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FIRST QUARTER REPORT
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SELIGMAN
GROWTH
FUND, INC.
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MARCH 31, 1996
[LOGO]
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A GROWTH STOCK FUND
ESTABLISHED IN 1937
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 GROWTH FUND, INC., WHICH CONTAINS INFORMATION ABOUT THE SALES CHARGES,
MANAGEMENT FEE, AND OTHER COSTS. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE
INVESTING OR SENDING MONEY.
EQGR3a 3/96
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TO THE SHAREHOLDERS
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Seligman Growth Fund performed favorably in the first quarter of 1996, outpacing
the Standard & Poor's 500 Composite Stock Price Index, as it continued to seek
to provide longer-term growth in capital value for its shareholders. For
long-term performance information, please refer to the table located on page 5.
Your Fund's net realized gain from investment transactions for both Class A
and D shares for the three months ended March 31, 1996, totaled $0.04 per share.
At March 31, net unrealized gain per share totaled $1.56.
The first quarter was one in which the US economy demonstrated its resilience.
Despite a strike at General Motors that spread to manufacturing plants and
companies across the nation, failure of both the Congress and Administration to
reach a budget agreement, disappointment that the Federal Reserve Board did not
continue to reduce short-term interest rates, and a rise in long-term interest
rates, the US economy continued to grow at a moderate rate.
Capital spending, which had been the strongest sector of the economy, slowed
dramatically during the first quarter. The relationship between new orders and
current shipments in the bellwether semiconductor industry, for example, hit a
nine-year low in March, while consumer cyclicals rebounded by the end of the
quarter, with retail sales advancing at an 8.2% annual rate. Personal income
continued to post solid advances, as employment growth remained on track.
Although there has been a sudden rise in energy and grain prices, which bears
monitoring, the financial markets' quick response to any sign of increased
inflation imparts its own kind of discipline on US policy makers and the Fed.
Therefore, 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 recent rise in long-term interest rates negatively
impacted the portfolio's interest rate sensitive issues, particularly its
financial services and insurance holdings. However, the economy's resilience and
improved outlook benefited the performance of your Fund's cyclical holdings,
including basic materials and capital goods.
Your Portfolio Manager decreased the Fund's technology holdings, in particular
semiconductors and semiconductor capital equipment, due to continued weakness in
the industry. The proceeds were shifted to selective telecommunications-related
issues that have higher growth prospects because of the growing demand for new
networks and delivery systems. Additionally, consumer staples lagged during the
quarter as investors shifted their investments from stable growth stocks to
cyclical stocks in what seemed to be an accelerating economy. Your Manager,
however, believes that the long-term prospects for consumer staples remain
positive.
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
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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) March 31, 1996
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SHARES VALUE
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COMMON STOCKS 99.5%
AEROSPACE 2.4%
Boeing .................................. 175,000 $ 15,159,375
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AUTOMOTIVE AND RELATED 2.4%
Autoliv (ADRs)+* ........................ 40,000 2,060,000
Echlin .................................. 150,000 5,437,500
Harley-Davidson ......................... 200,000 7,775,000
-----------
15,272,500
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BUSINESS SERVICES 12.7%
Alco Standard ........................... 175,000 9,121,875
First Data .............................. 225,000 15,862,500
General Motors (Class E) ................ 225,000 12,825,000
HFS Group* .............................. 250,000 12,156,250
Interpublic Group of Companies .......... 300,000 14,175,000
Reynolds & Reynolds (Class A) ........... 200,000 8,200,000
SunGard Data Systems* ................... 250,000 8,468,750
-----------
80,809,375
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CHEMICALS 2.4%
Air Products & Chemicals ................ 150,000 8,193,750
Bayer AG ................................ 8,000 2,711,268
Engelhard ............................... 200,000 4,675,000
-----------
15,580,018
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CONSUMER GOODS AND SERVICES 7.2%
Adidas .................................. 44,000 3,247,562
Coca-Cola ............................... 100,000 8,262,500
Duracell International .................. 150,000 7,443,750
Gillette ................................ 175,000 9,056,250
LVMH Moet-Hennessey ..................... 10,000 2,537,980
Mattel .................................. 218,750 5,933,594
PepsiCo ................................. 150,000 9,487,500
-----------
45,969,136
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DRUGS AND HEALTH CARE 19.5%
Amgen* .................................. 200,000 11,612,500
Columbia/HCA Healthcare ................. 250,000 14,437,500
Genzyme* ................................ 75,000 4,143,750
Guidant ................................. 100,000 5,412,500
Johnson & Johnson ....................... 125,000 11,531,250
Medtronic ............................... 150,000 8,943,750
Oxford Health Plans* .................... 125,000 10,984,375
PacifiCare Health Systems
(Class B)* ........................... 150,000 12,768,750
Pfizer .................................. 225,000 15,075,000
Roussel ................................. 12,000 $ 2,621,388
Schering-Plough ......................... 250,000 14,531,250
United Healthcare ....................... 200,000 12,300,000
-----------
124,362,013
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ENERGY 0.3%
Huaneng Power International (ADRs)* ..... 100,500 1,721,062
-----------
FINANCIAL SERVICES 15.9%
American International Group ............ 225,000 21,065,625
Citicorp ................................ 100,000 8,000,000
Federal National Mortgage
Association .......................... 300,000 9,562,500
General Re .............................. 75,000 10,931,250
General Tree Financial .................. 300,000 10,312,500
Internationale Nederlanden Groep ........ 33,825 2,456,576
MBNA .................................... 150,000 4,443,750
MGIC Investment ......................... 150,000 8,175,000
Norwest ................................. 250,000 9,187,500
SunAmerica .............................. 112,500 5,667,187
UTD Overseas Bank ....................... 228,000 2,297,800
Wells Fargo ............................. 35,000 9,135,000
-----------
101,234,688
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INDUSTRIAL EQUIPMENT 5.0%
BBC Brown Boverie ....................... 2,000 2,429,789
FKI Babcock ............................. 875,000 2,323,716
General Electric ........................ 150,000 11,681,250
Illinois Tool Works ..................... 75,000 4,846,875
Keyence ................................. 20,000 2,389,286
Xerox ................................... 65,000 8,157,500
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31,828,416
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LEISURE AND ENTERTAINMENT 7.7%
Circus Circus Enterprises* .................. 300,000 10,087,500
Disney, Walt ................................ 100,000 6,387,500
Granada Group ............................... 230,000 2,632,781
Hilton Hotels ............................... 65,000 6,110,000
Mirage Resorts* ............................. 180,000 7,897,500
Sun International Hotels .................... 75,000 2,700,000
Viacom (Class B) ............................ 250,000 10,531,250
WPP Group ................................... 1,000,000 3,052,500
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49,399,031
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PRINTING AND PUBLISHING 0.5%
Reed Elsevier ............................... 215,000 3,292,078
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2
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SHARES VALUE
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RETAIL TRADE 4.5%
Eckerd* ..................................... 100,000 $ 4,812,500
Home Depot .................................. 150,000 7,181,250
Hornbach Baumarkt ........................... 35,000 1,173,145
Nordstrom ................................... 175,000 8,476,563
Office Depot* ............................... 250,000 4,906,250
Schimachu ................................... 70,000 2,240,888
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28,790,596
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STEEL 1.3%
Nucor ....................................... 100,000 5,912,500
Pohang Iron & Steel (ADSs) .................. 100,000 2,425,000
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8,337,500
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TECHNOLOGY 9.2%
Cisco Systems* .............................. 300,000 13,931,250
Hewlett-Packard ............................. 75,000 7,050,000
Informix .................................... 150,000 3,965,625
Intel ....................................... 150,000 8,521,875
Microsoft* .................................. 100,000 10,306,250
Olivetti .................................... 3,300,000 1,694,737
Secom ....................................... 35,000 2,283,354
Sterling Software ........................... 100,000 7,050,000
3Com* ....................................... 100,000 3,981,250
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58,784,341
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TELECOMMUNICATIONS 5.0%
American Telephone & Telegraph .............. 100,000 6,125,000
Century Telephone Enterprises ............... 125,000 3,968,750
L.M. Ericsson (Series B) .................... 100,000 2,200,994
Motorola .................................... 100,000 5,300,000
Nera (ADSs) ................................. 45,000 1,755,000
Scientific-Atlanta .......................... 300,000 5,325,000
WorldCom* ................................... 150,000 6,909,375
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31,584,119
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SHARES OR
PRIN. AMT. VALUE
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TOBACCO 1.7%
Philip Morris ............................... 125,000 shs $10,968,750
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MISCELLANEOUS 1.8%
HIS ......................................... 45,000 2,549,349
Tyco International .......................... 250,000 8,937,500
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11,486,849
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TOTAL COMMON STOCKS
(Cost $455,619,098) ...................... 634,579,847
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CONVERTIBLE BONDS 0.1%
(Cost $753,837)
ELECTRONICS 0.1%
United Micro Electronics 11/4%, 6/8/2004..... $430,000 448,275
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TOTAL INVESTMENTS 99.6%
(Cost $456,372,935)....................... 635,028,122
OTHER ASSETS
LESS LIABILITIES 0.4%.................... 2,859,062
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NET ASSETS 100.0% .......................... $637,887,184
============
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* Non-income producing security.
+ Rule 144A security.
Note: Investments in stocks and bonds 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.
3
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LARGEST PORTFOLIO CHANGES*
DURING PAST THREE MONTHS
SHARES
----------------------
HOLDINGS
ADDITIONS INCREASE 3/31/96
- ------------ ---------- ---------
Century Telephone Enterprises ....................... 25,000 125,000
Duracell International .............................. 15,000 150,000
L.M. Ericsson (Series B) ............................ 100,000 100,000
Hilton Hotels ....................................... 65,000 65,000
Keyence ............................................. 5,000 20,000
Nucor ............................................... 25,000 100,000
Pohang Iron & Steel (ADRs) .......................... 30,000 100,000
Shimachu ............................................ 70,000 70,000
Sun International Hotels ............................ 75,000 75,000
WPP Group ........................................... 1,000,000 1,000,000
HOLDINGS
REDUCTIONS DECREASE 3/31/96
- ------------ ---------- ---------
Disney, Walt ........................................ 25,000 100,000
European Vinyls ..................................... 45,300 --
Farnell Electronics ................................. 250,000 --
HFS Group ........................................... 50,000 250,000(1)
Lam Research ........................................ 75,000 --
Mirage Resorts ...................................... 45,000 180,000
Protein Design Laboratories ......................... 125,000 --
Scandinavian Broadcast System ....................... 125,000 --
Tektronix ........................................... 100,000 --
Xilinx .............................................. 195,000 --
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* 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 150,000 shares received as a result of a 2-for-1 stock split.
MAJOR PORTFOLIO HOLDINGS
AT MARCH 31, 1996
SECURITY VALUE
- ----------- -----------
American International Group ......... $21,065,625
First Data ........................... 15,862,500
Boeing ............................... 15,159,375
Pfizer ............................... 15,075,000
Schering-Plough ...................... 14,531,250
Columbia/HCAHealthcare ............... 14,437,500
Interpublic Group of Companies ....... 14,175,000
Cisco Systems ........................ 13,931,250
General Motors (Class E) ............. 12,825,000
PacifiCare Health Systems (Class B) .. 12,768,750
4
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SELIGMAN GROWTH FUND
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INVESTMENT RESULTS
TOTAL RETURNS*
FOR PERIODS ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
AVERAGE ANNUAL
--------------------------------------------------------------------
CLASS D
THREE ONE FIVE 10 SINCE
MONTHS YEAR YEARS YEARS INCEPTION+
---------- ------- ------- ------- ------------
<S> <C> <C> <C> <C> <C>
CLASS A
With Sales Charge 1.83% 24.95% 11.74% 11.01% n/a
Without Sales Charge 6.90 31.26 12.83 11.56 n/a
CLASS D
With CDSL 5.65 28.82 n/a n/a n/a
Without CDSL 6.65 29.82 n/a n/a 12.87%
S&P 500** 5.37 32.10 14.67 13.95 17.15++
</TABLE>
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NET ASSET VALUE PER SHARE
MARCH 31, 1996 DECEMBER 31, 1995
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CLASS A $5.58 $5.22
CLASS D $5.29 $4.96
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* 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 is an unmanaged index and assumes reinvestment of estimated
dividends, and does 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.
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5
