- --------------------------------------------------------------------------------
FIRST QUARTER REPORT
================================================================================
SELIGMAN
INCOME
FUND, INC.
================================================================================
MARCH 31, 1996
[LOGO]
- --------------------------------------------------------------------------------
AN INCOME FUND
ESTABLISHED IN 1947
SELIGMAN FINANCIAL SERVICES, INC.
AN AFFILIATE OF
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
THIS REPORT IS INTENDED ONLY FOR THE INFORMATION OF SHAREHOLDERS OR THOSE WHO
HAVE RECEIVED THE OFFERING PROSPECTUS COVERING SHARES OF CAPITAL STOCK OF
SELIGMAN INCOME FUND, INC., WHICH CONTAINS INFORMATION ABOUT THE SALES CHARGES,
MANAGEMENT FEE, AND OTHER COSTS. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE
INVESTING OR SENDING MONEY.
EQIN3a 3/96
<PAGE>
================================================================================
TO THE SHAREHOLDERS
- --------------------------------------------------------------------------------
Seligman Income Fund continued to provide current income, while investing in a
conservative portfolio of carefully selected stocks and bonds for income and
growth. For long-term performance information, please refer to the table on page
7.
Seligman Income Fund's dividend and gain information at March 31, 1996, is as
follows: On March 27, your Fund paid an $0.18 per share dividend to Class A
shareholders of record March 21, and a $0.15 dividend to Class D shareholders of
record March 21. For both Class A and D shares, net realized gain per share from
investment transactions for the three months totaled $0.09. At March 31, net
unrealized gain totaled $0.80 per share.
In the economy and financial markets, the first quarter of 1996 was one of
mixed trends, although there were overall positive results for the equity market
and negative results for the bond market. Early in 1996, the Federal Reserve
Board lowered short-term interest rates in response to a slowdown in the rate of
economic growth and a stable rate of inflation. This less restrictive monetary
policy contributed to the continuation of the decline in long-term interest
rates. In the middle of the first quarter, however, the economy began to to
exhibit signs of strength. Up to this point, the bond market was rallying in
anticipation of an additional Fed easing of short-term interest rates. The
realization that this was no longer imminent caused long-term interest rates to
spike sharply. By quarter's end, however, further economic reports indicated
that the economy's rate of growth was in check.
We anticipate that the balance of 1996 will be more noteworthy for the
political debate inherent to a presidential election year than any dramatic
change in the direction of the economy.
Turning to your Fund, the rise in long-term interest rates dampened the bond
market's performance in the first quarter of 1996. The market retreated after
investors' expectations for continuing monetary stimulus by the Fed waned. In
general, both longer-term and convertible securities tend to perform less
favorably in a rising interest rate environment. Anticipating this in late 1995,
your Portfolio Manager shortened the maturity of the fixed-income securities in
your portfolio and decreased its exposure to convertible issues. In addition,
your Fund's retail and energy sectors, which are cyclical, performed well in the
past quarter, due mainly to signs of an accelerating economy.
For more information about your Fund, or your investment in its shares,
please write, or call Shareholder Services using the toll-free telephone numbers
listed below.
By order of the Board of Directors,
/s/William C. Morris
William C. Morris
Chairman
/s/Brian T. Zino
Brian T. Zino
President
April 26, 1996
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Important Telephone Numbers
- ---------------------------
SHAREHOLDER RETIREMENT PLAN 24-HOUR AUTOMATED
SERVICES SERVICES TELEPHONE ACCESS SERVICE
(800) 221-2450 (800) 445-1777 (800) 622-4597
1
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PORTFOLIO OF INVESTMENTS (unaudited)
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
---------- -------
U.S. GOVERNMENT AND GOVERNMENT AGENCY
SECURITIES 16.7%
U.S. Treasury Bonds
8 1/8%, 8/15/2021 .................... $ 5,000,000 $ 5,743,750
U.S. Treasury Notes:
5 1/4%, 1/31/2001 .................... 10,000,000 9,668,750
7 1/4%, 8/15/2004 .................... 10,000,000 10,540,620
MORTGAGE-BACKED SECURITIES:++
Federal National Mortgage
Association 7%, 4/1/2026 ............. 22,000,000 21,463,640
Government National Mortgage
Association Obligations:
7 1/2%, with various maturities
from 1/15/2023 to 12/15/2024 ......... 9,055,266 9,060,880
10%, with various maturities
from 1/15/2018 to 8/15/2021 .......... 8,838,362 9,744,295
------------
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY SECURITIES
(Cost $ 66,547,721) .................. 66,221,935
------------
CORPORATE BONDS 29.9%
AUTOMOTIVE 1.3%
General Motors Acceptance
6 3/4%, 3/15/2003 .................... 5,000,000 4,975,150
------------ ------------
BANKING AND FINANCE 14.0%
Alco Capital 5.435%, 2/22/1999 .......... 5,000,000 4,876,000
BCH Cayman Islands
6 1/2%, 2/15/2006 .................... 5,000,000 4,735,250
CAF 7 3/8%, 7/21/2000 ................... 5,000,000 5,018,305
Capital One Bank 8 1/8%, 3/1/2000 ....... 5,000,000 5,233,020
Finova Capital 6.54%, 11/15/2002 ........ 5,000,000 4,912,945
First Union 6.55%, 10/15/2035 ........... 5,000,000 4,865,470
First USA Bank 5 3/4%, 1/15/1999 ........ 4,000,000 3,919,944
Franchise Finance
7%, 11/30/2000 ....................... 5,000,000 4,911,940
Midland Bank 7.65%, 5/1/2025 ............ 5,000,000 5,270,855
United Companies Financial
7%, 7/15/1998 ........................ 2,000,000 2,010,926
United Companies Financial
9.35%, 11/1/1999 ..................... 3,000,000 3,147,165
USAA Capital
5.30%, 2/9/1999+ ..................... 5,000,000 4,893,300
USF&G 7%, 5/15/1998 ..................... 2,000,000 2,021,942
------------
55,817,062
------------
CHEMICALS 1.2%
Geon 6 7/8%, 12/15/2005 .................. 5,000,000 4,747,250
------------
COMMERCIAL SERVICES 1.0%
Service Corp. 6 3/8%, 10/1/2000 .......... 4,000,000 3,973,792
------------
ELECTRIC UTILITIES 0.7%
Texas Utilities 5 7/8%, 4/1/1998 ......... 3,000,000 2,979,672
------------
ENERGY 2.6%
Orxy Energy 10%, 4/1/2001 ................ 5,000,000 5,466,100
Tosco 7%, 7/15/2000 ...................... 5,000,000 4,961,725
------------
10,427,825
------------
INSURANCE 1.3%
AEGON N.V. 8%, 8/15/2006 ................. 5,000,000 5,347,450
------------
MEDIA 2.6%
Time Warner 9 1/8%, 1/15/2013 ............ 5,000,000 5,424,650
Viacom 6 3/4%, 1/15/2003 ................. 5,000,000 4,788,435
------------
10,213,085
------------
RETAILING 1.2%
Woolworth 7%, 10/15/2002 ................. 5,000,000 4,720,120
------------
TECHNOLOGY 1.5%
Solectron 7 3/8%, 3/1/2006+ .............. 4,000,000 3,921,440
Tektronix 7 5/8%, 8/15/2002 .............. 2,000,000 2,035,076
------------
5,956,516
------------
TRANSPORTATION 1.0%
Mayme Nickless 6 1/4%, 2/1/2006 .......... 4,000,000 3,775,352
-----------
MISCELLANEOUS 1.5%
CSR America 6 7/8%, 7/21/2005 ............ 3,000,000 3,000,372
Trinova 7.95%, 5/1/1997 .................. 3,000,000 3,056,778
------------
6,057,150
------------
TOTAL CORPORATE BONDS
(Cost $120,098,078) 118,990,424
------------
2
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March 31, 1996
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
---------- -------
CONVERTIBLE BONDS 20.1%
CONSUMER GOODS AND SERVICES 2.2%
Bell Sports 4 1/4%, 11/15/2000 ......... $ 2,500,000 $ 1,706,250
Unifi 6%, 3/15/2002 ..................... 4,000,000 4,170,000
Wendy's International
7%, 4/1/2006 ......................... 2,000,000 2,985,000
------------
8,861,250
------------
DIVERSIFIED 0.5%
MascoTech 4 1/2%, 12/15/2003 ............ 2,750,000 2,148,437
------------
DRUGS AND HEALTH CARE 1.0%
Ciba-Geigy 6 1/4%, 3/15/2016 ............ 2,000,000 2,077,500
Greenery Rehabilitation Group
8 3/4%, 4/1/2015 ..................... 2,000,000 1,775,000
------------
3,852,500
------------
ENERGY 2.0%
Apache 6%, 1/15/2002+ ................... 3,000,000 3,240,000
E. E. Finance 8 3/4%, 6/27/2006 ......... 1,000,000 1,537,697
Santa Fe Pipelines
11.162%, 8/15/2010 ................... 2,500,000 3,287,500
------------
8,065,197
------------
ENVIRONMENTAL SERVICES 0.7%
OHM 8%, 10/1/2006 ....................... 3,000,000 2,666,250
------------
FINANCE 0.2%
Finance One 2%, 8/31/2001 ............... 750,000 787,500
------------
INSURANCE 1.9%
Leucadia National 5 1/4%, 2/1/2003 ...... 3,000,000 3,052,500
LibLife International
6 1/2%, 9/30/2004 .................... 750,000 1,010,625
Trenwick Group 6%, 12/15/1999 ........... 3,000,000 3,300,000
------------
7,363,125
------------
MACHINERY 0.9%
Cooper Industries
7.05%, 1/1/2015 ...................... 2,724,000 2,815,935
Teco Electric and Machinery
2 3/4%, 4/15/2004 .................... 1,000,000 831,250
------------
3,647,185
------------
MEDIA 1.6%
Carlton Communications
7 1/2%, 8/14/2007 .................... 2,600,000 6,486,610
------------
RETAILING 1.6%
CML Group 5 1/2%, 1/15/2003 ............. 2,000,000 1,200,000
Price 6 3/4%, 3/1/2001 .................. 3,000,000 3,056,250
Proffitts 4 3/4%, 11/1/2003 ............. 2,000,000 1,910,000
------------
6,166,250
------------
PRIN. AMT.
OR SHARES VALUE
----------- -------
SEMICONDUCTORS 0.2%
Xilinx 5 1/4%, 11/1/2002+ ............... $ 1,000,000 $ 925,000
------------
TECHNOLOGY 3.1%
Bay Networks 5 1/4%, 5/15/2003+ ......... 2,000,000 2,020,000
Conner Peripheral 6 1/2%, 3/1/2002 ...... 3,000,000 3,363,750
Cray Research 6 1/8%, 2/1/2011 .......... 1,500,000 1,181,250
Data General 7 3/4%, 6/1/2001 ........... 2,000,000 2,050,000
EMC 4 1/4%, 1/1/2001 .................... 1,500,000 1,785,000
Evans & Sutherland Computer
6%, 3/1/2012 ......................... 2,000,000 1,750,000
------------
12,150,000
------------
TELECOMMUNICATIONS 1.0%
LDDS Communications
5%, 8/15/2003 ........................ 2,000,000 2,480,000
Network Equipment
7 1/4%, 5/15/2014 .................... 1,470,000 1,609,650
------------
4,089,650
------------
TRANSPORTATION 2.1%
Airborne Freight 6 3/4%, 8/15/2001 ...... 1,750,000 1,771,875
British Airways 9 3/4%, 6/15/2005 ....... 700,000a 2,340,731
Builders Transport 8%, 8/15/2005 ........ $ 3,000,000 2,797,500
Nippon Yusen 2%, 9/29/2000 .............. 115,000,000** 1,277,241
------------
8,187,347
------------
MISCELLANEOUS 1.1%
General Signal 5 3/4%, 6/1/2002 ......... $ 2,300,000 2,403,500
TriMas 5%, 8/1/2003 ..................... 2,000,000 2,170,000
------------
4,573,500
------------
TOTAL CONVERTIBLE BONDS
(Cost $71,419,355) ................... 79,969,801
------------
CONVERTIBLE PREFERRED
STOCKS 14.5%
BANKING AND FINANCE 0.8%
National City $4.00 ..................... 40,000 shs. 3,355,000
------------
COMPUTER AND BUSINESS
SERVICES 1.0%
Ceridian 5 1/2% ......................... 40,000 3,860,000
------------
CONSUMER GOODS AND SERVICES 0.8%
RJR Nabisco Holdings .................... 500,000 3,062,500
------------
ENERGY 2.5%
Snyder Oil (Class A) 6% ................. 150,000 2,756,250
Unocal Corp. $3.50+ ..................... 50,000 2,850,000
Williams Cos. $3.50+ .................... 50,000 4,075,000
WRT Energy 9% ........................... 40,000 80,000
------------
9,761,250
------------
3
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PORTFOLIO OF INVESTMENTS (unaudited) (continued)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
ENVIRONMENTAL SERVICES 0.8%
Browning-Ferris 7 1/4% .................. 100,000 $ 3,350,000
------------
INSURANCE 3.2%
Ahmanson (HF) (Series D) 6% ............. 50,000 2,850,000
Alexander & Alexander
(Series A) $3.625+ ................... 65,000 3,063,125
American General (Series A) $3.00 ....... 50,000 2,581,250
St. Paul Capital 6% ..................... 75,000 4,237,500
------------
12,731,875
------------
PAPER 0.9%
International Paper 5 1/4%+ ............. 80,000 3,740,000
------------
RETAILING 0.7%
TJX Companies $3.125 .................... 30,000 1,590,000
Venture Stores $3.25 .................... 40,000 1,095,000
------------
2,685,000
------------
STEEL 0.7%
U.S. Steel $3.25 ........................ 60,000 2,902,500
------------
TRANSPORTATION 2.0%
GATX $3.875 ............................. 50,000 2,818,750
Interpool 5 3/4% ........................ 20,000 1,685,000
Sea Containers $4.00 .................... 70,000 3,202,500
------------
7,706,250
------------
UTILITIES/TELECOMMUNICATIONS 0.3%
Mobile Telecommunications
Technologies $2.25+ .................. 50,000 1,325,000
------------
MISCELLANEOUS 0.8%
Corning (Delaware) 6% ................... 60,000 3,262,500
------------
TOTAL CONVERTIBLE PREFERRED
STOCKS
(Cost $54,558,445) ................... 57,741,875
------------
COMMON STOCKS 16.4%
BANKING AND FINANCE 3.5%
Banco de Santander ...................... 52,732 2,510,138
Citicorp ................................ 44,999 3,599,920
Grupo Financiera Banamex
Accival (Class B) .................... 443,000 946,637
HSBC Holdings ........................... 70,000 1,049,815
Internationale Nederlanden Groep ........ 31,518 2,289,027
National Australia Bank (ADRs) .......... 60,000 2,685,000
Societe Generale ........................ 6,164 685,501
------------
13,766,038
------------
CHEMICALS 0.7%
Bayer AG ................................ 5,700 1,931,778
European Vinyls ......................... 24,700 859,559
------------
2,791,337
------------
CONSUMER GOODS AND SERVICES 0.9%
Allied Domecq ........................... 140,000 1,049,144
B.A.T. Industries ....................... 200,000 1,475,884
Christian Dior--ABSA .................... 7,570 1,008,732
------------
3,533,760
------------
ELECTRIC UTILITIES 4.3%
Central Costanera (ADRs)+ ............... 14,000 402,500
Central & South West .................... 60,100 1,712,850
CINergy ................................. 102,300 3,069,000
Empresa Nacionale
de Electricidad (ADRs) ............... 25,000 1,425,000
Entergy ................................. 100,000 2,800,000
FPL Group ............................... 100,000 4,525,000
Hong Kong Electric ...................... 800,000 2,601,264
Huaneng Power International
(ADRs)* .............................. 35,000 599,375
------------
17,134,989
------------
ENERGY 2.4%
Atlantic Richfield ...................... 20,000 2,380,000
BP Prudhoe Bay Royalty Trust ............ 80,000 1,320,000
British Gas Petroleum (ADRs) ............ 25,000 856,250
Shell Transport and Trading
(ADRs) ............................... 50,000 4,012,500
Total SA (Class B) ...................... 15,000 1,012,809
------------
9,581,559
------------
INSURANCE 0.5%
AXA ..................................... 9,714 597,058
GCR Holdings ............................ 57,000 1,425,000
------------
2,022,058
------------
STEEL 0.1%
Pohang Iron & Steel (ADRs) .............. 15,000 363,750
------------
UTILITIES/TELECOMMUNICATIONS 3.8%
Alcatel Alsthom ......................... 15,000 1,390,825
British Telecommunications
(ADRs) ............................... 30,000 1,522,500
GTE ..................................... 100,000 4,387,500
NYNEX ................................... 50,000 2,493,750
Tele Danmark (ADSs) ..................... 50,000 1,293,750
Telecom Italia-Di Risp .................. 439,000 620,341
Telecom Italia Mobile ................... 439,000 483,950
U.S. West ............................... 50,000 1,618,750
VEBA AG ................................. 30,000 1,458,153
------------
15,269,519
------------
4
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March 31, 1996
- --------------------------------------------------------------------------------
SHARES OR
PRIN. AMT. VALUE
------------ -------
MISCELLANEOUS 0.2%
Pacific Dunlop .......................... 275,000 shs. $ 650,157
------------
OTHER ................................... 126,000
------------
TOTAL COMMON STOCKS
(Cost $53,551,987) ................... 65,239,167
------------
ASSET-BACKED SECURITIES++ 3.7%
AUTOMOTIVE 0.3%
Prat 1995-3 A4 6.10%, 7/16/1999 ......... $ 1,000,000 1,001,880
------------
FINANCE 3.4%
Chase 96-A
5.20%, 2/15/2002 ..................... 9,656,330 9,559,768
UCFC Loan Trust
6.175%, 4/15/2009 .................... 4,000,000 3,976,240
------------
13,536,008
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $14,660,188) ................... 14,537,888
------------
SHORT-TERM HOLDINGS 0.7%
(Cost $2,800,000) .................... 2,800,000
------------
TOTAL INVESTMENTS 102.0%
(Cost $383,635,774) .................. $405,501,090
OTHER ASSETS
LESS LIABILITIES (2.0)% (7,962,422)
------------
NET ASSETS 100.0% $397,538,668
============
- ----------
+ Rule 144A security.
++ Investments in mortgage-backed and asset-backed securities are subject to
principal paydowns. As a result of prepayments from refinancing or
satisfaction of the underlying instruments, the average life may be less than
the original maturity. This in turn may impact the ultimate yield realized
from these instruments.
a Principal amount reported in British pounds.
** Principal amount reported in Japanese yen.
* Non-income producing security.
Note: investments in u.S. Government securities, bonds, and stocks are valued at
current market values or, in their absence, at fair values determined in
accordance with procedures approved by the board of directors. Securities traded
on national exchanges are valued at last sales prices or, in their absence and
in the case of over-the-counter securities, a mean of bid and asked prices.
Short-term holdings maturing in 60 days or less are valued at amortized cost.
5
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LARGEST PORTFOLIO CHANGES#
DURING PAST THREE MONTHS
PRINCIPAL AMOUNT
--------------------------------
HOLDINGS
ADDITIONS INCREASE 3/31/96
- --------- ----------- ------------
U.S. GOVERNMENT AND
GOVERNMENT AGENCY SECURITIES
Federal National Mortgage
Association 7%, 4/1/2026 ............. $22,000,000 $22,000,000
U.S. Treasury Bonds
8 1/8%, 8/15/2021 .................... 5,000,000 5,000,000
U.S. Treasury Notes
5 1/4%, 1/31/2001 .................... 10,000,000 10,000,000
U.S. Treasury Notes
7 1/4%, 8/15/2004 .................... 10,000,000 10,000,000
CORPORATE BONDS
Alco Capital 5.435%, 2/22/1999 .......... 5,000,000 5,000,000
Franchise Finance 7%, 11/30/2000 ........ 5,000,000 5,000,000
General Motors Acceptance
6 3/4%, 3/15/2003 .................... 5,000,000 5,000,000
Time Warner 9 1/8%, 1/15/2013 ........... 5,000,000 5,000,000
USAA Capital 5.30%, 2/9/1999 ............ 5,000,000 5,000,000
ASSET-BACKED SECURITIES
Chase 96-A 5.20%, 2/15/2002 ............. 9,656,330 9,656,330
HOLDINGS
REDUCTIONS DECREASE 3/31/96
- ---------- ----------- ------------
U.S. GOVERNMENT SECURITIES
U.S. Treasury Bonds
12 1/2%, 8/15/2014 ...................... $ 10,000,000 --
U.S. Treasury Notes
9 1/4%, 2/15/2016 .................... 5,000,000 --
CORPORATE BONDS
Alco Capital 5.97%, 12/1/1998 ........... 5,000,000 --
Chase Manhattan Grantor Trust
5.90%, 11/15/2001 .................... 4,834,517 --
Ford Credit Grantor Trust
5.90%, 10/15/2000 .................... 4,863,483 --
General Motors 91/8%, 7/15/2001 ......... 4,000,000 --
News America Holdings
8 1/4%, 8/10/2018 .................... 5,000,000 --
St. Paul Companies
6.74%, 7/18/2005 ..................... 5,000,000 --
USAA Capital 5.73%, 11/17/1997 .......... 5,000,000 --
Whitman 7 5/8%, 6/15/2015 ............... 5,000,000 --
- ----------
# Largest portfolio changes from the previous quarter to the current quarter
are based on cost of purchases and proceeds from sales of securities.
MAJOR PORTFOLIO HOLDINGS
AT MARCH 31, 1996
SECURITY VALUE
- -------- ----------
Federal National Mortgage Association
7%, 4/1/2026 ........................................... $21,463,640
U.S. Treasury Notes 7 1/4%, 8/15/2004 ..................... 10,540,620
U.S. Treasury Notes 5 1/4%, 1/31/2001 ..................... 9,668,750
Chase 96-A 5.20%, 2/15/2002 ............................... 9,559,768
Carlton Communications 7 1/2%,
8/14/2007 (Conv. Bond) ................................. 6,486,610
U.S. Treasury Bonds 8 1/8%, 8/15/2021 ..................... 5,743,750
Orxy Energy 10%, 4/1/2001 ................................. 5,466,100
Time Warner 9 1/8%, 1/15/2013 ............................. 5,424,650
AEGON N.V. 8%, 8/15/2006 .................................. 5,347,450
Midland Bank 7.65%, 5/1/2025 .............................. 5,270,855
6
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SELIGMAN INCOME FUND
- --------------------------------------------------------------------------------
INVESTMENT RESULTS
TOTAL RETURNS *
FOR PERIODS ENDED MARCH 31, 1996
AVERAGE ANNUAL
--------------------------------------------
CLASS D
THREE ONE FIVE 10 SINCE
MONTHS YEAR YEARS YEARS INCEPTION+
--------- ------- ------- ------- ------------
CLASS A
With Sales Charge (4.30)% 9.50% 11.78% 8.72% n/a
Without Sales Charge 0.48 15.00 12.87 9.25 n/a
CLASS D
With CDSL (0.72) 13.10 n/a n/a n/a
Without CDSL 0.28 14.10 n/a n/a 6.94%
S&P 500** 5.37 32.10 14.67 13.95 17.15++
LEHMAN BROTHERS
AGGREGATE BOND INDEX (1.77) 10.79 8.49 8.62 5.92
++ Seligman Income Fund
invests in a diversified portfolio of both equity and fixed-income securities;
therefore, its performance is most likely to reflect a blend of the S&P 500 and
the Lehman Brothers Aggregate Bond Indices.
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
MARCH 31, 1996 DECEMBER 31, 1995
--------------- ------------------
CLASS A $14.52 $14.63
CLASS D $14.49 $14.60
- --------------------------------------------------------------------------------
* The returns for Class A shares are shown with and without the maximum initial
sales charge of 4.75%. No adjustment was made to performance for periods
prior to January 1, 1993, the commencement date for the annual
Administration, Shareholder Services and Distribution Plan fee of up to 0.25%
of average daily net assets of Class A shares. The returns for periods of one
year or less for Class D shares are shown with and without the effect of the
1% contingent deferred sales load ("CDSL")imposed on certain shares redeemed
within one year of purchase. For periods prior to January 1, 1996, the
returns for both Class A and D shares do not reflect the effect of the
increase in the management fee payable by the Fund, which became effective on
that date.
** The S&P 500 and Lehman Brothers Aggregate Bond Index are unmanaged indices
and assume reinvestment of estimated dividends, and do not reflect fees and
expenses. Investors may not invest directly in an index.
+ May 3, 1993.
++ From April 30, 1993.
- --------------------------------------------------------------------------------
THESE RATES OF RETURN REFLECT CHANGES IN PRICE AND ASSUME THAT ALL
DISTRIBUTIONS WITHIN THE PERIOD ARE REINVESTED IN ADDITIONAL SHARES. THE
RATES OF RETURN WILL VARY AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE. SHARES, IF REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE INVESTMENT RESULTS.
- --------------------------------------------------------------------------------
7
