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Seligman
Frontier
Fund, Inc.
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A Capital
Appreciation Fund
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Quarterly Report
December 31, 1994
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[JWS Logo]
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To the Shareholders
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We are pleased to report Seligman Frontier Fund's investment results and
portfolio holdings at December 31, 1994. We are also pleased to inform you that
Arsen Mrakovcic has been appointed Co-Portfolio Manager, to work with Paul Wick,
Portfolio Manager of your Fund.
For your Fund's Class A shares, net asset value per share was $10.35 at
December 31, compared to $11.62 at September 30. For your Fund's Class D shares,
net asset value per share was $10.10 at December 31, compared to $11.40 at
September 30. The decline of the net asset value reflects the payment of the
capital gain distribution of $1.385 per share to both Class A and D shareholders
on November 17, 1994. In addition, for both Class A and D shareholders, net
realized gain per share from investment transactions for your Fund's first
quarter totaled $0.22. At December 31, net unrealized gain per share totaled
$1.14.
For your Fund's Class A shares, total return was 0.84% for the three months
ended December 31. For your Fund's Class D shares, total return was 0.58% for
the period. This compares to the Standard & Poor's 500 Composite Stock Price
Index's total return of -0.02% and the NASDAQ Composite Index's total return of
- - -1.63% for the period. (Total return reflects change in net asset value. Class A
returns do not, however, reflect the effect of the maximum initial sales charge
of 4.75%, and Class D returns do not reflect the effect of the 1% contingent
deferred sales load.) Longer-term performance results appear on the back cover.
Looking back on 1994, the one generalization that can be made with
confidence is that it was a turbulent and trying year for equity and bond
investors alike. The Federal Reserve Board exhibited an aggressive stance
against inflation, putting through six short-term interest rate increases by the
end of the year. This caused an upheaval in the bond market, with yields
increasing and bond prices spiraling lower--an event in the financial markets
unmatched in magnitude since 1973-74. The equity market remained hostage to the
bond market and demonstrated lackluster performance for the year.
The U.S. economy continued to grow at a modest yet controlled pace,
accompanied by corporate news of solid growth and strong earnings. This economic
news, although positive, caused the underlying question to remain: Will the
economy overheat, opening the door to increased inflation? We don't believe so.
We believe an economic slowdown is close at hand. In March of 1995, the
current growth cycle will mark its fourth year. The consumer has both increased
debt as a percentage of income and drawn down savings--suggesting nearer-term
caution after a stronger-than-expected pattern of spending in 1994. We also
believe that inflation will remain under control in light of intense global
competition, low unit labor costs, and an aging population that should favor
saving over spending. Job creation remains robust despite gains in productivity,
and U.S. competitiveness in world markets is likely to be enhanced under
G.A.T.T.--General Agreement on Tariffs and Trade.
The weightings in your Fund's portfolio remained relatively unchanged since
September 30, 1994. Companies representing good value coupled with strong
prospects for future appreciation and earnings growth were selectively added to
a number of industries. A notable example is Coflexip, a manufacturer and
installer of specialty flexible tubing for the underwater oil-drilling industry.
Profits were taken in both the retail and apparel sectors, as well as in
technology. Nevertheless, technology remains the Fund's most heavily weighted
sector. Finally, the restaurants and financial sectors remain underweighted.
Going forward, your Portfolio Managers will continue to look at opportunities
that are attractively valued and have good long-term prospects.
For information about your Fund, or your investment in its shares, please
write, or call the toll-free telephone numbers listed on page 3.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Ronald T. Schroeder
Ronald T. Schroeder
President
February 3, 1995
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Portfolio of Investments (unaudited) December 31, 1994
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Shares Value
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Common Stocks -- 90.2%
Advertising -- 3.9%
Dimac* ................................. 105,200 $ 1,328,150
Heritage Media (Class A)* .............. 70,200 1,886,625
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3,214,775
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Apparel -- 4.0%
Cygne Designs* ......................... 85,000 1,147,500
Nautica Enterprises* ................... 43,800 1,314,000
St. John Knits ......................... 30,000 858,750
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3,320,250
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Broadcasting -- 3.7%
EZ Communications (Class A)* ........... 80,000 1,020,000
Jacor Communications* .................. 50,000 675,000
United Video Satellite
Group (Class A) ..................... 55,000 1,333,750
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3,028,750
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Business Services -- 10.3%
Ceridian* .............................. 44,200 1,187,875
Corporate Express* ..................... 60,000 1,162,500
Interim Services* ...................... 50,000 1,228,125
Nu-Kote Holdings (Class A)* ............ 79,000 2,044,125
SPS Transaction Services* .............. 51,300 1,346,625
SunGard Data Systems ................... 38,200 1,461,150
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8,430,400
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Capital Goods -- 10.3%
Cognex ................................. 69,200 1,807,850
Dorsey Trailer* ........................ 56,300 840,981
DT Industries .......................... 87,500 962,500
Fusion Systems* ........................ 70,000 1,811,250
Greenfield Industries .................. 34,000 807,500
Oak Industries ......................... 44,900 1,027,088
Wolverine Tube* ........................ 50,000 1,181,250
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8,438,419
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Consumer Goods -- 1.6%
Duracraft* ............................. 41,400 1,317,038
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Drugs and Health Care -- 4.6%
Community Psychiatric Centers* ......... 65,000 715,000
Lincare Holdings* ...................... 36,900 1,074,712
Protein Design Labs* ................... 76,400 1,208,075
Vivra* ................................. 27,000 756,000
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3,753,787
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Farm Equipment -- 2.0%
AGCO ................................... 53,700 1,631,138
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Financial Services -- 6.1%
Leasing Solutions* ..................... 150,000 1,050,000
T. Rowe Price .......................... 48,000 1,434,000
Roosevelt Financial Group .............. 99,200 1,481,800
World Acceptance* ...................... 45,000 1,051,875
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5,017,675
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Food -- 2.3%
Brothers Gourmet Coffees* .............. 87,400 928,625
Canandaigua Wine (Class A)* ............ 25,000 956,250
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1,884,875
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Leisure -- 1.5%
Aldila* ................................ 107,000 1,223,813
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Medical Products and Technology -- 4.0%
Patterson Dental* ...................... 64,300 1,310,112
Sullivan Dental Products* .............. 80,500 1,086,750
Sybron International* .................. 26,700 921,150
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3,318,012
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Oil and Gas -- 1.9%
Coflexip ............................... 40,100 927,312
Pogo Producing ......................... 35,000 621,250
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1,548,562
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Restaurants -- 1.7%
International House of Pancakes* ....... 51,100 1,386,088
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Retail Trade -- 4.0%
Central Tractor Farm &Country* ......... 46,400 684,400
Ernst Home Centers* .................... 81,400 722,425
General Nutrition Companies* ........... 40,000 1,150,000
Sunglass Hut* .......................... 30,000 693,750
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3,250,575
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Specialty Chemicals -- 0.8%
Airgas* ................................ 30,000 637,500
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Technology -- 23.2%
Altera* ................................ 33,200 1,388,175
Cypress Semiconductor* ................. 70,000 1,618,750
Electroglas* ........................... 37,000 1,239,500
Electronics for Imaging* ............... 71,700 1,962,788
Exar* .................................. 30,000 727,500
Integrated Device Technology* .......... 56,400 1,667,325
Integrated Silicon Systems* ............ 41,700 1,271,850
Lam Research* .......................... 21,500 798,187
Mapinfo ................................ 15,000 380,625
Quickturn Design Systems* .............. 70,000 949,375
Sanmina* ............................... 56,500 1,553,750
Standard Microsystems .................. 53,900 1,623,738
Viewlogic Systems* ..................... 67,300 1,236,637
Western Digital* ....................... 84,600 1,417,050
Xilinx* ................................ 20,000 1,182,500
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19,017,750
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Shares or
Prin. Amt. Value
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Telecommunications -- 1.9%
Cellular Communications Intl.* ......... 15,000sh. $ 802,500
Pronet* ................................ 53,600 780,550
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1,583,050
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Transportation -- 0.9%
Transport Corp. of America* ............ 76,400 740,125
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Utilities -- 1.5%
Trigen Energy .......................... 62,300 1,222,637
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Total Common Stocks
(Cost $64,864,760) .................. 73,965,219
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Short-Term Holdings -- 7.9%
Canadian Imperial Bank of
Commerce, Grand Cayman
Fixed Time Deposit 5 1/4%,
1/3/95 .............................. $ 3,270,000 3,270,000
First National Bank of Chicago,
Grand Cayman Fixed Time
Deposit 5 3/4%, 1/3/95 .............. 3,200,000 3,200,000
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Total Short-Term Holdings
(Cost $6,470,000) ................... 6,470,000
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Total Investments -- 98.1%
(Cost $71,330,760) .................. 80,435,219
Other Assets Less
Liabilities-- 1.9% .................. 1,522,408
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Net Assets-- 100.0% .................... $81,957,627
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* Non-income producing security.
Note: Investments in stocks are valued at current market values or, in their
absence, at fair value determined in accordance with procedures approved by the
Board of Directors. Securities traded on national exchanges are valued at last
sales prices or, in their absence and in the case of over-the-counter
securities, a mean of bid and asked prices. Short-term holdings maturing in 60
days or less are valued at amortized cost.
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Important Telephone Numbers
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan Services
(800) 622-4597 24-Hour Automated Telephone
Access Service
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Largest Portfolio Changes*
During Past Three Months
Shares
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Holdings
Additions Increase 12/31/94
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AGCO ................................... 17,800 53,700+
Altera ................................. 33,200 33,200
Canandaigua Wine (Class A) ............. 25,000 25,000
Coflexip ............................... 40,100 40,100
Duracraft .............................. 21,400 41,400
Oak Industries ......................... 44,900 44,900
Quickturn Design Systems ............... 70,000 70,000
Transport Corp. of America ............. 76,400 76,400
Viewlogic Systems ...................... 67,300 67,300
Wolverine Tube ......................... 37,000 50,000
Holdings
Reductions Decrease 12/31/94
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Ashworth ............................... 70,000 --
Fisher Scientific International ........ 25,000 --
Lam Research ........................... 12,500 21,500
Parametric Technology .................. 45,000 --
Perseptive Biosystems .................. 80,000 --
Tencor Instruments ..................... 50,000 --
Urban Outfitters ....................... 30,000 --
Xilinx ................................. 20,000 20,000
Xyplex ................................. 20,000 --
Zenith Laboratories .................... 50,000 --
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* Largest portfolio changes from the previous quarter to the current quarter are
based on cost of purchases and proceeds from sales of securities.
+ Includes 17,900 shares received as a result of a 3-for-2 stock split.
Major Portfolio Holdings
at December 31, 1994
Security Value
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Nu-Kote Holdings (Class A) ............................... $2,044,125
Electronics for Imaging .................................. 1,962,788
Heritage Media (Class A) ................................. 1,886,625
Fusion Systems ........................................... 1,811,250
Cognex ................................................... 1,807,850
Integrated Device Technology ............................. 1,667,325
AGCO ..................................................... 1,631,138
Standard Microsystems .................................... 1,623,738
Cypress Semiconductor .................................... 1,618,750
Sanmina .................................................. 1,553,750
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Long-Term Investment Results
Average Annual Total Returns
December 31, 1994
Class A*
One Five Ten
Year Years Years
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With Sales Charge 1.90% 15.24% 15.96%
Without Sales Charge 7.01 16.35 16.52
Class D**
Since
One Inception
Year 5/3/93
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With CDSL 4.55% n/a
Without CDSL 5.48 21.09%
* The maximum initial sales charge for Class Ashares is 4.75%. No adjustment
was made to performance for periods prior to June 1, 1992, the commencement
date for the annual Administration, Shareholder Services and Distribution
Plan fee of up to 0.25% of average daily net assets of Class A shares.
** The returns for the one-year period for Class D shares are shown with and
without the effect of the 1% contingent deferred sales load ("CDSL")imposed
on certain shares redeemed within one year of purchase.
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These rates of return reflect changes in prices and assume that all
distributions within the period are invested in additional shares. The rates of
return will vary and the principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.
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SELIGMAN FINANCIAL SERVICES, INC.
an affiliate of
[JWS Logo]
J. & W. SELIGMAN & CO.
INCORPORATED
100 Park Avenue, New York, NY 10017
This report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Capital Stock of
Seligman Frontier Fund, Inc., which contains information about the sales
charges, management fee, and other costs. Please read the prospectus carefully
before investing or sending money.
EQFR 3a 12/94
