SELIGMAN
GROWTH
FUND, INC.
Mid-Year Report
June 30, 2000
SEEKING LONGER-TERM
GROWTH OF CAPITAL
VALUE AND AN INCREASE
IN FUTURE INCOME
[SELIGMAN 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.
[PHOTO OMITTED]
JAMES, JESSE, AND
JOSEPH SELIGMAN, 1870
TIMES CHANGE...
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 136 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 in 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
For the six-month period ended June 30, 2000, Seligman Growth Fund delivered a
strong total return of 10.79%, based on the net asset value of Class A shares.
During the same time period, the Lipper Growth Funds Average and the Russell
1000 Growth Index posted total returns of 3.50% and 4.23%, respectively. A
discussion with your Portfolio Manager regarding the Fund's results begins on
page 2.
While the first six months of 2000 were rewarding for the Fund, the overall
investment environment was challenging. The Dow Jones Industrial Average lost
9.13% and the Standard & Poor's 500 Composite Stock Index (S&P 500) was flat at
-0.42%. These returns were not surprising, given the economic environment.
In June 1999, in an effort to slow the economy, the Federal Reserve Board began
raising interest rates; the most recent was a relatively aggressive hike of 50
basis points in May. For nearly a year, the Fed's efforts seemed to have little
effect on the strong US economy and investors soon became concerned that the Fed
would be unable to achieve its objective of an economic "soft landing." This
could prompt additional rate hikes, adversely affecting corporate profits and
stock prices.
As the six months ended June 30, 2000, came to a close, the economy finally
showed signs of a slowdown. "Concept stocks," those companies with interesting
ideas but no earnings, and growth stocks temporarily regained some momentum,
after having fallen out of favor in the middle of the period. At the end of the
six months, in which investors wavered between growth and value stocks, the
broad market averages delivered generally flat results. Many of the stocks in
the Fund's portfolio, however, were strong performers overall, allowing Seligman
Growth Fund to post strong returns, both in absolute and in relative terms.
Looking ahead, we feel the economy will continue to moderate and the market will
continue to broaden. In such an environment, we think the fundamentals of
long-term investing will be more important than ever, and diversification will
once again be crucial for long-term success. We believe investors should work
with their financial advisors to balance their portfolios to include small- and
mid-cap stocks, which began to deliver strong relative returns during the second
quarter; international stocks, which should deliver strong returns as the world
economy continues to recover; and "old economy" companies, which should do well
as they begin to utilize new technologies to produce and deliver their products.
While we think the economic slowdown and the corresponding moderation of the
stock market are healthy long-term trends, the investment environment may in
fact become more challenging. In 1999, many investors were successful simply by
buying stocks that appeared to be on an upward price trend. The remainder of
2000 may present an environment that is more complex, making professional
management, such as is offered through mutual funds, crucial.
Mutual funds provide investors with an opportunity to obtain the services of
money managers who have years of experience in specific disciplines, and who
have the support of research teams to find the best opportunities throughout the
world and across markets. Mutual funds can also provide diversification, which
is important for long-term investment success.
We thank you for your continued support of Seligman Growth Fund, and look
forward to serving your investment needs for many years to come.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Brian T. Zino
Brian T. Zino
President
August 11, 2000
1
<PAGE>
Interview With Your Portfolio Manager,
Marion S. Schultheis
Q: HOW DID SELIGMAN GROWTH FUND PERFORM DURING THE FIRST SIX MONTHS OF 2000?
A: For the six months ended June 30, 2000, Seligman Growth Fund posted a total
return of 10.79% based on the net asset value of Class A shares. This return
solidly outpaced both the 3.50% total return delivered by the Fund's peers,
as measured by the Lipper Growth Funds Average, and the 4.23% total return
delivered by the Russell 1000 Growth Index.
Q: WHAT ECONOMIC AND MARKET FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE
FIRST SIX MONTHS OF 2000?
A: The investment environment during this time was a challenging one. The
Federal Reserve Board's interest rate hikes seemed, at first, to have little
effect on the strong US economy. If the economy did not slow gradually, in
other words have a "soft landing," the economy could have been at risk for a
"hard landing," or a recession. Energy prices were also on the rise, further
contributing to inflation fears.
While the market as a whole was volatile, the technology sector experienced
even greater fluctuations and, in March, suffered a substantial correction.
Expectations for these stocks, reflected in their steep valuations, had
begun to exceed the reality of what these companies could reasonably
deliver. However, during the first half, a few factors came together to
provide the catalysts for these stocks to decline to more reasonable levels.
[PHOTO OMITTED]
GLOBAL GROWTH TEAM: (STANDING, FROM LEFT) CRAIG CHODASH, DAVID LEVY, SHELIA
GRAYSON (ADMINISTRATIVE ASSISTANT), JONATHAN MARK, PETER PAONE, (SEATED, FROM
LEFT) MARION SCHULTHEIS (PORTFOLIO MANAGER), SANDRA LEU, JACK CHANG
The first contributing factor was the overall market environment of rising
interest rates and energy prices. Within the technology sector specifically,
the US government's lawsuit against Microsoft put pressure on the entire
group. Then, in February, biotechnology stocks began to decline when the
Clinton administration commented that biotechnology information should be
free, diminishing hopes for the profits of these companies. Shortly
thereafter, business-to-business Internet stocks declined. By the end of
March, the entire sector was in the midst of a correction that would not
begin to reverse until the end of May.
Q: WHAT WAS YOUR STRATEGY DURING THE FIRST HALF OF THE YEAR?
A: The first six months of this year were choppy and uncertain, making it
challenging to navigate the Fund. However, we remained a few steps ahead of
the market most of the time, allowing the Fund to deliver strong returns for
the period.
During this time, we underweighted consumer stocks, which benefited the
Fund's overall performance. With higher interest rates and energy prices, we
felt that consumer strength would necessarily diminish, making it difficult
for these companies to deliver the strong profits they saw in 1999. We
realized that this slowdown could take some time, but were convinced it
would happen. We looked ahead to the fourth
A TEAM APPROACH
Seligman Growth Fund is managed by the Seligman Global 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
quarter of 2000 -- the important holiday season -- and determined that these
companies would be unable to match the holiday season of 1999, which had
been particularly strong. During the first half of this year, the market
began to factor this probability into these companies' stock prices, and the
group was one of the worst-performing sectors for the six-month period.
We maintained a significant overweighting in energy and utility stocks,
which were among the best-performing sectors during the first half. Utility
companies across the nation, and around the world, are being deregulated,
creating enormous opportunities for growth within a sector that has not been
a growth sector in recent years. In addition, natural gas reserves fell to
20-year lows and demand for electricity soared, with about 13% of this
demand coming from the high-growth area of technology.
Throughout the period, the Fund was about benchmark-weighted in technology,
which is a substantial weighting of about half the portfolio's assets.
Despite the March correction, the technology sector delivered strong
performance for the period as a whole. Within technology, the Fund was
overweighted in optical networking and Internet infrastructure stocks,
including Internet security stocks, and these areas delivered strong
returns.
At the beginning of this fiscal year, the Fund had substantial exposure to
business-to-business Internet stocks. By the second quarter, however, we had
significantly reduced exposure to this group because we felt that
expectations were too high. Although the Fund suffered somewhat when these
stocks began their decline in February, we avoided greater losses by
reducing the Fund's exposure when we did.
During this time, we increased the Fund's weighting in pharmaceutical
stocks. These stocks suffered last year and during the first quarter of 2000
because of concerns regarding patent expirations and changes to Medicare.
During the second quarter, however, we began to take another look at these
stocks because their prices had come down, and we believe they will deliver
strong performance over the long term.
Q: WHAT ASSET ALLOCATION CHANGES, IF ANY, DO YOU PLAN TO MAKE DURING THE SECOND
HALF OF 2000?
A: We don't anticipate making any major changes. We plan to continue to
underweight consumer stocks, at least until the fourth quarter. We are also
planning to maintain the Fund's overweighting in energy stocks. The world is
still in the early stages of energy deregulation, and we think that this
will continue to benefit this sector. Also, demand for electricity has never
been higher, and this is likely to continue as technological expansion
demands more and more energy.
Within the technology sector, we look at how corporate budgets are
allocating future expenditures and attempt to predict demand in this way.
Corporations are now overwhelmingly focused on building web infrastructure
-- to communicate internally, to communicate with their customers, and to
communicate with other businesses. We are thus enthusiastic about web
infrastructure stocks, especially companies that offer Internet security. We
will also be seeking to build exposure to wireless companies, which we think
will deliver solid long-term returns. We believe this is where the future of
the Internet lies. People want to be mobile, and will want to connect to
e-mail and to the entire Internet without being dependent on physical
telephone lines and cables.
Q: WHAT IS YOUR OUTLOOK?
A: We expect continued high volatility in the market nearly through year-end.
Most market watchers believe that the Federal Reserve Board is nearly done
raising interest rates. However, it will take some time for this
interest-rate uncertainty, which has been hanging over the market for a
year, to subside. We expect the economy to achieve a soft landing, and as
the evidence for this comes in, the markets should calm by the fourth
quarter. A more moderate economy and a more stable interest-rate environment
should create a positive backdrop for stocks in 2001, and during the second
half of this year we will be positioning the Fund in an effort to take
advantage of such a scenario.
3
<PAGE>
PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
AVERAGE ANNUAL
------------------------------------------------------------------
CLASS B CLASS C CLASS D
SINCE SINCE SINCE
SIX ONE FIVE 10 INCEPTION INCEPTION INCEPTION
MONTHS* YEAR YEARS YEARS 4/22/96 5/27/99 5/3/93
------ ----- ----- ----- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge 5.53% 25.11% 24.94% 17.16% n/a n/a n/a
Without Sales Charge 10.79 31.40 26.14 17.73 n/a n/a n/a
CLASS B**
With CDSC+ 5.33 25.53 n/a n/a 24.18% n/a n/a
Without CDSC 10.33 30.53 n/a n/a 24.42 n/a n/a
CLASS C**
With Sales Charge and CDSC 8.47 28.46 n/a n/a n/a 35.81% n/a
Without Sales Charge and CDSC 10.60 30.69 n/a n/a n/a 37.97 n/a
CLASS D**
With 1% CDSC 9.46 29.69 n/a n/a n/a n/a n/a
Without CDSC 10.46 30.69 25.15 n/a n/a n/a 19.58%
LIPPER GROWTH FUNDS AVERAGE*** 3.50 19.09 22.55 17.17 21.88++ 23.970o 19.52+++
RUSSELL 1000 GROWTH INDEX*** 4.23 25.67 28.67 20.11 28.69++ 31.440o 24.13+++
<CAPTION>
NET ASSET VALUE CAPITAL GAIN INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 2000
JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 1999
------------- ----------------- -------------
CLASS A $9.55 $8.62 $8.15 REALIZED $1.045oo
CLASS B 8.44 7.65 7.35 UNREALIZED 2.714ooo
CLASS C 8.45 7.64 7.35
CLASS D 8.45 7.65 7.35
</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 of the Lipper Growth Funds Average 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 2% since inception.
++ From April 30, 1996.
+++ From April 30, 1993.
o From May 31, 1999.
oo Excludes $0.287 per share of net gain realized in November and December
1999, payable in 2000.
ooo Represents the per share amount of net unrealized appreciation of
portfolio securities as of June 30, 2000.
4
<PAGE>
Performance Overview
GROWTH OF AN ASSUMED $10,000 INVESTMENT
CLASS A SHARES CLASS B SHARES
JUNE 30, 1990 TO JUNE 30, 2000 APRIL 22, 1996+ TO JUNE 30, 2000
[LINE CHART OMITTED] [LINE CHART OMITTED]
6/30/90 9532 4/22/96 10000
7784 6/30/96 10355
8633 10748
10201 12/31/96 11145
6/30/91 10126 10962
10941 6/30/97 12485
11953 13012
11712 12/31/97 13050
6/30/92 11130 15147
11814 6/30/98 15660
13303 14122
13237 12/31/98 17504
6/30/93 12819 18077
13966 6/30/99 19145
14127 18442
13617 12/31/99 22651
6/30/94 12892 24221
13698 6/30/00 24991
13585
14213 $10,000
6/30/95 15260 Initial Amount Invested
16786
17453 $24,991**
18656 Total Value at June 30, 2000
6/30/96 19559
20328
21142
20853
6/30/97 23816
24864
24970
29036
6/30/98 30063
27188
33770
34953
6/30/99 37092
35772
43992
47156
6/30/00 48738
$9,532*
Initial Amount Invested
$48,738
Total Value at June 30, 2000
CLASS C SHARES CLASS D SHARES
MAY 27, 1999+ TO JUNE 30, 2000 MAY 3, 1993+ TO JUNE 30, 2000
[LINE CHART OMITTED] [LINE CHART OMITTED]
5/27/99 9897 5/3/93 10000
6/30/99 10777 6/30/93 10265
10425 11146
10557 11240
9/30/99 10381 10724
10807 6/30/94 10037
11368 10638
12/31/99 12734 10503
12118 10958
12884 6/30/95 11726
3/31/00 13634 12877
13101 13339
12651 14227
6/30/00 14084 6/30/96 14899
15464
$9,897* 16035
Initial Amount Invested 15772
6/30/97 17963
$14,084 18722
Total Value at June 30, 2000 18777
21794
6/30/98 22532
20319
25222
26009
6/30/99 27546
26534
32591
34849
6/30/00 35999
$10,000
Initial Amount Invested
$35,999
Total Value at June 30, 2000
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 2% or 1% CDSC for Class B or Class C shares,
respectively.
+ Inception date.
5
<PAGE>
PORTFOLIO OVERVIEW
DIVERSIFICATION OF NET ASSETS
JUNE 30, 2000
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
------------------
JUNE 30, DEC. 31,
ISSUES COST VALUE 2000 1999
------ -------------- -------------- ------- -------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS:
Capital Goods .................... 4 $ 95,492,732 $ 176,314,775 11.8 10.4
Communication Services ........... 1 24,544,846 25,211,713 1.7 2.9
Consumer Cyclicals ............... 2 13,139,707 35,930,413 2.4 8.4
Consumer Staples ................. 5 91,174,509 95,627,038 6.4 14.3
Electronic Technology ............ 10 171,340,411 324,286,744 21.8 15.2
Energy ........................... 1 19,147,632 26,674,706 1.8 1.8
Financial Services ............... 2 15,766,892 20,266,575 1.4 4.1
Health Care ...................... 10 198,977,742 273,940,787 18.4 7.1
Technology Services .............. 10 195,975,692 245,322,262 16.5 23.7
Telecommunication Equipment ...... 6 136,314,622 133,573,350 9.0 --
Transportation ................... -- -- -- -- 1.4
Utilities ........................ 3 66,995,876 102,276,137 6.9 5.5
-- -------------- -------------- ----- -----
54 1,028,870,661 1,459,424,500 98.1 94.8
SHORT-TERM HOLDING AND
OTHER ASSETS LESS LIABILITIES .... 1 28,197,773 28,197,773 1.9 5.2
-- -------------- -------------- ----- -----
NET ASSETS ........................ 55 $1,057,068,434 $1,487,622,273 100.0 100.0
== ============== ============== ===== =====
</TABLE>
LARGEST INDUSTRIES
JUNE 30, 2000
[BAR CHART OMITTED]
$324,286,744 $273,940,787 $245,322,262 $176,314,775 $133,573,350
---------- ----------- ---------- ------- -----------------
ELECTRONIC HEALTH CARE TECHNOLOGY CAPITAL TELECOMMUNICATION
TECHNOLOGY SERVICES GOODS EQUIPMENT
6
<PAGE>
PORTFOLIO OVERVIEW
LARGEST PORTFOLIO CHANGES
DURING PAST SIX MONTHS
SHARES
-----------------------
HOLDINGS
ADDITIONS INCREASE 6/30/00
--------- -------- ---------
Alza .................................. 628,400 628,400
Cisco Systems ......................... 291,200 1,128,600(1)
Elan (ADRs) ........................... 493,500 493,500
Lucent Technologies ................... 359,400 754,200
Nortel Networks ....................... 416,700 416,700
Pfizer ................................ 598,800 1,208,800
Sycamore Networks ..................... 186,500 186,500
VeriSign .............................. 121,500 121,500
Williams Companies (The) .............. 659,800 659,800
WorldCom(2) ........................... 549,200 549,200
SHARES
-----------------------------
HOLDINGS
REDUCTIONS DECREASE 6/30/00
--------------- ------------ -------------
AES ................................... 319,900 969,000(3)
America Online ........................ 455,400 --
American International Group .......... 233,800 106,950
Computer Associates International ..... 421,600 --
General Electric ...................... 358,800 510,200(4)
Motorola .............................. 249,200 --
Nokia (ADRs) .......................... 638,000(5) --
Viacom (Class B)(6) ................... 480,500 --
Wal-Mart Stores ....................... 366,700 398,100
Yahoo! ................................ 57,200(7) --
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 445,600 shares received as a result of a 2-for-1 stock split.
(2) Formerly, MCIWorldCom.
(3) Includes 595,100 shares received as a result of a 2-for-1 stock split.
(4) Includes 527,000 shares received as a result of a 3-for-1 stock split.
(5) Includes 478,500 shares received as a result of a 4-for-1 stock split.
(6) Formerly, CBS.
(7) Includes 14,300 shares received as a result of a 2-for-1 stock split.
LARGEST PORTFOLIO HOLDINGS
JUNE 30, 2000
SECURITY VALUE
---------- -----------
Microsoft ............................. $74,674,819
Corning ............................... 71,921,687
Cisco Systems ......................... 71,701,369
Intel ................................. 66,587,544
Tyco International .................... 62,947,163
Micron Technology ..................... $61,106,569
Pfizer ................................ 58,022,400
Coca-Cola ............................. 48,684,025
Lucent Technologies ................... 44,686,350
AES ................................... 44,210,625
7
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
SHARES VALUE
------------ -------------------
COMMON STOCKS 98.1%
CAPITAL GOODS 11.8%
Corning 266,500 $ 71,921,687
General Dynamics 275,700 14,405,325
General Electric 510,200 27,040,600
Tyco International 1,328,700 62,947,163
--------------
176,314,775
--------------
COMMUNICATION
SERVICES 1.7%
WorldCom* 549,200 25,211,713
--------------
CONSUMER CYCLICALS 2.4%
Harley-Davidson 337,400 12,989,900
Wal-Mart Stores 398,100 22,940,513
--------------
35,930,413
--------------
CONSUMER STAPLES 6.4%
Coca-Cola 847,600 48,684,025
Disney (Walt) 426,400 16,549,650
Kimberly-Clark 112,700 6,466,163
Procter & Gamble 222,400 12,732,400
Time Warner 147,300 11,194,800
--------------
95,627,038
--------------
ELECTRONIC TECHNOLOGY 21.8%
Broadcom (Class A)* 76,200 16,683,038
Cisco Systems* 1,128,600 71,701,369
Dell Computer* 388,700 19,179,915
EMC* 205,900 15,841,431
Intel 498,200 66,587,544
International Business Machines 96,800 10,605,650
Micron Technology* 693,900 61,106,569
Sun Microsystems* 172,800 15,719,400
VERITAS Software* 146,500 16,549,921
Xilinx* 367,000 30,311,907
--------------
324,286,744
--------------
ENERGY 1.8%
Schlumberger 357,450 26,674,706
--------------
FINANCIAL SERVICES 1.4%
American International Group 106,950 12,566,625
Citigroup 127,800 7,699,950
--------------
20,266,575
--------------
HEALTH CARE 18.4%
ALZA* 628,400 37,154,150
Elan (ADRs)* (Ireland) 493,500 23,903,906
Genentech* 77,700 13,364,400
Guidant* 150,200 7,434,900
Johnson & Johnson 327,600 33,374,250
Lilly (Eli) 392,400 39,190,950
Medtronic 278,100 13,852,856
Merck 345,600 26,481,600
Pfizer 1,208,800 58,022,400
Watson Pharmaceuticals* 393,700 21,161,375
--------------
273,940,787
--------------
TECHNOLOGY SERVICES 16.5%
BMC Software* 304,100 11,090,147
Exodus Communications* 241,400 11,127,031
JDS Uniphase* 173,500 20,792,891
Microsoft* 933,800 74,674,819
Network Appliance* 232,100 18,676,797
Oracle* 395,400 33,225,956
Phone.com* 165,700 10,806,747
PMC-Sierra* (Canada) 97,900 17,392,546
Siebel Systems* 159,600 26,109,562
VeriSign* 121,500 21,425,766
--------------
245,322,262
--------------
TELECOMMUNICATION EQUIPMENT 9.0%
Ciena* 98,900 16,482,303
Lucent Technologies 754,200 44,686,350
Nortel Networks (Canada) 416,700 28,439,775
QUALCOMM* 100,600 6,032,856
SDL* 60,800 17,341,300
Sycamore Networks* 186,500 20,590,766
--------------
133,573,350
--------------
UTILITIES 6.9%
AES* 969,000 44,210,625
Enron 473,800 30,560,100
Williams Companies (The) 659,800 27,505,412
--------------
102,276,137
--------------
TOTAL COMMOM STOCKS
(Cost $1,028,870,660) 1,459,424,500
SHORT-TERM HOLDING 3.0%
(Cost $44,600,000) 44,600,000
--------------
TOTAL INVESTMENTS 101.1%
(Cost $1,073,470,660) 1,504,024,500
OTHER ASSETS LESS LIABILITIES (1.1)% (16,402,227)
--------------
NET ASSETS 100.0% $1,487,622,273
==============
----------
* Non-income producing security.
See Notes to Financial Statements.
8
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
ASSETS:
Investments, at value:
Common stocks (cost $1,028,870,660) ....... $1,459,424,500
Short-term holding (cost $44,600,000) ..... 44,600,000 $1,504,024,500
--------------
Cash ....................................................... 119,859
Receivable for securities sold ............................. 7,533,621
Receivable for Capital Stock sold .......................... 2,704,497
Receivable for interest and dividends ...................... 439,740
Investment in, and expenses prepaid to,
shareholder service agent ................................ 194,784
Other ...................................................... 51,727
---------------
TOTAL ASSETS ............................................... 1,515,068,728
---------------
LIABILITIES:
Payable for securities purchased ........................... 24,544,846
Payable for Capital Stock repurchased ...................... 727,412
Accrued expenses and other ................................. 2,174,197
---------------
TOTAL LIABILITIES .......................................... 27,446,455
---------------
NET ASSETS ................................................. $1,487,622,273
===============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($1 par value;
500,000,000 shares authorized;
158,632,528 shares outstanding):
Class A .................................................. $133,421,825
Class B .................................................. 12,121,020
Class C .................................................. 4,965,189
Class D .................................................. 8,124,494
Additional paid-in capital ................................. 691,018,787
Accumulated net investment loss ............................ (3,840,777)
Undistributed net realized gain ............................ 211,257,895
Net unrealized appreciation of investments ................. 430,553,840
---------------
NET ASSETS ................................................. $1,487,622,273
===============
NET ASSET VALUE PER SHARE:
CLASS A ($1,274,729,981 / 133,421,825 shares) .............. $9.55
===============
CLASS B ($102,340,171 / 12,121,020 shares) ................. $8.44
===============
CLASS C ($41,934,906 / 4,965,189 shares) ................... $8.45
===============
CLASS D ($68,617,215 / 8,124,494 shares) ................... $8.45
===============
----------
See Notes to Financial Statements.
9
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld
of $18,841) ................................. $2,373,862
Interest ...................................... 2,280,344
------------
TOTAL INVESTMENT INCOME ....................... $4,654,206
EXPENSES:
Management fee ................................ 4,618,604
Distribution and service fees ................. 2,278,572
Shareholder account services .................. 1,002,874
Shareholder reports and communications ........ 118,411
Custody and related services .................. 109,888
Registration .................................. 72,979
Auditing and legal fees ....................... 32,372
Directors' fees and expenses .................. 11,690
Miscellaneous ................................. 8,705
------------
TOTAL EXPENSES ................................................ 8,254,095
------------
NET INVESTMENT LOSS ........................................... (3,599,889)
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments .............. 165,760,478
Net change in unrealized appreciation
of investments .............................. (18,543,269)
------------
NET GAIN ON INVESTMENTS ....................................... 147,217,209
------------
INCREASE IN NET ASSETS FROM OPERATIONS ........................ $143,617,320
============
----------
See Notes to Financial Statements.
10
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2000 1999
-------------- --------------
OPERATIONS:
Net investment loss ........................ $(3,599,889) $(2,859,030)
Net realized gain on investments ........... 165,760,478 223,944,598
Net change in unrealized appreciation
of investments ........................... (18,543,269) 88,594,371
-------------- --------------
INCREASE IN NET ASSETS FROM OPERATIONS ..... 143,617,320 309,679,939
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ................................. -- --
Net realized gain on investments:
Class A ................................. -- (118,219,808)
Class B ................................. -- (8,932,891)
Class C ................................. -- (934,289)
Class D ................................. -- (7,151,077)
-------------- --------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS .. -- (135,238,065)
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares .......... 57,707,145 66,188,379
Exchanged from associated Funds ............ 89,450,032 806,017,257
Value of shares issued in payment
of gain distributions .................... -- 110,640,428
-------------- --------------
Total ...................................... 147,157,177 982,846,064
-------------- --------------
Cost of shares repurchased ................. (57,656,290) (88,487,332)
Exchanged into associated Funds ............ (79,178,848) (732,953,337)
-------------- --------------
Total ...................................... (136,835,138) (821,440,669)
-------------- --------------
INCREASE IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS ............... 10,322,039 161,405,395
-------------- --------------
INCREASE IN NET ASSETS ..................... 153,939,359 335,847,269
NET ASSETS:
Beginning of period ........................ 1,333,682,914 997,835,645
-------------- --------------
END OF PERIOD (including accumulated
net investment loss of $3,840,777
and $240,887, respectively) ............. $1,487,622,273 $1,333,682,914
============== ==============
----------
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-specific 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 accounting principles generally accepted in the
United States of America, 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, 2000, 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, 2000, amounted to $853,107,964 and $805,598,352,
respectively.
At June 30, 2000, 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 $456,937,900 and $26,384,060, 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:
CLASS A
-------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
-------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ------------ -------------
Net proceeds from
sales of shares 2,390,380 $ 21,065,163 4,110,733 $ 32,325,449
Exchanged from
associated Funds 7,069,686 61,979,072 65,446,614 512,373,199
Shares issued in
payment of gain
distributions -- -- 12,019,564 95,075,559
------------ ------------ ------------ -------------
Total 9,460,066 83,044,235 81,576,911 639,774,207
------------ ------------ ------------ -------------
Cost of shares
repurchased (5,097,993) (44,619,171) (8,682,126) (68,659,496)
Exchanged into
associated Funds (6,518,109) (57,265,712) (63,232,475) (495,275,862)
------------ ------------ ------------ -------------
Total (11,616,102) (101,884,883) (71,914,601) (563,935,358)
------------ ------------ ------------ -------------
Increase (Decrease) (2,156,036) $(18,840,648) 9,662,310 $ 75,838,849
============ ============ ============ =============
CLASS B
----------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
---------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- ---------- -----------
Net proceeds from
sales of shares . 1,178,035 $9,093,128 2,245,719 $15,855,044
Exchanged from
associated Funds 2,120,403 16,215,038 10,071,244 71,470,757
Shares issued in
payment of gain
distributions ... -- -- 1,137,929 7,988,123
---------- ----------- ---------- -----------
Total ............. 3,298,438 25,308,166 13,454,892 95,313,924
---------- ----------- ---------- -----------
Cost of shares
repurchased ..... (796,047) (6,150,318) (1,309,113) (9,355,564)
Exchanged into
associated Funds (1,656,098) (12,441,074) (4,855,957) (34,220,623)
---------- ----------- ---------- -----------
Total ............. (2,452,145) (18,591,392) (6,165,070) (43,576,187)
---------- ----------- ---------- -----------
Increase .......... 846,293 $6,716,774 7,289,822 $51,737,737
========== =========== ========== ===========
CLASS C
--------------------------------------------------------
SIX MONTHS ENDED MAY 27, 1999*
JUNE 30, 2000 TO DECEMBER 31, 1999
-----------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- -------------------------
Net proceeds from
sales of shares 3,201,782 $24,872,428 1,590,880 $11,530,253
Exchanged from
associated Funds 383,821 3,058,473 171,358 1,269,585
Shares issued in
payment of gain
distributions -- -- 128,844 904,484
------------ ------------- ------------ -------------
Total 3,585,603 27,930,901 1,891,082 13,704,322
------------ ------------- ------------ -------------
Cost of shares
repurchased (127,979) (998,552) (6,954) (50,819)
Exchanged into
associated Funds (228,546) (1,690,992) (148,017) (1,065,006)
------------ ------------- ------------ -------------
Total (356,525) (2,689,544) (154,971) (1,115,825)
------------ ------------- ------------ -------------
Increase 3,229,078 $25,241,357 1,736,111 $12,588,497
============ ============= ============ =============
----------
* Commencement of offering of shares.
CLASS D
---------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
---------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- ----------- ------------
Net proceeds from
sales of shares . 338,451 $2,676,426 926,888 $6,477,633
Exchanged from
associated Funds 1,066,565 8,197,449 31,344,202 220,903,716
Shares issued in
payment of gain
distributions ... -- -- 950,466 6,672,262
---------- ----------- ---------- -----------
Total ............. 1,405,016 10,873,875 33,221,556 234,053,611
---------- ----------- ----------- ------------
Cost of shares
repurchased ..... (761,588) (5,888,249) (1,470,418) (10,421,453)
Exchanged into
associated Funds (1,032,352) (7,781,070) (28,646,374) (202,391,846)
---------- ----------- ----------- ------------
Total ............. (1,793,940) (13,669,319) (30,116,792) (212,813,299)
---------- ----------- ----------- ------------
Increase (Decrease) (388,924) $(2,795,444) 3,104,764 $21,240,312
======== =========== =========== ===========
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 0.69% 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
$31,578 from sales of
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Class A shares. Commissions of $238,477 and $230,727 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
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,
2000, fees incurred under the Plan aggregated $1,397,794 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, 2000, 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 $443,200, $124,873, and $312,705, 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, 2000, such charges amounted to $11,910.
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, 2000, amounted to
$13,404.
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, 2000,
Seligman Services, Inc. received commissions of $22,894 from the sales of shares
of the Fund. Seligman Services, Inc. also received distribution and service fees
of $444,373, pursuant to the Plan.
Seligman Data Corp., which is owned by the Fund and certain associated
investment companies, charged the Fund at cost $989,143 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, 2000, of $195,220 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 $825 million
committed line of credit that is shared by substantially all open-end 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 0.10% 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 in June 2001, but is renewable annually with
the consent of the participating banks. For the six months ended June 30, 2000,
the Fund did not borrow 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 ----------------------------------------------------------------------
6/30/00 1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD .... $8.62 $7.42 $6.08 $5.85 $5.22 $4.54
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) ............ (0.02) (0.02) 0.01 -- (0.01) 0.01
Net realized and unrealized gain
on investment .......................... 0.95 2.18 2.07 1.06 1.13 1.27
Net realized and unrealized gain (loss)
from foreign currency transactions .... -- -- -- (0.03) (0.01) 0.01
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS ........ 0.93 2.16 2.08 1.03 1.11 1.29
---------- ---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS:
Dividends from net investment income .... -- -- (0.01) -- -- (0.01)
Distributions from net realized
capital gain .......................... -- (0.96) (0.73) (0.80) (0.48) (0.60)
---------- ---------- ---------- ---------- ---------- ----------
TOTAL DISTRIBUTIONS ..................... -- (0.96) (0.74) (0.80) (0.48) (0.61)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD .......... $9.55 $8.62 $7.42 $6.08 $5.85 $5.22
========== ========== ========== ========== ========== ==========
TOTAL RETURN: ........................... 10.79% 30.27% 35.24% 18.11% 21.14% 28.47%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $1,274,730 $1,169,098 $934,654 $732,754 $675,086 $597,510
Ratio of expenses to average net assets . 1.13%+ 1.16% 1.14% 1.16% 1.20% 0.94%
Ratio of net investment income (loss)
to average net assets ................. (0.44)%+ (0.19)% 0.11% (0.02)% (0.12)% 0.17%
Portfolio turnover rate ................. 61.03% 92.24% 77.85% 54.15% 26.05% 102.30%
</TABLE>
----------
See footnotes on page 16.
15
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B CLASS C
---------------------------------------------------- ---------------------
SIX MONTHS YEAR ENDED DECEMBER 31, 4/22/96* SIX MONTHS 5/27/99*
ENDED ---------------------------- TO ENDED TO
6/30/00 1999 1998 1997 12/31/96 6/30/00 12/31/99
-------- ------- ------- ------ ----- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ............. $7.65 $6.72 $5.60 $5.49 $5.35 $7.64 $6.75
-------- ------- ------- ------ ----- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss .............................. (0.04) (0.07) (0.04) (0.05) (0.03) (0.04) (0.03)
Net realized and unrealized gain on investments .. 0.83 1.96 1.89 0.99 0.65 0.85 1.88
Net realized and unrealized loss from
foreign currency transactions .................. -- -- -- (0.03) -- -- --
-------- ------- ------- ------ ----- ------- -------
TOTAL FROM INVESTMENT OPERATIONS ................. 0.79 1.89 1.85 0.91 0.62 0.81 1.85
-------- ------- ------- ------ ----- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ............. -- -- -- -- -- -- --
Distributions from net realized capital gain ..... -- (0.96) (0.73) (0.80) (0.48) -- (0.96)
-------- ------- ------- ------ ----- ------- -------
TOTAL DISTRIBUTIONS .............................. -- (0.96) (0.73) (0.80) (0.48) -- (0.96)
-------- ------- ------- ------ ----- ------- -------
NET ASSET VALUE, END OF PERIOD ................... $8.44 $7.65 $6.72 $5.60 $5.49 $8.45 $7.64
======== ======= ======= ====== ===== ======= =======
TOTAL RETURN: .................................... 10.33% 29.41% 34.13% 17.10% 11.45% 10.60% 28.66%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ......... $102,340 $86,228 $26,791 $4,219 $880 $41,935 $13,272
Ratio of expenses to average net assets .......... 1.89%+ 1.92% 1.90% 1.93% 1.99%+ 1.89%+ 1.80%+
Ratio of net investment income (loss)
to average net assets .......................... (1.20)%+ (0.95)% (0.65)% (0.79)% (0.83)%+ (1.20)%+ (1.02)%+
Portfolio turnover rate .......................... 61.03% 92.24% 77.85% 54.15% 26.05%++ 61.03% 92.24%+++
</TABLE>
<TABLE>
<CAPTION>
CLASS D
-------------------------------------------------------------------------
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ----------------------------------------------------------
6/30/00 1999 1998 1997 1996 1995
------- ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................... $7.65 $6.73 $5.60 $5.49 $4.96 $4.38
------- ------- ------- ------- ------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss .................................... (0.04) (0.07) (0.04) (0.05) (0.05) (0.04)
Net realized and unrealized gain
on investments ....................................... 0.84 1.95 1.90 0.99 1.07 1.21
Net realized and unrealized gain
(loss) from foreign currency
transactions ......................................... -- -- -- (0.03) (0.01) 0.01
------- ------- ------- ------- ------- ----------
TOTAL FROM INVESTMENT OPERATIONS ....................... 0.80 1.88 1.86 0.91 1.01 1.18
------- ------- ------- ------- ------- ----------
LESS DISTRIBUTIONS:
Dividends from net investment income ................... -- -- -- -- -- --
Distributions from net realized
capital gain ......................................... -- (0.96) (0.73) (0.80) (0.48) (0.60)
------- ------- ------- ------- ------- ----------
TOTAL DISTRIBUTIONS .................................... -- (0.96) (0.73) (0.80) (0.48) (0.60)
------- ------- ------- ------- ------- ----------
NET ASSET VALUE, END OF PERIOD ......................... $8.45 $7.65 $6.73 $5.60 $5.49 $4.96
======= ======= ======= ======= ======= ==========
TOTAL RETURN: 10.46% 29.22% 34.33% 17.10% 20.21% 27.01%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ............... $68,617 $65,085 $36,391 $15,765 $11,493 $6,412
Ratio of expenses to average net assets ................ 1.89%+ 1.92% 1.90% 1.93% 1.97% 1.91%
Ratio of net investment income (loss)
to average net assets ................................ (1.20)%+ (0.95)% (0.65)% (0.79)% (0.88)% (0.83)%
Portfolio turnover rate ................................ 61.03% 92.24% 77.85% 54.15% 26.05% 102.30%
</TABLE>
----------
* Commencement of offering of shares.
+ Annualized.
++ For the year ended December 31, 1996.
+++ For the year ended December 31, 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 of Seligman
Growth Fund, Inc., including the portfolio of investments, as of June 30, 2000,
and 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, 1999, 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 auditing standards generally accepted
in the United States of America. 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, 2000, 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, the 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, 2000, the results of its operations
for the six months then ended, and the changes in its net assets, and the
financial highlights for all the respective stated periods, in conformity with
accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
New York, New York
August 11, 2000
17
<PAGE>
BOARD OF DIRECTORS
JOHN R. GALVIN (2, 4)
DIRECTOR, Raytheon Company
DEAN EMERITUS, Fletcher School of Law and Diplomacy
at Tufts University
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)
DIRECTOR, Commonwealth Industries, Inc.
TRUSTEE, New York-Presbyterian Hospital
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
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
RICHARD R. SCHMALTZ (1)
MANAGING DIRECTOR, DIRECTOR OF INVESTMENTS,
J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER (3, 4)
RETIRED VICE PRESIDENT, Pfizer Inc.
JAMES N. WHITSON (2, 4)
DIRECTOR AND CONSULTANT, Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, CommScope, Inc.
BRIAN T. ZINO (1)
PRESIDENT
PRESIDENT, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
DIRECTOR, ICI Mutual Insurance Company
MEMBER OF THE BOARD OF GOVERNORS,
Investment Company Institute
DIRECTOR EMERITUS
FRED E. BROWN
DIRECTOR AND CONSULTANT,
J. & W. Seligman & Co. Incorporated
----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
18
<PAGE>
EXECUTIVE OFFICERS
WILLIAM C. MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
MARION S. SCHULTHEIS
VICE PRESIDENT
LAWRENCE P. VOGEL
VICE PRESIDENT AND TREASURER
FRANK J. NASTA
SECRETARY
FOR MORE INFORMATION
MANAGER
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
GENERAL COUNSEL
Sullivan & Cromwell
INDEPENDENT AUDITORS
Deloitte & Touche LLP
GENERAL DISTRIBUTOR
Seligman Advisors, Inc.
100 Park Avenue
New York, NY 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
IMPORTANT TELEPHONE NUMBERS
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan Services
(212) 682-7600 Outside the United States
(800) 622-4597 24-Hour Automated Telephone Access Service
19
<PAGE>
GLOSSARY OF FINANCIAL TERMS
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in a fund's portfolio.
CAPITAL APPRECIATION/DEPRECIATION -- An increase or decrease in the market value
of a mutual fund's portfolio securities, which is reflected in the net asset
value of the fund's shares. Capital appreciation/depreciation of an individual
security is in relation to the original purchase price.
COMPOUNDING -- The change in the value of an investment as shareholders receive
earnings on their investment's earnings. For example, if $1,000 is invested at a
fixed rate of 7% a year, the initial investment is worth $1,070 after one year.
If the return is compounded, second year earnings will not be based on the
original $1,000, but on the $1,070, which includes the first year's earnings.
CONTINGENT DEFERRED SALES CHARGE (CDSC) -- Depending on the class of shares
owned, a fee charged by a mutual fund when shares are sold back to the fund. The
CDSC expires after a fixed time period.
DIVIDEND -- A payment by a mutual fund, usually derived from the fund's net
investment income (dividends and interest less expenses).
DIVIDEND YIELD -- A measurement of a fund's dividend as a percentage of the
maximum offering price or net asset value.
EXPENSE RATIO -- The cost of doing business for a mutual fund, expressed as a
percent of the fund's net assets.
INVESTMENT OBJECTIVE -- The shared investment goal of a fund and its
shareholders.
MANAGEMENT FEE -- The amount paid by a mutual fund to its investment advisor(s).
MULTIPLE CLASSES OF SHARES -- Although an individual mutual fund invests in only
one portfolio of securities, it may offer investors several purchase options
which are "classes" of shares. Multiple classes permit shareholders to choose
the fee structure that best meets their needs and goals. Generally, each class
will differ in terms of how and when sales charges and certain fees are
assessed.
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD) -- A self-regulatory
body with authority over firms that distribute mutual funds.
NET ASSET VALUE (NAV) PER SHARE -- The market worth of one fund share, obtained
by adding a mutual fund's total assets (securities, cash, and any accrued
earnings), subtracting liabilities, and dividing the resulting net assets by the
number of shares outstanding.
OFFERING PRICE -- The price at which a mutual fund's share can be purchased. The
offering price per share is the current net asset value plus any sales charge.
PORTFOLIO TURNOVER -- A measure of the trading activity in a mutual fund's
investment portfolio that reflects how often securities are bought and sold.
PROSPECTUS -- The legal document describing a mutual fund to all prospective
shareholders. It contains information required by the Securities and Exchange
Commission (SEC), such as a fund's investment objective and policies, services,
investment restrictions, how shares are bought and sold, fund fees and other
charges, and the fund's financial highlights.
SEC YIELD -- SEC Yield refers to the net income earned by a fund during a recent
30-day period. This income is annualized and then divided by the maximum
offering price per share on the last day of the 30-day period. The SEC Yield
formula reflects semiannual compounding.
SECURITIES AND EXCHANGE COMMISSION -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- A document that contains more detailed
information about an investment company and that supplements the prospectus. It
is available at no charge upon request.
TOTAL RETURN -- A measure of a fund's performance encompassing all elements of
return. Reflects the change in share price over a given period and assumes all
distributions are taken in additional fund shares. The AVERAGE ANNUAL TOTAL
RETURN represents the average annual compounded rate of return for the periods
presented.
YIELD ON SECURITIES -- For bonds, the current yield is the coupon rate of
interest, divided by the purchase price. For stocks, the yield is measured by
dividing dividends paid by the market price of the stock.
----------
Adapted from the Investment Company Institute's 2000 MUTUAL FUND FACT BOOK.
20
<PAGE>
SELIGMAN ADVISORS, INC.
AN AFFILIATE OF
[SELIGMAN LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
www.seligman.com
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.
EQGR3 6/00 [RECYCLE LOGO] Printed on Recycled Paper
