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SELIGMAN
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SELIGMAN
GROWTH
FUND, INC.
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SEEKING LONGER-TERM GROWTH OF CAPITAL VALUE AND
AN INCREASE IN FUTURE INCOME
JUNE 30, 1997 o MID-YEAR REPORT
<PAGE>
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OVER THE LONG TERM -- J. & W. SELIGMAN & CO. INCORPORATED
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TIME IS THE TEST
In an industry that has changed dramatically in recent years, it's comforting
to know that stability, tradition, and consistent professional service can still
be found in an investment management firm.
J. & W. Seligman & Co. Incorporated has been providing financial services for
more than 130 years. From its beginning, Seligman has followed a long-term
approach to making money for its clients, by managing investment products and
services of the highest quality. Today, Seligman manages the Seligman Group of
Funds, which offers investors more than 50 investment options.
A PLACE IN HISTORY
Established in 1864, Seligman played a major role in the geographical
expansion and industrial development of the United States. The firm helped
finance the westward path of the railroads and the building of the Panama Canal.
In the late 1800s and early 1900s, the firm was instrumental in financing the
fledgling automobile and steel industries. Seligman also participated in the
original underwritings for some of the nation's most prominent companies,
including General Motors, Victor Talking Machine, United Artists Theater
Circuit, and Maytag. In 1929, Seligman introduced Tri-Continental Corporation --
which today is the nation's largest diversified closed-end investment company.
In 1930, Seligman began managing its first mutual fund, Broad Street Investing
Co., now known as Seligman Common Stock Fund.
------------------
[PHOTO]
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JAMES, JESSE AND
JOSEPH SELIGMAN
SELIGMAN GROWTH FUND
Seligman Growth Fund, established April 1, 1937, is the first growth stock
mutual fund created in the United States. Seligman Growth Fund has helped
investors seek their financial goals through all market conditions by staying
true to its objective of long-term growth of capital value and an increase in
future income. Current income is not an objective.
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TABLE OF CONTENTS
To the Shareholders ........................................................ 1
Interview with Your Portfolio Manager ...................................... 2
Performance Overview ....................................................... 4
Portfolio Overview ......................................................... 6
Portfolio of Investments ................................................... 8
Statement of Assets and Liabilities ........................................ 10
Statement of Operations .................................................... 11
Statements of Changes in Net Assets ........................................ 12
Notes to Financial Statements .............................................. 13
Financial Highlights ....................................................... 15
Report of Independent Auditors ............................................. 17
Board of Directors ......................................................... 18
Executive Officers/For More Information .................................... 19
Glossary of Financial Terms ................................................ 20
"Your Fund has long followed a policy of investing its funds primarily in the
stocks of `growth' companies. These are companies believed able, over a period
of years, to increase their sales and earnings at a greater rate than American
business as a whole. They may be relatively small, little-known companies or
they may be large and leaders in their industries."
-- FRANCIS F. RANDOLPH,
FUND CHAIRMAN
1942-1967
"We continue to use a thorough and rigorous investment process in our stock
selection, and this discipline is primarily responsible for the Fund's strong
results. We continue to invest in growth companies in expanding business areas
with attractive price-to-earnings ratios and good opportunities for
appreciation."
-- WILLIAM C. MORRIS,
FUND CHAIRMAN
1989-PRESENT
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TO THE SHAREHOLDERS
For the six months ended June 30, 1997, Seligman Growth Fund posted a total
return of 12.65% based on the net asset value of Class A shares, which lagged
the 14.29% total return of its peers, as measured by the Lipper Growth Funds
Average, and the 20.61% total return of the Standard & Poor's 500 Composite
Stock Price Index (S&P 500). Additional information on the Fund's investment
results appears on page 4.
Thus far, 1997 has shown great promise for both the domestic economy and the
financial markets. Instead of increasing inflation, the growing economy actually
generated lower producer prices for six consecutive months. The Federal Reserve
Board's decision to leave the federal funds rate unchanged in May also helped
tame inflation fears and gave further support to the already strong financial
markets. Low unemployment and high consumer confidence levels continued, while
consumer spending was relatively restrained.
While low interest rates generally supported the appreciation of the equity
market and the Fund's portfolio, market participants remained primarily focused
on the large, more liquid stocks with predictable earnings. The 25 largest
stocks in the S&P 500 were, therefore, responsible for the majority of the
equity market's gains. Seligman Growth Fund has a diversified growth portfolio
that is not focused solely on the largest stocks in the market. Consequently,
the Fund's results were not in line with that of the large-capitalization
benchmarks. However, the Fund's performance relative to the market improved in
the second quarter, when the market broadened to include a wider group of
stocks.
The long-term outlook for the US economy, the financial markets, and the Fund
remains positive. Productivity improvements, driven in large part by the
deployment of technology, have helped reduce corporate costs and have increased
profitability. We believe that as investors focus greater attention on
valuations relative to earnings potential, the Fund's rigorous investment
strategy of finding companies with strong growth rates whose stocks are selling
at attractive valuations will be rewarded.
We are pleased to introduce your redesigned Shareholder Report. This change
is part of a corporate effort to enhance the overall clarity and quality of all
communications to our Shareholders. We hope you find the additional information
contained herein helpful.
We thank you for your continued support of Seligman Growth Fund, and look
forward to serving your investment needs in the many years to come.
A discussion with your Portfolio Manager and the Fund's portfolio of
investments follow this letter.
By order of the Board of Directors,
/s/William C. Morris
- --------------------
William C. Morris
Chairman
/s/Brian T. Zino
----------------
Brian T. Zino
President
August 1, 1997
1
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INTERVIEW WITH YOUR PORTFOLIO MANAGER, LORIS MUZZATTI
Q. HOW DID SELIGMAN GROWTH FUND PERFORM IN THE LAST SIX MONTHS?
A. For the six months ended June 30, 1997, Seligman Growth Fund posted a total
return of 12.65% based on the net asset value of Class A shares. The Fund's
total return lagged the 14.29% total return of its competitive universe, as
measured by the Lipper Growth Funds Average. The Russell 1000 Growth Index,
a leading index that measures the performance of the large-cap growth stocks
that are part of the broader Russell 1000 Index, had a total return of
19.55%.
Q. WHICH ECONOMIC FACTORS AFFECTED THE FUND'S PERFORMANCE IN THE FIRST HALF OF
THE YEAR?
A. Strong economic growth and low levels of inflation spurred the performance
of the equity market in the first half of the year. In spite of the
historically low unemployment rate, inflation remained moderate and the
Federal Reserve Board did not raise short-term interest rates in May, having
raised them in March. The Fed's decision to leave the federal funds rate
unchanged in the second quarter further encouraged market participants.
Otherwise, the lasting strength of the US Dollar impacted multinational
corporations with significant international sales, decreasing the value of
overseas revenues and increasing the cost of exporting US goods.
Q. WHICH MARKET FACTORS INFLUENCED THE FUND'S PERFORMANCE IN THE
LAST SIX MONTHS?
A. The equity market continued to favor large established companies with
predictable earnings and stable financials. The 25 largest companies in the
S&P 500 were, therefore, responsible for the majority of the gains in the
period. The Fund emphasizes longer-term capital appreciation potential based
on strong future earnings growth rather than pure liquidity. Therefore, the
performance of the stocks held in the portfolio did not mirror that of the
large-capitalization indices.
Another factor was that, given the market's high valuations, investors
avoided any stocks that reported disappointing earnings, or where negative
events made future prospects unpredictable. While some companies'
fundamentals have deteriorated, others with strong long-term growth
prospects saw temporary reductions in their valuations. In the latter
instance, the momentary correction provided the Fund opportunities to
purchase companies such as Boston Scientific, a medical devices company, at
attractive valuations that could reward investors over the long term.
The Fund did participate in certain areas of strength in the equity
market. As the market favored stocks that capitalized on global
opportunities, consumer products companies with strong global expansion
strategies, such as Procter & Gamble and Colgate-Palmolive, were added.
Other areas of strength in the market included health care and
pharmaceutical stocks which capitalized on the aging population.
Q. WHAT WAS YOUR INVESTMENT STRATEGY?
A. Using a rigorous research process, we continued to invest in
large-capitalization companies with strong growth rates in revenues,
earnings, and/or assets, which were selling at attractive valuations. In
- --------------------------------------------------------------------------------
[PHOTO]
SELIGMAN GROWTH TEAM: (FROM LEFT) MICHELLE BORRE, LOUISE KNIGHT (ADMINISTRATIVE
ASSISTANT), DAVID LEVY, LOUISE OH, (SEATED) LORIS MUZZATTI (PORTFOLIO MANAGER)
A TEAM APPROACH
Seligman Growth Fund is managed by the Seligman Growth Team, headed by Loris
Muzzatti. Mr. Muzzatti is assisted in the management of the Fund by seasoned
research professionals who are responsible for identifying those companies in
specific industries that offer the greatest potential for growth, consistent
with the Fund's objective.
- --------------------------------------------------------------------------------
2
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INTERVIEW WITH YOUR PORTFOLIO MANAGER, LORIS MUZZATTI
particular, we sought financially solid companies with exceptional
managements, strong balance sheets, and high returns on equity and invested
capital. Generally, we tried to find companies in great businesses with good
market share, and avoided stocks that were driven by market momentum rather
than underlying fundamentals. Additionally, to offset the potential impact
of the strong US Dollar, the Fund's holdings were focused in companies that
hedged their foreign currency exposure and managed their costs effectively.
Q. WHAT SECTORS IMPROVED THE FUND'S PERFORMANCE?
A. The continued low inflation environment supported the Fund's financial
services stocks. The best performers in this group included American
International Group, MGIC Investment, Federal National Mortgage Association,
and MBNA. The Fund's exposure to the industry was increased in the period
with the purchase of Travelers and GreenPoint Financial.
The Fund's weighting in drugs and health care stocks also improved
results, with Pfizer and Eli Lilly leading the group. The aging of the baby
boomers and the current efforts to reduce costs bode well for the sector's
future prospects. We therefore added Merck, Johnson & Johnson, Bristol-Myers
Squibb, and Cardinal Health, a distributor of pharmaceuticals, to the Fund's
holdings.
In technology, communications equipment makers such as Lucent Technologies
were strong. We took advantage of the weakness in the technology market and
increased the Fund's telecommunications weighting, adding to positions in
Lucent Technologies and Motorola.
Q. WHAT SECTORS IMPAIRED THE FUND'S PERFORMANCE?
A. Despite high levels of consumer confidence and overall consumption, there
has been weakness in consumer-related stocks, particularly gaming companies
which faced increased competition and capacity. The Fund's holdings in
Circus Circus and Hilton Hotels were affected by the weakness in the
industry, and the position in Circus Circus was sold.
The technology stocks in the portfolio had mixed results. In May,
announcements of slower growth by bellwether semiconductor manufacturer,
Intel, and disk-drive maker, Seagate Technology, reduced valuations in the
sector. Due to market conditions and to growing price competition in the
computer services industry, the Fund's holdings in Electronic Data Systems
and Computer Associates International were sold. The Fund's networking
stocks were also reduced as growth in the industry slowed.
Q. WHAT IS THE OUTLOOK?
A. Given the Fed's decision to maintain the current fed funds rate, it seems
that economic conditions are set for continued growth and low inflation. We
believe that companies that have good top-line revenue growth and that make
additional profitability improvements will outperform the market over time.
We also continue to believe that companies that have global expansion
strategies will outperform the market; therefore, we have increased the
Fund's investments in these companies. The broadening of the market as seen
in May and June is also a positive, as it may indicate renewed interest in
earnings growth among market participants. We feel optimistic regarding the
Fund's long-term prospects and believe that the portfolio's composition of
high-quality companies with good future growth potential will be rewarded in
a more valuation-conscious market environment.
3
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PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS*
FOR PERIODS ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-----------------------------------------------------------------
CLASS B CLASS D
SINCE SINCE
SIX ONE FIVE 10 INCEPTION INCEPTION
MONTHS YEAR YEARS YEARS 4/22/96 5/3/93
---------- ---------- ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
With Sales Charge 7.33% 16.01% 15.29% 11.32% n/a n/a
Without Sales Charge 12.65 21.77 16.43 11.86 n/a n/a
CLASS B
With CDSL+ 7.02 15.56 n/a n/a 17.26% n/a
Without CDSL 12.02 20.56 n/a n/a 20.52 n/a
CLASS D
With 1% CDSL 11.02 19.56 n/a n/a n/a n/a
Without CDSL 12.02 20.56 n/a n/a n/a 15.11%
S&P 500** 20.61 34.70 19.78 14.64 32.37++ 21.28+++
RUSSELL 1000 GROWTH INDEX** 19.55 31.34 18.96 14.57 30.25++ 21.36+++
LIPPER GROWTH FUNDS AVERAGE*** 14.29 23.97 16.90 12.73 21.32++ 17.54+++
</TABLE>
NET ASSET VALUE
JUNE 30, 1997 DECEMBER 31, 1996 JUNE 30, 1996
------------- ----------------- -------------
CLASS A $6.59 $5.85 $5.85
CLASS B 6.15 5.49 5.54
CLASS D 6.15 5.49 5.54
CAPITAL GAIN INFORMATION
FOR SIX MONTHS ENDED JUNE 30, 1997
REALIZED $0.274#
UNREALIZED 2.365##
- ------------------
* Return figures reflect any change in price per share and assume the
investment of capital gain distributions. Return figures for Class A shares
are calculated with and without the effect of the initial 4.75% maximum
sales charge. Class A share returns reflect the effect of the service fee
of up to 0.25% under the Administration, Shareholder Services and
Distribution Plan after January 1, 1993, only. Returns for Class B shares
are calculated with and without the effect of the maximum 5% contingent
deferred sales load ("CDSL"), charged only on certain redemptions made
within one year of the date of purchase, declining to 1% in the sixth year
and 0% thereafter. Returns for Class D shares are calculated with and
without the effect of the 1% CDSL, charged only on redemptions made within
one year of the date of purchase. Performance data quoted represent changes
in prices 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.
** The S&P 500 and the Russell 1000 Growth Index are unmanaged benchmarks that
assume investment of dividends, and do not reflect fees and sales charges.
Investors cannot invest directly in an index.
*** The Lipper Growth Funds Average does not reflect sales charges that may be
incurred in connection with purchases or sales. The monthly performance is
used in the Performance Overview. Investors cannot invest directly in an
average.
+ The CDSL is 5% for periods of one year or less, and 4% since inception.
++ From April 30, 1996.
+++ From April 30, 1993.
# Excludes 1996 undistributed realized capital gains of $0.07 per share at
June 30, 1997.
## Represents the per share amount of net unrealized
appreciation of portfolio securities as of June 30, 1997.
4
<PAGE>
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PERFORMANCE OVERVIEW
GROWTH OF AN ASSUMED $10,000
INVESTMENT IN CLASS A SHARES
JUNE 30, 1987, TO JUNE 30, 1997
[The following table represents a graph in the printed piece.]
6/30/87 9524
9/30/87 9957
12/31/87 7779
3/31/88 7871
6/30/88 8460
9/30/88 8256
12/31/88 8350
3/31/89 8846
6/30/89 9799
9/30/89 11259
12/31/89 11168
3/31/90 10577
6/30/90 11694
9/30/90 9550
12/31/90 10592
3/31/91 12515
6/30/91 12423
9/30/91 13423
12/31/91 14665
3/31/92 14369
6/30/92 13654
9/30/92 14494
12/31/92 16321
3/31/93 16240
6/30/93 15727
9/30/93 17134
12/31/93 17332
3/31/94 16706
6/30/94 15816
9/30/94 16805
12/31/94 16667
3/31/95 17437
6/30/95 18722
9/30/95 20595
12/31/95 21412
3/31/96 22889
6/30/96 23996
9/30/96 24940
12/31/96 25938
3/31/97 25583
6/30/97 29219
GROWTH OF AN ASSUMED $10,000
INVESTMENT IN CLASS B SHARES
APRIL 22, 1996+, TO JUNE 30, 1997
[The following table represents a graph in the printed piece.]
4/22/96 10000
6/30/96 10355
9/30/96 10748
12/31/96 11145
3/31/97 10962
6/30/97 12485
GROWTH OF AN ASSUMED $10,000
INVESTMENT IN CLASS D SHARES
MAY 3, 1993+, TO JUNE 30, 1997
[The following table represents a graph in the printed piece.]
5/3/93 10000
6/30/93 10265
9/30/93 11146
12/31/93 11240
3/31/94 10724
6/30/94 10037
9/30/94 10638
12/31/94 10503
3/31/95 10958
6/30/95 11726
9/30/95 12877
12/31/95 13339
3/31/96 14227
6/30/96 14899
9/30/96 15464
12/31/96 16035
3/31/97 15772
6/30/97 17963
These charts reflect the growth of a $10,000 investment for a 10-year period
for Class A shares and since inception for Class B and Class D shares. Since the
measured periods vary, the charts are plotted using different scales and are not
comparable.
- -----------------
* Net of the 4.75% maximum initial sales charge.
** Excludes the effect of the 4% CDSL.
+ Inception date.
5
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PORTFOLIO OVERVIEW
<TABLE>
<CAPTION>
DIVERSIFICATION OF ASSETS
JUNE 30, 1997
PERCENT OF NET ASSETS
-------------------------
JUNE 30, DEC. 31,
ISSUES COST VALUE 1997 1996
-------- ------- -------- ------ ------
<S> <C> <C> <C> <C> <C>
Short-Term Holdings and
Other Assets Less Liabilities .......................... 1 $ (2,460,978) $ (2,460,978) (0.3) 0.8
-- ---------- ---------- ---- ----
Common Stocks:
Aerospace ........................................... 1 9,669,962 15,918,750 2.1 2.3
Apparel ............................................. 1 6,341,170 8,392,500 1.1 2.8
Automotive and Related .............................. 3 10,477,175 17,753,950 2.3 11.9
Business Services ................................... 6 38,052,033 71,309,063 9.4 2.5
Chemicals ........................................... 3 14,349,332 18,302,545 2.4 5.6
Consumer Goods and Services ......................... 8 56,398,944 82,955,973 10.9 12.6
Drugs and Health Care ............................... 12 97,379,814 127,074,762 16.7 0.1
Energy .............................................. 1 1,894,123 2,562,750 0.3 0.3
Financial Services .................................. 14 78,908,312 143,675,388 18.9 16.7
Industrial Equipment ................................ 5 27,382,054 45,089,066 5.9 5.2
Leisure and Entertainment ........................... 9 31,062,059 41,104,646 5.4 8.6
Printing and Publishing ............................. 1 1,114,615 2,006,218 0.3 0.4
Retail Trade ........................................ 2 14,336,280 14,069,932 1.9 4.3
Steel ............................................... 1 9,816,040 9,887,500 1.3 0.7
Technology .......................................... 8 49,901,942 96,255,924 12.7 15.1
Telecommunications .................................. 7 31,386,315 48,208,571 6.3 5.7
Tobacco ............................................. 1 9,296,670 15,975,000 2.1 2.1
Miscellaneous ....................................... 1 1,968,650 2,589,083 0.3 2.3
-- ------------ ------------ ----- -----
84 489,735,490 763,131,621 100.3 99.2
-- ------------ ------------ ----- -----
NET ASSETS ............................................. 85 $487,274,512 $760,670,643 100.0 100.0
== ============ ============ ===== =====
</TABLE>
LARGEST INDUSTRIES
AT JUNE 30, 1997
[The following table represents a bar chart in the printed piece.]
Percent of
Net Assets Value
---------- ------------
Financial Services 18.9% $143,675,388
Drugs and Health Care 16.7 127,074,762
Technology 12.7 96,255,924
Consumer Goods and Services 10.9 82,955,973
Business Services 9.4 71,309,063
6
<PAGE>
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PORTFOLIO OVERVIEW
LARGEST PORTFOLIO CHANGES
DURING PAST SIX MONTHS
SHARES
---------------------
HOLDINGS
ADDITIONS INCREASE 6/30/97
- --------- -------- --------
Boston Scientific ................................... 200,000 200,000
Cardinal Health ..................................... 185,000 185,000
Colgate-Palmolive ................................... 185,000 185,000
HFS ................................................. 125,000 240,000
Merck ............................................... 155,000 255,000
Motorola ............................................ 120,000 220,000
Nike (Class B) ...................................... 205,000 205,000
PepsiCo ............................................. 280,000 280,000
Procter & Gamble .................................... 100,000 100,000
Travelers ........................................... 255,000 255,000
SHARES
--------------------
HOLDINGS
REDUCTIONS DECREASE 6/30/97
- ---------- -------- -------
Circus Circus ....................................... 250,000 --
Cisco Systems ....................................... 200,000 --
Computer Associates
International ..................................... 155,000 --
Consolidated Stores ................................. 250,000 --
Electronic Data Systems ............................. 225,000 --
Guidant ............................................. 195,000 --
Home Depot .......................................... 180,000 --
Tyco International .................................. 250,000 --
Viacom (Class B) .................................... 275,000 --
Wells Fargo ......................................... 35,000 --
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
LARGEST PORTFOLIO HOLDINGS
AT JUNE 30, 1997
SECURITY VALUE
- -------- --------------
Microsoft ..................................................... $27,823,125
Merck ......................................................... 26,392,500
Intel ......................................................... 21,239,063
Pfizer ........................................................ 20,912,500
First Data .................................................... 19,771,875
General Electric ............................................. 19,612,500
Xerox ......................................................... 17,746,875
Motorola ...................................................... 16,720,000
Gillette ...................................................... 16,581,250
American International Group .................................. 16,431,250
7
<PAGE>
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PORTFOLIO OF INVESTMENTS
June 30, 1997
SHARES VALUE
------ -----
COMMON STOCKS 100.3 %
AEROSPACE 2.1 %
Boeing 300,000 $ 15,918,750
------------
APPAREL 1.1 %
Liz Claiborne 180,000 8,392,500
------------
AUTOMOTIVE AND RELATED 2.3%
Echlin 163,000 5,868,000
Harley-Davidson 200,000 9,587,500
Valeo (France) 37,000 2,298,450
------------
17,753,950
------------
BUSINESS SERVICES 9.4 %
First Data 450,000 19,771,875
HFS* 240,000 13,920,000
IKON Office Solutions 175,000 4,364,063
Interpublic Group of Companies 250,000 15,328,125
Reynolds & Reynolds (Class A) 400,000 6,300,000
SunGard Data Systems* 250,000 11,625,000
------------
71,309,063
------------
CHEMICALS 2.4 %
Air Products & Chemicals 150,000 12,187,500
Bayer (Germany) 50,000 1,927,545
Engelhard 200,000 4,187,500
------------
18,302,545
------------
CONSUMER GOODS AND
SERVICES 10.9 %
Adidas (Germany) 25,000 2,796,661
Coca-Cola 200,000 13,500,000
Colgate-Palmolive 185,000 12,071,250
CPC International 64,500 5,954,156
Gillette 175,000 16,581,250
Mattel 218,750 7,410,156
PepsiCo 280,000 10,517,500
Procter & Gamble 100,000 14,125,000
------------
82,955,973
------------
DRUGS AND HEALTH CARE 16.7 %
American Home Products 100,000 7,650,000
Amgen* 55,000 3,195,156
Boston Scientific 200,000 12,287,500
Bristol-Myers Squibb 85,000 6,885,000
Cardinal Health 185,000 10,591,250
Columbia/HCA Healthcare 340,000 13,366,250
Eli Lilly 40,000 4,372,500
Johnson & Johnson 170,000 10,943,750
Merck 255,000 26,392,500
Novartis* (Switzerland) 2,000 3,198,356
Pfizer 175,000 20,912,500
United Healthcare 140,000 7,280,000
------------
127,074,762
------------
ENERGY 0.3 %
Huaneng Power International
(ADRs)* (China) 100,500 2,562,750
------------
FINANCIAL SERVICES 18.9 %
American International Group 110,000 16,431,250
Citicorp 55,000 6,630,938
Federal National Mortgage
Association 300,000 13,087,500
General Re 75,000 13,650,000
Green Tree Financial 190,000 6,768,750
GreenPoint Financial 110,000 7,321,875
ING Groep (Netherlands) 70,000 3,229,013
MBNA 225,000 8,240,625
MGIC Investment 300,000 14,381,250
Morgan Stanley, Dean Witter
Discover 250,000 10,765,625
Norwest 250,000 14,062,500
SunAmerica 225,000 10,968,750
UTD Overseas Bank (Singapore) 200,000 2,056,375
Travelers 255,000 16,080,937
------------
143,675,388
------------
INDUSTRIAL EQUIPMENT 5.9 %
FKI Babcock (UK) 700,000 1,979,565
General Electric 300,000 19,612,500
Honeywell 135,000 10,243,125
Illinois Tool Works 200,000 9,987,500
Keyence (Japan) 22,000 3,266,376
------------
45,089,066
------------
- -------------------
See footnotes on page 9.
8
<PAGE>
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PORTFOLIO OF INVESTMENTS
June 30, 1997
SHARES VALUE
------ -----
LEISURE AND
ENTERTAINMENT 5.4 %
Capital Radio (UK) 200,000 $ 1,788,262
Disney, Walt 115,000 9,228,750
Granada Group (UK) 180,000 2,365,497
Hilton Hotels 260,000 6,906,250
Ladbroke Group (UK) 500,000 1,954,613
Mirage Resorts* 300,000 7,575,000
Sol Melia (Spain) 70,000 2,875,280
Sun International Hotels 150,000 5,540,625
WPP Group (UK) 700,000 2,870,369
------------
41,104,646
------------
PRINTING AND
PUBLISHING 0.3 %
Elsevier (Netherlands) 120,000 2,006,218
------------
RETAIL TRADE 1.9%
Nike (Class B) 205,000 11,966,875
Shimachu (Japan) 70,000 2,103,057
------------
14,069,932
------------
STEEL 1.3 %
Nucor 175,000 9,887,500
------------
TECHNOLOGY 12.7 %
Hewlett-Packard 235,000 13,160,000
Intel 150,000 21,239,063
Microsoft* 220,000 27,823,125
Seagate Technology * 200,000 7,037,500
Secom (Japan) 35,000 2,570,742
SGS-Thomson Microelectronics*
(France) 45,000 3,553,619
Sterling Commerce* 100,000 3,125,000
Xerox 225,000 17,746,875
------------
96,255,924
------------
TELECOMMUNICATIONS 6.3 %
L.M. Ericsson Telefon
(Series B) (Sweden) 75,000 2,959,759
Grupo Iusacell (Mexico) 49,000 900,375
Lucent Technologies 185,000 13,331,562
Motorola 220,000 16,720,000
Telefonica Del Peru
(ADRs) ( Peru ) 100,000 2,618,750
Videsh Sanchar Nigam
(GDRs)*(India) 100,000 2,087,500
WorldCom* 300,000 9,590,625
------------
48,208,571
------------
TOBACCO 2.1 %
Philip Morris 360,000 15,975,000
------------
MISCELLANEOUS 0.3 %
HIS (Japan) 49,000 2,589,083
------------
TOTAL COMMON STOCKS
(Cost $489,735,490) 763,131,621
------------
SHORT-TERM HOLDINGS 0.7 %
(Cost $5,600,000) 5,600,000
------------
TOTAL INVESTMENTS 101.0%
(Cost $495,335,490) 768,731,621
OTHER ASSETS
LESS LIABILITIES (1.0)% (8,060,978)
------------
NET ASSETS 100.0% $760,670,643
============
- -------------------------------
* Non-income producing security.
See Notes to Financial Statements.
9
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments, at value:
Common stocks (cost $489,735,490) ..................... $763,131,621
Short-term holdings (cost $5,600,000) ................. 5,600,000 $768,731,621
------------
Cash .................................................................... 5,247,770
Receivable for securities sold .......................................... 3,025,124
Receivable for interest and dividends ................................... 800,342
Expenses prepaid to shareholder service agent ........................... 173,603
Receivable for Capital Stock sold ....................................... 149,344
Other 88,994
------------
TOTAL ASSETS ............................................................ 778,216,798
------------
LIABILITIES:
Payable for securities purchased ........................................ 12,041,391
Payable for Capital Stock repurchased ................................... 4,219,373
Accrued expenses, taxes, and other ...................................... 1,285,391
------------
TOTAL LIABILITIES ....................................................... 17,546,155
------------
NET ASSETS .............................................................. $760,670,643
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($1 par value; 500,000,000 shares
authorized; 115,609,183 shares outstanding):
Class A ............................................................... $112,740,770
Class B ............................................................... 445,921
Class D ............................................................... 2,422,492
Additional paid-in capital .............................................. 330,951,598
Undistributed net investment income ..................................... 1,088,895
Undistributed net realized gain ......................................... 39,634,072
Net unrealized appreciation of investments .............................. 275,575,787
Net unrealized depreciation on translation of assets and liabilities
denominated in foreign currencies ....................................... (2,188,892)
------------
NET ASSETS .............................................................. $760,670,643
============
NET ASSET VALUE PER SHARE:
CLASS A ($743,023,937 / 112,740,770 shares) ............................. $6.59
=====
CLASS B ($2,742,986 / 445,921 shares) ................................... $6.15
=====
CLASS D ($14,903,720 / 2,422,492 shares) ................................ $6.15
=====
</TABLE>
- ------------------
See Notes to Financial Statements.
10
<PAGE>
================================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $53,876) ...... $3,502,692
Interest .................................................. 851,583
Other ..................................................... 1,190,868
----------
TOTAL INVESTMENT INCOME ................................................. $ 5,545,143
EXPENSES:
Management fee ............................................ 2,487,205
Distribution and service fees ............................. 907,118
Shareholder account services .............................. 533,229
Custody and related services .............................. 102,500
Shareholder reports and communications .................... 70,163
Registration .............................................. 54,273
Auditing and legal fees ................................... 42,410
Directors' fees and expenses .............................. 18,431
Miscellaneous ............................................. 16,844
----------
TOTAL EXPENSES .......................................................... 4,232,173
-----------
NET INVESTMENT INCOME ................................................... 1,312,970
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments .......................... 31,665,614
Net realized loss from foreign currency transactions ...... (339,409)
Net change in unrealized appreciation of investments ...... 54,963,221
Net change in unrealized depreciation on translations of
assets and liabilities denominated in foreign currencies .. (1,891,945)
----------
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS ............... 84,397,481
-----------
INCREASE IN NET ASSETS FROM OPERATIONS .................................. $85,710,451
===========
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------- -----------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ............................................... $ 1,312,970 $ (820,251)
Net realized gain on investments ........................................... 31,665,614 45,998,438
Net realized loss from foreign currency transactions ....................... (339,409) (192,526)
Net change in unrealized appreciation of investments ....................... 54,963,221 80,581,682
Net change in unrealized appreciation/depreciation of assets and liabilities
denominated in foreign currencies .......................................... (1,891,945) (1,186,005)
------------ ------------
INCREASE IN NET ASSETS FROM OPERATIONS ..................................... 85,710,451 124,381,338
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments:
Class A ................................................................. -- (51,655,332)
Class B ................................................................. -- (48,869)
Class D ................................................................. -- (833,364)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS .................................. -- (52,537,565)
------------ ------------
SHARES
---------------------------------
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------- -----------------
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sale of shares:
Class A ........................ 1,150,751 1,555,646 7,121,445 8,910,750
Class B ........................ 252,293 146,621 1,448,806 807,268
Class D ........................ 324,101 648,614 1,857,638 3,516,242
Exchanged from associated Funds:
Class A ........................ 8,806,681 13,065,985 54,584,171 74,567,188
Class B ........................ 86,538 24,435 504,423 136,451
Class D ........................ 2,923,526 830,652 17,202,193 4,521,180
Shares issued in payment of
gain distributions:
Class A ........................ -- 6,962,221 -- 40,868,393
Class B ........................ -- 8,453 -- 46,662
Class D ........................ -- 147,558 -- 814,469
----------- ----------- ------------ ------------
Total ............................. 13,543,890 23,390,185 82,718,676 134,188,603
----------- ----------- ------------ ------------
Cost of Shares Repurchased:
Class A ........................ (4,608,633) (7,581,746) (28,581,957) (43,251,632)
Class B ........................ (15,125) (7,314) (88,096) (40,259)
Class D ........................ (303,379) (323,816) (1,753,257) (1,774,413)
Exchanged into associated Funds:
Class A ........................ (7,999,175) (13,094,458) (49,111,375) (74,677,608)
Class B ........................ (37,938) (12,042) (219,388) (65,695)
Class D ........................ (2,613,548) (503,789) (15,463,736) (2,685,707)
----------- ----------- ------------ -------------
Total ............................. (15,577,798) (21,523,165) (95,217,809) (122,495,314)
----------- ----------- ------------ -------------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ... (2,033,908) 1,867,020 (12,499,133) 11,693,289
=========== =========== ------------ ------------
INCREASE IN NET ASSETS ......................................... 73,211,318 83,537,062
NET ASSETS:
Beginning of period ............................................ 687,459,325 603,922,263
------------ ------------
END OF PERIOD (including undistributed/accumulated net investment
income (loss) of $1,088,895 and $(233,414), respectively) ....... $760,670,643 $687,459,325
============ ============
</TABLE>
- -------------------
* The Fund began offering Class B shares on April 22, 1996.
See Notes to Financial Statements.
12
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- Seligman Growth Fund, Inc. (the "Fund") offers
three classes of shares. All shares existing prior to May 3, 1993, the
commencement of Class D shares, were classified as Class A shares. The Fund
began offering Class B shares on April 22, 1996. 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 load ("CDSL") of 1% on redemptions within 18 months after
purchase. Class B shares are sold without an initial sales charge but are
subject to a distribution fee of 0.75%, a service fee of up to 0.25% on an
annual basis, and a CDSL, if applicable, of 5% on redemptions in the first year
after 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. 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 CDSL
of 1% imposed on certain redemptions made within one year after purchase. The
three 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 and convertible
securities 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. FOREIGN CURRENCY TRANSACTIONS -- The books and records of the Fund are
maintained in US dollars. The market value of investment securities and
other assets and liabilities denominated in foreign currencies are
translated into US dollars at the closing daily rate of exchange as reported
by a pricing service. Purchases and sales of investment securities, income,
and expenses are translated into US dollars at the rate of exchange
prevailing on the respective dates of such transactions.
The Fund separates that portion of the results of operations resulting
from changes in the foreign exchange rates from the fluctuations arising
from changes in the market prices of securities held in the portfolio.
Similarly, the Fund separates the effect of changes in foreign exchange
rates from the fluctuations arising from changes in the market prices of
portfolio securities sold during the period.
c. 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.
d. 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, except
that certain dividends from foreign securities where the ex-dividend dates
may have passed are recorded as soon as the Fund is informed of the
dividend. Interest income is recorded on an accrual basis.
e. 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, 1997, distribution and service fees were the only
class-specific expenses.
f. 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.
3. 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, 1997, amounted to $201,785,824 and $205,176,036,
respectively.
At June 30, 1997, 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, including the effects of foreign currency translations,
amounted to $276,790,273 and $3,394,142, respectively.
13
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
4. SHORT-TERM INVESTMENTS -- At June 30, 1997, the Fund owned short-term
investments which matured in less than seven days.
5. MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and
provides or arranges for the necessary personnel and facilities. Seligman
Henderson Co. (the "Subadviser"), an entity owned 50% each by the Manager and
Henderson plc, supervises and directs all or a portion of the Fund's foreign
investments. For this service, the Subadviser receives a fee from the Manager,
payable monthly. 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 or by Henderson plc. The Manager
receives a fee, calculated daily and payable monthly, equal to 0.70% per annum
of the first $1 billion of the Fund's average daily net assets, 0.65% per annum
of the next $1 billion of the Fund's average daily net assets and 0.60% per
annum of the Fund's average daily net assets in excess of $2 billion. The
management fee reflected in the Statement of Operations represents .70% per
annum of the Fund's average daily net assets.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the Fund's shares and an affiliate of the Manager, received
concessions of $12,137 from sales of Class A shares, after commissions of
$94,694 paid to dealers.
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 charges
such fees to the Fund pursuant to the Plan. For the six months ended June 30,
1997, fees incurred aggregated $830,594, or 0.24% per annum of the average daily
net assets of Class A shares.
Under the Plan, with respect to Class B 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 and Class D shares for which the organizations are
responsible; and, for Class D shares only, 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 substantially all
of 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, 1997, fees incurred under the Plan,
equivalent to 1% per annum of the average daily net assets of Class B and Class
D shares, amounted to $9,208 and $67,316, respectively.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions of Class D shares occurring within one year of purchase. For the six
months ended June 30, 1997, such charges amounted to $3,105.
The Distributor has sold its rights to collect any CDSL imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSL 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 Bshares sold. The aggregate amount of such payments
and the Class B shares distribution fees retained by the Distributor, for the
six months ended June 30, 1997, was $3,859.
Seligman Services, Inc., an affiliate of the Manager, is eligible to
receive commissions from certain sales of Fund shares, as well as distribution
and service fees pursuant to the Plan. For the six months ended June 30, 1997,
Seligman Services, Inc. received commissions of $11,453 from the sales of Fund
shares. Seligman Services, Inc. also received distribution and service fees of
$295,467, pursuant to the Plan.
Seligman Data Corp., which is owned by the Fund and certain associated
investment companies, charged the Fund at cost $522,680 for shareholder account
services. The Fund's investment in Seligman Data Corp. is recorded at a cost of
$43,170.
Certain officers and directors of the Fund are officers or directors of
the Manager, the Subadviser, 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. Interest is accrued on the
deferred balances. The cost of such fees and interest is included in directors'
fees and expenses and the accumulated balance thereof at June 30, 1997, of
$240,747 is included in other liabilities. Deferred fees and the related accrued
interest are not deductible for federal income tax purposes until such amounts
are paid.
14
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
The Fund's financial highlights are presented below. "Per share operating
performance" data is designed to allow investors to trace the operating
performance of each Class, on a per share basis, from the beginning net asset
value to the ending net asset value, so that investors can understand what
effect the individual items have on their investment, assuming it was held
throughout the period. Generally, per share amounts are derived by converting
the actual dollar amounts incurred for each item, as disclosed in the financial
statements, to their equivalent per share amounts.
"Total return based on net asset value" measures each Class's performance
assuming that investors purchased Fund shares at net asset value as of the
beginning of the period, invested dividends and capital gains paid at net asset
value, and then sold their shares at the net asset value on the last day of the
period. The total return computations do not reflect any sales charges investors
may incur in purchasing or selling shares of the Fund. Total returns for periods
of less than one year are not annualized.
"Average commission rate paid" represents the average commission paid by the
Fund to purchase or sell portfolio securities. It is determined by dividing the
total commission dollars paid by the number of shares purchased and sold during
the period for which commissions were paid. This rate is provided for periods
beginning January 1, 1996.
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------
SIX
MONTHS YEAR ENDED DECEMBER 31,
ENDED ---------------------------------------------------------
6/30/97@ 1996@ 1995@ 1994@ 1993 1992
-------- ----- ----- ----- ---- ----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD .......... $5.85 $5.22 $4.54 $5.26 $6.04 $5.95
----- ----- ----- ----- ----- -----
Net investment income (loss) .................. .01 (.01) 01 .01 .01 .03
Net realized and unrealized
investment gain (loss) ...................... .75 1.13 1.27 (.22) .35 .64
Net realized and unrealized
investment gain (loss)
on foreign currency transactions ............ (.02) (.01) .01 -- -- --
----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS .................................... .74 1.11 1.29 (.21) .36 .67
Dividends paid ................................ -- -- (.01) (.01) (.01) (.03)
Distributions from net gain realized .......... -- (.48) (.60) (.50) (1.13) (.55)
----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE .... .74 .63 .68 (.72) (.78) .09
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................ $6.59 $5.85 $5.22 $4.54 $5.26 $6.04
===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........ 12.65% 21.14% 28.47% (3.84)% 6.20% 11.30%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................ 1.18%+ 1.20% .94% .90% .89% .77%
Net investment income (loss) to
average net assets .......................... .38%+ (.12)% .17% 14% .18% .49%
Portfolio turnover ............................ 29.35% 26.05% 102.30% 93.59% 105.64% 46.96%
Average commission rate paid .................. $.0571 $.0437
NET ASSETS, END OF PERIOD
(000s omitted) ................................ $743,024 $675,086 $597,510 $513,328 $591,491 $614,860
</TABLE>
- --------------
See footnotes on page 16.
-----
15
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B CLASS D
-------------------- --------------------------------------------------
SIX SIX
MONTHS 4/22/96* MONTHS YEAR ENDED DECEMBER 31, 5/3/93*
ENDED TO ENDED -------------------------- TO
6/30/97@ 12/31/96@ 6/30/97@ 1996@ 1995@ 1994@ 12/31/93
-------- --------- -------- ----- ----- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ..... $5.49 $5.35 $5.49 $4.96 $4.38 $5.23 $5.67
----- ----- ----- ----- ----- ----- -----
Net investment loss ...................... (.01) (.03) (.01) (.05) (.04) (.12) (.03)
Net realized and unrealized investment
gain (loss) ............................ .69 .65 .69 1.07 1.21 (.23) .72
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON FOREIGN CURRENCY TRANSACTIONS ......... (.02) -- (.02) (.01) .01 -- --
----- ----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ............................... .66 .62 .66 1.01 1.18 (.35) .69
Distributions from net gain realized ..... -- (.48) -- (.48) (.60) (.50) (1.13)
----- ----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE .66 .14 .66 .53 .58 (.85) (.44)
----- ----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ........... $6.15 $5.49 $6.15 $5.49 $4.96 $4.38 $5.23
===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ... 12.02% 11.45% 12.02% 20.21% 27.01% (6.56)% 12.40%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ........... 1.94%+ 1.99%+ 1.94%+ 1.97% 1.91% 2.93% 2.17%+
Net investment loss to average net assets (.38)%+ (.83)%+ (.38)%+ (.88)% (.83)% (2.34)% (1.03)%+
Portfolio turnover ....................... 29.35% 26.05%++ 29.35% 26.05% 102.30% 93.59% 105.64%+++
Average commission rate paid ............. $.0571 $.0437++ $.0571 $.0437
NET ASSETS, END OF PERIOD
(000S OMITTED) ........................... $2,743 $880 $14,904 $11,493 $6,412 $1,742 $1,197
</TABLE>
- ------------
* Commencement of offering of shares.
@Per share amounts for the periods ended June 30, 1997, and December 31,
1996, 1995, and 1994, are calculated based on average shares outstanding.
+ Annualized.
++ For the year ended December 31, 1996.
+++ For the year ended December 31, 1993.
See Notes to Financial Statements.
16
<PAGE>
================================================================================
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN GROWTH FUND, INC.:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Seligman Growth Fund, Inc. as of
June 30, 1997, 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, 1996, 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, 1997, 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 present
fairly, in all material respects, the financial position of Seligman Growth
Fund, Inc. as of June 30, 1997, 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 1, 1997
- --------------------------------------------------------------------------------
17
<PAGE>
================================================================================
BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
FRED E. BROWN
DIRECTOR EMERITUS
DIRECTOR AND CONSULTANT, J. & W. Seligman & Co.
Incorporated
JOHN R. GALVIN 2
DEAN, Fletcher School of Law and Diplomacy
at Tufts University
DIRECTOR, USLIFE Corporation
ALICE S. ILCHMAN 3
PRESIDENT, Sarah Lawrence College
TRUSTEE, Committee for Economic Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
JOHN E. MEROW
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Aluminum Corporation
BETSY S. MICHEL 2
DIRECTOR OR TRUSTEE, Various Organizations
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
RETIRED PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN 3
DIRECTOR, The Brooklyn Union Gas Company
TRUSTEE, Committee for Economic Development
DIRECTOR, Dow Jones & Co., Inc.
DIRECTOR, Public Broadcasting Service
RICHARD R. SCHMALTZ 1
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER 3
DIRECTOR OR TRUSTEE, Various Organizations
JAMES N. WHITSON 2
EXECUTIVE VICE PRESIDENT AND DIRECTOR,
Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, Red Man Pipe and Supply Company
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
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Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
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18
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EXECUTIVE OFFICERS
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WILLIAM C. MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
LORIS D. MUZZATTI
VICE PRESIDENT
LAWRENCE P. VOGEL
VICE PRESIDENT
THOMAS G. ROSE
TREASURER
FRANK J. NASTA
SECRETARY
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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 Financial Services, 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
(800) 622-4597 24-Hour Automated
Telephone Access
Service
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GLOSSARY OF FINANCIAL TERMS
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in the fund's portfolio. The fund generates
short-term capital gains when portfolio securities held for less than one year
are sold at a profit. The fund generates long-term capital gains when portfolio
securities held for one year or more are sold at a profit. Short-term capital
gains are taxed as ordinary income. Long-term capital gains are taxed at the
federal capital gains rate appropriate to the shareholder's tax bracket.
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 increase 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. Assuming the same rate of return, 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 LOAD (CDSL) -- Depending on the class of shares owned,
a fee charged by a mutual fund when shares are sold back to the fund (the CDSL
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.
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 the 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 (OP) -- The price at which a mutual fund's shares can be
purchased. The offering price is the current net asset value per share 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, such as the fund's investment objective and policies, services,
investment restrictions, officers and directors, how shares are bought and
redeemed, fund fees and other charges, and the fund's financial statements.
SECURITIES AND EXCHANGE COMMISSION (SEC) -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- Document that contains updated or more
detailed information about a mutual fund and supplements the prospectus. It is
available at no charge upon request.
TOTAL RETURN -- A measure of fund 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 -- 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 maximum offering price of the stock.
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Adapted from the Investment Company Institute's 1996 MUTUAL FUND FACT BOOK.
20
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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.
[LOGO]
EQGR3 6/97 Printed on Recycled
