2) 5,885,256
aQuantive, Inc.* 249,500(2) 2,465,060
Ascential Software Corp.* 186,000 2,974,140
ATMI, Inc.* 568,000(2) 15,512,080
Audiovox Corp., Class A* 175,700 2,965,816
Avid Technology, Inc.* 3 34,400 18,248,208
BearingPoint, Inc.* 1,104,500(2) 9,796,915
Benchmark Electronics, Inc.* 293,300 8,535,030
Blue Coat Systems, Inc. * 227,200(2) 7,608,928
Captiva Software Corp. * 313,085 3,033,794
Centra Software, Inc.* 548,300 1,233,675
Ceridian Corp.* 266,800 6,003,000
CheckFree Corp.* 80,700(2) 2,421,000
Checkpoint Systems, Inc.* 401,200 7,193,516
Citadel Security
Software, Inc.* 959,500(2) 2,955,260
Cognex Corp. 175,900(2) 6,768,632
Cognizant Technology Solutions
Corp.* 406,986 10,341,514
CSG Systems
International, Inc.* 171,400(2) 3,547,980
CTS Corp. 972,600(2) 11,729,556
Dot Hill Systems Corp.* 853,700 9,569,977
Dupont Photomasks, Inc.* 270,794(2) 5,505,242
eFunds Corp.* 421,126 7,369,705
Electronics for Imaging, Inc.* 239,581(2) 6,770,559
Equinix, Inc.* 297,500(2) 10,097,150
Exfo Electro-Optical
Engineering, Inc.* 1,488,400(2) 7,650,376
Fairchild Semiconductor
International, Inc.* 492,000 8,054,040
FLIR Systems, Inc.* 123,600(2) 6,785,640
Formfactor, Inc.* 294,400 6,609,280
Helix Technology Corp. 270,700 5,774,031
Hi/Fn, Inc.* 570,300(2) 6,815,085
Hyperion Solutions Corp.* 501,400(2) 21,921,208
Identix, Inc.* 1,379,900(2) 10,307,853
IKON Office Solutions, Inc. 838,800(2) 9,621,036
Infocrossing, Inc.* 137,200(2) 1,852,200
Intevac, Inc.* 724,300 6,424,541
Intrado, Inc.* 406,700 6,543,803
Ixia, Inc.* 1,166,800 11,481,312
Keithley Instruments, Inc. 536,600 11,885,690
Kemet Corp.* 556,100 6,795,542
Lionbridge Technologies, Inc.* 741,400 5,671,710
Magma Design Automation, Inc.* 264,100(2) 5,078,643
McData Corp., Class A* 764,700(2) 4,114,086
Measurement Specialties, Inc.* 145,700 3,147,120
Mentor Graphics Corp.* 283,600(2) 4,387,292
Micromuse, Inc.* 970,900(2) 6,495,321
Microsemi Corp.* 735,500(2) 10,451,455
Mindspeed Technologies, Inc.* 1,431,100 7,098,256
Netscout Systems, Inc.* 768,500 5,064,415
Open Solutions, Inc. 255,900 6,392,382
Orbotech Ltd.* 240,200 4,888,070
Parametric Technology Corp.* 1,100,200 5,501,000
Park Electrochemical Corp. 264,300(2) 6,673,575
Pemstar, Inc.* 332,800(2) 772,096
Photon Dynamics, Inc.* 122,500 4,296,075
Photronics, Inc.* 428,200(2) 8,110,108
Reynolds & Reynolds Co., The,
Class A 115,000 2,659,950
</Table>
The accompanying notes are an integral part of these financial
statements.
14
<Page>
Managers Special Equity Fund
June 30, 2004
============================
Special Equity
==============
Schedule of Portfolio Investments(continued)
- --------------------------------------------
<Table>
Security Description Shares Value
- -----------------------------------------------------
Rogers Corp.* 153,400(2) $ 10,722,660
Roper Industries, Inc. 220,300(2) 12,535,070
Secure Computing Corp.* 285,700 3,328,405
Silicon Laboratories, Inc.* 421,200(2) 19,522,620
Skyworks Solutions, Inc.* 681,500(2) 5,949,495
SupportSoft, Inc.* 483,875(2) 4,200,035
SYNNEX Corp.* 290,900 4,567,130
Synopsys, Inc.* 430,000(2) 12,224,900
Tech Data Corp.* 245,400 9,602,502
Tessera Technologies, Inc. 229,800 4,140,996
Tier Technologies, Inc.* 394,200 3,839,508
Trident Microsystems, Inc. * 299,800 3,360,758
Ultratech Stepper, Inc.* 337,300 5,491,244
Verint Systems, Inc.* 105,400(2) 3,606,788
Verity, Inc.* 508,700 6,872,537
Vishay Intertechnology, Inc.* 713,900(2) 13,264,262
Woodhead Industries, Inc. 548,900 8,485,994
X-Rite, Inc. 395,500 5,750,570
Total Information Technology 579,986,268
Materials - 5.9%
Airgas, Inc. 778,800(2) 18,621,108
AK Steel Holding Corp.* 6,085,200(2) 32,069,004
Cytec Industries, Inc. * 164,100 7,458,345
Landec Corp.* 427,100 2,917,093
Longview Fibre Co. 878,800 12,944,724
Massey Energy Co. 400,000(2) 11,284,000
Minerals Technologies, Inc. 173,400 10,057,200
RTI International Metals, Inc.* 409,030 6,524,029
Scotts Co., The, Class A* 131,900(2) 8,425,772
Spartech Corp. 506,200 13,130,828
Stillwater Mining Co.* 789,262 11,846,823
Symyx Technologies, Inc.* 70,400 1,698,048
United States Steel Corp. 1,413,300(2) 49,635,095
USEC, Inc. 1,915,600(2) 16,799,812
Total Materials 203,411,881
Telecommunication Services - 0.3%
Alamosa Holdings, Inc.* 456,100(2) 3,352,335
General Communication, Inc.,
Class A* 878,100 6,972,114
Total Telecommunication Services 10,324,449
Utilities - 3.5%
Avista Corp. 1,202,200 22,144,524
Reliant Resources, Inc. * 5,991,000(2) 64,882,530
Sierra Pacific
Resources Corp.* 2,346,800(2) 18,093,828
Texas Genco Holdings, Inc. 369,900(2) 16,678,791
Total Utilities 121,799,673
Total Common Stocks
(cost $2,479,552,731) 3,189,516,048
Warrants - 0.03%
Air France, ADR warrant 861,980(2) 1,034,376
Short-Term Investments - 36.0%1
Other Investment Companies - 35.9%
AIM Liquid Assets, 1.08% 20,031,825 20,031,825
Bank of New York
Institutional Cash Reserves
Fund, 1.25%(3) 981,141,430 981,141,430
JPMorgan Prime Money Market
Fund, Institutional Class
Shares, 1.03% 238,430,186 238,430,186
Total Other Investment Companies 1,239,603,441
Other Short-Term Investments - 0.1%(3)
Atlantis One Funding Corp.,
due 07/19/04, 1.25% 4,997,275 4,997,275
Total Short-Term Investments
(cost $1,244,600,716) 1,244,600,716
Total Investments - 128.3%
(cost $3,725,515,375) 4,435,151,140
Other Assets, less Liabilities - (28.3)% (978,316,396)
Net Assets - 100.0% $ 3,456,834,744
</Table>
The accompanying notes are an integral part of these financial
statements.
15
<Page>
Managers International Equity Fund
June 30, 2004
==================================
International Equity
====================
Schedule of Portfolio Investments(unaudited)
- --------------------------------------------
<Table>
Security Description Shares Value
- -----------------------------------------------------
Common Stocks - 98.9%
Consumer Discretionary - 18.9%
Antena 3 de Television SA
(Spain)* 10,300 $ 545,119
British Sky Broadcasting PLC
(United Kingdom)* 319,665 3,615,245
Continental AG (Germany)* 60,500 2,936,863
Enterprise Inns PLC.
(United Kingdom) 244,700 2,558,329
Fast Retailing Co., Ltd. (Japan) 20,700 1,687,009
George Wimpey PLC
(United Kingdom)* 154,000 1,033,243
Hennes & Mauritz AB (Sweden) 14,400 372,912
HIS Co., Ltd. (Japan) 2,300 69,981
Honda Motor Co., Ltd. (Japan)* 70,000 3,400,492
Hyundai Motor Co., Ltd.
(South Korea)* 15,800 610,973
Intercontinental Hotels Group
PLC (United Kingdom)* 229,835 2,437,262
Isetan Co., Ltd. (Japan) 67,000 970,471
JC Decaux International (France)* 21,500 461,801
Koninklijke (Royal) Phillips
Electronics N.V. (Netherlands) 67,200 1,827,634
Lagardere S.C.A. (France) 22,900(2) 1,436,732
Marui Co., Ltd. (Japan) 74,800 1,016,241
Nissan Motor Co., Ltd. (Japan)* 382,000 4,273,386
Pearson PLC (United Kingdom)* 82,653 1,009,255
Persimmon PLC (United Kingdom)* 94,800 1,092,853
Pioneer Corp. (Japan)* 19,100 498,050
PT Multimedia-Servicos de
Telecomunicacoes e Multimedia,
SGPS, SA (Portugal) 21,300 466,407
Resorttrust, Inc. (Japan) 1,700 48,609
Sekisui Chemical Co., Ltd.
(Japan) 287,600 2,441,089
Singapore Press Holdings Ltd.
(Singapore) 182,325 440,844
Societe Television Francaise 1
(France) 46,300 1,465,506
Takashimaya Co., Ltd. (Japan) 107,500(2) 1,249,219
Toyota Motor Corp. (Japan)* 12,000 488,801
United Business Media PLC
(United Kingdom) 82,200 761,656
Volkswagen AG (Germany)* 29,200 1,240,590
Whitbread PLC (United Kingdom)* 168,800 2,527,119
Wolters Kluwer NV (Netherlands)* 40,200 731,441
WPP Group PLC (United Kingdom) 118,100 1,204,782
Total Consumer Discretionary 44,919,914
Consumer Staples - 6.7%
Ajinomoto Co., Inc. (Japan) 66,000 796,577
British American Tobacco PLC
(United Kingdom)* 53,400 829,452
Cadbury Schweppes PLC
(United Kingdom) 192,900 1,668,061
Delhaize Le Lion (Belgium) 8,900 457,219
Diageo PLC (United Kingdom)* 83,646 1,130,697
Foster's Group, Ltd.
(Australia)* 200,700 662,858
Groupe Danone (France) 8,200 717,468
Koninklijke Ahold N.V.
(Netherlands)* 112,400 886,932
Nestle SA, Registered
(Switzerland)* 3,700 988,174
Nippon Meat Packers, Inc.
(Japan)* 67,000 827,563
Seven-Eleven Japan Co., Ltd.
(Japan)* 39,000 1,281,043
Tesco PLC (United Kingdom) 772,700 3,746,818
Unilever PLC (United Kingdom)* 140,626 1,384,514
Yamazaki Baking Co., Ltd.
(Japan)* 47,000 463,253
Total Consumer Staples 15,840,629
Energy - 9.0%
BP PLC (United Kingdom)* 479,200 4,238,123
China Petroleum and Chemical
Corp., Class H (Hong Kong)* 924,000 341,082
EnCana Corp. (Canada) 38,634 1,660,333
Eni SpA (Italy) 143,400(2) 2,867,418
IHC Caland NV (Netherlands) 9,266 431,845
Oao Gazprom-Sponsored ADR
(Russia) 31,500(2) 901,845
Petroleo Brasileiro SA,
Sponsored ADR (Brazil) 39,000(2) 982,800
Repsol YPF, S.A. (Spain)* 81,900(2) 1,794,429
Royal Dutch Petroleum Co.
(Netherlands)* 22,600 1,167,110
Saipem SpA (Italy) 51,200 467,027
Statoil ASA (Norway) 60,500 768,687
Talisman Energy, Inc. (Canada) 156,900 3,405,400
Total SA (France)* 10,988 2,107,203
YUKOS, ADR (Russia) 9,500(2) 302,100
Total Energy 21,435,402
Financials - 20.3%
Aiful Corp. (Japan)* 2,850 299,694
Assurances Generales de France
(France)* 56,600(2) 3,451,344
Aviva PLC (United Kingdom)* 129,000 1,338,470
Bank of East Asia, Ltd.
(Hong Kong)* 302,000 867,458
Bank of Nova Scotia (Canada) 69,128(2) 1,846,851
BNP Paribas SA (France) 35,900(2) 2,220,594
Credit Suisse Group
(Switzerland)* 49,700 1,775,230
Daiwa Securities Group, Inc.
(Japan)* 104,000 754,596
DBS Group Holdings, Ltd.
(Singapore)* 122,000 1,023,147
Depfa Bank PLC. (Ireland)* 58,000 846,209
Deutsche Boerse AG (Germany)* 21,636(2) 1,111,142
Hang Seng Bank Ltd. (Hong Kong)* 75,800 973,581
Hannover Rueckversicherungs
AG (Germany) 1,500 50,627
Henderson Land Development
Co., Ltd. (Hong Kong)* 144,000 623,458
Hong Kong Exchanges &
Clearing Ltd. (Hong Kong)* 100,000 205,750
</Table>
The accompanying notes are an integral part of these financial
statements.
16
<Page>
Managers International Equity Fund
June 30, 2004
==================================
International Equity
====================
Schedule of Portfolio Investments(continued)
- --------------------------------------------
<Table>
Security Description Shares Value
- -----------------------------------------------------
Japan Retail Fund
Investment Corp. (Japan) 76 $ 524,474
Kookmin Bank (South Korea)* 55,874 1,747,012
Manulife Financial Corp (Canada) 42,000 1,693,157
Mitsubishi Estate Co., Ltd.
(Japan)* 156,000 1,950,350
Mitsubishi Tokyo Financial
Group, Inc. (Japan) 219 2,045,284
Mitsui Fudosan Co., Ltd.
(Japan)* 135,000 1,629,273
Nikko Cordial Corp. (Japan)* 122,000 597,521
Nomura Holdings, Inc. (Japan) 104,000 1,551,320
ORIX Corp. (Japan)* 9,000 1,036,248
Promise Co., Ltd. (Japan)* 31,500 2,112,634
Royal & Sun Alliance
Insurance Group PLC
(United Kingdom)* 954,300 1,435,040
Royal Bank of Scotland
Group PLC (United Kingdom)* 23,400 677,245
SFCG Co Ltd (Japan) 6,010(2) 1,212,224
Shinhan Financial Group Co., Ltd.
(South Korea)* 65,790 959,066
Shinsei Bank, Ltd. (Japan)* 81,000(2) 516,666
Societe Generale (France)* 26,300(2) 2,247,437
Standard Chartered, PLC.
(United Kingdom)* 41,100 671,916
Sumitomo Mitsui Financial
Group, Inc. (Japan)* 262 1,814,534
Sumitomo Realty &
Development Co., Ltd. (Japan)* 279,000(2) 3,483,296
Sun Hung Kai Properties, Ltd.
(Hong Kong)* 71,000 585,387
UFJ Holdings, Inc. (Japan)* 323 1,448,524
Willis Group Holdings, Ltd.
(United Kingdom) 29,300(2) 1,097,285
Total Financials 48,424,044
Health Care - 5.7%
Actelion, Ltd. (Switzerland)* 7,100 817,275
Aventis SA (France) 30,900 2,341,153
Fresenius AG, Preferred
(Germany) 29,300 2,221,815
GlaxoSmithKline PLC
(United Kingdom)* 185,300 3,776,248
Novartis AG (Switzerland)* 29,149 1,294,211
Schering AG (Germany)* 14,279 845,231
Serono SA (Switzerland) 2,290 1,445,334
Taisho Pharmaceutical Co., Ltd.
(Japan)* 36,000 801,122
Total Health Care 13,542,389
Industrials - 8.6%
ABB Ltd. (Switzerland)* 154,500 854,805
ACS, Actividades de
Construccion y Servicios, SA
(Spain) 90,810(2) 1,530,966
Autoroutes du sud de la France
(France)* 29,468(2) 1,171,781
Dai Nippon Printing Co., Ltd.
(Japan)* 42,000 674,629
FANUC, Ltd. (Japan)* 7,300 439,389
Goodwill Group, Inc., The (Japan) 287(2) 752,444
Heidelberger Druckmaschinen
(Germany)* (a) 17,900(2) 595,340
Hutchison Whampoa, Ltd.
(Hong Kong)* 163,000 1,118,932
ITOCHU Corp. (Japan)* 170,000 768,044
MAN AG (Germany) 80,000 2,953,358
Mitsubishi Corp. (Japan)* 126,000 1,230,171
Mitsui & Co., Ltd. (Japan) 143,000 1,076,995
RT Group PLC (United Kingdom) 360,539 26,154
Secom Co., Ltd. (Japan) 29,000 1,239,105
Siemens AG (Germany) 11,000 797,816
Technip-Coflexip sp ADR (France) 4,800 652,842
Tostem Inax Holding Corp.
(Japan)* 32,000 691,388
Vinci SA (France)* 15,191(2) 1,536,065
West Japan Railway Co. (Japan) 250 1,010,313
Yamato Transport Co., Ltd.
(Japan)* 75,000 1,229,801
Total Industrials 20,350,338
Information Technology - 9.4%
Atos Origin SA (France)* 18,500 1,196,656
Canon, Inc. (Japan) 98,500 5,248,278
Compal Electronics, Inc.
(Taiwan)* 278,138(2) 1,508,926
Ericsson LM, Class B (Sweden)* 1,236,700 3,697,812
Flextronics International, Ltd.
(Singapore)* 64,500(2) 1,028,775
Fujitsu Ltd. (Japan)* 63,000 448,303
Hitachi Ltd (Japan)* 124,000 863,045
Nippon Electric Glass Co., Ltd.,
(Japan) 72,000 1,518,664
Samsung Electronics Co Ltd.,
(South Korea)* 6,900 2,867,508
SAP AG (Germany) 6,300 1,055,538
Taiwan Semiconductor
Manufacturing Co., Ltd.
(Taiwan)* 106,672(2) 886,444
TietoEnator Oyj (Finland) 16,600 505,335
Toshiba Corp. (Japan)* 179,000 726,585
United Internet Ag (Germany) 27,600 776,670
Total Information Technology 22,328,540
Materials - 14.9%
Alcan, Inc. (Canada) 38,504 1,585,248
Anglo American PLC
(United Kingdom)* 3,900 80,386
Aracruz Celulose SA (Brazil) 32,600(2) 1,064,716
Arcelor (Luxembourg)* 199,500(2) 3,367,666
Barrick Gold Corp. (Canada) 29,400(2) 580,650
Bayer AG (Germany)* 45,296(2) 1,318,273
BOC Group PLC (United Kingdom) 58,978 988,866
Cemex SA de CV (Mexico) 30,718(2) 893,894
Cia de Minas Buenaventura
SA (Peru) 61,700 1,363,570
DSM NV (Netherlands)* 30,700 1,509,817
GMK Norilsk Nickel, Sponsored
ADR (Russia) 5,900 327,450
</Table>
The accompanying notes are an integral part of these financial
statements.
17
<Page>
Managers International Equity Fund
June 30, 2004
==================================
International Equity
====================
Schedule of Portfolio Investments(continued)
- --------------------------------------------
<Table>
Security Description Shares Value
- -----------------------------------------------------
Gold Fields, Ltd.
(South Africa)* 134,100 1,408,567
Goldcorp, Inc. (Canada) 88,700 1,030,065
Harmony Gold Mining Co., Ltd.
(South Africa)* 97,800 1,030,128
HeidelbergCement AG (Germany)* 25,312 1,255,888
Impala Platinum Holdings, Ltd.
(South Africa) 47,800(2) 906,025
JFE Holdings, Inc. (Japan)* 27,100 669,047
Meridian Gold, Inc. (Canada)* 62,100 799,438
Placer Dome, Inc. (Canada) 91,000 1,520,343
POSCO (South Korea)* 9,800 1,268,005
Rio Tinto PLC (United Kingdom)* 33,733 815,207
RMC Group, PLC (United Kingdom)* 40,600 448,989
Shin-Etsu Chemical Co., Ltd.
(Japan)* 24,000 864,870
Sinopec Shangai Petrochemical
Co., Ltd., Class H (China)* 1,936,000 646,480
Svenska Cellulosa AB (Sweden)* 71,300 2,718,807
Syngenta AG (Switzerland)* 47,540 3,993,210
Umicore (Belgium) 18,400 1,161,222
UPM-Kymmene Oyj (Finland) 28,200 536,426
Xstrata PLC (United Kingdom)* 103,090 1,384,889
Total Materials 35,538,142
Telecommunication Services - 3.5%
Bouygues (France) 49,000(2) 1,648,251
Deutsche Telekom AG (Germany)* 53,500 947,001
France Telecom SA (France)* 50,600 1,328,422
Singapore Telecommunications
Ltd. (Singapore)* 637,000 833,411
Sk Telecom Co., Ltd.
(South Korea) 3,700 611,717
TDC A/S (Denmark)* 10,900 356,254
Vodafone Group PLC
(United Kingdom) 1,227,600 2,699,193
Total Telecommunication Services 8,424,249
Utilities - 1.9%
CLP Holdings Ltd. (Hong Kong) 288,000 1,578,061
E.ON AG (Germany)* 11,900 862,227
Hong Kong & China Gas Co.,
Ltd. (Hong Kong)* 625,000 1,032,513
National Grid Transco PLC,
(United Kingdom) 126,900 982,088
Total Utilities 4,454,889
Total Common Stocks
(cost $200,765,866) 235,258,535
Other Investment Companies - 17.4%
Bank of New York Institutional
Cash Reserves
Fund, 1.24%(1,3) 36,935,336 36,935,336
JPMorgan Prime Money Market
Fund, Institutional Class
Shares, 1.03%(1) 4,502,651 4,502,651
Total Other Investment Companies
(cost $41,437,987) 41,437,987
Total Investments - 116.3%
(cost $242,203,853) 276,696,521
Other Assets, less Liabilities - (16.3)% (38,694,226)
Net Assets - 100.0% $238,002,295
</Table>
The accompanying notes are an integral part of these financial
statements.
18
<Page>
Managers Emerging Markets Equity Fund
June 30, 2004
=====================================
Emerging Markets
=================
Schedule of Portfolio Investments(unaudited)
- --------------------------------------------
<Table>
Security Description Shares Value
- -----------------------------------------------------
Common Stocks - 98.3%
Consumer Discretionary - 12.1%
Consorcio ARA, S.A. de C.V.
(Mexico)* 330,000 949,970
Genting Berhad (Malaysia)* 189,600 764,401
Grupo Televisa S. A. (Mexico)* 20,000(2) 905,400
Hankook Tire Co., Ltd.
(South Korea)* 130,000 1,141,390
Hyundai Motor Co., Ltd.
(South Korea)* 55,000 1,077,686
Total Consumer Discretionary 4,838,847
Consumer Staples - 6.2%
Coca-Cola Femsa, S.A. de C.V.,
Sponsored ADR (Mexico) 29,070(2) 645,063
IOI Corp., Berhad (Malaysia)* 416,000 892,211
IOI Oleochemical Industries
Berhad(Malaysia)* 416 1,018
Natura Cosmeticos SA (Brazil) 4,700 75,561
PT Hanjaya Mandala Sampoerna
Tbk (Indonesia)* 1,600,000 871,192
Total Consumer Staples 2,485,045
Energy - 6.6%
China Oilfield Services, Ltd.
(China)* 3,700,000 1,058,810
LUKOIL Holdings, ADR (Russia) 6,700 704,840
Petroleo Brasileiro S.A.,
Sponsored ADR (Brazil) 31,600(2) 887,012
Total Energy 2,650,662
Financials - 18.1%
Fubon Financial Holding Co.,
Ltd. (Taiwan)* 590,000 516,408
Grupo Financiero Banorte S.A
de C.V. (Mexico)* 206,000 728,582
Kookmin Bank, Sponsored ADR
(South Korea) 31,257 980,845
Sanlam, Ltd. (South Africa)* 820,000 1,164,534
Savings Bank of The Russian
Federation (Russia) 18,000 702,684
SinoPac Holdings (Taiwan)* 1,840,000 967,517
SM Prime Holdings, Inc.
(Philippines)* 800 87
State Bank of India, GDR (India) 27,000(2) 505,821
Turkiye Is Bankasi (Isbank)
(Turkey)* 250,000,000 909,704
Uniao de Bancos Brasileiros
SA (Brazil) 38,000 751,260
Total Financials 7,227,442
Health Care - 3.6%
Ranbaxy Laboratories, Ltd.,
GDR (India) 24,560 485,831
Richter Gedeon Rt (Hungary) 9,565 962,877
Total Health Care 1,448,708
Industrials - 6.2%
Alfa, S.A. (Mexico)* 233,000 781,852
Daelim Industrial Co., Ltd.
(South Korea)* 26,500 835,280
Sime Darby Berhad (Malaysia)* 600,000 878,441
Total Industrials 2,495,573
Information Technology - 9.4%
Hon Hai Precision Industry Co.,
Ltd. (Taiwan)* 219,000 819,491
Mediatek, Inc. (Taiwan) 94,300 755,919
Samsung Electronics Co.,
Ltd., GDR, (South Korea) (a)* 6,670(2) 1,376,716
Taiwan Semiconductor
Manufacturing Co., Ltd.
(Taiwan)* 912 1,316
United Microelectronics Corp.
(Taiwan)* 1,100,000 821,662
Total Information Technology 3,775,104
Materials - 10.5%
Anglo American PLC
(United Kingdom)* 50,000 1,030,594
China Steel Corp. (Taiwan)* 720,000 683,303
Formosa Chemicals & Fibre Corp.
(Taiwan)* 620,000 972,012
Hindalco Ind., Ltd.,
Sponsored GDR, (India) (a)* 31,500(2) 683,783
Siam Cement Public Co., Ltd.,
The (Thailand)* 135,000 810,338
Total Materials 4,180,030
Telecommunication Services - 25.6%
Advanced Information Services
PCL (Thailand)* 350,000 762,745
Cesky Telecom a.s.
(Czech Republic)* 63,300 777,826
China Mobile Ltd. (Hong Kong) 326,000 989,242
China Telecom Corp., Ltd.,
Class H (China)* 3,204,000 1,126,211
Compania Anonima Nacional
Telefonos de Venezuela ADR 43,200 870,480
Maxis Communications
Berhad (Malaysia) 370,000 858,370
PT Telekomunikasi Indonesia
(Indonesia)* 1,000,000 785,535
SK Telecom Co., Ltd.,
Sponsored ADR (South Korea) 29,000(2) 608,710
Telecom Argentina Stet France
Telecom S.A., Sponsored ADR 84,000 759,360
Telekomunikacja Polska S.A.,
Sponsored GDR, (Poland) 208,000 860,787
Turkcell Iletisim Hizmetleri
A.S. (Turkey) 85,000,000 1,051,516
Vimpel Communication Adr
(Russia)* 8,400(2) 810,180
Total Telecommunication Services 10,260,962
</Table>
The accompanying notes are an integral part of these financial
statements.
19
<Page>
Managers Emerging Markets Equity Fund
June 30, 2004
=====================================
Emerging Markets
=================
Schedule of Portfolio Investments(continued)
- --------------------------------------------
<Table>
Security Description Shares Value
- -----------------------------------------------------
Total Common Stocks
(cost $35,520,015) $39,362,373
Other Investment Companies - 13.0%
Bank of New York Institutional
Cash Reserves Fund, 1.24%(1,3) 5,073,145 5,073,145
JPMorgan Prime Money Market Fund,
Institutional Class
Shares, 1.03%(1) 116,756 116,756
Total Other Investment Companies
(cost $5,189,901) 5,189,901
Total Investments - 111.3%
(cost $40,709,916) 44,552,274
Other Assets, less Liabilities - (11.3)% (4,533,327)
Net Assets - 100.0% $40,018,947
</Table>
The accompanying notes are an integral part of these financial
statements.
20
<Page>
Managers Bond Fund
June 30, 2004
===================
Bond
=====
Schedule of Portfolio Investments(unaudited)
- --------------------------------------------
<Table>
Security Description Principal
Amount Value
- -------------------------------------------------------------
Corporate Bonds - 45.8%
Asset-Backed Security - 2.9%
Bank of America-First
Union National Bank Commercial
Mortgage, Series 2001-3,
Class A2, 5.464%, 04/11/37 $ 1,500,000 $ 1,546,673
Community Program Loan Trust,
Series 87-A, Class A4,
4.500%, 10/01/18 261,349 260,930
Community Program Loan Trust,
Series 87-A, Class A5,
4.500%, 04/01/29 3,225,000 2,831,623
Continental Airlines, Inc.,
6.648%, 09/15/17 1,660,894 1,550,180
Total Asset-Backed Security 6,189,406
Convertible Bonds - 2.3%
Devon Energy Corp.,
4.900%, 08/15/08 1,250,000 1,293,750
Devon Energy Corp.,
4.950%, 08/15/08 1,692,000 1,751,220
Loews Corp., 3.125%, 09/15/07 1,920,000 1,836,000
Total Convertible Bonds 4,880,970
Finance - 12.2%
AON Corp. 7.375%, 12/14/12 600,000 667,357
ASIF Global Financial,
2.380%, 02/26/09 (a) SGD 5,800,000 3,309,137
Cerro Negro Finance Ltd.,
7.900%, 12/01/20 (a) 500,000(2) 447,500
EOP Operating LP, 6.750%, 02/15/12 500,000 536,863
First Industrial L.P.,
7.600%, 07/15/28 1,750,000 1,823,075
First Industrial L.P.,
Medium Term, 7.500%, 12/01/17 1,145,000 1,249,022
Ford Motor Credit Co., 7.250%,
02/22/05 GBP 650,000 1,188,205
GMAC, 5.125%, 05/09/08 500,000(2) 501,848
GMAC, 6.125%, 01/22/08 2,000,000 2,091,944
GMAC, 6.875%, 09/15/11 250,000 256,324
GMAC, 7.000%, 12/07/05 GBP 250,000 460,992
GMAC, 7.500%, 12/01/06 NZD 1,000,000 631,874
GMAC International Finance BV,
8.000%, 03/14/07 NZD 950,000 606,314
Highwoods Properties, Inc.,
7.500%, 04/15/18 2,250,000 2,294,696
Inter-American Development Bank,
0.000%, 05/11/094 BRL 6,500,000 874,152
International Bank for
Reconstruction & Development,
0.000%, 08/20/074 NZD 4,800,000 2,486,296
KeyCorp Capital II,
6.875%, 03/17/29 500,000(2) 509,575
Loews Corp., 7.000%, 10/15/23 150,000 148,809
New Plan Excel Realty Trust,
5.875%, 06/15/07 1,250,000 1,320,954
NiSource Finance Corp., 6.150%,
03/01/13 1,250,000(2) 1,295,079
PDVSA Finance Ltd., Series 98-1,
7.400%, 08/15/16 300,000 288,750
PDVSA Finance Ltd., Series 98-1,
7.500%, 11/15/28 1,000,000(2) 910,000
Provident Co., Inc., 7.250%,
03/15/28 250,000(2) 233,579
Spieker Properties, Inc.,
7.350%,12/01/17 250,000 276,729
UnumProvident Corp., 6.750%,
12/15/28 1,000,000 899,650
UnumProvident Corp., 7.375%,
06/15/32 450,000 420,750
Total Finance 25,729,474
Industrials - 25.9%
Abitibi-Consolidated, Inc.,
7.500%, 04/01/28 500,000(2) 430,898
Altria Group, Inc., 7.000%,
11/04/13 1, 500,000 1,527,484
America Movil S.A de C.V.,
4.125%, 03/01/09 (a) 3,000,000(2) 2,817,687
American Airlines, Inc., Series
01-2, 6.978%, 04/01/11 2,184,993 2,158,066
American Airlines, Inc.,
8.608%, 04/01/11 125,000 113,679
American President, Ltd.,
8.000%, 01/15/24 250,000 237,813
Arrow Electronics, Inc., 6.875%,
07/01/13 500,000(2) 522,280
Bausch & Lomb, Inc., 7.125%,
08/01/28 500,000 500,592
Boise Cascade Co., 7.450%,
08/10/11 250,000 254,375
Bowater, Inc., 6.500%, 06/15/13 500,000(2) 470,385
</Table>
The accompanying notes are an integral part of these financial
statements.
21
<Page>
Managers Bond Fund
June 30, 2004
===================
Bond
=====
Schedule of Portfolio Investments(continued)
- --------------------------------------------
<Table>
Security Description Principal
Amount Value
- -------------------------------------------------------------
Cia Brasileira Bebidas,
8.750, 09/15/13 (a) $ 3,795,000(2) $ 4,003,725
Clear Channel Communications,
4.250%, 05/15/09 1,500,000 1,463,978
Clear Channel Communications,
5.750%, 01/15/13 500,000(2) 502,766
Continental Airlines, Inc.,
Series 991A, 6.545%, 02/02/19 4,389,804(2) 4,107,676
Continental Airlines, Inc.,
Series 01-1, 6.703%, 06/15/21 ` 433,876 404,616
Continental Airlines, Inc.,
6.795%, 08/02/20 85,195 66,620
Continental Airlines, Inc.,
Series 99-2, 7.256%, 03/15/20 394,892(2) 384,713
Dell Computer Corp.,
7.100%, 04/15/28 850,000 948,937
Delphi Corp., 7.125%, 05/01/29 1,950,000(2) 1,932,914
Delta Airlines, 8.300%, 12/15/29 500,000(2) 207,500
Dillards, Inc., 7.000%, 12/01/28 225,000(2) 205,875
Foot Locker, Inc., 8.500%, 01/15/22 570,000 602,775
Ford Motor Co., 6.375%, 02/01/29 2,500,000(2) 2,112,780
General Motors Corp.,
6.750%, 05/01/28 500,000 459,101
Georgia-Pacific Corp.,
7.250%, 06/01/28 500,000 460,000
Georgia-Pacific Corp.,
7.750%, 11/15/29 925,000 888,000
HCA, Inc., 5.750, 03/15/14 2,500,000(2) 2,376,755
HCA, Inc., 6.250%, 02/15/13 1,940,000 1,928,391
HCA, Inc., 7.050%, 12/01/27 1,600,000 1,465,262
HCA, Inc., 7.580%, 09/15/25 125,000 122,530
Health Care Property, Inc.,
6.000%, 03/01/15 1,500,000 1,506,107
Hutchison Whampoa
International, LTD, 5.450%,
11/24/10 (a) 2,225,000 2,183,904
International Telecom
Satellite, 7.625%, 04/15/12 1,000,000 947,471
Kellwood Co., 7.625%, 10/15/17 250,000 265,464
Lowe's Co., Inc., 6.875%, 02/15/28 500,000 546,854
Macmillan Bloedel Ltd.,
7.700%, 02/15/26 1,350,000 1,476,024
Motorola, Inc., 5.800%, 10/15/08 250,000(2) 260,922
Motorola, Inc., 7.625%, 11/15/10 375,000(2) 422,197
Motorola, Inc., 8.000%, 11/01/11 1,075,000(2) 1,238,025
Penney (JC), Co., 7.125%, 11/15/23 33,000(2) 33,825
Pf Export Rec Master Trust,
6.436%, 06/01/15 (a) 898,182 885,706
Pulte Homes, Inc., 7.625%, 10/15/17 500,000 549,523
Raytheon Co., 6.400%, 12/15/18 400,000 416,537
Raytheon Co., 7.000%, 11/01/28 1,500,000 1,598,479
Raytheon Co., 7.200%, 08/15/27 800,000(2) 870,574
Samsung Electronics Co., Ltd.,
7.700%, 10/01/27 (a) 1,800,000 1,938,103
Schering-Plough Corp.,
5.300%, 12/01/13 1,500,000 1,473,053
Sprint Capital Corp., 6.875%,
11/15/28 2,300,000 2,210,868
Sprint Capital Corp., 6.900%,
05/01/19 500,000 502,978
Teck Cominco Ltd., 7.000%,
09/15/12 1,000,000 1,069,390
Telekom Malaysia Berhad, 7.875%,
08/01/25 (a) 250,000(2) 270,591
Weyerhaeuser Co., 6.950%, 10/01/27 250,000 257,798
Total Industrials 54,602,566
Utility - 2.5%
Constellation Energy Group Inc.,
4.550%, 06/15/15 1,675,000(2) 1,492,420
El Paso Corp., 6.750%, 05/15/09 250,000(2) 226,250
El Paso Corp., 6.950%, 06/01/28 300,000 222,000
El Paso Corp., 7.000%. 05/15/11 500,000(2) 437,500
Global Marine, Inc.,
7.000%, 06/01/28 250,000 267,896
KN Capital Trust III, 7.630%,
04/15/28 250,000 264,651
MidAmerican Energy Holdings,
5.875%, 10/01/12 750,000 761,556
Southern Natural Gas Co.,
7.350%, 02/15/31 1,000,000(2) 895,000
Tennessee Gas Pipeline
Co., 7.500%, 04/01/17 250,000(2) 243,750
</Table>
The accompanying notes are an integral part of these financial
statements.
22
<Page>
Managers Bond Fund
June 30, 2004
===================
Bond
=====
Schedule of Portfolio Investments(continued)
- --------------------------------------------
<Table>
Security Description Principal
Amount Value
- -------------------------------------------------------------
Transocean, Inc., 7.375%,
04/15/18 500,000 $ 563,682
Total Utility 5,374,705
Total Corporate Bonds
(cost $93,996,876) 96,777,121
Foreign Corporate Obligations - 3.0%
Empresa Nacional de
Electricidad SA, 8.625%,
08/01/15 300,000 323,483
Empresa Nacional de
Electricidad, Yankee, 7.875%,
02/01/27 2,900,000 2,715,212
Enersis SA, Yankee, 7.400%,
12/01/16 225,000 216,748
Petroleos Mexicanos, 8.625%,
12/01/23 (a) 950,000 978,500
Tenaga Nasional Berhad, 7.500%,
11/01/25 (a) 2,000,000 2,017,970
Total Foreign Corporate Obligations
(cost $5,722,434) 6,251,913
Foreign Government and Agency Obligations - 4.9%
British Columbia, Province of,
5.250%, 12/01/06 CAD 2,160,000 1,671,565
British Columbia, Province of,
6.000%, 06/09/08 CAD 560,000 444,316
Canadian Government, 4.500%,
09/01/07 CAD 665,000 506,084
Kommunekredit, 5.000%,
06/07/06 NOK 1,600,000 238,782
Mexico Government, 7.500%,
01/14/12 1,250,000 1,346,875
New Zealand Government,
6.000%, 11/15/11 NZD 500,000 312,038
Ontario Province, 5.900%,
03/08/06 CAD 585,000 455,067
Province of Alberta, Series CS,
Sinking Fund, 5.930%, 09/16/16 CAD 213,300 168,648
Province of Manitoba, 5.750%,
06/02/08 CAD 3,000,000 2,359,836
Province of Manitoba, 6.500%,
09/22/17 CAD 1,800,000 1,477,416
Republic of South Africa,
Yankee, 8.500%, 06/23/17 1,175,000 1,330,687
Total Foreign Government and
Agency Obligations (cost $9,841,410) 10,311,314
U.S. Government and Agency Obligations - 38.7%
U.S. Government Agency Obligations- 20.9%
FHLMC, 2.875%, 09/01/05 3,500,000(2) 3,518,988
FHLMC, 3.220%, 06/20/07 SGD 500,000 299,866
FHLMC, Gold, 5.000%, 12/01/31 318,306 308,253
FHLMC, 5.250%, 01/01/06 3,300,000 3,423,212
FHLMC, 5.500%, 09/15/11 5,090,000 5,305,770
FHLMC, 6.000%, 11/15/28 171,081 171,361
FNMA, 2.290%, 02/19/09 SGD 3,800,000 2,161,141
FNMA, 2.375%, 02/15/07 7,000,000(2) 6,813,758
FNMA, 3.250%, 01/15/08 3,000,000(2) 2,948,292
FNMA, 4.000%, 10/01/18 13,068,575 12,478,157
FNMA, 5.000%, 01/15/07 3,200,000 3,326,515
FNMA, 5.250%,04/15/07 3,200,000(2) 3,347,834
FNMA, 6.000%, 07/01/29 45,082 46,252
Total U.S. Government Agency Obligations 44,149,399
U.S. Treasury Notes- 17.8%
USTN, 1.625%, 09/30/05 3,500,000(2) 3,474,023
USTN, 1.625%, 10/31/05 7,000,000(2) 6,937,658
USTN, 1.625%, 02/28/06 12,000,000(2) 11,824,224
USTN, 1.875%, 12/31/05 11,000,000(2) 10,908,480
USTN, 2.375%, 08/15/06 985,000(2) 976,573
USTN, 3.500%, 11/15/06 3,400,000(2) 3,443,962
Total U.S. Treasury Notes 37,564,920
Total U.S. Government and Agency Obligations
(cost $82,897,777) 81,714,319
</Table>
The accompanying notes are an integral part of these financial
statements.
23
<Page>
Managers Bond Fund
June 30, 2004
===================
Bond
=====
Schedule of Portfolio Investments(continued)
- --------------------------------------------
<Table>
Security Description Principal
Amount Value
- -------------------------------------------------------------
Preferred Stock - 0.8%
Entergy Louisiana, Inc., 4.440% 226 $ 14,944
Entergy New Orleans, Inc., 4.750% 482 33,710
Entergy New Orleans, Inc., 5.560% 100 8,188
Newell Financial Trust I, 5.250% 32,000 (2) 1,440,000
Union Electric Co., 3.500% 350 20,650
Wisconsin Electric Power Co., 3.600% 3,946 237,870
Total Preferred Stock (cost $1,649,983) 1,755,362
Short-Term Investments - 33.5%
Other Investment Companies - 30.1%
Bank of New York Institutional Cash
Reserves Fund, 1.25%(1,3) 51,924,719 51,924,719
JPMorgan Prime Money Market Fund,
Institutional Class
Shares, 1.03%(1) 11,680,311 11,680,311
Total Other Investment Companies 63,605,030
Other Short-Term Investments - 3.4%
Due 12/31/05 to 11/15/06,
1.63% to 3.50%3 7,200,076 7,200,076
Total Short-Term Investments
(cost $70,805,106) 70,805,106
Total Investments - 126.7%
(cost $264,913,586) 267,615,135
Other Assets, less Liabilities - (26.7)% (56,364,776)
Net Assets - 100.0% $211,250,359
</Table>
The accompanying notes are an integral part of these financial
statements.
24
<Page>
Managers Global Bond Fund
June 30, 2004
=========================
Global Bond
===========
Schedule of Portfolio Investments (unaudited)
- ---------------------------------------------
<Table>
Security Description Principal
Amount Value
- -------------------------------------------------------------
Foreign Government and Agency Obligations - 44.7%
Foreign Government - 44.7%
Belgium Government Bond,
3.750%, 03/28/09 EUR 760,000 $ 930,645
Brazil, Republic of, 8.000%,
04/15/14 USD 87,958 80,262
Brazil, Republic of, 8.250,
01/20/34 USD 290,000(2) 219,385
Bundes Immobil, 4.625%,
09/27/12 EUR 525,000 648,513
Canada Government, 0.700%,
03/20/06 JPY 19,000,000 175,488
Colombia, Republic of, 8.125,
05/21/24 USD 140,000(2) 113,400
European Investment Bank,
0.875%, 11/08/04 JPY 47,000,000 431,977
Irish Government, 4.600%,
04/18/16 EUR 540,000 665,291
Kingdom of Denmark, 4.000%,
08/15/08 DKK 1,465,000 243,517
Kingdom of Norway, 5.500%,
05/15/2009 NOK 930,000 143,183
Kingdom of Norway, 6.750%,
01/15/07 NOK 840,000 131,753
Kingdom of Spain, 4.750%,
03/14/05 JPY 40,000,000 378,775
Netherlands Government SA,
5.500%, 01/15/28 EUR 465,000 612,661
New Zealand Government,
6.000%, 11/15/11 NZD 85,000 53,046
Ontario Province, 5.700%,
12/01/08 CAD 555,000 435,059
Queensland Treasury Corp.,
8.000%, 09/14/07 AUD 1,330,000 989,307
Republic of Austria, 4.500%,
09/28/05 JPY 20,000,000 193,113
Republic of Austria, 4.750%,
12/20/04 JPY 34,000,000 318,578
Republic of Austria, 5.500%,
03/03/05 CHF 215,000 176,930
Republic of Austria, 6.000%,
02/14/07 HUF 7,000,000 31,227
Republic of Italy, .375%,
10/10/06 JPY 116,000,000 1,062,924
Republic of Italy, 5.000%,
12/15/04 JPY 41,000,000 384,053
Republic of Panama, 8.125%,
04/28/34 USD 50,000(2) 45,000
Republic of Peru, 8.750%,
11/21/33 USD 50,000 43,900
Republic of South Africa,
5.250%, 05/16/13 EUR 350,000 414,223
Republic of South Africa,
Yankee, 8.500%, 06/23/17 USD 200,000 226,500
Republic of Turkey, 9.500%,
01/15/14 USD 40,000 40,300
Saskatchewan Province,
5.750%, 03/05/29 CAD 155,000 114,768
Singapore Government, 3.625%,
07/01/11 SGD 660,000 396,476
Singapore, Government of,
2.250%, 07/01/13 SGD 1,000,000 524,646
Spain, Government of, 3.600%,
01/31/09 EUR 920,000 1,119,485
Swedish Government, 5.250%,
03/15/11 SEK 3,450,000 480,842
Swedish Government, 6.500%,
05/05/08 SEK 2,855,000 414,779
U.K. Treasury, 5.000%,
03/07/12 GBP 355,000 639,286
U.K. Treasury, 6.250%,
11/25/10 GBP 335,000 646,313
United Mexican States,
5.375%, 06/10/13 EUR 250,000 294,931
United Mexican States,
6.750%, 06/06/06 JPY 18,000,000 183,868
Total Foreign Government and
Agency Obligations (cost $13,699,493) 14,004,404
Corporate Bonds - 44.6%
Convertible Bonds - 0.5%
Corning, Inc., 3.500%,
11/01/08 USD 45,000(2) 63,338
Nextel Communications Inc.,
5.250%, 01/15/10 USD 70,000(2) 68,075
Samsung Electronics Co., Ltd.,
7.700%, 10/01/27 (a) USD 25,000 26,918
Total Convertible Bonds 158,331
Finance - 25.0%
Arcel Finance Ltd., 7.048%, 09/01/11
(a) USD 105,000 103,950
Bangkok Bank Public Co.,
Hong Kong, 9.025%,
03/15/29 (a) USD 140,000 145,669
Bank of America Corporation, 4.625,
02/18/14 EUR 90,000 108,372
Capital One Financial Corp.,
6.250%, 11/15/13 USD 125,000 126,342
Depfa ACS Bank, 3.250%,
04/15/08 EUR 900,000 1,084,527
</Table>
The accompanying notes are an integral part of these financial
statements.
25
<Page>
Managers Global Bond Fund
June 30, 2004
=========================
Global Bond
===========
Schedule of Portfolio Investments (continued)
- ---------------------------------------------
<Table>
Security Description Principal
Amount Value
- -------------------------------------------------------------
Finance(continued)
DEPFA Deutsche Pfandbriefbank
AG, 5.000%, 02/03/05 EUR 845,000 $ 1,044,466
Eksportfinans ASA, 2.500%,
12/28/05 CHF 145,000 117,572
First Citizens St. Lucia,
5.125%, 02/14/11 USD 175,000 170,837
Ford Credit Canada, 7.163%,
04/23/07 CAD 150,000 117,753
Ford Motor Credit Co.,
7.250%, 02/22/05 GBP 100,000 182,801
GMAC, 7.000%, 12/07/05 GBP 90,000 165,957
GMAC International Finance
BV, 8.000%, 03/14/07 NZD 400,000 255,290
Hilton Group Finance Plc.,
6.500%, 07/17/09 EUR 105,000 139,629
Household Finance Corp., 5.125%,
06/24/09 EUR 225,000 286,931
Household Financial Corp.,
Ltd., 4.500%, 07/02/08 CAD 100,000 74,684
Istar Financial, Inc., 4.875%,
01/15/09 USD 75,000 72,622
KFW International Finance, Inc.,
1.000%, 12/20/04 JPY 97,000,000 892,580
MBNA Europe Funding, PLC.,
6.500%, 03/27/07 EUR 50,000 65,419
Morgan Stanley Co., Series
EMTN, 5.375%, 11/14/13 GBP 120,000 209,194
Muenchener Hypothekenbank eG,
5.000%, 01/16/12 EUR 360,000 461,106
National Rural Utilities
Cooperative Finance Corp.,
4.125%, 02/24/06 EUR 250,000 308,776
NGG Finance, PLC., 6.125%,
08/23/11 EUR 75,000 99,492
Nordic Investment Bank, 5.250%,
04/20/06 SEK 2,000,000 273,943
Olivetti Finance, 6.875%,
01/24/13 EUR 105,000 143,550
Permanent Financing PLC, 5.100%,
06/11/07 EUR 275,000 350,136
The International Bank for
Reconstruction and Development,
4.750%, 12/20/04 JPY 59,000,000 552,745
Volkswagen International Finance,
4.875%, 05/22/13 EUR 250,000 298,994
Total Finance 7,853,337
Industrials - 17.0%
AGCO Corp., 6.875%, 04/15/14 EUR 120,000 139,063
Alcan, Inc., 5.500%, 05/02/06 EUR 140,000 177,504
Allied Waste North America,
6.500%, 11/15/10 (a) USD 55,000(2) 54,450
Allied Waste North America, 8.500%,
12/01/08 USD 50,000(2) 54,688
America Movil S.A de C.V., 4.125%,
03/01/09 (a) USD 35,000(2) 32,873
American Standard, Inc., 7.125%,
06/01/06 EUR 75,000 96,268
American Standard, Inc.,
8.250%, 06/01/09 GBP 50,000 95,209
ASIF Global, 2.380%,
02/26/09 (a) SGD 500,000 285,270
Bavaria S.A., 8.875%,
11/01/10 (a) USD 60,000 61,800
Bowater, Inc., 6.500%, 06/15/13 USD 145,000(2) 136,412
Canadian Pacific Railway, Ltd.,
4.900%, 06/15/10 (a) CAD 50,000 36,885
Celestica, Inc., 7.875%,
07/01/11 USD 100,000 102,000
Chesapeake Energy Corp.,
6.875%, 01/15/16 USD 125,000 121,875
CITGO Petroleum Corp.,
11.375%, 02/01/11 USD 90,000 104,400
Corning Inc., 6.750%, 09/15/13 USD 125,000 124,418
Dana Corp., 9.000%, 08/15/11 EUR 100,000 142,956
Deutsche Telekom,
5.250, 05/20/08 EUR 100,000 127,377
Diageo Capital Beverages,
3.875%, 01/06/09 EUR 130,000 157,550
Falconbridge Ltd., 7.350%,
06/05/12 USD 150,000 155,742
Flextronics International, Ltd.,
9.750%, 07/01/10 EUR 50,000 65,699
General Motors Corp., 8.250%,
07/15/23 USD 115,000 120,434
Gruma SA de CV, 7.625%,
10/15/07 USD 150,000(2) 161,250
Hasbro, Inc., 6.600%,
07/15/28 USD 140,000 135,450
HCA, Inc., 5.250%, 11/06/08 USD 150,000 149,072
HCA, Inc., 7.500%, 11/06/33 USD 150,000 147,705
HeidelbergCement AG, 4.750%,
04/09/09 EUR 50,000 60,072
Hutchison Wham International,
Ltd., 7.450%, 11/24/33 (a) USD 110,000(2) 105,279
IMC Global, Inc., 10.875%,
06/01/08 USD 45,000 52,313
</Table>
The accompanying notes are an integral part of these financial
statements.
26
<Page>
Managers Global Bond Fund
June 30, 2004
=========================
Global Bond
===========
Schedule of Portfolio Investments (continued)
- ---------------------------------------------
<Table>
Security Description Principal
Amount Value
- -------------------------------------------------------------
Industrials(continued)
Imperial Chem., PLC.,
9.750%, 04/15/05 GBP 90,000 $ 168,250
McDonald's Corp., 3.628%,
10/10/10 SGD 250,000 145,775
News America Holdings,
8.625%, 02/07/14 AUD 350,000 254,952
Overseas Shipholding Group,
7.500, 02/15/24 USD 85,000 78,625
Pearson PLC, 6.125%, 02/01/07 EUR 35,000 45,364
Philippine Long Distance
Telephone, 11.375%, 05/15/12 USD 50,000 55,250
Phillips Van-Heusen, 7.250,
02/15/11 (a) USD 70,000 70,350
Premcor Refining Group, 7.500%,
06/15/15 USD 75,000 77,813
Repsol International Finance,
5.750%, 12/04/06 EUR 100,000 128,253
Service Corp. International,
6.500%, 03/15/08 USD 70,000 70,000
Shaw Communications, Inc.,
7.500%, 11/20/13 CAD 175,000 131,321
Sing Telecommunications,
6.000%, 11/21/11 EUR 50,000 66,237
Stena AB, 7.500%, 11/01/13 USD 75,000 74,156
Teck Cominco Ltd., 7.000%,
09/15/12 USD 100,000 106,939
Telefonica Europe, BV, 5.125%,
02/14/13 EUR 50,000 62,423
Telekom Malaysia Berhad, 7.875%,
08/01/25 (a) USD 70,000(2) 75,766
Vale Overseas, Ltd., 8.250,
01/17/34 USD 50,000 43,500
Volvo Treasury AB, 6.000,
02/09/07 EUR 35,000 45,306
WPP Group, PLC., 6.000%,
06/18/08 EUR 250,000 326,129
XTO Energy, Inc., 6.250%,
04/15/13 USD 85,000 88,422
Total Industrials 5,318,845
Utility - 2.1%
Enersis SA, Yankee, 7.400%,
12/01/16 USD 155,000 149,315
Petroleos Mexicanos, 9.500%,
09/15/27 USD 325,000 364,000
Pioneer Natural Resources Co. USD 65,000 69,078
Tenaga Nasional Berhad, 7.500%,
11/01/25 (a) USD 70,000 70,629
Total Utility 653,022
Total Corporate Bonds
(cost $13,122,985) 13,983,535
U.S. Government and Agency Obligations - 5.5%
U.S. Government Agency Obligations- 3.1%
FNMA, 1.750%,
03/26/08 JPY80,000,000 764,295
FNMA, 2.290%, 02/19/09 SGD 400,000 227,489
Total U.S. Government
Agency Obligations 991,783
U.S. Treasury Notes - 2.4%
USTN, 3.500%, 11/15/06 USD 735,000(2) 744,504
Total U.S. Government and
Agency Obligations (cost $1,729,595) 1,736,287
Other Investment Companies - 7.8%
SHARES
Bank of New York Institutional ---------
Cash Reserves Fund, 1.24%(1,3) 1,727,390 1,727,390
JPMorgan Prime Money
Market Fund, Institutional
Class Shares, 1.03%(1) 700,811 700,811
Total Other Investment Companies
(cost $2,428,201) 2,428,201
Total Investments - 102.6%
(cost $30,980,274) 32,152,427
Other Assets, less Liabilities - (2.6)% (810,589)
Net Assets - 100.0% $31,341,838
</Table>
The accompanying notes are an integral part of these financial
statements.
27
<Page>
Notes to Schedules of Portfolio Investments (unaudited)
- -------------------------------------------------------
The following footnotes and abbreviations should be read in conjunction
with each of the Schedules of Portfolio Invest-ments previously
presented in this report.
At June 30, 2004, the cost of securities for Federal income tax
purposes and the gross aggregate unrealized appreciation and/or
depreciation based on tax cost were approximately:
<Table>
Fund Cost Appreciation Depreciation Net
- ---- ---- ------------ ------------- ---
Value $ 133,158,575 $ 18,818,567 $ (921,184) $ 17,897,383
Capital Appreciation 118,020,552 14,302,160 (1,330,847) 12,971,313
Small Company 21,372,533 6,115,312 (349,616) 5,765,695
Special Equity 3,725,515,375 827,898,325 (118,262,560) 709,635,765
International Equity 242,203,853 40,488,759 (5,996,091) 34,492,668
Emerging Markets 40,709,916 5,328,310 (1,485,952) 3,842,358
Bond 264,913,586 6,083,856 (3,382,307) 2,701,549
Global Bond 30,980,274 1,414,332 (242,179) 1,172,153
</Table>
* Non-income-producing security
(a) Security exempt from registration under Rule 144A of the Securities
Act of 1933. This security may be resold in transac-tions exempt
from registration, normally to qualified buyers. At June 30, 2004,
the value of these securities amounted to the following:
<Table>
<s>
Fund Market Value % of Net Assets
- ---- ------------ ---------------
International Equity $ 595,340 0.3%
Emerging Markets 2,060,499 5.1%
Bond 18,852,823 8.9%
Global Bond 1,069,838 3.4%
</Table>
(1)Yield shown for each investment company represents its June 30, 2004,
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, 2004, amounting to:
<Table>
<s>
Fund Market Value % of Net Assets
- ----------- ----- ---------------
Value $ 32,211,567 28.7%
Capital Appreciation 29,034,381 28.4%
Small Company 4,929,686 22.6%
Special Equity 962,390,779 27.8%
International Equity 36,943,421 15.5%
Emerging Markets 5,080,456 12.7%
Bond 58,975,100 27.9%
Global Bond 1,727,890 5.5%
</Table>
(3)Collateral received from brokers for securities lending was invested
in these short-term investments.
(4)Zero coupon security.
(5)Affiliated Company - See Note 10 in the Notes to Financial Statements.
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.
<Table>
FHLMC: Federal Home Loan Mortgage Corp. USTB: United States Treasury Bond
FNMA: Federal National Mortgage Association USTN: United States Treasury Note
GNMA: Government National Mortgage Association GMAC: General Motors Acceptance Corp.
</Table>
Registered shares: A security whose owner has been recorded with its
issuer or issuer's registrar.
Abbreviations have been used throughout the portfolios to indicate
amounts shown in currencies other than the U.S. dollar (USD):
AUD: Australian Dollar SEK: Swedish Krona
CAD: Canadian Dollar SGD: Singapore Dollar
DKK: Danish Krone NZD: New Zealand Dollar
EUR: euro NOK: Norwegian Krone
GBP: British Pound ZAR: South African Rand
HUF: Hungarian Forint JPY: Japanese Yen
BRL: Brazilian Real CHF: Swiss Franc
28
<Page>
Statements of Assets and Liabilities (unaudited)
June 30, 2004
- ------------------------------------------------
<Table>
Managers Managers
Managers Capital Small
Value Appreciation Company
Fund Fund Fund
-------- ------------ --------
Assets:
Investments at value* $ 151,045,958 $ 130,991,865 $ 27,138,228
Cash - 161,769 -
Foreign currency** - - -
Receivable for
investments sold 931,693 1,666,980 26,369
Receivable for Fund
shares sold 333,860 277,148 61,139
Receivable for open
forward foreign
currency contracts - - -
Dividends, interest and
other receivables 162,406 49,590 3,184
Prepaid expenses 20,574 12,009 12,476
Total assets 152,494,491 133,159,361 27,241,396
Liabilities:
Payable to Custodian 514,551 - 33,197
Payable for Fund shares
repurchased 6,396,513 813,306 101,243
Payable upon return of
securities loaned 32,988,445 29,309,016 4,918,110
Payable for investments
purchased 289,632 555,400 317,267
Payable for open forward
foreign currency contracts - - -
Payable for variation margin on
futures
Accrued expenses:
Investment advisory and
management fees 55,016 50,328 15,613
Administrative fees 23,441 21,000 4,337
Other 73,101 127,794 22,270
Total liabilities 40,340,699 30,876,844 5,412,037
Net Assets $ 112,153,792 $ 102,282,517 $ 21,829,359
Net Assets $ 112,153,792 $ 102,282,517 $ 21,829,359
Shares outstanding 4,079,582 4,000,583 2,239,423
Net asset value, offering and
redemption price per share $27.49 $25.57 $9.75
I Class Shares:
Net Assets
Shares outstanding
Net asset value, offering
and redemption price per share
Net Assets Represent:
Paid-in capital $ 97,567,238 $ 254,126,126 $ 24,561,749
Undistributed net
investment
income (loss) 291,215 (294,633) (115,304)
Accumulated net realized
gain(loss) from investments,
futures and foreign currency
transactions (3,602,044) (164,520,289) (8,382,782)
Net unrealized
appreciation of
investments, futures
and foreign currency
contracts and
translations 17,897,383 12,971,313 5,765,696
Net Assets $112,153,792 $ 102,282,517 $ 21,829,359
* Investments at
cost $133,148,575 $ 118,020,552 $ 21,372,532
**Foreign currency
at cost - - -
</Table>
The accompanying notes are an integral part of these financial
statements.
29
<Page>
<Table>
Managers
Managers Managers Emerging Managers
Special International Markets Managers Global
Equity Equity Equity Bond Bond
Fund Fund Fund Fund Fund
------- ------------- -------- -------- --------
Assets:
Investments at value* $4,435,151,140 $276,696,521 $44,552,274 $267,615,135 $32,152,427
Cash - 1,690,349 - 72,166 52,137
Foreign currency** - 53,337 139,087 135,378 108,531
Receivable for investments sold 37,691,894 1,420,455 1,116,093 - 1,614,236
Receivable for Fund shares sold 7,685,272 282,865 325,347 819,864 382,085
Receivable for open forward
foreign currency contracts - 372,416 501,590 - 77,163
Dividends, interest and other
receivables 1,248,558 623,980 64,360 2,496,366 478,849
Prepaid expenses 142,250 22,055 14,637 46,578 12,752
Total assets 4,481,919,114 281,161,978 46,713,388 271,185,487 34,878,180
Liabilities:
Payable to Custodian 291,352 225,645 121,311 - 22,454
Payable for Fund shares
repurchased 9,307,484 1,831,845 158,833 511,314 60,026
Payable upon return of
securities loaned 986,138,705 36,935,336 5,073,145 59,124,795 1,727,390
Payable for investments purchased 25,026,969 3,299,612 766,785 66,733 1,590,146
Payable for open forward foreign
currency contracts - 374,152 501,406 - 77,453
Payable for variation margin on
futures - 2,555 - - -
Accrued expenses:
Investment advisory and
management fees 2,439,323 131,884 32,998 95,632 11,335
Administrative fees 689,844 48,632 8,054 43,074 5,038
Other 1,190,693 310,022 31,909 93,580 42,500
Total liabilities 1,025,084,370 43,159,683 6,694,441 59,935,128 3,536,342
Net Assets $3,456,834,744 $238,002,295 $40,018,947 $211,250,359 $31,341,838
Net Assets $3,274,321,113 $238,002,295 $40,018,947 $211,250,359 $31,341,838
Shares outstanding 39,752,608 5,705,463 2,987,230 8,855,771 1,430,079
Net asset value, offering and
redemption price per share $82.37 $41.71 $13.40 $23.85 $21.92
I Class Shares:
Net Assets $182,513,631
Shares outstanding 2,215,057
Net asset value, offering and
redemption price per share $82.40
Net Assets Represent:
Paid-in capital $2,923,645,468 $342,438,178 $34,303,512 $206,253,808 $28,395,401
Undistributed net investment income
(loss) (10,967,347) 1,079,218 152,022 (1,026,513) 557,268
Accumulated net realized gain
(loss) from investments,
futures and foreign currency
transactions (165,479,142) (140,041,015) 1,720,797 3,320,780 1,218,098
Net unrealized appreciation of
investments, futures and foreign
currency contracts and translations 709,635,765 34,525,914 3,842,616 2,702,284 1,171,071
Net Assets $3,456,834,744 $238,002,295 $40,018,947 $211,250,359 $31,341,838
*Investments at cost $3,725,515,375 $242,203,853 $40,709,916 $264,913,586 $30,980,274
**Foreign currency at cost - 53,337 139,087 135,378 108,531
</Table>
The accompanying notes are an integral part of these financial
statements.
30
<Page>
Statements of Operations (unaudited)
For the six months ended June 30, 2004
- --------------------------------------
<Table>
Managers
Managers Capital
Value Appreciation
Fund Fund
-------- ------------
Investment Income:
Dividend income $941,600 $438,408
Interest income 34,126 16,113
Foreign withholding tax (5,875) (5,840)
Securities lending fees 10,072 11,803
Total investment income 979,923 460,484
Expenses:
Investment advisory and
management fees 405,992 425,596
Administrative fees 135,331 132,999
Transfer agent 126,082 161,608
Custodian 20,094 23,060
Professional fees 15,511 22,710
Registration fees 13,411 8,227
Trustees fees and
expenses 2,729 2,743
Insurance 1,278 1,601
Reports to shareholders 5,862 9,184
Miscellaneous 187 197
Total expenses before
offsets 726,477 787,925
Expense
(reimbursement)/
recoupment (29,212) (32,808)
Net expenses 697,265 755,117
Net investment income
(loss) 282,658 (294,633)
Net Realized and Unrealized Gain (Loss):
Net realized gain on
investment
transactions 3,035,915 2,335,217
Net realized gain
on futures contracts - -
Net realized gain (loss)
on foreign currency
contracts and transactions - -
Net unrealized appreciation
(depreciation) of
investments 1,622,094 (1,549,098)
Net unrealized
appreciation of
futures contracts - -
Net unrealized
depreciation of foreign
currency contracts and
translations - -
Net realized and
unrealized
gain (loss) 4,658,009 786,119
Net Increase (Decrease) in
Net Assets Resulting from
Operations $4,940,667 $491,486
</Table>
The accompanying notes are an integral part of these financial
statements.
31
<Page>
<Table>
Managers
Managers Managers Managers Emerging Managers
Small Special International Markets Managers Global
Company Equity Equity Equity Bond Bond
Fund Fund Fund Fund Fund Fund
-------- ------- ------------- -------- -------- --------
Investment Income:
Dividend income $24,040 $10,464,835 $3,606,311 $597,535 $102,499 $665,247
Interest income 5,305 1,118,630 25,435 3,655 4,557,236 -
Foreign withholding tax (68) - (388,139) (52,482) - -
Securities lending fees 1,883 556,169 120,021 9,103 37,420 1,661
Total investment
income 31,160 12,139,634 3,363,628 557,811 4,697,155 666,908
Expenses:
Investment advisory
and management fees 90,909 15,205,637 1,131,711 247,303 624,355 111,012
Administrative fees 25,252 4,223,788 314,364 53,762 249,742 31,718
Transfer agent 5,782 3,748,086 395,484 14,496 60,786 38,901
Custodian 4,141 378,553 269,693 42,045 36,341 26,494
Professional fees 8,573 225,797 53,825 12,049 28,572 16,373
Registration fees 6,591 72,747 16,607 10,539 23,483 9,407
Trustees fees and
expenses 1,075 90,289 7,742 1,119 5,072 901
Insurance 254 55,730 5,364 463 2,402 483
Reports to shareholders 531 150,513 16,368 3,805 13,127 1,504
Miscellaneous 182 14,499 23,575 5,593 417 547
Total expenses before
offsets 143,290 24,165,639 2,234,733 391,174 1,044,297 237,340
Expense
(reimbursement)/
recoupment 3,174 (275,991) (88,073) 14,615 (55,318) (12,262)
Net expenses 146,464 23,889,648 2,146,660 405,789 988,979 225,078
Net investment
income (loss) (115,304) (11,750,014) 1,216,968 152,022 3,708,176 441,830
Net Realized and Unrealized Gain (Loss):
Net realized gain
on investment
transactions 697,051 239,999,525 22,297,962 4,530,393 2,771,175 1,169,200
Net realized gain on
futures contracts - - 13,922 - - -
Net realized gain
(loss) on foreign
currency contracts
and transactions - - (173,158) 40,897 32,513 56,440
Net unrealized
appreciation
(depreciation) of
investments 608,592 (69,570,746) (19,193,744) (5,208,258) (5,456,638) 241,194
Net unrealized
appreciation of
futures contracts - - 10,125 - - -
Net unrealized
depreciation of
foreign currency
contracts and
translations - - (111,266) (2,782) (2,960,004) (2,413,869)
Net realized and
unrealized gain
(loss) 1,305,643 170,428,779 2,843,841 (639,750) (5,612,954) (947,035)
Net Increase (Decrease)
in Net Assets
Resulting from
Operations $1,190,339 $158,678,765 $4,060,809 $(487,728) $(1,904,778) $(505,205)
</Table>
The accompanying notes are an integral part of these financial
statements.
32
<Page>
Statements of Changes in Net Assets
For the six months ended June 30,2004, (unaudited) and for the year
ended December 31, 2003
- -------------------------------------------------------------------
<Table>
Managers Value Fund Managers Capital Appreciation Fund
------------------- ----------------------------------
2004 2003 2004 2003
---- ---- ---- ----
Increase (Decrease) in
Net Assets
From Operations:
Net investment
income (loss) $282,658 $428,958 $(294,633) $(709,729)
Net realized gain
(loss) on investments,
futures and foreign
currency transactions 3,035,915 326,249 2,335,217 (12,737,985)
Net unrealized
appreciation
(depreciation)of
investments and foreign
currency translations 1,622,094 19,154,237 (1,549,098) 37,420,403
Net increase (decrease) in
net assets resulting from
operations 4,940,667 19,909,444 491,486 23,972,689
Distributions to Shareholders:
From net investment income - (438,692) - -
From net realized gain on
investments - - - -
Total distributions to
shareholders - (438,692) - -
From Capital Share Transactions:
Proceeds from sale
of shares 30,731,758 47,708,843 13,340,793 22,460,907
Reinvestment of dividends
and distributions - 425,823 - -
Cost of shares
repurchased (24,238,605) (14,886,224) (22,452,326) (43,075,991)
Net increase (decrease)
from capital share
transactions 6,493,153 33,248,442 (9,111,533) (20,615,084)
Total increase (decrease)
in net assets 11,433,820 52,719,194 (8,620,047) 3,357,605
Net Assets:
Beginning of period 100,719,972 48,000,778 110,902,564 107,544,959
End of period $112,153,792 $100,719,972 $102,282,517 $110,902,564
End of period undistributed
net investment income
(loss) $291,215 $8,557 $(294,633) $ -
Share Transactions:
Sale of shares 1,133,546 2,171,992 521,965 1,000,544
Reinvested shares - 16,473 - -
Shares repurchased (892,157) (670,271) (876,750) (1,927,145)
Net increase (decrease)
in shares 241,389 1,518,194 (354,785) (926,601)
I Class Shares:
Sale of shares
Reinvested shares
Shares repurchased
Net increase in shares
</Table>
The accompanying notes are an integral part of these financial
statements.
33
Statements of Changes in Net Assets
For the six months ended June 30,2004, (unaudited) and for the year
ended December 31, 2003
- -------------------------------------------------------------------
<Table>
Managers Small Company Fund Managers Special Equity Fund Managers International Equity Fund
--------------------------- ---------------------------- ----------------------------------
2004 2003 2004 2003 2004 2003
--- ---- ---- ---- ---- ----
Increase (Decrease) in
Net Assets
From Operations:
Net investment
income (loss) $(115,304) $(178,647) $(11,750,014) $(17,687,106) $1,216,968 $2,019,127
Net realized gain
(loss) on
investments,
futures and
foreign currency
transactions 697,051 652,393 239,999,525 112,083,619 22,138,726 (7,506,334)
Net unrealized
appreciation
(depreciation)of
investments and
foreign currency
translations 608,592 5,031,669 (69,570,746) 822,956,114 (19,294,885) 84,411,352
Net increase (decrease)
in net assets resulting
from operations 1,190,339 5,505,415 158,678,765 917,352,627 4,060,809 78,924,145
Distributions to
Shareholders:
From net investment
income - - - - - (3,048,493)
From net realized
gain on investments - - - - - -
Total distributions
to shareholders - - - - - (3,048,493)
From Capital Share Transactions:
Proceeds from sale
of shares 4,645,008 5,332,694 783,476,143 1,063,154,651 26,773,554 806,194,386
Reinvestment of
dividends and
distributions - - - - - 2,327,700
Cost of shares
repurchased (2,755,997) (4,697,715) (764,638,434) (722,009,661)(59,442,839) (980,348,314)
Net increase
(decrease) from
capital share
transactions 1,889,011 634,979 18,837,709 341,144,990 (32,669,285) (171,826,228)
Total increase
(decrease) in net
assets 3,079,350 6,140,394 177,516,474 1,258,497,617 (28,608,476) (95,950,576)
Net Assets:
Beginning of period 18,750,009 12,609,615 3,279,318,270 2,020,820,653 266,610,771 362,561,347
End of period $21,829,359 $18,750,009 $3,456,834,744 $3,279,318,270$238,002,295 $266,610,771
End of period
undistributed
net investment
income (loss) $ (115,304) $ - $ (10,967,347) $ 782,667 $ 1,079,218 $ (137,750)
Share Transactions:
Sale of shares 488,962 691,683 7,306,272 16,496,840 642,963 25,132,128
Reinvested shares - - - - - 58,033
Shares repurchased (289,894) (622,350) (9,337,834) (11,400,533) (1,419,932) (30,322,340)
Net increase
(decrease) in shares 199,068 69,333 (2,031,562) 5,096,307 (776,969) (5,132,179)
I Class Shares:
Sale of shares 2,447,376
Reinvested shares -
Shares repurchased (232,319)
Net increase in shares 2,215,057
</Table>
The accompanying notes are an integral part of these financial
statements.
34
<Page>
Statements of Changes in Net Assets
For the six months ended June 30,2004, (unaudited) and for the year
ended December 31, 2003
- -------------------------------------------------------------------
<Table>
Managers Emerging Markets
Equity Fund Managers Bond Fund
------------------------- -------------------
2004 2003 2004 2003
---- ---- ---- ----
Increase (Decrease) in
Net Assets From Operations:
Net investment
income (loss) $ 152,022 $ 22,265 $ 3,708,176 $ 7,051,680
Net realized gain
(loss) on investments,
futures and foreign currency
transactions 4,571,290 2,839,220 2,803,688 2,620,799
Net unrealized appreciation
(depreciation) of investments
and foreign currency
translations (5,211,040) 9,096,605 (8,416,642) 6,488,956
Net increase (decrease) in net assets
resulting from operations (487,728) 11,958,090 (1,904,778) 16,161,435
Distributions to Shareholders:
From net investment income - (122,962) (4,772,371) (7,242,910)
From net realized gain on
investments - - - (1,652,619)
Total distributions to
shareholders - (122,962) (4,772,371) (8,895,529)
From Capital Share Transactions:
Proceeds from sale of shares 23,613,660 115,364,722 75,976,226 138,938,793
Reinvestment of dividends and
distributions - 119,204 4,474,757 8,197,878
Cost of shares repurchased (19,834,647) (112,802,639) (42,164,568) (103,102,078)
Net increase (decrease) from
capital share transactions 3,779,013 2,681,287 38,286,415 44,034,593
Total increase (decrease) in
net assets 3,291,285 14,516,415 31,609,266 51,300,499
Net Assets:
Beginning of period 36,727,662 22,211,247 179,641,093 128,340,594
End of period $40,018,947 $36,727,662 $211,250,359 $179,641,093
End of period undistributed
net investment income (loss) $ 152,022 $ - $ (1,026,513) $ 37,682
Share Transactions:
Sale of shares 1,664,160 11,585,328 3,094,070 5,752,592
Reinvested shares - 9,141 184,121 338,265
Shares repurchased (1,446,592) (11,349,104) (1,731,810) (4,256,109)
Net increase (decrease)
in shares 217,568 245,365 1,546,381 1,834,748
</Table>
The accompanying notes are an integral part of these financial
statements.
35
<Page>
Statements of Changes in Net Assets
For the six months ended June 30,2004, (unaudited) and for the year
ended December 31, 2003
- -------------------------------------------------------------------
<Table>
Managers Global Bond Fund
-------------------------
2004 2003
---- ----
Increase (Decrease) in Net Assets
From Operations:
Net investment income (loss) $441,830 $887,761
Net realized gain (loss) on
investments, futures and foreign
currency transactions 1,225,640 2,092,353
Net unrealized appreciation
(depreciation) of investments and
foreign currency translations (2,172,675) 1,888,674
Net increase (decrease) in net assets
resulting from operations (505,205) 4,868,788
Distributions to Shareholders:
From net investment income - (2,551,417)
From net realized gain on investments - (644,990)
Total distributions to shareholders - (3,196,407)
From Capital Share Transactions:
Proceeds from sale of shares 9,577,834 54,118,889
Reinvestment of dividends and
distributions - 3,177,019
Cost of shares repurchased (10,037,887) (46,407,165)
Net increase (decrease) from
capital share transactions (460,053) 10,888,743
Total increase (decrease) in net assets (965,258) 12,561,124
Net Assets:
Beginning of period 32,307,096 19,745,972
End of period $31,341,838 $32,307,096
End of period undistributed
net investment income (loss) $557,268 $115,438
Share Transactions:
Sale of shares 431,242 2,429,610
Reinvested shares - 144,148
Shares repurchased (457,041) (2,077,261)
Net increase (decrease) in shares (25,799) 496,497
</Table>
The accompanying notes are an integral part of these financial
statements.
36
Financial Highlights
- --------------------
For a share outstanding throughout the six months ended June 30, 2004,
(unaudited) and each year ended December 31,
Managers Value Fund
-------------------
June 30,
<Table>
2004 2003 2002 2001 2000 1999
---- ---- ---- ---- ---- ----
Net Asset Value, Beginning of Period $26.24 $20.69 $27.45 $27.73 $27.50 $30.67
Income from Investment Operations:
Net investment income 0.07 0.11 0.15 0.09 0.17 0.30
Net realized and unrealized gain (loss)
on investments 1.18 5.56 (6.65) 0.70 2.45 0.91
Total from investment operations 1.25 5.67 (6.50) 0.79 2.62 1.21
Less Distributions to Shareholders from:
Net investment income 0.00 (0.12) (0.16) (0.08) (0.17) (0.29)
Net realized gain on investments 0.00 - (0.10) (0.99) (2.22) (4.09)
Total distributions to shareholders 0.00 (0.12) (0.26) (1.07) (2.39) (4.38)
Net Asset Value, End of Period $27.49 $26.24 $20.69 $27.45 $27.73 $27.50
Total Return(1) 4.76%(2) 27.39% (23.79)% 2.92% 9.80% 4.15%
Ratio of net expenses to average net assets(1) 1.29%(3) 1.27% 1.28% 1.25% 1.30% 1.35%
Ratio of total expenses to average net assets(1) 1.34%(3) 1.42%(5)1.35% 1.35% 1.38% 1.35%
Ratio of net investment income
to average net assets 0.52%(3) 0.59% 0.60% 0.43% 0.61% 0.92%
Portfolio turnover 16%(2) 40% 53% 147% 153% 94%
Net assets at end of period (000's omitted) $112,154 $100,720 $48,001 $63,628 $57,300 $42,471
</Table>
<Table>
Managers Capital Appreciation Fund
----------------------------------
June 30,
2004 2003 2002 2001 2000 1999
---- ---- ---- ---- ---- ----
Net Asset Value, Beginning of Period 25.46 $20.36 $29.29 $42.79 $61.12 $33.78
Income from Investment Operations:
Net investment loss (0.07) (0.16) (0.28) (0.25) (0.42) (0.27)
Net realized and unrealized gain (loss)
on investments 0.18 5.26 (8.65) (13.25) (13.25) 34.81
Total from investment operations 0.11 5.10 (8.93) (13.50) (13.67) 34.54
Less Distributions to Shareholders from:
Net realized gain on investments - - - - (4.66) (7.20)
Net Asset Value, End of Period $25.57 $25.46 $20.36 $29.29 $42.79 $61.12
Total Return(1) 0.43%(2) 25.05% (30.49)% (31.55)% (22.20)% 103.02%
Ratio of net expenses to average net assets(1) 1.42%(3) 1.33% 1.39% 1.34% 1.23% 1.26%
Ratio of total expenses to average net assets(1) 1.48%(3) 1.52%(5) 1.43% 1.40% 1.26% 1.30%
Ratio of net investment loss
to average net assets (0.55)%(3) (0.67)% (1.07)% (0.75)% (0.82)% (0.86)%
Portfolio turnover 38%(2) 109% 141% 265% 306% 200%
Net assets at end of period (000's omitted) $102,283 $110,903 $107,545 $186,876 $286,515 $248,487
</Table>
37
<Page>
<Table>
Managers Small Company Fund
---------------------------
June 30,
2004 2003 2002 2001 2000*
---- ---- ---- ---- ----
Net Asset Value, Beginning of Period $9.19 $6.40 $8.16 $9.29 $10.00
Income from Investment Operations:
Net investment loss (0.05) (0.09) (0.13) (0.07) (0.01)
Net realized and unrealized gain (loss)
on investments 0.61 2.88 (1.63) (1.06) (0.70)
Total from investment operations 0.56 2.79 (1.76) (1.13) (0.71)
Net Asset Value, End of Period $9.75 $9.19 $6.40 $8.16 $9.29
Total Return(1) 6.09%(2) 43.59% (21.57)% (12.16)% (7.10)%(2)
Ratio of net expenses to average net assets(1) 1.45%(3) 1.45% 1.40% 1.30% 1.30%(3)
Ratio of total expenses to average net assets(1) 1.42%(3) 1.50%(5) 1.70% 1.71% 1.72%(3)
Ratio of net investment loss
to average net assets (1.14)%(3) (1.20)% (1.17)% (0.92)% (0.45)%(3)
Portfolio turnover 9%(2) 48% 134% 95% 55%(2)
Net assets at end of period (000's omitted) $21,829 $18,750 $12,610 $26,764 $25,705
* Commencement of operations was June 19, 2000.
</Table>
Managers Special Equity Fund - I Class
---------------------------------------
For the period*
ended June 30, 2004
---------------------------------------
Net Asset Value, Beginning of Period $78.91
Income from Investment Operations:
Net investment loss (0.07)
Net realized and unrealized gain on investments 3.56
Total from investment operations 3.49
Net Asset Value, End of Period $82.40
Total Return(1) (4.42)%(2)
Ratio of net expenses to average net assets(1) 1.24%(3)
Ratio of total expenses to average net assets(1) 1.25%(3)
Ratio of net investment loss
to average net assets (0.59)%(3)
Portfolio turnover 36%(2)
Net assets at end of period (000's omitted) $182,514
*Commencement of operations was May 3, 2004.
38
<Page>
Financial Highlights
- --------------------
For a share outstanding throughout the six months ended June 30, 2004,
(unaudited) and each year ended December 31,
- ----------------------------------------------------------------------
<Table>
<c>
Managers Special Equity Fund - Managers Class
---------------------------------------------
June 30,
2004 2003 2002 2001 2000 1999
---- ---- ---- ---- ---- ----
Net Asset Value, Beginning of Period $78.48 $55.08 $70.59 $76.82 $91.42 $61.23
Income from Investment Operations:
Net investment loss (0.29) (0.43) (0.34) (0.18) (0.12) (0.29)
Net realized and unrealized gain (loss)
on investments 4.18 23.83 (15.17) (6.05) (2.71) 33.30
Total from investment operations 3.89 23.40 (15.51) (6.23) (2.83) 33.01
Less Distributions to Shareholders from:
Net realized gain on investments - - - - (11.77) (2.82)
Net Asset Value, End of Period $82.37 $78.48 $55.08 $70.59 $76.82 $91.42
Total Return (1) (4.94)%(2) 42.50% (21.98)% (8.07) (2.56)% 54.11%
Ratio of net expenses to average net assets(1) 1.42%(3) 1.43% 1.31% 1.29% 1.26% 1.31%
Ratio of total expenses to average net assets(1) 1.43%(3) 1.46%(5) 1.32% 1.30% 1.26% 1.31%
Ratio of net investment loss
to average net assets (0.70)%(3) (0.72)% (0.56)% (0.27)% (0.16)% (0.47)%
Portfolio turnover 36%(2) 64% 67% 62% 69% 89%
Net assets at end of period (000's omitted) $3,274,321 $3,279,318 $2,020,821 $2,295,234 $2,132,376 $1,543,150
</Table>
<Table>
<c>
Managers International Equity Fund
------------------------------------
June 30,
2004 2003 2002 2001 2000 1999
---- ---- ---- ---- ---- ----
$41.13 $31.22 $37.61 $49.38 $58.71 $48.85
Net investment income 0.21 0.34 0.19 0.20(4) 0.27 0.35
Net realized and unrealized gain (loss)
on investments 0.37 10.04 (6.48) (11.72)(4) (5.38) 11.96
Total from investment operations 0.58 10.38 (6.29) (11.52) (5.11) 12.31
Net investment income - (0.47) (0.10) (0.25) (0.24) (0.35)
Net realized gain on investments - - - - (3.98) (2.10)
Total distributions to shareholders - (0.47) (0.10) (0.25) (4.22) (2.45)
Net Asset Value, End of Period $41.71 $41.13 $31.22 $37.61 $49.38 $58.71
Total Return(1) 1.46%(2) 33.21% (16.71)% (23.35)% (8.46)% 25.28%
Ratio of net expenses to average net assets(1) 1.71%(3) 1.72% 1.54% 1.45% 1.41% 1.40%
Ratio of total expenses to average net assets(1) 1.79%(3) 1.73% 1.56% 1.46% 1.42% 1.41%
Ratio of net investment income
to average net assets 0.97%(3) 0.70% 0.54% 0.46%(4) 0.42% 0.66%
Portfolio turnover 37%(2) 80% 132% 108% 99% 43%
Net assets at end of period (000's omitted) $238,002 $266,611 $362,561 $560,602 $656,630 $704,209
</Table>
39
<Page>
Financial Highlights
- --------------------
For a share outstanding throughout the six months ended June 30, 2004,
(unaudited) and each year ended December 31,
- ----------------------------------------------------------------------
<Table>
<c>
Managers Emerging Markets Equity Fund
-------------------------------------
June 30,
2004 2003 2002 2001 2000 1999
---- ---- ---- ---- ---- ----
Net Asset Value, Beginning of Period $13.26 $8.80 $9.56 $9.63 $14.67 $7.74
Income from Investment Operations:
Net investment income (loss) 0.05 0.01 0.03 (0.01) (0.04) 0.03
Net realized and unrealized gain (loss)
on investments 0.09 4.50 (0.79) (0.04) (3.90) 6.93
Total from investment operations 0.14 4.51 (0.76) (0.05) (3.94) 6.96
Less Distributions to Shareholders from:
Net investment income - (0.05) - - - (0.03)
Net realized gain on investments - - - (0.02) (1.10) -
Total distributions to shareholders - (0.05) - (0.02) (1.10) (0.03)
Net Asset Value, End of Period $13.40 $13.26 $8.80 $9.56 $9.63 $14.67
Total Return(1) 1.06%(2) 51.20% (7.95)% (0.57)% (26.69)% 90.06%
Ratio of net expenses to average net assets(1) 1.89%(3) 1.99% 1.97% 1.94% 1.98% 1.85%
Ratio of total expenses to average net assets(1) 1.83%(3,5) 1.97%(5) 2.18% 2.36% 2.48% 2.52%
Ratio of net investment income (loss)
to average net assets 0.71%(3) 0.08% 0.32% (0.09)% (0.34)% 0.37%
Portfolio turnover 44%(2) 79% 68% 69% 40% 119%
Net assets at end of period (000's omitted) $40,019 $36,728 $22,211 $15,202 $12,390 $12,434
</Table>
<Table>
<c>
Managers Bond Fund
------------------
June 30,
2004 2003 2002 2001 2000 1999
---- ---- ---- ---- ---- ----
Net Asset Value, Beginning of Period $24.58 $23.44 $22.32 $21.75 $21.45 $22.19
Income from Investment Operations:
Net investment income 0.45 1.08 1.24 1.44 1.49 1.45
Net realized and unrealized gain (loss)
on investments (0.61) 1.40 1.12 0.60 0.48 (0.65)
Total from investment operations (0.16) 2.48 2.36 2.04 1.97 0.80
Less Distributions to Shareholders from:
Net investment income (0.57) (1.11) (1.24) (1.45) (1.50) (1.45)
Net realized gain on investments - (0.23) - (0.02) (0.17) (0.09)
Total distributions to shareholders (0.57) (1.34) (1.24) (1.47) (1.67) (1.54)
Net Asset Value, End of Period $23.85 $24.58 $23.44 $22.32 $21.75 $21.45
Total Return(1) (0.67)%(2) 10.77% 10.98% 9.64% 9.44% 3.66%
Ratio of net expenses to average net assets(1) 0.99%(3) 0.99% 1.00% 1.18% 1.19% 1.25%
Ratio of total expenses to average net assets(1) 1.04%(3,5) 1.09%(5) 1.17% 1.18% 1.20% 1.26%
Ratio of net investment income
to average net assets 3.71%(3) 4.50% 5.55% 6.45% 6.91% 6.52%
Portfolio turnover 10%(2) 73% 24% 16% 10% 39%
Net assets at end of period (000's omitted) $211,250 $179,641 $128,341 $66,817 $51,383 $33,389
</Table>
40
<Page>
Financial Highlights
- --------------------
For a share outstanding throughout the six months ended June 30, 2004,
(unaudited) and each year ended December 31,
- ----------------------------------------------------------------------
<Table>
<c>
Managers Global Bond Fund
-------------------------
June 30,
2004 2003 2002 2001 2000 1999
---- ---- ---- ---- ---- ----
Net Asset Value, Beginning of Period $22.19 $20.58 $17.97 $18.98 $19.44 $22.38
Income from Investment Operations:
Net investment income 0.31 0.80 0.81 0.57(4) 0.72 0.82
Net realized and unrealized gain (loss)
on investments (0.58) 3.43 2.57 (1.33)(4) (1.06) (3.05)
Total from investment operations (0.27) 4.23 3.38 (0.76) (0.34) (2.23)
Less Distributions to Shareholders from:
Net investment income - (2.09) (0.55) - (0.12) (0.49)
Net realized gain on investments - (0.53) (0.22) (0.25) - (0.22)
Total distributions to shareholders - (2.62) (0.77) (0.25) (0.12) (0.71)
Net Asset Value, End of Period $21.92 $22.19 $20.58 $17.97 $18.98 $19.44
Total Return(1) (1.26)%(2) 20.69% 18.85% (4.10)% (1.62)% (9.97)%
Ratio of net expenses to average net assets(1) 1.42%(3) 1.68% 1.55% 1.45% 1.47% 1.54%
Ratio of total expenses to average net assets(1) 1.50%(3,5) 1.68% 1.56% 1.46% 1.50% 1.54%
Ratio of net investment income
to average net assets 2.79%(3) 3.48% 4.01% 2.87%(4) 4.07% 3.77%
Portfolio turnover 64%(2) 152% 220% 244% 176% 171%
Net assets at end of period (000's omitted) $31,342 $32,307 $19,746 $19,879 $22,723 $19,073
</Table>
The following notes should be read in conjunction with the Financial
Highlights of the Funds presented on the preceding pages.
(1) See Note 1(c) of "Notes to Financial Statements."
(2) Not Annualized.
(3) Annualized.
(4) Effective January 1, 2001, the Trust adopted the provisions of
the AICPA Audit and Accounting Guide for Investment Companies
and began amortizing premium and discount on all debt securities,
as required. The effect of this change during the year ended
December 31, 2001 on International Equity, Intermediate Bond
and Global Bond was to decrease net investment income and
increase net realized and unrealized gain (loss) per share by
$0.01, $0.04 and $0.04, respectively. The effect of this
change on the remaining Funds was not significant. Without
this change the ratio of net investment income to average net
assets for the year ended December 31, 2001 for International
Equity and Global Bond would have been 0.46% and 3.08%,
respectively. Per share data, ratios and supplemental data
for prior periods have not been restated to reflect this change.
(5) Excludes the impact of expense (reimbursement)/recoupment and
expense offsets such as brokerage credits, but includes
non-reimbursable expenses such as interest and taxes.
(See Note 1c to the Notes to Financial Statements.)
41
<Page>
Notes to Financial Statements (unaudited)
June 30, 2004
- -----------------------------------------
(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 nine investment series. Included
in this report are the Managers Value Fund ("Value"), Manag-ers Capital
Appreciation Fund ("Capital Appreciation"), Managers Small Company Fund
("Small Company"), Managers Special Equity Fund ("Special Equity"),
Managers International Equity Fund ("International Equity"), Managers
Emerg-ing Markets Equity Fund ("Emerging Markets Equity"), Managers
Bond Fund ("Bond") and Managers Global Bond Fund ("Global Bond"),
collectively the "Funds."
The Funds' financial statements are prepared in accordance with
accounting principles generally accepted in the Unit-ed States of
America, which require 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 reporting periods. Actual results could differ from those
estimates. 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. In-ternational Equity and Emerging Markets Equity
invest in securities that trade in foreign markets. Because substantial
time may pass between the time the local market for a security closes
and the time a Fund calculates its NAV (typi-cally the close of the
NYSE), intervening events may call into question the reliability of the
closing local market price for that security. On behalf of
International Equity and Emerging Markets Equity, the Manager monitors
intervening events that may affect the value of securities held in each
Fund's portfolio and, in accordance with procedures adopt-ed by the
Funds' Trustees, will adjust the prices of securities traded in foreign
markets, as appropriate, to reflect fair value as of the time each
Fund's NAV is calculated. 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 remain-ing maturity of 60
days or less are valued at amortized cost, which approximates market
value. Investments in other regulated investment companies are valued
at their end of day net asset value per share except iShares, which are
valued the same as equity securities. 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 of Trustees of the Trust.
Investments in certain mortgage-backed, stripped mortgage-backed,
preferred stocks, convertible securities and other debt securities not
traded on an organized 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, various relationships
between securities and yield to maturity in determining value.
(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.
In addition, each of the Funds has a "balance credit" arrangement with
The Bank of New York ("BNY"), the Funds' custodian, whereby each Fund
is credited with an interest factor equal to 1% below the effective 90-
day T-Bill rate for account balances left uninvested overnight. These
credits serve to reduce custody expenses that would otherwise be
charged to each Fund. For the six months ended June 30, 2004, the
custodian expense was not reduced for any of the Funds.
42
<Page>
Notes to Financial Statements (continued)
- -----------------------------------------
Effective May 1, 2004, The Managers Funds LLC (the "Investment
Manager"), a subsidiary of Affiliated Managers Group, Inc. ("AMG"), has
contractually agreed, through at least May 1, 2005, to waive fees and
pay or reimburse ex-penses of Small Company, Emerging Markets Equity,
Bond and Global Bond to the extent that the total annual operat-ing
expenses (exclusive of brokerage, interest, taxes and extraordinary
expenses) of the Fund exceed 1.45%, 1.99%, 0.99% and 1.19%,
respectively, of each Fund's average daily net assets. Each Fund is
obligated to repay the Invest-ment Manager such amounts waived, paid or
reimbursed in future years provided that the repayment occurs within
three (3) years after the waiver or reimbursement and that such
repayment would not cause the Fund's expenses in any such year to
exceed 1.45%, 1.99%, 0.99% and 1.19%, respectively, of the Fund's
average daily net assets. Also, the Investment Manager has
contractually agreed, through at least May 1, 2005, to waive management
fees of Value, Capital Appreciation and International Equity to the
extent total expenses (exclusive of brokerage, interest, taxes and
extraordinary expenses) of the Fund exceed 1.19%, 1.29% and 1.55%,
respectively, of each Fund's average daily net assets, provided that
the amount of fees waived does not exceed 0.25% per annum of each
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 three (3) years after
the waiver or reimbursement and that such repayment would not cause the
Fund's expenses in any such year to exceed 1.19%, 1.29% and 1.55%,
respectively, of the Fund's average daily net assets. For the six
months ended June 30, 2004, Small Company and Emerging Mar-kets Equity
made such repayments to the Investment Manager in the amounts of $3,174
and $22,186, respectively. At June 30, 2004, the cumulative amount of
reimbursement by the Manager for Value, Capital Appreciation,
International Equity, Emerging Markets Equity, Bond and Global Bond
equaled $29,212, $32,808, $88,073, $7,571, $377,733 and $12,262,
respectively.
The Investment Manager has agreed to waive a portion of its fee or
reimburse expenses of Special Equity commen-surate with the reduction
in the fee paid to Essex Investment Management Company LLC ("Essex")
(subadvisor to Special Equity since December 19, 2003), which is 0.10%
of the average daily net assets of the portion of the Fund managed by
Essex in excess of $100 million. For the six months ended June 30,
2004, the amount reimbursed equaled $275,991.
Total returns and net investment income for the Funds would have been
lower had certain expenses not been offset.
(d) Dividends and Distributions
- -------------------------------
Dividends resulting from net investment income, if any, normally will
be declared and paid annually for Global Bond and the Equity Funds.
Dividends resulting from net investment income, if any, normally will
be declared and paid monthly for Bond. Distributions of capital gains,
if any, will be made on an annual basis and when required for Fed-eral
excise tax purposes. Income and capital gain distributions are
determined in accordance with Federal income tax regulations, which may
differ from generally accepted accounting principles. These differences
are primarily due to differing treatments for losses deferred due to
wash sales, equalization accounting for tax purposes, foreign currency
and market discount transactions. Permanent book and tax basis
differences, if any, relating to shareholder distribu-tions will result
in reclassifications to paid-in capital.
(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 its taxable income and gains to its shareholders
and to meet certain diversifi-cation and income requirements with
respect to investment companies. Therefore, no provision for Federal
income or excise tax is included in the accompanying financial
statements.
43
<Page>
Notes to Financial Statements (continued)
- -----------------------------------------
(f) Capital Loss Carryovers
- ---------------------------
As of June 30, 2004, the following Funds had accumulated net realized
capital loss carryovers from securities transac-tions 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.
Capital Loss
Fund Carryover Amount Expires December 31,
- ---- ---------------- --------------------
Value $ 5,605,699 2010
Capital Appreciation 122,787,551 2009
30,988,593 2010
12,899,489 2011
Small Company 1,040,860 2008
6,267,133 2009
1,700,278 2010
Special Equity 143,210,597 2009
241,877,816 2010
International Equity 52,865,926 2009
92,266,533 2010
16,170,119 2011
Emerging Markets Equity 2,488,378 2010
(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. Dividends and distributions to
shareholders are recorded on the ex-dividend date.
At June 30, 2004, certain unaffiliated shareholders and specifically
omnibus accounts, individually held greater than 10% of the outstanding
shares of the following Funds: Value - one owns 42%; Capital
Appreciation - one owns 17%; Special Equity - one owns 24%;
International Equity - two own 40%; Emerging Markets Equity - two own
62%; Bond - three own 46%; Special Equity I class shares - three
unaffiliated shareholders collectively own 46%.
(h) Repurchase Agreements
- -------------------------
Each Fund may enter into repurchase agreements provided that the value
of the underlying collateral, including ac-crued interest, will be
equal to or exceed the value of the repurchase agreement during the
term of the agreement. The underlying collateral for all repurchase
agreements is held in safekeeping by the Fund's custodian or at the
Fed-eral Reserve Bank.
If the seller defaults and the value of the collateral declines, or if
bankruptcy proceedings commence with respect to the seller of the
security, realization of the collateral by the Fund may be delayed or
limited.
(i) 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.
In addition, the Funds do not isolate the net realized and unrealized
gain or loss resulting from changes in exchange rates from the
fluctuations resulting from changes 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 a Fund Management Agreement under which the
Investment Manager provides or oversees investment advisory and
management services to the Funds. The Investment Manager selects
portfolio managers for each Fund (subject to Trustee approval),
allocates assets among portfolio managers and monitors the portfolio
manag-
44
<Page>
Notes to Financial Statements (continued)
- -----------------------------------------
ers' investment programs and results. Each Fund's investment portfolio
is managed by portfolio managers who serve pursuant to Portfolio
Management Agreements with the Investment Manager and the Fund. The
Funds are distributed by Managers Distributors, Inc. ("MDI"), a wholly-
owned subsidiary of The Managers Funds LLC. Certain Trustees and
Officers of the Funds are Officers and/or Directors of the Investment
Manager, AMG and/or MDI.
Investment advisory and management fees are paid directly by each Fund
to the Investment Manager based on aver-age daily net assets. The
annual investment advisory and management fee rates, as a percentage of
average daily net assets for the six months ended June 30, 2004, were
as follows:
Investment Advisory
Fund and Management Fee
- ---- -------------------
Value 0.75%
Capital Appreciation 0.80%
Small Company 0.90%
Special Equity 0.90%
International Equity 0.90%
Emerging Markets Equity 1.15%
Bond 0.625%
Global Bond 0.70%
The Trust has entered into an Administration and Shareholder Servicing
Agreement under which The Managers Funds LLC 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 interme-diary
with the Funds' shareholders. During the six months ended June 30,
2004, each of the Funds, except Global Bond, paid a fee to the
Administrator at the rate of 0.25% per annum of the Fund's average
daily net assets. Global Bond paid a fee to the Administrator at the
rate of 0.20% per annum of the Fund's average daily net assets.
The aggregate annual fee paid to each independent Trustee for serving
as a Trustee of the Trust was $20,000. In addi-tion, the Trustees
received in-person and telephonic per meeting fees of $1,000 and $500,
respectively. Effective April 1, 2004 the aggregate annual retainer
paid to each Independent Trustee became $52,000, plus $2,000 for each
meeting attended. The Trustees' fees and expenses are allocated amongst
of all the Funds for which The Managers Funds, LLC serves as the
Advisor based on the relative net assets of such Funds. The Independent
Chairman of the Trust receives an additional payment of $5,000 per
year. The "Trustee fees and expenses" shown in the financial statements
repre-sents 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) Purchases and Sales of Securities
- -------------------------------------
Purchases and sales of securities, excluding short-term securities, for
the six months ended June 30, 2003, were as follows:
<Table>
Long-Term Securities U.S. Government Securities
Fund Purchases Sales Purchases Sales
- ---- --------- ----- --------- -----
Value $ 27,994,172 $ 16,466,119 N/A N/A
Capital Appreciation 38,337,356 46,573,729 N/A N/A
Small Company 3,567,185 1,656,173 N/A N/A
Special Equity 1,145,833,131 1,123,611,892 N/A N/A
International Equity 91,169,465 121,390,067 N/A N/A
Emerging Markets Equity 22,614,657 17,820,677 N/A N/A
Bond 48,177,216 19,012,294 $19,014,011 $1,003,828
Global Bond 20,644,119 19,096,846 1,406,634 2,488,048
</Table>
(4) Portfolio Securities Loaned
- -------------------------------
The Funds may participate in a securities lending program offered by
BNY providing for the lending of equities, cor-porate bonds and
government securities to qualified brokers. Collateral on all
securities loaned is accepted in cash and/or government securities.
Collateral is maintained at a minimum level of 102% of the market
value, plus inter-est, if applicable, of investments on loan.
Collateral received in the form of cash is invested temporarily in
institu-
45
<Page>
Notes to Financial Statements (continued)
- -----------------------------------------
tional money market funds or other short-term investments by BNY.
Earnings of such temporary cash investments are divided between BNY, as
a fee for its services under the program, and the Fund loaning the
security, according to agreed-upon rates.
(5) Commitments and Contingencies
- ---------------------------------
In the normal course of business, the Funds may enter into contracts
and agreements that contain a variety of repre-sentations 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 against the Funds that have not
yet occurred. However, based on experience, the Funds expect the risks
of loss to be remote.
(6) Risks Associated with Collateralized Mortgage Obligations ("CMOs")
- ----------------------------------------------------------------------
The net asset value of Funds may be sensitive to interest rate
fluctuations because the Funds may hold several instru-ments, including
CMOs and other derivatives, whose values can be significantly impacted
by interest rate movements. CMOs are obligations collateralized by a
portfolio of mortgages or mortgage-related securities. Payments of
principal and interest on the mortgage are passed through to the holder
of the CMOs on the same schedule as they are re-ceived, although
certain classes of CMOs have priority over others with respect to the
receipt of prepayments on the mortgages.
Therefore, the investment in CMOs may be subject to a greater or lesser
risk of prepayment than other types of mort-gage-related securities.
CMOs may have a fixed or variable rate of interest.
(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 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.
(8) Forward Foreign Currency Contracts
- --------------------------------------
During the six months ended June 30, 2004, International Equity,
Emerging Markets Equity and Global Bond invested in forward foreign
currency exchange contracts to manage currency exposure. These
investments may involve greater market risk than the amounts disclosed
in the Funds' financial statements.
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 counter party is realized on the date
of offset, otherwise gain or loss is realized on settlement date.
The Funds, except Value, Capital Appreciation, Small Company and
Special Equity, may invest in non-U.S. dollar de-nominated instruments
subject to limitations, and enter into forward foreign currency
exchange contracts to facilitate transactions in foreign securities and
to protect against a possible loss resulting from an adverse change in
the rela-tionship between the U.S. dollar and such foreign currency.
Risks may arise upon entering into these contracts from the potential
inability of counter parties to meet the terms of their contracts and
from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
Open forward foreign currency exchange contracts (in U.S. Dollars) at
June 30, 2004 were as follows:
<Table>
Foreign Currency Settlement Contract Value Current Value Unrealized
Date (Payable Amount) (Receivable Amount) Gain/Loss
---------- ---------------- ------------------- ----------
International Equity
Swedish Krona Contracts 07/01/04 $374,152 $372,416 $(1,736)
Emerging Markets Equity
Thai Baht Contracts 07/02/04 501,406 501,590 184
Global Bond
euro-dollar Contracts 07/02/04 77,453 77,163 (290)
</Table>
46
<Page>
Notes to Financial Statements (continued)
- -----------------------------------------
(9) Futures Contracts Held or Issued for Purposes other than Trading
- --------------------------------------------------------------------
International Equity uses Equity Index futures contracts to a limited
extent, with the objective of maintaining exposure to equity stock
markets while maintaining liquidity. The Fund may purchase or sell
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
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 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. The Fund had the
following open futures contracts as of June 30, 2004: Long - 3-month
Eurodollar, 14 contracts, expiring September 2004 with an unrealized
gain of $10,125.
(10) Transactions with Affiliated Companies - Special Equity
- ------------------------------------------------------------
An affiliated company is a company that is directly or indirectly
controlled by a related party or a company in which a fund has
ownership of at least 5% of the voting securities. Transactions during
the six months ended June 30, 2004, with companies which are or were
affiliates are as follows:
Summary of Transactions with Affiliated Companies - Special Equity
<Table>
Purchase Sales Dividend Market Value
Affiliate Cost Cost Income at June 30, 2004
- --------- -------- ----- -------- ----------------
AK Steel Holding Corp. $ - $ - $ - $ 32,069,004
Axsys Technologies, Inc. 535,991 - - 10,013,619
Anaren Microwave Inc. 17,286,086
Brandywine Realty Trust 224,743 4,574,707 195,976 -
Duckwall-ALCO Stores, Inc. - - - 4,160,314
Meristar Hospitality Corp. 1,162,649 - - 34,368,264
Totals 1,923,383 $ 4,574,707 $ 195,976 $ 97,897,287
</Table>
47
<Page>
[Logo:] Managers
Investment Manager
and 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
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
-----------------------
The Managers Funds
PFPC Inc. c/o Wrap Services
P.O. Box 9847
Providence, RI 02940
(800) 358-7668
<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
Kern Capital Management LLC GLOBAL BOND FUND
Skyline Asset Management, L.P. FIXED INCOME FUND
Westport Asset Management, Inc. Loomis, Sayles & Company L.P.
INTERNATIONAL EQUITY FUND
Lazard Asset Management, LLC CONVERTIBLE SECURITIES FUND
Bernstein Investment Research 40|86 Advisors,Inc.
and Management
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>
Nothing contained herein is to be considered an offer or sale or a
solicitation of an offer to buy shares of The Managers Funds. Such
offering is made only by Prospectus, which includes details as to of-
fering price and other material information.
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 or to request
additional information about the Funds or other Managers Funds or
Managers AMG Funds, please contact us by calling 1-800-835-3879 or by
visiting our websites. Distributed by Managers Distributors, Inc.,
member NASD.
www.managersfunds.com
www.managersamg.com
www.managerschoice.com
<Page>
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. [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) 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: September 9, 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: September 9, 2004
-----------------
By: /s/ Galan G. Daukas
----------------------------------------
Galan G. Daukas, Chief Financial Officer
Date: September 9, 2004
-----------------
<Page>