SELIGMAN
- ----------
GROWTH
FUND, INC.
MID-YEAR REPORT
JUNE 30, 1999
---- 0 ----
SEEKING LONGER-TERM
GROWTH OF CAPITAL
VALUE AND AN INCREASE
IN FUTURE INCOME
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<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]
JAMES, JESSE, AND
JOSEPH SELIGMAN, 1870
- ----------------------
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 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 ........... 9
Statement of Operations ....................... 10
Statements of Changes in Net Assets ........... 11
Notes to Financial Statements ................. 12
Financial Highlights .......................... 15
Report of Independent Auditors ................ 17
Board of Directors ............................ 18
Executive Officers AND For More Information ... 19
Glossary of Financial Terms ................... 20
<PAGE>
TO THE SHAREHOLDERS
During the first six months of 1999, Seligman Growth Fund posted a total return
of 9.84% based on the net asset value of Class A shares. Over the same period,
the Lipper Growth Funds Average returned 11.69% and the Russell 1000 Growth
Index returned 10.45%. A discussion with your Portfolio Manager 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 US
Treasury bond yield above 6%.
We are optimistic regarding the outlook for common stocks and for the Fund. The
US economy remains strong, the rest of the world is showing solid signs of
recovery, and inflation appears to be under control.
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 Growth Fund. We look forward to
continuing to serve 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 MANAGER,
MARION S. SCHULTHEIS
Q: HOW DID SELIGMAN GROWTH FUND PERFORM DURING THE FIRST SIX MONTHS OF 1999?
A: For the six-month period ended June 30, 1999, Seligman Growth Fund posted a
total return of 9.84% based on the net asset value of Class A shares. This
compares to 11.69% for the Lipper Growth Funds Average and 10.45% for the
Russell 1000 Growth Index.
Q: WHY DID THE FUND UNDERPERFORM RELATIVE TO ITS BENCHMARKS DURING THE PERIOD
UNDER REVIEW?
A: The Fund's underperformance relative to its benchmarks was primarily the
result of the Fund' s underweighting in the technology sector, which
delivered particularly strong gains.
At the beginning of the period, we had underweighted technology in an effort
to shield the Fund somewhat from what we believed would be the adverse
effects of Y2K-related spending patterns. Over the past two to three years,
many software and hardware companies saw their earnings rise sharply as a
result of increased spending on technology in an effort to correct Y2K
issues.
We believed that these high levels of spending resulted in unusually strong
earnings reports in 1998. Earnings were expected to slow as Y2K issues were
resolved. Therefore, we believed it would be difficult for these companies to
meet growth expectations for 1999. The end result would be a slowdown, or a
reversal, of the technology sector rally. However, technology stocks
continued to hit new highs at least for the first four months of the fiscal
year, and this hurt the Fund's relative returns.
Q: WHAT ECONOMIC AND MARKET FACTORS INFLUENCED THE FUND'S RESULTS DURING THE
FIRST HALF OF ITS FISCAL YEAR?
A: The past six months have provided a supportive environment for equities. The
global economy has shown solid signs of recovery, inflation has remained
benign, and the Federal Reserve Board seems to be cautiously watching for
signs of inflation, but is not overly aggressive. We believe that this
positive environment will continue throughout the remainder of 1999.
Q: WHAT WAS YOUR INVESTMENT STRATEGY?
A: During the first half of fiscal 1999, the US economy entered its ninth year
of expansion, with continued strong consumer demand and an increasingly
healthy and supportive global outlook. In this environment, we overweighted
capital goods because these companies, which have a great deal of
international exposure, would likely benefit from the improving worldwide
economy. We also overweighted the communica-
- --------------------------------------------------------------------------------
[PHOTO]
GROWTH TEAM: (FROM LEFT) DAVID LEVY, SHEILA GRAYSON (ADMINISTRATIVE
ASSISTANT), (SEATED) MARION S. SCHULTHEIS (PORTFOLIO MANAGER); (NOT PICTURED)
CRAIG CHODASH
- --------------------------------------------------------------------------------
A TEAM APPROACH
Seligman Growth Fund is managed by the Seligman Growth Team, headed by Marion S.
Schultheis. Ms. Schultheis is assisted in the management of the Fund by a group
of seasoned 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
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
MARION S. SCHULTHEIS
tions sector because global growth has driven demand for wireless,increased
bandwidth, and Internet access.
We underweighted technology during this time because we believed that these
stocks would suffer a short-term setback just ahead of the year 2000.
However, this has not proven to be the case, and we believe that we
underestimated the technology sector's enormous capacity for growth in all
types of environments.
We are now increasing the Fund's weighting to this sector because we believe
that it will be one of the greatest growth areas in the coming years. In
particular, as Y2K becomes less of a concern, companies will likely focus
their information technology budgets on creating infrastructure for
e-commerce, installing software that will enable them to deal more
effectively with their customers, and building Internet access for
business-to-business transactions as a way of reducing costs.
We underweighted health care during the period, which proved to be a
beneficial decision for the Fund. Health care stocks underperformed during
the first half of 1999 because of investor concerns that the government's
plans to reform health care reimbursements will put pricing pressure on drugs
and health care services.
During the period, we increased the Fund's exposure to cyclical growth stocks
in the energy sector and the capital goods sector. Since the beginning of the
fiscal year, the market has broadened considerably to include cyclical
stocks. We had expected that this would happen as a result of the improving
global economic outlook. This broadening was certainly positive for the
portfolio's results.
Q: WHAT INDUSTRIES AFFECTED THE FUND'S PERFORMANCE DURING THE PERIOD UNDER
REVIEW?
A: The best-performing industry sectors of the Fund during the period
were energy, communications, and utilities. The worst-performing sector was
health care, but this affected performance only slightly since the Fund was
underweighted in this area.
Q: WHAT IS YOUR OUTLOOK?
A: American business fundamentals remain strong and should gain additional
support from rising worldwide demand. Therefore, we believe that corporate
profits will grow and may even exceed expectations, despite higher interest
rates. This, in addition to a benign inflation outlook, bodes well for common
stocks.
We believe that the Fund is well positioned to benefit from a continued
strong economy in the US and from the global recovery. In addition, the
actions that we have taken during the first half of the fiscal year -- to
increase the Fund' s exposure to technology and international cyclical growth
stocks -- should benefit the portfolio during the second half of the year.
3
<PAGE>
PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
AVERAGE ANNUAL
----------------------------------------------------------
CLASS C CLASS B CLASS D
SINCE SINCE SINCE
INCEPTION SIX ONE FIVE 10 INCEPTION INCEPTION
*5/27/99* MONTHS* YEAR YEARS YEARS 4/22/96 5/3/93
-------- ------- ---- ----- ----- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge n/a 4.62% 17.45% 22.34% 16.04% n/a n/a
Without Sales Charge n/a 9.84 23.38 23.54 16.60 n/a n/a
CLASS B**
With CDSC+ n/a 4.38 17.25 n/a n/a 21.98% n/a
Without CDSC n/a 9.38 22.25 n/a n/a 22.59 n/a
CLASS C**
With Sales Charge and CDSC 6.81% n/a n/a n/a n/a n/a n/a
Without Sales Charge and CDSC 8.89 n/a n/a n/a n/a n/a n/a
CLASS D**
With 1% CDSC n/a 8.21 21.25 n/a n/a n/a n/a
Without CDSC n/a 9.21 22.25 22.38 n/a n/a 17.87%
LIPPER GROWTH FUNDS AVERAGE*** 6.00o 11.69 18.84 23.03 16.60 22.31++ 19.35+++
RUSSELL 1000 GROWTH INDEX*** 7.00o 10.45 27.27 29.65 19.80 29.66++ 23.89+++
NET ASSET VALUE CAPITAL GAIN INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 1999
JUNE 30, 1999 DECEMBER 31, 1998 JUNE 30, 1998
------------- ----------------- -------------
CLASS A $8.15 $7.42 $7.32 REALIZED $0.863 oo
CLASS B 7.35 6.72 6.72 UNREALIZED 2.355 ooo
CLASS C 7.35 n/a n/a
CLASS D 7.35 6.73 6.72
</TABLE>
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. Returns for Class A
shares are calculated with and without the effect of the initial 4.75%
maximum sales charge. Returns for Class A shares 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 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 Lipper Growth Funds Average excludes the effect of sales charges that
may be incurred in connection with purchases or sales. The monthly
performance is used in the Performance Overview. The Russell 1000 Growth
Index is an unmanaged benchmark that assumes investment of dividends and
excludes the effect of fees and sales charges. Investors cannot invest
directly in an average or an index.
+ The CDSC is 5% for periods of one year or less, and 3% since inception.
++ From April 30, 1996.
+++ From April 30, 1993.
o From May 31, 1999.
oo Excludes $0.123 per share of net gain realized in November and December
1998, payable in 1999.
ooo 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
[The following tables represent charts in the printed piece.]
CLASS A SHARES
JUNE 30, 1989 TO JUNE 30, 1999
6/30/89 9533
10953
10865
10289
6/30/90 11376
9290
10304
12175
6/30/91 12085
13058
14266
13978
6/30/92 13283
14100
15877
15798
6/30/93 15299
16669
16861
16252
6/30/94 15386
16348
16213
16963
6/30/95 18213
20035
20830
22266
6/30/96 23344
24262
25233
24888
6/30/97 28425
29676
29802
34654
6/30/98 35880
32449
40304
41716
6/30/99 44269
CLASS B SHARES
APRIL 22, 1996+ TO JUNE 30, 1999
4/22/96 10000
10150
10505
6/30/96 10355
9794
10075
10748
10729
11449
12/31/96 11145
11815
11733
10962
11409
12018
6/30/97 12485
13439
12464
13012
12545
12957
12/31/97 13050
13493
14542
15147
15450
14961
6/30/98 15660
15544
13306
14122
15217
16254
12/31/98 17504
18025
17478
18077
18390
17869
6/30/99 19145
CLASS C SHARES
MAY 27, 1999+ TO JUNE 30, 1999
5/27/99 9900
10047
10047
10325
10091
10545
10399
6/30/99 10780
CLASS D SHARES
MAY 3, 1993+ TO JUNE 30, 1999
5/3/93 10000
10370
10370
10370
6/30/93 10265
10176
10723
11146
11129
10829
11240
11562
11369
10724
10574
10574
6/30/94 10037
10316
10896
10638
10939
10531
10503
10551
10743
10958
11078
11462
6/30/95 11726
12349
12397
12877
12877
13212
13339
13716
14092
14227
14603
15114
6/30/96 14899
14092
14496
15464
15437
16473
16035
16999
16882
15772
16415
17291
6/30/97 17963
19335
17934
18722
18050
18173
18777
19414
20922
21794
22230
21526
6/30/98 22532
22364
19179
20319
21928
23423
25222
25897
25147
26009
26459
25672
6/30/99 27546
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, Class C, and Class D shares,
assuming that all distributions within the periods 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:
Capital Goods ......................... 5 $ 97,206,922 $ 157,122,825 13.6 11.4
Communications Services ............... 2 43,545,796 60,628,456 5.3 8.3
Consumer Cyclicals .................... 6 52,729,582 102,503,025 8.9 12.0
Consumer Staples ...................... 8 152,513,125 181,163,975 15.7 17.2
Energy ................................ 3 43,854,258 50,458,100 4.4 0.4
Financial Services .................... 4 39,706,364 73,067,438 6.3 6.0
Health Care ........................... 6 94,701,011 131,025,325 11.4 16.7
Technology ............................ 11 192,717,321 283,892,872 24.6 22.5
Utilities ............................. 1 20,333,495 34,247,250 3.0 1.0
----- ------------- --------------- ----- -----
46 737,307,874 1,074,109,266 93.2 95.5
SHORT-TERM HOLDINGS AND
OTHER ASSETS LESS LIABILITIES ......... 2 77,900,965 77,900,965 6.8 4.5
----- ------------- --------------- ----- -----
NET ASSETS ................................ 48 $815,208,839 $1,152,010,231 100.0 100.0
===== ============= =============== ===== =====
</TABLE>
LARGEST INDUSTRIES
JUNE 30, 1999
[The following table represents a graph in the printed piece.]
Percent of
Net Assets
-----------
TECHNOLOGY 24.6% $283,892,872
CONSUMER STAPLES 15.7% $181,163,975
CAPITAL GOODS 13.6% $157,122,825
HEALTH CARE 11.4% $131,025,325
CONSUMER CYCLICALS 8.9% $102,503,025
6
<PAGE>
PORTFOLIO OVERVIEW
LARGEST PORTFOLIO CHANGES
DURING PAST SIX MONTHS
SHARES
--------------------------
HOLDINGS
ADDITIONS INCREASE 6/30/99
- --------- -------- --------
AlliedSignal ............. 346,100 624,800
America Online ........... 166,100 166,100
Cendant .................. 936,100 936,100
Dell Computer ............ 460,400 460,400
Enron .................... 236,900 236,900
Intel .................... 185,200 370,400(1)
McDonald's ............... 215,800 368,300(2)
Monsanto ................. 415,800 415,800
Nokia (Finland) .......... 345,200 366,700(3)
Schlumberger ............. 427,600 427,600
SHARES
--------------------------
HOLDINGS
ADDITIONS INCREASE 6/30/99
- --------- -------- --------
American Home Products ... 262,500 --
Bristol-Myers Squibb ..... 258,200 249,600(4)
Cardinal Health .......... 292,500 --
EMC ...................... 284,400(5) --
Interpublic Group
of Companies ........... 284,400 90,600
Johnson & Johnson ........ 250,000 --
Lucent Technologies ...... 238,900(6) --
Microsoft ................ 145,200 531,600(7)
Motorola ................. 258,800 142,500
SBC Communications ....... 426,200 --
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 185,200 shares received as a result of a 2-for-1 stock split.
(2) Includes 152,500 shares received as a result of a 2-for-1 stock split.
(3) Includes 21,500 shares received as a result of a 2-for-1 stock split.
(4) Includes 253,900 shares received as a result of a 2-for-1 stock split.
(5) Includes 44,400 shares received as a result of a 2-for-1 stock split.
(6) Includes 77,900 shares received as a result of a 2-for-1 stock split.
(7) Includes 296,300 shares received as a result of a 2-for-1 stock split.
LARGEST PORTFOLIO HOLDINGS
JUNE 30, 1999
SECURITY VALUE
- -------- -----------
Tyco International $59,531,425
Microsoft 47,910,450
Cisco Systems 40,028,484
AlliedSignal 39,362,400
General Electric 38,646,000
Merck 35,964,000
Wal-Mart Stores 34,257,500
AES 34,247,250
Philip Morris 33,785,631
Nokia (Finland) 33,575,969
7
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 1999
SHARES VALUE
-------- ------------
COMMON STOCKS 93.2%
CAPITAL GOODS 13.6%
AlliedSignal 624,800 $ 39,362,400
General Dynamics 156,000 10,686,000
General Electric 342,000 38,646,000
Illinois Tool Works 108,500 8,897,000
Tyco International 628,300 59,531,425
------------
157,122,825
------------
COMMUNICATIONS SERVICES 5.3%
AT&T 539,850 30,130,378
MCI WorldCom* 354,500 30,498,078
------------
60,628,456
------------
CONSUMER CYCLICALS 8.9%
Cendant* 936,100 19,190,050
Dayton Hudson 208,300 13,539,500
Harley-Davidson 248,200 13,495,875
Interpublic Group of Companies 90,600 7,848,225
Lowe's Companies 250,000 14,171,875
Wal-Mart Stores 710,000 34,257,500
------------
102,503,025
------------
CONSUMER STAPLES 15.7%
CBS* 682,700 29,654,781
Coca-Cola 339,000 21,187,500
Disney (Walt) 325,300 10,023,306
McDonald's 368,300 15,215,394
Monsanto 415,800 16,398,113
Philip Morris 840,700 33,785,631
Procter & Gamble 249,800 22,294,650
Time Warner 443,600 32,604,600
------------
181,163,975
-------------
ENERGY 4.4%
Enron 236,900 19,366,575
Schlumberger 427,600 27,232,775
Transocean Offshore 147,000 3,858,750
------------
50,458,100
------------
FINANCIAL SERVICES 6.3%
American International Group 272,600 31,911,238
Citigroup 127,800 6,070,500
Fannie Mae 140,000 9,572,500
Wells Fargo 596,800 25,513,200
------------
73,067,438
------------
HEALTH CARE 11.4%
Bristol-Myers Squibb 249,600 17,581,200
Medtronic 269,100 20,956,163
Merck 486,000 35,964,000
Pfizer 191,900 21,061,025
Schering-Plough 236,500 12,534,500
Warner-Lambert 330,500 22,928,437
------------
131,025,325
------------
SHARES OR
PRIN. AMT. VALUE
---------- -------------
TECHNOLOGY 24.6%
America Online* 166,100 shs. $ 18,354,050
Cisco Systems* 621,500 40,028,484
Compuware* 689,400 21,909,994
Dell Computer* 460,400 17,020,412
Intel 370,400 22,027,225
Microsoft* 531,600 47,910,450
Motorola 142,500 13,501,875
Nokia (Finland) 366,700 33,575,969
Oracle Systems* 409,500 15,202,688
Raytheon (Class A) 453,300 31,221,038
Xerox 391,800 23,140,687
--------------
283,892,872
--------------
UTILITIES 3.0%
AES* 589,200 34,247,250
--------------
TOTAL COMMON STOCKS
(Cost $737,307,874) 1,074,109,266
--------------
FIXED TIME DEPOSITS 6.0%
Canadian Imperial Bank
of Commerce,
Grand Cayman,
5.50%, 7/1/1999 $34,500,000 34,500,000
Republic National
Bank of New York,
Grand Cayman,
5.375%, 7/1/1999 34,500,000 34,500,000
--------------
TOTAL FIXED TIME
DEPOSITS
(Cost $69,000,000) 69,000,000
--------------
TOTAL INVESTMENTS 99.2%
(Cost $806,307,874) 1,143,109,266
OTHER ASSETS
LESS LIABILITIES 0.8% 8,900,965
--------------
NET ASSETS 100.0% $1,152,010,231
==============
- -----------
* Non-income producing security.
See Notes to Financial Statements.
8
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments, at value:
Common stocks (cost $737,307,874) .......... $1,074,109,266
Short-term holdings (cost $69,000,000) ..... 69,000,000 $1,143,109,266
---------------
Receivable for securities sold .................................... 11,004,720
Receivable for interest and dividends ............................. 1,085,492
Receivable for Capital Stock sold ................................. 625,389
Investment in, and expenses prepaid to,
shareholder service agent ....................................... 207,199
Other ............................................................. 93,456
--------------
TOTAL ASSETS ...................................................... 1,156,125,522
--------------
LIABILITIES:
Payable for Capital Stock repurchased ............................. 1,384,663
Payable to custodian .............................................. 908,953
Accrued expenses and other ........................................ 1,821,675
--------------
TOTAL LIABILITIES ................................................. 4,115,291
--------------
NET ASSETS ........................................................ $1,152,010,231
--------------
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($1 par value;
500,000,000 shares authorized;
143,016,996 shares outstanding):
Class A .......................................................... $ 126,755,757
Class B .......................................................... 8,187,458
Class C .......................................................... 112,887
Class D .......................................................... 7,960,894
Additional paid-in capital ........................................ 531,664,327
Accumulated net investment loss ................................... (566,942)
Undistributed net realized gain ................................... 141,094,585
Net unrealized appreciation of investments ........................ 336,801,265
--------------
NET ASSETS ........................................................ $1,152,010,231
==============
NET ASSET VALUE PER SHARE:
CLASS A ($1,032,513,243 / 126,755,757 shares) ..................... $8.15
======
CLASS B ($60,182,419 / 8,187,458 shares) .......................... $7.35
======
CLASS C ($829,837 / 112,887 shares) ............................... $7.35
======
CLASS D ($58,484,732 / 7,960,894 shares) .......................... $7.35
======
</TABLE>
- -----------
See Notes to Financial Statements.
9
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Dividends ...................................... $ 4,371,582
Interest ....................................... 1,696,907
-----------
TOTAL INVESTMENT INCOME $ 6,068,489
EXPENSES:
Management fee .................................................... 3,677,689
Distribution and service fees ..................................... 1,614,080
Shareholder account services ...................................... 811,021
Custody and related services ...................................... 97,021
Shareholder reports and communications ............................ 63,844
Registration ...................................................... 59,358
Auditing and legal fees ........................................... 31,338
Directors' fees and expenses ...................................... 25,561
Miscellaneous ..................................................... 23,577
-----------
TOTAL EXPENSES .................................................... 6,403,489
-----------
NET INVESTMENT LOSS (335,000)
NET REALIZED AND UNREALIZED GAIN (LOSS)ON INVESTMENTS:
Net realized gain on investments ............... 123,480,939
Net change in unrealized appreciation
of investments ............................... (23,701,473)
------------
NET GAIN ON INVESTMENTS ........................................... 99,779,466
-----------
INCREASE IN NET ASSETS FROM OPERATIONS ............................ $99,444,466
===========
</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 (loss) ................................................... $ (335,000) $ 693,864
Net realized gain on investments ............................................... 123,480,939 137,133,994
Net realized loss from foreign currency transactions ........................... -- (3,183,176)
Net change in unrealized appreciation of investments ........................... (23,701,473) 126,289,172
Net change in unrealized depreciation of assets and liabilities
denominated in foreign currencies ............................................ -- 3,073,583
-------------- ------------
INCREASE IN NET ASSETS FROM OPERATIONS ......................................... 99,444,466 264,007,437
-------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ..................................................................... -- (1,259,431)
Net realized gain on investments:
Class A ..................................................................... -- (85,132,303)
Class B ..................................................................... -- (2,101,759)
Class D ..................................................................... -- (3,291,473)
-------------- ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS ...................................... -- (91,784,966)
-------------- ------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares .............................................. 26,511,805 54,962,873
Investment of dividends ........................................................ -- 937,188
Exchanged from associated Funds ................................................ 530,738,753 599,564,894
Shares issued in payment of gain distributions ................................. -- 73,163,459
-------------- ------------
Total .......................................................................... 557,250,558 728,628,414
-------------- ------------
Cost of shares repurchased ..................................................... (42,364,336) (91,215,429)
Exchanged into associated Funds ................................................ (460,156,102) (564,538,227)
-------------- ------------
Total .......................................................................... (502,520,438) (655,753,656)
-------------- ------------
INCREASE IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS ................................................... 54,730,120 72,874,758
-------------- ------------
INCREASE IN NET ASSETS ......................................................... 154,174,586 245,097,229
NET ASSETS:
Beginning of Period ............................................................ 997,835,645 752,738,416
-------------- ------------
END OF PERIOD (including accumulated net investment
loss of $566,942 and $231,942, respectively) ................................ $1,152,010,231 $997,835,645
============== ============
</TABLE>
- ---------------
See Notes to Financial Statements.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- Seligman Growth Fund, Inc. (the "Fund") 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 an
exchange 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, other
assets and liabilities denominated in foreign currencies are translated into
US dollars at the 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, 1999,
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.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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, 1999, amounted to $422,336,544 and $400,859,402,
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 $352,493,336 and $15,691,944, respectively.
4. CAPITAL SHARE TRANSACTIONS-- The Fund has authorized 500,000,000 shares of $1
par value Capital Stock. Transactions in shares of Capital Stock were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
----------------------------------------------------------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
Net proceeds from
sales of shares .................. 1,645,347 $ 12,620,540 6,247,606 $ 43,436,023
Investment of
dividends ........................ -- -- 135,042 937,188
Exchanged from
associated Funds ................. 44,476,954 342,819,302 62,988,477 438,189,220
Shares issued in
payment of gain
distributions .................... -- -- 9,931,558 68,030,814
- -------------------------------------------------------------------------------- ----------------------------------
Total .............................. 46,122,301 355,439,842 79,302,683 550,593,245
- -------------------------------------------------------------------------------- ----------------------------------
Cost of shares
repurchased ...................... (4,282,757) (33,006,070) (12,291,159) (85,236,803)
Exchanged into
associated Funds ................. (40,999,338) (315,460,891) (61,662,662) (429,794,412)
- -------------------------------------------------------------------------------- ----------------------------------
Total .............................. (45,282,095) (348,466,961) (73,953,821) (515,031,215)
- -------------------------------------------------------------------------------- ----------------------------------
Increase in Shares ................. 840,206 $ 6,972,881 5,348,862 $ 35,562,030
- -------------------------------------------------------------------------------- ----------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
----------------------------------------------------------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
Net proceeds from
sales of shares .................. 1,304,490 $ 9,038,126 1,189,920 $ 7,641,423
Exchanged from
associated Funds ................. 5,367,638 37,178,341 2,657,809 16,973,170
Shares issued in
payment of gain
distributions .................... -- -- 315,870 1,958,406
- -------------------------------------------------------------------------------- ----------------------------------
Total .............................. 6,672,128 46,216,467 4,163,599 26,572,999
- -------------------------------------------------------------------------------- ----------------------------------
Cost of shares
repurchased ...................... (509,953) (3,565,787) (220,048) (1,386,808)
Exchanged into
associated Funds ................. (1,959,622) (13,233,102) (712,218) (4,510,173)
- -------------------------------------------------------------------------------- ----------------------------------
Total .............................. (2,469,575) (16,798,889) (932,266) (5,896,981)
- -------------------------------------------------------------------------------- ----------------------------------
Increase in Shares ................. 4,202,553 $29,417,578 3,231,333 $20,676,018
- -------------------------------------------------------------------------------- ----------------------------------
MAY 27, 1999*
TO JUNE 30, 1999
- --------------------------------------------------------------------------------
CLASS C SHARES AMOUNT
- --------------------------------------------------------------------------------
Net proceeds from
sales of shares .................. 112,887 $809,257
- --------------------------------------------------------------------------------
Increase in Shares ................. 112,887 $809,257
- --------------------------------------------------------------------------------
* Commencement of offering of shares.
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
----------------------------------------------------------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
Net proceeds from
sales of shares ................... 582,013 $ 4,043,882 609,777 $ 3,885,427
Exchanged from
associated Funds .................. 21,673,356 150,741,110 22,625,884 144,402,504
Shares issued in
payment of gain
distributions ..................... -- -- 511,974 3,174,239
- -------------------------------------------------------------------------------- ----------------------------------
Total ............................... 22,255,369 154,784,992 23,747,635 151,462,170
- -------------------------------------------------------------------------------- ----------------------------------
Cost of shares
repurchased ....................... (832,108) (5,792,479) (729,441) (4,591,818)
Exchanged into
associated Funds .................. (18,871,021) (131,462,109) (20,427,040) (130,233,642)
- -------------------------------------------------------------------------------- ----------------------------------
Total ............................... (19,703,129) (137,254,588) (21,156,481) (134,825,460)
- -------------------------------------------------------------------------------- ----------------------------------
Increase in Shares .................. 2,552,240 $ 17,530,404 2,591,154 $ 16,636,710
- -------------------------------------------------------------------------------- ----------------------------------
</TABLE>
5. MANAGEMENT FEE, DISTRIBUTION SERVICES, AND OTHER TRANSACTIONS -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and
provides for 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 0.70% 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 0.70% per annum of the Fund's average daily net assets.
Seligman Advisors, Inc. (the "Distributor"), agent for the distribution of
the Fund's shares and an affiliate of the Manager, received concessions of
$31,886 from sales of Class A shares. Commissions of $241,927 and $7,573 were
paid to dealers from the 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
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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,
1999, fees incurred under the Plan aggregated $1,156,688 or 0.24% 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 $225,413, $127, and $231,852, 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 $5,762.
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 Bshares sold. The aggregate of such payments
retained by the Distributor, for the six months ended June 30, 1999, amounted to
$13,311.
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 $16,174 from the sales of shares
of the Fund. Seligman Services, Inc. also received distribution and service fees
of $385,206, pursuant to the Plan.
Seligman Data Corp., which is owned by the Fund and certain associated
investment companies, charged the Fund at cost $788,941 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 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 $224,880 is
included in other liabilities. Deferred fees and related accrued earnings are
not deductible for federal income tax purposes until such amounts are paid.
6. 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 for the past five and one-half years or from its inception if less
than five and one-half years. 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
---------------------------------------------------------------------
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ---------------------------------------------------------
6/30/99 1998 1997 1996 1995 1994
---------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $7.42 $6.08 $5.85 $5.22 $4.54 $5.26
----- ----- ----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) ......................... -- 0.01 -- (0.01) 0.01 0.01
Net realized and unrealized gain (loss) on investments 0.73 2.07 1.06 1.13 1.27 (0.22)
Net realized and unrealized gain (loss) from
foreign currency transactions ...................... -- -- (0.03) (0.01) 0.01 --
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS ..................... 0.73 2.08 1.03 1.11 1.29 (0.21)
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from net investment income ................. -- (0.01) -- -- (0.01) (0.01)
Distributions from net realized capital gain ......... -- (0.73) (0.80) (0.48) (0.60) (0.50)
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS .................................. -- (0.74) (0.80) (0.48) (0.61) (0.51)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.15 $7.42 $6.08 $5.85 $5.22 $4.54
===== ===== ===== ===== ===== =====
TOTAL RETURN: ........................................ 9.84% 35.24% 18.11% 21.14% 28.47% (3.84)%
RATIOS/SUPPLEMENTAL DATA:
NET ASSETS, END OF PERIOD (000s omitted) ............. $1,032,513 $934,654 $732,754 $675,086 $597,510 $513,328
Ratio of expenses to average net assets .............. 1.15%+ 1.14% 1.16% 1.20% 0.94% 0.90%
Ratio of net income (loss) to average net assets ..... --% 0.11% (0.02)% (0.12)% 0.17% 0.14%
Portfolio turnover rate .............................. 40.44% 77.85% 54.15% 26.05% 102.30% 93.59%
</TABLE>
- -----------------------
See footnotes on page 16.
15
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------- CLASS C
YEAR ENDED ---------
SIX MONTHS DECEMBER 31, 4/22/96* 5/27/99*
ENDED ------------------- TO TO
6/30/99 1998 1997 12/31/96 6/30/99
------- ---- ---- -------- -------
PER SHARE DATA:
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ........... $6.72 $5.60 $5.49 $5.35 $6.75
----- ----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) ................... (0.03) (0.04) (0.05) (0.03) (0.01)
Net realized and unrealized gain on investments 0.66 1.89 0.99 0.65 0.61
Net realized and unrealized gain (loss) from
foreign currency transactions .................. -- -- (0.03) -- --
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS ............... 0.63 1.85 0.91 0.62 0.60
----- ----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from net investment income ........... -- -- -- -- --
Distributions from net realized capital gain ... -- (0.73) (0.80) (0.48) --
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS ............................ -- (0.73) (0.80) (0.48) --
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................. $7.35 $6.72 $5.60 $5.49 $7.35
===== ===== ===== ===== =====
TOTAL RETURN: .................................. 9.38% 34.13% 17.10% 11.45% 8.89%
RATIOS/SUPPLEMENTAL DATA:
NET ASSETS, END OF PERIOD (000s omitted) ....... $60,182 $26,791 $4,219 $880 $830
Ratio of expenses to average net assets ........ 1.91%+ 1.90% 1.93% 1.99%+ 2.08%+
Ratio of net income (loss) to average net assets (0.76)%+ (0.65)% (0.79)% (0.83)%+ (0.78)%+
Portfolio turnover rate ........................ 40.44% 77.85% 54.15% 26.05%++ 40.44%+++
</TABLE>
<TABLE>
<CAPTION>
CLASS D
-------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ------------------------------------------------------------------
6/30/99 1998 1997 1996 1995 1994
------- ---- ---- ---- ---- ----
PER SHARE DATA:
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ... $6.73 $5.60 $5.49 $4.96 $4.38 $5.23
----- ----- ----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) ........... (0.03) (0.04) (0.05) (0.05) (0.04) (0.12)
Net realized and unrealized gain
(loss) on investments ................ 0.65 1.90 0.99 1.07 1.21 (0.23)
Net realized and unrealized gain
(loss) from foreign
currency transactions ................ -- -- (0.03) (0.01) 0.01 --
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS ....... 0.62 1.86 0.91 1.01 1.18 (0.35)
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from net investment income ... -- -- -- -- -- --
Distributions from net
realized capital gain ................ -- (0.73) (0.80) (0.48) (0.60) (0.50)
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS .................... -- (0.73) (0.80) (0.48) (0.60) (0.50)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ......... $7.35 $6.73 $5.60 $5.49 $4.96 $4.38
----- ----- ----- ----- ----- -----
TOTAL RETURN: .......................... 9.21% 34.33% 17.10% 20.21% 27.01% (6.56)%
RATIOS/SUPPLEMENTAL DATA:
NET ASSETS, END OF PERIOD (000s omitted) $58,485 $36,391 $15,765 $11,493 $6,412 $1,742
Ratio of expenses to average net assets 1.91%+ 1.90% 1.93% 1.97% 1.91% 2.93%
Ratio of net income (loss)
to average net assets ................ (0.76)%+ (0.65)% (0.79)% (0.88)% (0.83)% (2.34)%
Portfolio turnover rate ................ 40.44% 77.85% 54.15% 26.05% 102.30% 93.59%
</TABLE>
- ----------
* Commencement of offering of shares.
+ Annualized.
++ For the year ended December 31, 1996.
+++ 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 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, 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management 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 Growth Fund, Inc. 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.
DELOITTE & TOUCHE LLP
New York, New York
August 6, 1999
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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, CommScope, Inc.
DIRECTOR, C-SPAN
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
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EXECUTIVE OFFICERS
WILLIAM C. MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
MARION S. SCHULTHEIS
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
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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 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.
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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.
SELIGMAN ADVISORS, INC.
AN AFFILIATE OF
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
EQGR3 6/99 Printed on Recycled Paper
