SELIGMAN
- ---------
LARGE-CAP
VALUE FUND
Mid-Year Report
June 30, 1999
----------------
A Value Approach
to Seeking the
Capital Appreciation
Potential of
Larger Companies
<PAGE>
Seligman -- Times Change...Values Endure
J. & W. Seligman & Co. Incorporated is a firm with a long tradition of
investment expertise, offering a broad array of investment choices to help
today's investors seek their long-term financial goals.
Times Change...
[Photo of James, Jesse and Joseph Seligman omitted]
Established in 1864, Seligman has a history of providing financial services
marked not by fanfare, but rather by a quiet and firm adherence to financial
prudence. While the world has changed dramatically in the 135 years since
Seligman first opened its doors, the firm has continued to offer its clients
high-quality investment solutions through changing times.
In the late 19th century, as the country grew, Seligman helped finance the
westward expansion of the railroads, the construction of the Panama Canal, and
the launching of urban transit systems. In the first part of the 20th century,
as America became an industrial power, the firm helped fund the growing capital
needs of the nascent automobile and steel industries.
With the formation of Tri-Continental Corporation in 1929 -- today, the nation's
largest diversified publicly-traded closed-end investment company -- Seligman
began shifting its emphasis from investment banking to investment management.
Despite the stock market crash and ensuing depression, Seligman was convinced of
the importance that investment companies could have in building wealth for
individual investors and began managing its first mutual fund in 1930.
In the decades that followed, Seligman has continued to offer forward-looking
investment solutions, including equity funds that specialize in small companies,
technology, or international securities, and bond funds that focus on high-yield
issuers, US government bonds, or municipal securities.
...Values Endure
Seligman is proud of its distinctive past and of the traditional values that
continue to shape the firm's business decisions and investment judgment. While
much has changed over the years, the firm's commitment to providing prudent
investment management that seeks to build wealth for clients over time is an
enduring value that will guide Seligman into the new millennium.
<TABLE>
<CAPTION>
Table of Contents
<S> <C> <C> <C>
To the Shareholders ...................... 1 Statements of Changes in Net Assets .......... 11
Interview With Your Portfolio Managers ... 2 Notes to Financial Statements ................ 12
Performance Overview ..................... 4 Financial Highlights ......................... 15
Portfolio Overview ....................... 6 Report of Independent Auditors ............... 17
Portfolio of Investments ................ 8 Board of Directors ........................... 18
Statement of Assets and Liabilities ..... 9 Executive Officers and For More Information .. 19
Statement of Operations ................. 10 Glossary of Financial Terms .................. 20
</TABLE>
<PAGE>
TO THE SHAREHOLDERS
During the first six months of 1999, Seligman Large-Cap Value Fund posted a
total return of 10.56% based on the net asset value of Class A shares. During
the same time, the Russell 1000 Value Index returned 12.87% and the Standard &
Poor's 500 Composite Stock Price Index (S&P 500) returned 12.38%. A discussion
with your Portfolio Managers regarding the Fund's results begins on page 2.
The economic environment of the past six months has been supportive for common
stocks. Inflation remained benign, corporate profits were strong, and the global
economy continued to recover, which should begin to lift some of the pressure
for world economic growth off the US. During this time, the US economy entered
its ninth year of expansion, with the pace of growth remarkably strong.
The robust US economy, coupled with improved business prospects in most of the
rest of the world, caused the Federal Reserve Board to announce in May that it
was leaning toward a tighter monetary policy. Thus, market participants were not
surprised when the Fed increased the federal funds rate by 25 basis points on
June 30. However, markets did not expect the Fed to also announce that it was
changing its bias from tightening to neutral. This news immediately pushed the
Dow Jones Industrial Average 155 points higher and pushed the 30-year Treasury
bond yield back below 6%. Since then, however, fears of additional interest rate
hikes have surfaced, sending the market averages lower and the 30-year Treasury
bond yield above 6%.
During this period, the market broadened considerably, which was good news for
value stocks. It appeared that investors were once again looking beyond richly
valued growth stocks for securities with more reasonable valuations. Looking
ahead, we believe that this positive trend will continue. In addition, we expect
that the economic environment will remain constructive for equities in general,
and for value stocks in particular.
As the millennium approaches, we have become concerned that the media's focus on
the Year 2000 (Y2K) computer issue, and the fears that this attention may spark,
will cause some investors to take actions that are not in their best long-term
interests. In our view, the primary danger to investors is losing sight of their
long-term financial goals, and altering their portfolios and asset allocations
in an attempt to respond to the confusion surrounding this issue.
In the US, governments and businesses have committed substantial resources to
this issue and, while there may be scattered inconveniences, we believe that the
US will enter the year 2000 relatively seamlessly, and that much of the rest of
the developed world is also well positioned to deal with the new millennium.
For the past several years, J. & W. Seligman & Co. Incorporated (Seligman), your
Fund's manager, and Seligman Data Corp. (Seligman Data), your Fund's shareholder
service agent, have been working to ensure that shareholders do not experience
any Y2K-related inconveniences. We are pleased to report that the early start
has paid off. During the spring of this year, Seligman and Seligman Data
participated in Y2K testing conducted by the Securities Industry Association.
These tests were completed without any Y2K-related problems on the part of
Seligman or Seligman Data. Tests with key service providers were also conducted,
all of which were successfully completed in a Y2K environment.
Thank you for your continued support of Seligman Large-Cap Value Fund. We look
forward to serving your investment needs for many years to come.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Brian T. Zino
Brian T. Zino
President
August 6, 1999
1
<PAGE>
Interview With Your Portfolio Managers,
Neil T. Eigen and Richard S. Rosen
Q: How did Seligman Large-Cap Value Fund perform during the first six months
of 1999?
A: For the six-month period ended June 30, 1999, Seligman Large-Cap Value Fund
posted a total return of 10.56% based on the net asset value of Class A
shares. This compares to 12.87% for the Russell 1000 Value Index and 12.38%
for the Standard & Poor's 500 Composite Stock Price Index (S&P 500).
Q: What economic and market factors influenced the Fund's results during the
first half of its fiscal year?
A: During the first fiscal quarter of 1999, value stocks continued to
underperform growth stocks. This was the fifth consecutive quarter in which
value suffered this performance disparity.
The outperformance by growth stocks during that period was primarily the
result of the financial turmoil that swept the globe during 1998. Investors
everywhere focused on securities considered to be safe, such as US Treasury
bonds and large-capitalization growth stocks, to the exclusion of a broader
range of investments.
In mid-March of this year, however, it became clear that the easier monetary
policies of the world's central banks were indeed stimulating economic
growth and that the global economic system was beginning to show signs of
recovery. In addition, the US seemed out of danger of being dragged into a
recession, as many had feared last autumn.
As a result of the improving global outlook and continued strong growth in
the US, the Federal Reserve Board announced that it was leaning toward
higher interest rates in May, and followed through with a 25 basis point
increase in the federal funds rate in June. The market had anticipated a
rate hike, but was surprised by the Fed's announcement that it had shifted
its bias from a tightening stance to a neutral one. This unexpected bias
shift sparked a rally in both the stock and the bond markets.
As the global economic environment began to improve, the near-term outlook
for value stocks improved as well. Value stocks tend to be economically
sensitive and often move higher during periods of worldwide economic
expansion. Within such a positive economic environment, these companies
generate substantial earnings growth.
As investors gained confidence that the world economic system had indeed hit
bottom and was solidly on an upswing, they began searching for value once
again. Up until the second quarter of this year, the market's focus had been
exceptionally narrow and the valuation disparity between value and growth
had, in our view, become too wide to be sustainable. Once
A TEAM APPROACH
Seligman Large-Cap Value Fund is managed by the Seligman Value Team, headed by
Neil T. Eigen, who has over 30 years of experience as a value investor. Mr.
Eigen and Richard S. Rosen are assisted in the management of the Fund by
seasoned research professionals who are responsible for identifying reasonably
valued large-capitalization companies with the potential for high returns on
equity.
[PICTURE OMITTED]
Value Team: (from left) Nevis George (Administrative Assistant), Milton Rubin
(Client Services), Richard S. Rosen (Co-Portfolio Manager), (seated) Neil T.
Eigen (Portfolio Manager)
2
<PAGE>
Interview With Your Portfolio Managers,
Neil T. Eigen and Richard S. Rosen
investor sentiment changed, value stocks, many of which had been neglected
opportunities for some time, enjoyed a significant rebound. We have long
maintained that, over the long term, if the earnings are there, investors
will take notice, and patience will be rewarded.
Q: What was the Fund's strategy during this period?
A: Despite substantial changes in the economic outlook and investor sentiment
during the past six months, our strategy has remained consistent, focusing
on the long-term viability of value stocks. When we choose a stock for the
portfolio, we base our decision on a company's fundamental two-year outlook.
During the period under review, we continued to favor the financial sector.
We believe that valuations within this industry are reasonable enough to
produce a substantial pickup in acquisition activity in the second half of
the fiscal year as potential buyers recognize the franchise worth of many of
these outstanding companies.
Q: What is your outlook?
A: The recent rebound in the global economy has paved the way toward stronger
worldwide economic growth, which is favorable for US companies and for value
investors. As a whole, US stock valuations appear high, but most of the
overvaluation is concentrated in the growth sector. Despite the recent
rebound in value stocks, we continue to find attractive long-term
opportunities within the value universe.
A recovering global economy, strong corporate earnings, low inflation, and
higher interest rates (which make stocks with high valuations less
attractive) should continue to provide a supportive environment for value
stocks in the months ahead.
3
<PAGE>
PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
AVERAGE ANNUAL
CLASS C ---------------------
SINCE SINCE
INCEPTION SIX ONE INCEPTION
5/27/99* MONTHS* YEAR 4/25/97
--------- ------- ---- --------
<S> <C> <C> <C> <C>
CLASS A**
With Sales Charge n/a 5.31% 3.25% 21.10%
Without Sales Charge n/a 10.56 8.44 23.86
CLASS B**
With CDSC+ n/a 5.14 2.67 21.83
Without CDSC n/a 10.14 7.67 22.91
CLASS C**
With Sales Charge and CDSC 1.94% n/a n/a n/a
Without Sales Charge and CDSC 3.98 n/a n/a n/a
CLASS D**
With 1% CDSC n/a 9.14 6.67 n/a
Without CDSC n/a 10.14 7.67 22.91
RUSSELL 1000 VALUE INDEX*** 2.90+++ 12.87 16.37 26.03++
S&P 500*** 5.55+++ 12.38 22.76 30.18++
NET ASSET VALUE
JUNE 30, 1999 DECEMBER 31, 1998 JUNE 30, 1998 CAPITAL GAIN INFORMATION
------------- ------------------- ------------- FOR THE SIX MONTHS ENDED JUNE 30, 1999
CLASS A $11.10 $10.04 $10.34
CLASS B 10.97 9.96 10.25 REALIZED $0.025
CLASS C 10.97 n/a n/a UNREALIZED 1.548o
CLASS D 10.97 9.96 10.25
</TABLE>
Performance data quoted represent changes in price and assume that all
distributions within the periods are invested 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.
- --------------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price per share and assume the
investment of dividend and capital gain distributions. Return figures for
Class A shares are calculated with and without the effect of the initial
4.75% maximum sales charge. Returns for Class B shares are calculated with
and without the effect of the maximum 5% contingent deferred sales charge
("CDSC"), charged on redemptions made within one year of the date of
purchase, declining to 1% in the sixth year and 0% thereafter. Returns for
Class C shares are calculated with and without the effect of the initial 1%
maximum sales charge and the 1% CDSC that is charged on redemptions made
within 18 months of the date of purchase. Returns for Class D shares are
calculated with and without the effect of the 1% CDSC, charged on
redemptions made within one year of the date of purchase.
*** The Russell 1000 Value Index and the S&P 500 are unmanaged benchmarks that
assume investment of dividends and exclude the effect of fees and sales
charges. Investors cannot invest directly in an index.
+ The CDSC is 5% for periods of one year or less, and 3% since inception.
++ From April 30, 1997.
+++ From May 31, 1999.
o Represents the per share amount of net unrealized appreciation of portfolio
securities as of June 30, 1999.
4
<PAGE>
PERFORMANCE OVERVIEW
GROWTH OF AN ASSUMED $10,000 INVESTMENT
CLASS A SHARES
APRIL 25, 1997+ TO JUNE 30, 1999
4/25/97 9520*
10173
6/30/97 10813
11813
11333
9/30/97 11813
11360
12120
12/31/97 12308
12335
13432
3/31/98 13906
13973
14095
6/30/98 14000
13621
11319
9/30/98 11509
12768
13662
12/31/98 13732
13691
13322
3/31/99 13787
14922
14813
6/30/99 15182
CLASS B SHARES
APRIL 25, 1997+ TO JUNE 30, 1999
4/25/97 10000
10672
6/30/97 11311
12381
11863
9/30/97 12367
11891
12661
12/31/97 12846
12874
14011
3/31/98 14494
14551
14664
6/30/98 14565
14167
11766
9/30/98 11950
13258
14167
12/31/98 14239
14182
13796
3/31/99 14267
15425
15311
6/30/99 15683
CLASS C SHARES
MAY 27, 1999+ TO JUNE 30, 1999
5/27/99 9900
6/3/99 10313
6/10/99 10219
6/17/99 10360
6/24/99 10013
6/30/99 10294
CLASS D SHARES
APRIL 25, 1997+ TO JUNE 30, 1999
4/25/97 10000
10672
6/30/97 11331
12381
11863
9/30/97 12367
11891
12661
12/31/97 12846
12874
14011
3/31/98 14494
14551
14664
6/30/98 14565
14167
11766
9/30/98 11950
13258
14167
12/31/98 14239
14182
13796
3/31/99 14267
15425
15311
6/30/99 15683
These charts reflect the growth of a $10,000 investment for Class A, Class B,
Class C, and Class D shares since inception, assuming that all distributions
within the period are invested in additional shares. Since the measured periods
vary, the charts are plotted using different scales and are not comparable.
- -----------
* Net of the 4.75% or 1% maximum initial sales charge for Class A or Class C
shares, respectively.
** Excludes the effects of the 3% or 1% CDSC for Class B
or Class C shares, respectively.
+ Inception date.
5
<PAGE>
PORTFOLIO OVERVIEW
DIVERSIFICATION OF NET ASSETS
June 30, 1999
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
-----------------------
JUNE 30, DECEMBER 31,
ISSUES COST VALUE 1999 1998
------ ------------ ------------ -------- ------------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS:
Aerospace ............................... 2 $ 8,880,869 $ 11,121,750 6.2 6.3
Automotive and Related .................. 2 7,793,410 9,930,375 5.5 6.0
Banking ................................. 3 16,682,455 18,057,271 10.1 10.8
Drugs and Health Care ................... 3 13,206,130 17,076,663 9.5 6.1
Electric Utilities ...................... 1 3,938,034 4,374,563 2.4 3.2
Energy .................................. 1 5,385,177 6,112,500 3.4 2.6
Finance and Insurance ................... 5 24,232,202 26,858,126 15.0 15.0
Food .................................... 1 6,188,268 4,744,063 2.6 2.1
Household Products and Furnishings ...... 3 14,819,168 17,609,038 9.8 10.2
Industrial Equipment .................... 1 3,339,294 5,085,000 2.8 3.1
Medical Products and Technology ......... 2 8,185,736 10,793,688 6.0 6.8
Office Equipment ........................ 1 3,661,955 5,103,000 2.8 3.4
Packaging ............................... 1 6,600,616 4,845,000 2.7 2.3
Paper and Forest Products ............... 2 8,646,708 11,515,960 6.4 6.6
Retail Trade ............................ 2 9,966,389 13,193,231 7.4 8.0
Specialty Materials ..................... 1 5,466,627 5,735,000 3.2 2.7
Tobacco ................................. 1 6,456,292 6,558,600 3.7 4.1
--- ------------ ------------ ----- -----
32 153,449,330 178,713,828 99.5 99.3
SHORT-TERM HOLDING AND
OTHER ASSETS LESS LIABILITIES 1 955,354 955,354 0.5 0.7
--- ------------ ------------ ----- -----
NET ASSETS 33 $154,404,684 $179,669,182 100.0 100.0
=== ============ ============ ===== =====
</TABLE>
LARGEST INDUSTRIES Percent of
June 30, 1999 Net Assets
----------
{The following plot points represents a chart in the printed matter]
FINANCE AND INSURANCE 15.0% $26,858,126
BANKING 10.1% $18,057,271
HOUSEHOLD PRODUCTS AND FURNISHINGS 9.8% $17,609,038
DRUGS AND HEALTH CARE 9.5% $17,076,663
RETAIL TRADE 7.4% $13,193,231
6
<PAGE>
PORTFOLIO OVERVIEW
LARGEST PORTFOLIO CHANGES
DURING PAST SIX MONTHS
SHARES
--------------------
HOLDINGS
ADDITIONS INCREASE 6/30/99
- --------- -------- --------
Armstrong World Industries .......... 25,000 104,000
Crown Cork &Seal .................... 60,000 170,000
Dole Food ........................... 60,000 161,500
Fannie Mae .......................... 20,000 85,100
Humana .............................. 425,000 425,000
Philip Morris ....................... 50,000 163,200
St. Paul Companies .................. 30,000 149,846
Summit Bancorp ...................... 30,000 180,000
Tandy ............................... 86,600 173,200(1)
Texaco .............................. 24,000 97,800
SHARES
---------------------
HOLDINGS
REDUCTIONS DECREASE 6/30/99
- ---------- -------- ----------
Champion International .............. 8,000 111,900
Dial ................................ 15,000 165,000
Georgia-Pacific Group ............... 36,000 130,000(2)
May Department Stores ............... 68,000 --
Penney (J.C.) ....................... 75,000 --
United Technologies ................. 10,000 84,000(3)
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
- -------------------
(1) Includes 86,600 shares received as a result of a 2-for-1 stock split.
(2) Includes 18,000 shares received as a result of a 2-for-1 stock split.
(3) Includes 5,000 shares received as a result of a 2-for-1 stock split.
LARGEST PORTFOLIO HOLDINGS
JUNE 30, 1999
SECURITY VALUE
- ----------- ----------
Tandy ............................... $8,465,150
Summit Bancorp ...................... 7,526,250
Philip Morris ....................... 6,558,600
United Healthcare ................... 6,450,375
Georgia-Pacific Group ............... 6,158,750
<PAGE>
SECURITY VALUE
- ----------- ----------
Dial ................................ $6,135,938
Texaco .............................. 6,112,500
United Technologies ................. 6,021,750
Armstrong World Industries .......... 6,012,500
Citigroup ........................... 5,942,250
7
<PAGE>
PORTFOLIO OF INVESTMENTS
June 30, 1999
SHARES VALUE
-------- -----------
COMMON STOCKS 99.5%
AEROSPACE 6.2%
Goodrich (B.F.) 120,000 $ 5,100,000
United Technologies 84,000 6,021,750
------------
11,121,750
------------
AUTOMOTIVE AND RELATED 5.5%
Ford Motor 90,000 5,079,375
General Motors 73,500 4,851,000
------------
9,930,375
------------
BANKING 10.1%
Bank of America 66,580 4,881,146
Bank of New York 154,000 5,649,875
Summit Bancorp 180,000 7,526,250
------------
18,057,271
------------
DRUGS AND HEALTH CARE 9.5%
Bristol-Myers Squibb 72,800 5,127,850
Humana 425,000 5,498,438
United Healthcare 103,000 6,450,375
------------
17,076,663
------------
ELECTRIC UTILITIES 2.4%
Dominion Resources 101,000 4,374,563
------------
ENERGY 3.4%
Texaco 97,800 6,112,500
------------
FINANCE AND INSURANCE 15.0%
Citigroup 125,100 5,942,250
Equitable Companies (The) 80,000 5,360,000
Fannie Mae 85,100 5,818,713
St. Paul Companies 149,846 4,766,976
Washington Mutual 140,500 4,970,187
------------
26,858,126
------------
FOOD 2.6%
Dole Food 161,500 4,744,063
------------
HOUSEHOLD PRODUCTS
AND FURNISHINGS 9.8%
Armstrong World Industries 104,000 6,012,500
Dial 165,000 6,135,938
Kimberly-Clark 95,800 5,460,600
------------
17,609,038
------------
SHARES VALUE
----------- ------------
INDUSTRIAL EQUIPMENT 2.8%
General Electric 45,000 5,085,000
------------
MEDICAL PRODUCTS
AND TECHNOLOGY 6.0%
Baxter International 81,700 4,953,063
Medtronic 75,000 5,840,625
------------
10,793,688
------------
OFFICE EQUIPMENT 2.8%
Xerox 86,400 5,103,000
------------
PACKAGING 2.7%
Crown Cork & Seal 170,000 4,845,000
------------
PAPER AND
FOREST PRODUCTS 6.4%
Champion International 111,900 5,357,210
Georgia-Pacific Group 130,000 6,158,750
------------
11,515,960
------------
RETAIL TRADE 7.4%
Sears, Roebuck 106,100 4,728,081
Tandy 173,200 8,465,150
------------
13,193,231
------------
SPECIALTY MATERIALS 3.2%
Raychem 155,000 5,735,000
------------
TOBACCO 3.7%
Philip Morris 163,200 6,558,600
------------
TOTAL COMMON STOCKS
(Cost $153,449,330) 178,713,828
SHORT-TERM HOLDINGS 1.1%
(Cost $1,900,000) 1,900,000
------------
TOTAL INVESTMENTS 100.6%
(Cost $155,349,330) 180,613,828
OTHER ASSETS
LESS LIABILITIES (0.6)% (944,646)
------------
NET ASSETS 100.0% $179,669,182
============
- ----------------------------------
See Notes to Financial Statements.
8
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C>
Investments, at value:
Common stocks (cost $153,449,330) ................................ $178,713,828
Short-term holdings (cost $1,900,000) ............................ 1,900,000 $180,613,828
-------------
Cash .................................................................................. 51,494
Receivable for Capital Stock sold ..................................................... 1,036,215
Receivable for dividends and interest ................................................. 278,326
Expenses prepaid to shareholder service agent ......................................... 35,122
Deferred organization expenses ........................................................ 7,301
Other ................................................................................. 51,261
------------
TOTAL ASSETS .......................................................................... 182,073,547
------------
LIABILITIES:
Payable for securities purchased ...................................................... 1,690,901
Payable for Capital Stock repurchased ................................................. 388,237
Accrued expenses and other ............................................................ 325,227
------------
TOTAL LIABILITIES ..................................................................... 2,404,365
------------
NET ASSETS ............................................................................ $179,669,182
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.001 par value; 1,000,000,000 shares authorized;
16,320,142 shares outstanding):
Class A ............................................................................. $ 5,220
Class B ............................................................................. 6,173
Class C ............................................................................. 242
Class D ............................................................................. 4,685
Additional paid-in capital ............................................................ 154,561,242
Undistributed net investment income ................................................... 23,436
Accumulated net realized loss ......................................................... (196,314)
Net unrealized appreciation of investments ............................................ 25,264,498
------------
NET ASSETS ............................................................................ $179,669,182
============
NET ASSET VALUE PER SHARE:
CLASS A ($57,942,643 / 5,220,267 shares) .............................................. $11.10
======
CLASS B ($67,694,064 / 6,173,006 shares) .............................................. $10.97
======
CLASS C ($2,655,247 / 242,116 shares) ................................................. $10.97
======
CLASS D ($51,377,228 / 4,684,753 shares) .............................................. $10.97
======
</TABLE>
- ----------------------------
See Notes to Financial Statements.
9
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends ....................................................... $1,544,290
Interest ........................................................ 18,443
-------------
TOTAL INVESTMENT INCOME .......................................................... $1,562,733
EXPENSES:
Management fee .................................................. 629,153
Distribution and service fees ................................... 594,079
Shareholder account services .................................... 190,621
Registration .................................................... 43,775
Auditing and legal fees ......................................... 27,775
Shareholder reports and communications .......................... 25,513
Custody and related services .................................... 19,205
Directors' fees and expenses .................................... 3,550
Amortization of deferred organization expenses .................. 1,288
Miscellaneous ................................................... 3,230
-------------
TOTAL EXPENSES ................................................................... 1,538,189
-----------
NET INVESTMENT INCOME............................................................. 24,544
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments ................................ 404,034
Net change in unrealized appreciation of investments ............ 15,289,139
-------------
NET GAIN ON INVESTMENTS .......................................................... 15,693,173
-----------
INCREASE IN NET ASSETS FROM OPERATIONS ........................................... $15,717,717
===========
</TABLE>
- -------------------
See Notes to Financial Statements.
10
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
---------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income .......................................................... $ 24,544 $ 166,821
Net realized gain (loss) on investments ........................................ 404,034 (600,348)
Net change in unrealized appreciation of investments ........................... 15,289,139 6,792,088
------------ ------------
INCREASE IN NET ASSETS FROM OPERATIONS ......................................... 15,717,717 6,358,561
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ..................................................................... -- (192,895)
Net realized gain on investments:
Class A ..................................................................... -- (282,285)
Class B ..................................................................... -- (326,267)
Class D ..................................................................... -- (219,836)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS ...................................... -- (1,021,283)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares .............................................. 26,585,139 78,687,815
Investment of dividends ........................................................ -- 171,043
Exchanged from associated Funds ................................................ 33,725,861 55,824,065
Shares issued in payment of gain distributions ................................. -- 758,184
------------ ------------
Total .......................................................................... 60,311,000 135,441,107
------------ ------------
Cost of shares repurchased ..................................................... (22,092,337) (19,032,005)
Exchanged into associated Funds ................................................ (22,791,939) (24,208,824)
------------ ------------
Total .......................................................................... (44,884,276) (43,240,829)
------------ ------------
INCREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS .......................................................... 15,426,724 92,200,278
------------ ------------
INCREASE IN NET ASSETS ......................................................... 31,144,441 97,537,556
NET ASSETS:
Beginning of period ............................................................ 148,524,741 50,987,185
------------ ------------
END OF PERIOD (including undistributed/(distribution in excess of)
net investment income of $23,436 and $(1,108), respectively) ................. $179,669,182 $148,524,741
</TABLE>
- -------------------
See Notes to Financial Statements.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- Seligman Large-Cap Value Fund (the "Fund"), a
series of Seligman Value Fund Series, Inc., offers four classes of shares. Class
A shares are sold with an initial sales charge of up to 4.75% and a continuing
service fee of up to 0.25% on an annual basis. Class A shares purchased in an
amount of $1,000,000 or more are sold without an initial sales charge but are
subject to a contingent deferred sales charge ("CDSC") of 1% on redemptions
within 18 months of purchase. Class B shares are sold without an initial sales
charge but are subject to a distribution fee of 0.75% and a service fee of up to
0.25% on an annual basis, and a CDSC, if applicable, of 5% on redemptions in the
first year of purchase, declining to 1% in the sixth year and 0% thereafter.
Class B shares will automatically convert to Class A shares on the last day of
the month that precedes the eighth anniversary of their date of purchase. The
Fund began offering Class C shares on May 27, 1999. Class C shares are sold with
an initial sales charge of up to 1% and are subject to a distribution fee of up
to 0.75% and a service fee of up to 0.25% on an annual basis, and a CDSC, if
applicable, of 1% imposed on redemptions made within 18 months of purchase.
Class D shares are sold without an initial sales charge but are subject to a
distribution fee of up to 0.75% and a service fee of up to 0.25% on an annual
basis, and a CDSC, if applicable, of 1% imposed on redemptions made within one
year of purchase. The four classes of shares represent interests in the same
portfolio of investments, have the same rights and are generally identical in
all respects except that each class bears its separate distribution and certain
other class expenses, and has exclusive voting rights with respect to any matter
on which a separate vote of any class is required.
2. SIGNIFICANT ACCOUNTING POLICIES -- The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Fund:
A. SECURITY VALUATION -- Investments in common 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, at the mean of bid and asked
prices. Short-term holdings maturing in 60 days or less are valued at
amortized cost.
B. FEDERAL TAXES -- There is no provision for federal income tax. The Fund has
elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT
INCOME -- Investment transactions are recorded on trade dates. Identified
cost of investments sold is used for both financial statement and federal
income tax purposes. Dividends receivable and payable are recorded on
ex-dividend dates. Interest income is recorded on an accrual basis.
D. MULTIPLE CLASS ALLOCATIONS -- All income, expenses (other than class-specific
expenses), and realized and unrealized gains or losses are allocated daily to
each class of shares based upon the relative value of shares of each class.
Class-specific expenses, which include distribution and service fees and any
other items that are specifically attributable to a particular class, are
charged directly to such class. For the six months ended June 30, 1999,
distribution and service fees were the only class-specific expenses.
E. DISTRIBUTIONS TO SHAREHOLDERS -- The treatment for financial statement
purposes of distributions made to shareholders during the year from net
investment income or net realized gains may differ from their ultimate
treatment for federal income tax purposes. These differences are caused
primarily by differences in the timing of the recognition of certain
components of income, expense, or realized capital gain for federal income
tax purposes. Where such differences are permanent in nature, they are
reclassified in the components of net assets based on their ultimate
characterization for federal income tax purposes. Any such reclassification
will have no effect on net assets, results of operations, or net asset value
per share of the Fund.
F. ORGANIZATION EXPENSES -- Deferred organization expenses are being amortized
on a straight-line basis over a period of 60 months beginning with the
commencement of operations of the Fund.
3. SHORT-TERM INVESTMENTS -- At June 30, 1999, the Fund owned short-term
investments which matured in less than seven days.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
4. PURCHASES AND SALES OF SECURITIES -- Purchases and sales of portfolio
securities, excluding US Government obligations and short-term investments, for
the six months ended June 30, 1999, amounted to $28,034,098 and $12,474,077,
respectively.
At June 30, 1999, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes, and the
tax basis gross unrealized appreciation and depreciation of portfolio securities
amounted to $32,592,353 and $7,327,855, respectively.
5. CAPITAL SHARE TRANSACTIONS-- The Fund has authorized 1,000,000,000 shares of
$0.001 par value Capital Stock. Transactions in shares of Capital Stock were as
follows:
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
------------------------ ------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------- ------------------------
Net proceeds from
sales of shares 1,085,712 $11,432,512 2,732,752 $26,848,150
Investment of
dividends -- -- 17,633 171,043
Exchanged from
associated Funds 1,626,246 17,436,057 2,456,260 24,149,943
Shares issued in
payment of gain
distributions -- -- 26,432 260,093
- ----------------------------------------------- ------------------------
Total 2,711,958 28,868,569 5,233,077 51,429,229
- ----------------------------------------------- ------------------------
Cost of shares
repurchased (934,858) (9,713,310) (1,351,175) (12,554,489)
Exchanged into
associated Funds (1,466,239) (15,642,307) (1,580,952) (15,313,160)
- ----------------------------------------------- -------------------------
Total (2,401,097) (25,355,617) (2,932,127) (27,867,649)
- ----------------------------------------------- -------------------------
Increase in Shares 310,861 $ 3,512,952 2,300,950 $23,561,580
- ----------------------------------------------- -------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
------------------------ ------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------- ------------------------
Net proceeds from
sales of shares 791,016 $ 8,275,418 3,343,264 $33,045,799
Exchanged from
associated Funds 749,763 7,725,081 1,184,929 11,389,752
Shares issued in
payment of gain
distributions -- -- 29,903 290,656
- ----------------------------------------------- ------------------------
Total 1,540,779 16,000,499 4,558,096 44,726,207
- ------------------------------------------------------------------------
Cost of shares
repurchased (550,923) (5,640,524) (357,377) (3,440,426)
Exchanged into
associated Funds (476,245) (4,829,125) (413,592) (3,869,171)
- ----------------------------------------------- ------------------------
Total (1,027,168) (10,469,649) (770,969) (7,309,597)
- ----------------------------------------------- ------------------------
Increase in Shares 513,611 $ 5,530,850 3,787,127 $37,416,610
- ----------------------------------------------- ------------------------
MAY 27, 1999*
TO JUNE 30, 1999
-----------------
CLASS C Shares Amount
- -----------------------------------------------
Net proceeds from
sales of shares 242,138 $2,644,601
- -----------------------------------------------
Total 242,138 2,644,601
Exchanged into
associated Funds (22) (243)
Total (22) (243)
- -----------------------------------------------
Increase in Shares 242,116 $2,644,358
- -----------------------------------------------
* Commencement of offering of shares.
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
------------------------ ------------------------
CLASS D SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------- ------------------------
Net proceeds from
sales of shares 412,836 $4,232,608 1,904,014 $18,793,866
Exchanged from
associated Funds 857,117 8,564,723 2,084,910 20,284,370
Shares issued in
payment of gain
distributions -- -- 21,341 207,435
- ----------------------------------------------- ------------------------
Total 1,269,953 12,797,331 4,010,265 39,285,671
- ----------------------------------------------- ------------------------
Cost of shares
repurchased (661,678) (6,738,503) (318,189) (3,037,090)
Exchanged into
associated Funds (231,268) (2,320,264) (530,094) (5,026,493)
- ----------------------------------------------- -------------------------
Total (892,946) (9,058,767) (848,283) (8,063,583)
- ----------------------------------------------- -------------------------
Increase in Shares 377,007 $3,738,564 3,161,982 $31,222,088
- ----------------------------------------------- -------------------------
6. MANAGEMENT FEE, DISTRIBUTION SERVICES, AND OTHER TRANSACTIONS -- J. & W.
SELIGMAN & CO. Incorporated (the "Manager") manages the affairs of the Fund and
provides the necessary personnel and facilities. Compensation of all officers of
the Fund, all directors of the Fund who are employees or consultants of the
Manager, and all personnel of the Fund and the Manager is paid by the Manager.
The Manager receives a fee, calculated daily and payable monthly, equal to 0.80%
per annum of the Fund's average daily net assets.
The Distributor, agent for the distribution of the Fund's shares and an
affiliate of the Manager, received concessions of $21,673 from sales of Class A
shares. Commissions of $165,178 and $20,262 were paid to dealers for sales of
Class A and Class C shares, respectively.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to distribution of its shares. Under the Plan, with
respect to Class A shares, service organizations can enter into agreements with
the Distributor and receive a continuing fee of up to 0.25% on an annual basis,
payable quarterly, of the average daily net assets of the Class A shares
attributable to the particular service organizations for providing personal
services and/or the maintenance of shareholder accounts. The Distributor
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
charges such fees to the Fund pursuant to the Plan. For the six months ended
June 30, 1999, fees incurred under the Plan aggregated $64,886, or 0.25% per
annum of the average daily net assets of Class A shares.
Under the Plan, with respect to Class B shares, Class C shares, and Class D
shares, service organizations can enter into agreements with the Distributor and
receive a continuing fee for providing personal services and/or the maintenance
of shareholder accounts of up to 0.25% on an annual basis of the average daily
net assets of the Class B, Class C, and Class D shares for which the
organizations are responsible; and, for Class C and Class D shares, fees for
providing other distribution assistance of up to 0.75% on an annual basis of
such average daily net assets. Such fees are paid monthly by the Fund to the
Distributor pursuant to the Plan.
With respect to Class B shares, a distribution fee of 0.75% on an annual
basis of average daily net assets is payable monthly by the Fund to the
Distributor; however, the Distributor has sold its rights to this fee to a third
party (the "Purchaser"), which provides funding to the Distributor to enable it
to pay commissions to dealers at the time of the sale of the related Class B
shares.
For the six months ended June 30, 1999, fees incurred under the Plan,
equivalent to 1% per annum of the average daily net assets of Class B, Class C,
and Class D shares, amounted to $295,587, $716, and $232,890, respectively.
The Distributor is entitled to retain any CDSC imposed on certain
redemptions of Class A and Class C shares occurring within 18 months of purchase
and on redemptions of Class D shares occurring within one year of purchase. For
the six months ended June 30, 1999, such charges amounted to $26,362.
The Distributor has sold its rights to collect any CDSC imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSC and the distribution fees with respect to Class B
shares described above, the Distributor receives payments from the Purchaser
based on the value of Class B shares sold. The aggregate of such payments
retained by the Distributor, for the six months ended June 30, 1999, amounted to
$12,313.
Seligman Services, Inc., an affiliate of the Manager, is eligible to
receive commissions from certain sales of shares of the Fund as well as
distribution and service fees pursuant to the Plan. For the six months ended
June 30, 1999, Seligman Services, Inc. received commissions of $106 from the
sales of shares of the Fund. Seligman Services, Inc. also received distribution
and service fees of $7,148, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged the Fund at cost $190,621 for shareholder account services.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Directors may elect to have their
deferred fees accrue interest or earn a return based on the performance of the
Fund or other funds in the Seligman Group of Investment Companies. The cost of
such fees and earnings accrued thereon is included in directors' fees and
expenses, and the accumulated balance thereof at June 30, 1999, of $1,575 is
included in other liabilities. Deferred fees and related accrued earnings are
not deductible for federal income tax purposes until such amounts are paid.
7. CAPITAL LOSS CARRYFORWARD -- At December 31, 1998, the Fund had a net capital
loss carryforward for federal income tax purposes of $600,348, which is
available for offset against future taxable net gains and will expire in 2006.
Accordingly, no capital gain distributions are expected to be paid to
shareholders until net capital gains have been realized in excess of the
available capital loss carryforward.
8. COMMITTED LINE OF CREDIT -- The Fund is a participant in a joint $750 million
committed line of credit that is shared by substantially all funds in the
Seligman Group of Investment Companies. The Fund's borrowings are limited to 10%
of its net assets. Borrowings pursuant to the credit facility are subject to
interest at a rate equal to the overnight federal funds rate plus 0.50%. The
Fund incurs a commitment fee of 0.08% per annum on its share of the unused
portion of the credit facility. The credit facility may be drawn upon only for
temporary purposes and is subject to certain other customary restrictions. The
credit facility commitment expires one year from the date of the agreement but
is renewable with the consent of the participating banks. To date, the Fund has
not borrowed from the credit facility.
14
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below are intended to help you understand each Class's financial
performance from the inception of the Fund. Certain information reflects
financial results for a single share of a Class that was held throughout the
periods shown. Per share amounts are calculated using average shares
outstanding. "Total return" shows the rate that you would have earned (or lost)
on an investment in each Class, assuming you reinvested all your dividends and
capital gain distributions. Total returns do not reflect any sales charges and
are not annualized for periods of less than one year.
<TABLE>
<CAPTION>
Class A Class B
--------------------------------------------------------------------------------
SIX MONTHS YEAR 4/25/97* SIX MONTHS YEAR 4/25/97*
ENDED Ended To ENDED Ended To
6/30/99 12/31/98 12/31/97 6/30/99 12/31/98 12/31/97
------------ ----------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ............. $10.04 $ 9.09 $7.14 $ 9.96 $9.04 $7.14
------------ ----------- --------- ------- ------- -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) ..................... 0.02 0.06 0.03 (0.01) (0.02) (0.01)
Net realized and unrealized gain (loss)
on investments ................................. 1.04 0.99 2.06 1.02 1.00 2.04
------------ ----------- --------- ------- ------- -----
TOTAL FROM INVESTMENT OPERATIONS ................. 1.06 1.05 2.09 1.01 0.98 2.03
------------ ----------- --------- ------- ------- -----
LESS DISTRIBUTIONS:
Dividends from net investment income ............. -- (0.04) (0.01) -- -- --
Distributions from net realized capital gains .... -- (0.06) (0.13) -- (0.06) (0.13)
------------ ----------- --------- ------- ------- -----
TOTAL DISTRIBUTIONS .............................. -- (0.10) (0.14) -- (0.06) (0.13)
------------ ----------- --------- ------- ------- -----
NET ASSET VALUE, END OF PERIOD ................... $11.10 $10.04 $9.09 $10.97 $9.96 $9.04
============ =========== ========= ======= ======= =====
TOTAL RETURN: .................................... 10.56% 11.57% 29.28% 10.14% 10.85% 28.46%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ......... $57,943 $49,297 $23,699 $67,694 $56,342 $16,930
Ratio of expenses to average net assets .......... 1.45%+ 1.50% 1.47%+ 2.20%+ 2.25% 2.25%+
Ratio of net income (loss) to average net assets . 0.53%+ 0.61% 0.58%+ (0.21)%+ (0.14)% (0.20)%+
Portfolio turnover rate .......................... 7.87% 10.44% 38.74% 7.87% 10.44% 38.74%
Without management fee waiver:**
Ratio of expenses to average net assets .......... 2.07%+ 2.85%+
Ratio of net income (loss) to average net assets . (0.02)%+ (0.80)%+
</TABLE>
- -------------------------
See footnotes on page 16.
15
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
CLASS C CLASS D
-----------------------------------------------
5/27/99* SIX MONTHS YEAR 4/25/97*
TO ENDED ENDED TO
6/30/99 6/30/99 12/31/98 12/31/97
--------- ---------- --------- ---------
<S> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ............. $10.55 $ 9.96 $9.04 $7.14
--------- ------ ------- -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) ..................... -- (0.01) (0.02) (0.01)
Net realized and unrealized gain (loss)
on investments ................................. 0.42 1.02 1.00 2.04
--------- ------ ------- -----
TOTAL FROM INVESTMENT OPERATIONS ................. 0.42 1.01 0.98 2.03
--------- ------ ------- -----
LESS DISTRIBUTIONS:
Dividends from net investment income ............. -- -- -- --
Distributions from net realized capital gains .... -- -- (0.06) (0.13)
--------- ------ ------- -----
TOTAL DISTRIBUTIONS .............................. -- -- (0.06) (0.13)
--------- ------ ------- -----
NET ASSET VALUE, END OF PERIOD ................... $10.97 $10.97 $9.96 $9.04
========= ====== ======= =====
TOTAL RETURN: .................................... 3.98% 10.14% 10.85% 28.46%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ......... $2,655 $51,377 $42,886 $10,358
Ratio of expenses to average net assets .......... 2.27%+ 2.20%+ 2.25% 2.25%+
Ratio of net income (loss) to average net assets . (0.17)%+ (0.21)%+ (0.14)% (0.20)%+
Portfolio turnover rate .......................... 7.87%++ 7.87% 10.44% 38.74%
Without management fee waiver:**
Ratio of expenses to average net assets .......... 2.85%+
Ratio of net income (loss) to average net assets . (0.80)%+
</TABLE>
- -----------------------
* Commencement of offering of shares.
** The Manager, at its discretion, waived a portion of its fees for
certain of the periods presented.
+ Annualized.
++ For the six months ended June 30, 1999.
See Notes to Financial Statements.
16
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS AND SHAREHOLDERS, SELIGMAN
LARGE-CAP VALUE FUND:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Large-Cap Value Fund as of June 30,
1999, the related statements of operations for the six months then ended and of
changes in net assets for the six months then ended and for the year ended
December 31, 1998, and the financial highlights for each of the periods
presented. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1999, by correspondence with the Fund's custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Seligman Large-Cap Value Fund as of June 30, 1999, the results of its
operations, the changes in its net assets, and the financial highlights for the
respective stated periods in conformity with generally accepted accounting
principles.
/S/Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
New York, New York
August 6, 1999
17
<PAGE>
BOARD OF DIRECTORS
JOHN R. GALVIN 2, 4
Dean, Fletcher School of Law and Diplomacy
at Tufts University
Director, Raytheon Company
ALICE S. ILCHMAN 3, 4
Trustee, Committee for Economic Development
Chairman, The Rockefeller Foundation
FRANK A. MCPHERSON 2, 4
Director, Kimberly-Clark Corporation
Director, Baptist Medical Center
Director, Conoco Inc.
JOHN E. MEROW 2, 4
Retired Chairman and Senior Partner,
Sullivan & Cromwell, Law Firm
Director, Commonwealth Industries, Inc.
Director, New York Presbyterian Hospital
BETSY S. MICHEL 2, 4
Trustee, The Geraldine R. Dodge Foundation
WILLIAM C. MORRIS 1
Chairman
Chairman of the Board,
J. & W. Seligman & Co. Incorporated
Chairman, Carbo Ceramics Inc.
Director, Kerr-McGee Corporation
JAMES C. PITNEY 3, 4
Retired Partner, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN 3, 4
Director, KeySpan Energy Corporation
Trustee, Committee for Economic Development
Director, Public Broadcasting Service
RICHARD R. SCHMALTZ 1
Managing Director, Director of Investments,
J. & W. Seligman & Co. Incorporated
Trustee Emeritus, Colby College
ROBERT L. SHAFER 3, 4
Retired Vice President, Pfizer Inc.
JAMES N. WHITSON 2, 4
Director and Consultant, Sammons Enterprises, Inc.
Director, C-SPAN
Director, CommScope, Inc.
BRIAN T. ZINO 1
President
President, J. & W. Seligman & Co. Incorporated
Chairman, Seligman Data Corp.
Director, ICI Mutual Insurance Company
Member of the Board of Governors,
Investment Company Institute
Director Emeritus
FRED E. BROWN
Director and Consultant,
J. & W. Seligman &Co. Incorporated
- ----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
18
<PAGE>
EXECUTIVE OFFICERS
WILLIAM C. MORRIS
Chairman
BRIAN T. ZINO
President
NEIL T. EIGEN
Vice President
LAWRENCE P. VOGEL
Vice President
THOMAS G. ROSE
Treasurer
FRANK J. NASTA
Secretary
FOR MORE INFORMATION
MANAGER
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
GENERAL COUNSEL
Sullivan & Cromwell
INDEPENDENT AUDITORS
Deloitte & Touche LLP
GENERAL DISTRIBUTOR
Seligman Advisors, Inc.
100 Park Avenue
New York, NY 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
IMPORTANT TELEPHONE NUMBERS
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan Services
(212) 682-7600 Outside the United States
(800) 622-4597 24-Hour Automated Telephone Access Service
19
<PAGE>
GLOSSARY OF FINANCIAL TERMS
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in a fund's portfolio.
CAPITAL APPRECIATION/DEPRECIATION -- An increase or decrease in the market value
of a mutual fund's portfolio securities, which is reflected in the net asset
value of the fund's shares. Capital appreciation/depreciation of an individual
security is in relation to the original purchase price.
COMPOUNDING -- The change in the value of an investment as shareholders receive
earnings on their investment's earnings. For example, if $1,000 is invested at a
fixed rate of 7% a year, the initial investment is worth $1,070 after one year.
If the return is compounded, second year earnings will not be based on the
original $1,000, but on the $1,070, which includes the first year's earnings.
CONTINGENT DEFERRED SALES CHARGE (CDSC) -- Depending on the class of shares
owned, a fee charged by a mutual fund when shares are sold back to the fund. The
CDSC expires after a fixed time period.
DIVIDEND -- A payment by a mutual fund, usually derived from the fund's net
investment income (dividends and interest less expenses).
DIVIDEND YIELD -- A measurement of a fund's dividend as a percentage of the
maximum offering price or net asset value.
EXPENSE RATIO -- The cost of doing business for a mutual fund, expressed as a
percent of the fund's net assets.
INVESTMENT OBJECTIVE -- The shared investment goal of a fund and its
shareholders.
MANAGEMENT FEE -- The amount paid by a mutual fund to its investment advisor(s).
MULTIPLE CLASSES OF SHARES -- Although an individual mutual fund invests in only
one portfolio of securities, it may offer investors several purchase options
which are "classes" of shares. Multiple classes permit shareholders to choose
the fee structure that best meets their needs and goals. Generally, each class
will differ in terms of how and when sales charges and certain fees are
assessed.
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD) -- A self-regulatory
body with authority over firms that distribute mutual funds.
NET ASSET VALUE (NAV) PER SHARE -- The market worth of one fund share, obtained
by adding a mutual fund's total assets (securities, cash, and any accrued
earnings), subtracting liabilities, and dividing the resulting net assets by the
number of shares outstanding.
OFFERING PRICE -- The price at which a mutual fund's share can be purchased. The
offering price per share is the current net asset value plus any sales charge.
PORTFOLIO TURNOVER -- A measure of the trading activity in a mutual fund's
investment portfolio that reflects how often securities are bought and sold.
PROSPECTUS -- The legal document describing a mutual fund to all prospective
shareholders. It contains information required by the Securities and Exchange
Commission (SEC), such as a fund's investment objective and policies, services,
investment restrictions, how shares are bought and sold, fund fees and other
charges, and the fund's financial highlights.
SEC YIELD -- SEC Yield refers to the net income earned by a fund during a recent
30-day period. This income is annualized and then divided by the maximum
offering price per share on the last day of the 30-day period. The SEC Yield
formula reflects semiannual compounding.
SECURITIES AND EXCHANGE COMMISSION -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- A document that contains more detailed
information about an investment company and that supplements the prospectus. It
is available at no charge upon request.
TOTAL RETURN -- A measure of a fund's performance encompassing all elements of
return. Reflects the change in share price over a given period and assumes all
distributions are taken in additional fund shares. The Average Annual Total
Return represents the average annual compounded rate of return for the periods
presented.
YIELD ON SECURITIES -- For bonds, the current yield is the coupon rate of
interest, divided by the purchase price. For stocks, the yield is measured by
dividing dividends paid by the market price of the stock.
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Adapted from the Investment Company Institute's 1999 Mutual Fund Fact Book.
<PAGE>
[Back Cover]
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 LARGE-CAP VALUE FUND, WHICH CONTAINS INFORMATION ABOUT THE SALES
CHARGES, MANAGEMENT FEE, AND OTHER COSTS. PLEASE READ THE PROSPECTUS CAREFULLY
BEFORE INVESTING OR SENDING MONEY.
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
EQVL3 6/99 [GRAPHIC] Printed on Recycled Paper
