Neuberger Berman Absolute Return Multi-Manager Fund Sees Assets Pass $1 Billion As Investors Embrace Hedge Fund Mutual Funds

An investor should consider the Fund’s investment objectives, risks and fees and expenses carefully before investing. This and other important information can be found in the Fund’s prospectus or summary prospectus, which you can obtain by calling 877.628.2583. Please read the prospectus or, if available, summary prospectus carefully before making an investment.

The Fund’s performance will largely depend on what happens in the equity and fixed income markets. Shares of the Fund may be worth more or less upon redemption. The actual risk exposure taken by the Fund will vary over time, depending on various factors, including Neuberger Berman’s methodology and decisions in allocating the Fund’s assets to subadvisers, and its selection and oversight of subadvisers. The subadvisers’ investment styles may not always be complementary, which could adversely affect the performance of the Fund. Some subadvisers have little experience managing registered investment companies which, unlike the hedge funds these managers have been managing, are subject to daily inflows and outflows of investor cash and are subject to certain legal and tax-related restrictions on their investments and operations.

The Fund’s returns may deviate from overall market returns to a greater degree than other mutual funds that do not employ an absolute return focus. Thus, the Fund might not benefit as much as funds following other strategies during periods of strong market performance. A subadviser may use strategies intended to protect against losses (i.e., hedged strategies), but there is no guarantee that such hedged strategies will be used or, if used, that they will protect against losses, perform better than nonhedged strategies or provide consistent returns. 

Event-driven strategies that invest in companies in anticipation of an event carry the risk that the event may not happen or may take considerable time to unfold, it may happen in modified or conditional form, or the market may react differently than expected to the event, in which case the Fund may experience losses. Additionally, event-driven strategies may fail if adequate information about the event is not obtained or such information is not properly analyzed. The actions of other market participants may also disrupt the events on which event-driven strategies depend. Arbitrage strategies involve the risk that underlying relationships between securities in which investment positions are taken may change in an adverse manner or in a manner not anticipated, in which case the Fund may realize losses. The Fund’s use of event-driven and arbitrage strategies will cause it to invest in actual or anticipated special situations—i.e., acquisitions, spin-offs, reorganizations and liquidations, tender offers and bankruptcies. These transactions may not be completed as anticipated or may take an excessive amount of time to be completed. They may also be completed on different terms than the subadviser anticipates, resulting in a loss to the Fund. Some special situations are sufficiently uncertain that the Fund may lose its entire investment in the situation.

The value of certain securities will fluctuate based on interest rates, market conditions, credit quality and other factors. Generally, values of fixed income securities will decline as interest rates rise. When interest rates are low, issuers of certain fixed income securities will often repay the obligation underlying a “callable security” early, in which case the Fund may have to reinvest the proceeds in an investment offering a lower yield and may not benefit from any increase in value that might otherwise result from declining interest rates. The Fund’s performance could be affected if unexpected interest rate trends cause the Fund’s mortgage- or asset-backed securities to be paid off earlier or later than expected, shortening or lengthening their duration. An increase in market interest rates would likely extend the effective duration of mortgage-backed securities, thereby magnifying the effect of the rate increase on the securities’ price. Unlike mortgage-related securities issued or guaranteed by agencies of the U.S. government or government-sponsored entities, mortgage-related securities issued by private issuers do not have a government or government-sponsored entity guarantee (but may have other credit enhancement features), and may, and frequently do, have less favorable collateral, credit risk or other underwriting characteristics. These securities potentially offer higher interest rates than agency-backed mortgaged-backed securities, but require careful analysis of quality in an effort to protect against risk of non payment of principal and/or interest.

Stock markets are volatile and may decline significantly in response to adverse issuer, political, regulatory, market or economic developments. To the extent that the Fund sells stocks before they reach their market peak, it may miss out on opportunities for higher performance. Small- and mid-capitalization stocks trade less frequently and in lower volume than larger company stocks and thus may be more volatile and more vulnerable to financial and other risks. Investing in foreign securities may involve greater risks than investing in securities of U.S. issuers, such as currency fluctuations, potential social, political or economic instability, restrictions on foreign investors, less stringent regulation and less market liquidity. Securities issued in emerging market countries may be more volatile and less liquid than securities issued in foreign countries with more developed economies or markets as such governments may be less stable and more likely to impose capital controls as well as impose additional taxes and liquidity restrictions. Exchange rate exposure and currency fluctuations could erase or augment investment results. Funds may hedge currency risks when available, though the hedging instruments may not always perform as expected.

Derivatives contracts on non-U.S. currencies are subject to exchange rate movements. The risks involved in seeking capital appreciation from investments primarily in companies based outside the United States are set forth in the prospectus. Shares in a fund may fluctuate based on interest rates, market condition, credit quality and other factors. In a rising interest rate environment, the value of a fund’s fixed-income investments is likely to fall.

Derivatives may involve risks different from, or greater than, those associated with more traditional investments. Investments in the over-the-counter (“OTC”) market introduce counterparty risk due to the possibility that the dealer providing the derivative may fail to timely satisfy its obligations. Investments in the futures markets also introduce the risk that its futures commission merchant (“FCM”) may default on its obligations including the FCM’s obligation to return margin posted in connection with a fund’s futures contracts. Short sales, selling a security a fund does not own in anticipation that the security’s price will decline, theoretically presents unlimited risk on an individual stock basis, since a fund may be required to buy the security sold short at a time when the security has appreciated in value. Leverage may amplify changes in a fund’s net asset value. ETFs are subject to tracking error and may be unable to sell poorly performing stocks that are included in their index. ETFs may trade in the secondary market at prices below the value of their underlying portfolios and may not be liquid. The use of options involves investment strategies and risks different from those associated with ordinary securities transactions. A “covered call” involves selling a call option while simultaneously holding an equivalent position in the underlying security. A put option involves buying the right to sell a security at a specific price within a given time period.

Several of the strategies utilized by the Fund may engage in frequent and active trading and have a high portfolio turnover rate, which may increase the Fund’s transaction costs, may adversely affect the Fund’s performance or may generate a greater amount of capital gain distributions to shareholders than if the Fund had a low portfolio turnover rate.

Past performance is no guarantee of future results.

Morningstar rankings are based on Morningstar total returns, which include both income and capital gains or losses and are not adjusted for sales charges or redemption fees ended March 3, 2014, to all funds that have the same Morningstar category. The highest percentile rank is 1 and the lowest is 100. Neuberger Berman Absolute Return Multi-Manager Fund - Institutional Class, Class A and Class C were ranked in the 9th, 10th and 13th percentiles for the 1-year period ending March 3, 2014. The Morningstar multialternative category contains 271 and 144 funds as of March 3, 2014 for the 1- and 3-year periods respectively. Ratings are ©2014 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

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