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THIRD QUARTER REPORT
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SELIGMAN
FRONTIER
FUND, INC.
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June 30, 1995
[J&WS LOGO]
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A Capital Appreciation Fund
Established in 1984
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TO THE SHAREHOLDERS
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Seligman Frontier Fund completed its third quarter on June 30, 1995, with the
net asset value of the Class A shares at $12.32 per share, up from $11.16 at
March 31, and $11.62 at September 30, 1994 (the beginning of your Fund's fiscal
year), and the net asset value of Class D shares at $11.96, up from $10.87 and
$11.40, respectively, for the same periods.
Total returns for the past three- and nine-month periods were 10.40% and
20.04%, respectively, for Class A shares, and 10.03% and 19.10%, respectively,
for Class D shares, which compares to the 9.55% and 20.19% total returns of the
Standard & Poor's 500 Composite Stock Price Index, and the 14.22% and 22.11%
total returns for the NASDAQ Composite Index for the same periods. (Total return
reflects change in net asset value and assumes any distributions paid within the
period are reinvested in additional shares. 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.)
For both Class A and D shares, net realized gain per share from investment
transactions for the nine months ended June 30 totaled $0.47. At June 30, net
unrealized gain per share totaled $1.56. Long-term performance results follow
the portfolio.
After four years of expansion, the recent stream of economic reports shows
that the long awaited slowdown is under way. The Federal Reserve Board (FRB),
concerned that growth at an accelerated rate would swell inflationary pressures,
increased short-term interest rates seven times, beginning in early 1994.
However, evidence of this current slowdown and moderate inflation led the FRB to
lower rates in early July--the first decrease in three years.
In the financial markets, with signs pointing toward a slowing economy and
prospects favoring declining interest rates, the bond market rallied this past
quarter. Investor demand for equities also continued to be strong, as shown by
the Dow Jones Industrial Average moving to new highs and all broad market equity
indices posting positive returns.
Looking ahead, the economy is likely to regain strength later this year as
consumers respond to lower interest rates, exports are stimulated by a weaker
dollar, and business capital spending remains strong.
Since we last reported, overall earnings in the small-cap market continue
to be strong, and stocks are still trading at good values. However, in reaction
to an adjustment in consumer spending seen earlier in the year, your Manager
maintained an underweighted position in the retail sector, and further reduced
the portfolio's exposure to trucking. Proceeds were shifted to a number of
areas, including media, where the rate of advertising continues to grow, and
cash flows are increasing. The companies in this area are also benefiting from a
positive regulatory environment that looks advantageous for further acquisition
and growth.
In addition, your Fund's technology holdings, particularly electronics and
telecommunications, continue to positively affect performance. Your Manager
remains optimistic about the long-term outlook for this sector.
For more information about Seligman Frontier Fund, or your investment in
its shares, please write or call the toll-free telephone numbers listed below.
By order of the Board of Directors,
/S/ William Morris
William C. Morris
Chairman
/S/ Ronald T. Schroeder
Ronald T. Schroeder
President
July 28, 1995
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Important Telephone Numbers
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(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan
Services
(800) 622-4597 24-Hour Automated
Telephone Access Service
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PORTFOLIO OF INVESTMENTS (unaudited)
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SHARES VALUE
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COMMON STOCKS 89.3%
ADVERTISING 4.4%
DIMAC* ......................... 175,000 $ 2,712,500
Heritage Media (Class A)* ...... 160,000 4,620,000
Katz Media Group* .............. 175,000 2,778,125
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10,110,625
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AEROSPACE AND DEFENSE 1.1%
BDM International* ............ 125,000 2,562,500
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APPAREL 2.6%
Nautica Enterprises* .......... 58,000 2,088,000
St. John Knits ................ 85,000 3,814,375
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5,902,375
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BROADCASTING 3.3%
EZ Communications (Class A)* .. 94,000 1,715,500
Jacor Communications* ......... 155,000 2,538,125
United Video Satellite
Group (Class A)* ........... 110,000 3,176,250
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7,429,875
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BUSINESS GOODS AND SERVICES 10.5%
Barefoot ...................... 81,600 1,127,100
Bell & Howell Holdings* ........ 140,000 2,835,000
Bisys Group* .................. 150,000 3,318,750
Holophane* .................... 100,000 2,237,500
Interim Services* ............. 80,000 1,990,000
National Data ................. 95,000 2,185,000
Nu-Kote Holdings (Class A)* ... 155,000 4,882,500
SITEL* ........................ 200,000 3,537,500
SPS Transaction Services* ..... 50,000 1,731,250
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23,844,600
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CAPITAL GOODS 5.5%
DT Industries ................. 190,000 2,161,250
Fusion Systems* ............... 110,000 3,726,250
Greenfield Industries ......... 95,000 2,731,250
Oak Industries ................ 55,000 1,416,250
Wolverine Tube* ............... 80,000 2,570,000
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12,605,000
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COMMUNICATIONS 7.6%
Arch Communications Group* .... 135,000 2,978,438
Aspect Telecommunications* .... 70,000 3,150,000
Cellular Communications Intl.* 15,000 678,750
CIDCO* ........................ 75,000 2,357,813
Lannet Data Communications .... 100,000 2,400,000
MobileMedia (Class A) ......... 150,000 3,093,750
ProNet* ....................... 135,000 2,742,187
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17,400,938
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COMPUTER HARDWARE PERIPHERALS 3.0%
Planar System* ................ 145,000 3,226,250
Storemedia* ................... 112,000 3,500,000
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6,726,250
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COMPUTER SOFTWARE AND SERVICES 5.2%
Mentor Graphics* .............. 175,000 3,040,625
Netmanage* .................... 135,000 2,328,750
SunGard Data Systems .......... 62,000 3,255,000
Synopsys ...................... 53,000 3,312,500
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11,936,875
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CONSUMER GOODS AND SERVICES 1.1%
Benson Eyecare ................ 199,200 2,016,900
Custom Chrome ................. 26,200 517,450
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2,534,350
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DRUGS AND HEALTH CARE 5.5%
AmeriSource Health* ........... 108,500 2,495,500
Clintrials Research* .......... 30,000 393,750
Community Psychiatric Centers . 220,000 2,475,000
Lincare Holdings* ............. 80,000 2,130,000
Living Centers of America* .... 80,000 2,170,000
Protein Design Labs* .......... 132,000 2,755,500
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12,419,750
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ELECTRONICS 14.8%
Cognex ........................ 93,000 3,731,625
Credence Systems* ............. 102,500 3,075,000
Cypress Semiconductor* ........ 55,000 2,227,500
Electro Scientific Industries . 80,000 2,670,000
Electroglas* .................. 73,000 4,197,500
Electronics for Imaging* ...... 122,000 6,389,750
Lam Research* ................. 45,000 2,874,375
Lattice Semiconductor ......... 100,000 3,443,750
Sanmina* ...................... 75,000 2,878,125
Vicor* ........................ 50,000 2,240,625
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33,728,250
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FARM EQUIPMENT 1.7%
AGCO .......................... 105,000 3,937,500
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FINANCIAL SERVICES 5.8%
Commerce Bancorp .............. 115,000 2,220,937
Leasing Solutions* ............ 180,000 2,070,000
T. Rowe Price ................. 140,000 5,407,500
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June 30, 1995
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SHARES VALUE
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Roosevelt Financial Group ........108,000 $ 1,795,500
World Acceptance* .................50,000 1,687,500
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13,181,437
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FOOD AND BEVERAGES 1.6%
Canandaigua Wine (Class A)* ... 80,000 3,570,000
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MEDICAL PRODUCTS AND TECHNOLOGY 3.0%
Dentsply International ........ 75,000 2,704,687
Patterson Dental* ............. 70,000 1,653,750
Sybron International* ......... 60,000 2,392,500
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6,750,937
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METALS 0.8%
Easco ......................... 142,000 1,704,000
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OIL AND GAS 1.9%
Coflexip (ADRs) ............... 78,000 1,979,250
Pogo Producing ................ 100,000 2,287,500
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4,266,750
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REAL ESTATE INVESTMENT TRUST 0.7%
Equity Inns ................... 150,000 1,621,875
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RESTAURANTS 1.3%
Consolidated Products* ........ 75,000 975,000
International House of Pancakes* 80,000 2,080,000
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3,055,000
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RETAIL TRADE 1.9%
Casey's General Store ......... 175,000 3,117,188
Central Tractor Farm & Country* 110,000 1,141,250
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4,258,438
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SPECIALTY CHEMICALS 1.8%
AIRGAS* ....................... 55,000 1,478,125
Sealed Air* ................... 60,000 2,640,000
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4,118,125
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TRANSPORTATION 1.6%
US Xpress Enterprises (Class A)* 200,000 1,662,500
Werner Enterprises ............ 105,000 2,073,750
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3,736,250
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UTILITIES 2.6%
California Energy* ............ 285,000 4,666,875
Trigen Energy ................. 75,000 1,321,875
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5,988,750
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TOTAL COMMON STOCKS
(Cost $174,557,969 ) ................. 203,390,450
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PRINCIPAL
AMOUNT VALUE
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SHORT-TERM HOLDINGS 15.3%
Bank of Montreal, Toronto Fixed
Time Deposit 61/16%, 7/5/95 $9,000,000 $9,000,000
Canadian Imperial Bank of
Commerce, Grand Cayman
Fixed Time Deposit
6.06%, 7/5/95 .............. 7,745,000 7,745,000
First National Bank of Chicago,
Grand Cayman Fixed Time
Deposit 6%, 7/5/95 ......... 9,000,000 9,000,000
Union Bank of Switzerland,
Grand Cayman Fixed Time
Deposit 6 1/8%, 7/5/95 ...... 9,000,000 9,000,000
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TOTAL SHORT-TERM HOLDINGS
(Cost $34,745,000) .................. 34,745,000
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TOTAL INVESTMENTS 104.6%
(Cost $209,302,969) ................. 238,135,450
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OTHER ASSETS LESS
LIABILITIES (4.6)% ................ (10,470,494)
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NET ASSETS 100.0% .................... $227,664,956
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* Non-income producing security.
Note: Investments in stocks are valued at current market value 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.
3
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LARGEST PORTFOLIO CHANGES*
During Past Three Months
SHARES
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HOLDINGS
ADDITIONS INCREASE 6/30/95
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California Energy ................ 175,000 285,000
Credence Systems ................. 75,000 102,500**
Katz Media Group ................. 175,000 175,000
Lattice Semiconductor ............ 100,000 100,000
Mentor Graphics .................. 175,000 175,000
MobileMedia (Class A) ............ 150,000 150,000
Planar System .................... 145,000 145,000
SITEL ............................ 200,000 200,000
Storemedia ....................... 112,000 112,000
Synopsys ......................... 53,000 53,000
HOLDINGS
REDUCTIONS DECREASE 6/30/95
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Altera ........................... 40,000 --
Cypress Semiconductor ............ 25,000 55,000
Dorsey Trailer ................... 120,000 --
Duracraft ........................ 39,100 --
Exar ............................. 120,000 --
General Nutrition Companies ...... 60,000 --
Integrated Device Technology ..... 40,000 --
Palmer Wireless .................. 120,000 --
Transport Corp. of America ....... 113,200 --
Xilinx ........................... 20,000 --
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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 27,500 shares received as a result of a 3-for-2 stock split.
MAJOR PORTFOLIO HOLDINGS
at June 30, 1995
SECURITY VALUE
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Electronics for Imaging ................ $6,389,750
T. Rowe Price .......................... 5,407,500
Nu-Kote Holdings (Class A) ............. 4,882,500
California Energy ...................... 4,666,875
Heritage Media (Class A) ............... 4,620,000
Electroglas ............................ 4,197,500
AGCO ................................... 3,937,500
St. John Knits ......................... 3,814,375
Cognex ................................. 3,731,625
Fusion Systems ......................... 3,726,250
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LONG-TERM INVESTMENT RESULTS
AVERAGE ANNUAL TOTAL RETURNS
June 30, 1995
Class A*
ONE FIVE TEN
YEAR YEARS YEARS
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With Sales Charge 31.71% 18.43% 15.61%
Without Sales Charge 38.24 19.60 16.18
Class D**
SINCE
ONE INCEPTION
YEAR 5/3/93
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With CDSL 35.87% n/a
Without CDSL 36.87 25.32%
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* The maximum initial sales charge for Class A shares 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 price and assume that all distributions
within the period are reinvested in additional shares. The rates of return will
vary and the principal value of an investment will fluctuate. Shares, if
redeemed, may be worth more or less than their original cost. Past performance
is not indicative of future investment results.
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SELIGMAN FINANCIAL SERVICES, INC.
an affiliate of
[J&WS LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
This report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Capital Stock of
Seligman 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.
EQFR3c 6/95
