TO THE SHAREHOLDERS
We are pleased to update you on Seligman Frontier Fund with this First Quarter
Report.
For CLASS A and D shares, net realized gain per share from investment
transactions for the three months ended December 31, 1995, totaled $0.20. Net
unrealized gain per share totaled $1.51 at December 31. A realized gain
distribution of $0.477 per share was paid on November 17, 1995, to shareholders
of record November 13, 1995.
After a slow start, the small-cap market--as did all equity markets--had a
strong year in 1995, due to many factors including low inflation, falling
interest rates, and strong corporate earnings.
All equity markets, however, did teeter towards the end of the year, due in
part to the Federal budget stalemate between the White House and Congress, which
brought on fears of higher interest rates and inflation. Nevertheless, the
deadlock in Washington did not deter the Federal Reserve Board from lowering
short-term interest rates on December 19--a move that quickly rejuvenated the
markets. Despite this, the small-cap market, as measured by the Russell 2000,
had a weak fourth quarter relative to the large-cap market, as measured by the
Standard & Poor's 500 Composite Stock Price Index (S&P 500). This was because
the Russell 2000 has a heavier weighting in technology than the S&P 500, and
technology was the weakest performing sector in the fourth quarter.
In the past three months, your Fund's technology holdings, which
represented 25% of the portfolio, remained under pressure, due mainly to pricing
pressure on certain types of memory chips, slower unit growth in the cellular
phone market, and the general market reaction after mid-year highs. However,
fundamentals within the technology sector remain strong and we continue to be
positive on the sector. In addition, retail and trucking had a tough quarter, as
both sectors were adversely affected by a mediocre holiday season. On the
upside, your Fund's positions in business goods and services were particularly
strong. One notable area that your Manager selectively added to was the health
care sector, specifically medical technology and services.
Going forward, your Manager remains optimistic and will continue to strive
to maintain your Fund's excellent performance record.
In closing, the slowing economy, the budget negotiations, and the 1996
Presidential election are a few of the factors that may create somewhat more
volatile markets in the year ahead. We remain optimistic about the small-cap
market and your Fund's performance. We will continue to search for, and invest
in, those companies that can sustain earnings growth in a challenging and
competitive global business environment--a strategy we believe is key to
investment performance.
We thank you for your continued investment in Seligman Frontier Fund, and
look forward to serving your investment needs in 1996 and the years ahead.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Brian T. Zino
Brian T. Zino
President
February 2, 1996
Important Telephone Numbers
- ---------------------------
(800) 221-2450 SHAREHOLDER SERVICES
(800) 445-1777 RETIREMENT PLAN SERVICES
(800) 622-4597 24-HOUR AUTOMATED
TELEPHONE
ACCESS SERVICE
1
<PAGE>
PORTFOLIO OF INVESTMENTS (unaudited)
SHARES VALUE
------ ------
COMMON STOCKS 91.6%
ADVERTISING 2.2%
DIMAC* ........................ 171,100 $ 4,662,475
Heritage Media (Class A)* ..... 168,000 4,305,000
Katz Media Group* ............. 156,000 2,749,500
-----------
11,716,975
-----------
AEROSPACE AND DEFENSE 1.5%
BDM International* 275,000 7,975,000
-----------
APPAREL 1.0%
St. John Knits ................ 98,500 5,232,813
-----------
BROADCASTING 2.7%
Argyle Television ............. 130,000 2,242,500
Evergreen Media (Class A)* .... 200,000 6,400,000
Jacor Communications* ......... 180,000 3,060,000
United Video Satellite
Group (Class A)* ........... 90,000 2,452,500
-----------
14,155,000
-----------
BUSINESS GOODS AND SERVICES 15.7%
Barefoot ...................... 290,000 2,990,625
Bell & Howell Holdings* ....... 186,800 5,230,400
Bisys Group* .................. 220,000 6,710,000
Ceridian* ..................... 155,000 6,393,750
Corporate Express* ............ 260,000 7,800,000
DST Systems* .................. 215,000 6,127,500
HFS Group* .................... 65,000 5,313,750
Inter-Tel* .................... 325,000 5,037,500
National Data ................. 240,000 5,970,000
Nu-Kote Holdings (Class A)* ... 310,000 5,308,750
SITEL* ........................ 309,000 9,424,500
SPS Transaction Services* ..... 100,000 2,962,500
US Office Products* ........... 350,000 7,896,875
United Transnet* .............. 370,000 5,688,750
-----------
82,854,900
-----------
CAPITAL GOODS 5.3%
Carbide/Graphite Group* ....... 400,000 5,750,000
DT Industries ................. 190,000 2,517,500
Fusion Systems* ............... 110,000 3,052,500
Greenfield Industries ......... 100,000 3,112,500
Oak Industries* ............... 150,000 2,812,500
UCAR International* ........... 215,000 7,256,250
Wolverine Tube* ............... 90,000 3,358,125
-----------
27,859,375
-----------
COMMUNICATIONS 6.4%
ADFlex Solutions* ............. 183,000 4,849,500
Arch Communications Group* .... 220,000 5,293,750
Aspect Telecommunications* .... 180,000 6,007,500
Cellular Communications Intl.*. 15,000 751,875
Cidco* ........................ 231,200 5,866,700
Madge Networks* ............... 99,090 4,415,698
MobileMedia (Class A)* ........ 150,000 3,318,750
ProNet* ....................... 100,000 2,956,250
-----------
33,460,023
-----------
COMPUTER HARDWARE
PERIPHERALS 2.4%
Electronics for Imaging* ...... 120,000 5,205,000
Planar System* ................ 390,000 7,458,750
-----------
12,663,750
-----------
COMPUTER SOFTWARE
AND SERVICES 4.6%
Mentor Graphics* .............. 280,000 5,075,000
Netmanage* .................... 250,000 5,781,250
Oak Technology* ............... 24,000 1,023,000
SunGard Data Systems* ......... 150,000 4,218,750
Synopsys* ..................... 210,000 8,006,250
-----------
24,104,250
-----------
CONSUMER GOODS AND
SERVICES 4.3%
Buckeye Cellulose* ............ 350,000 7,700,000
Oakley* ....................... 270,000 9,180,000
ThermoLase* ................... 200,000 5,175,000
USA Detergents* ............... 33,000 771,375
-----------
22,826,375
-----------
DRUGS AND HEALTH CARE 9.0%
AmeriSource Health* ........... 182,000 6,006,000
Clintrials Research* .......... 175,000 3,543,750
Community Psychiatric Centers . 435,000 5,328,750
National Surgery Centers* ..... 130,000 2,957,500
Omnicare ...................... 175,000 7,831,250
Protein Design Labs* .......... 132,000 3,036,000
Scherer (R.P.)* ............... 87,300 4,283,156
Total Renal Care Holdings* .... 310,000 9,145,000
Vivra ......................... 202,500 5,087,813
-----------
47,219,219
-----------
ELECTRONICS 16.0%
Cognex* ....................... 380,000 13,300,000
Credence Systems* ............. 250,000 5,687,500
2
<PAGE>
Shares Value
------ -----
Cypress Semiconductors* ....... 450,000 $ 5,737,500
Electro Scientific Industries*. 180,000 5,197,500
Electroglas* .................. 244,000 6,161,000
Information Storage Device* ... 325,000 3,575,000
Lam Research* ................. 150,000 6,843,750
Lattice Semiconductor* ........ 140,000 4,576,250
Microchip Technology* ......... 139,000 5,090,875
Sanmina* ...................... 140,000 7,280,000
Semitool* ..................... 50,000 646,875
Silicon Valley Group* ......... 26,000 658,125
Tencor Instruments* ........... 200,000 4,875,000
Ultratech Stepper* ............ 126,000 3,244,500
Vicor* ........................ 370,000 7,353,750
Xilinx* ....................... 100,000 3,037,500
Zilog* ........................ 22,000 807,125
-----------
84,072,250
-----------
FARM EQUIPMENT 1.0%
AGCO .......................... 105,000 5,355,000
-----------
FINANCIAL SERVICES 7.3%
Commerce Bancorp .............. 115,000 2,537,187
First Investors Financial
Services Group* ............. 150,000 1,237,500
First Savings Bank of
Washington* ................. 150,000 1,968,750
Flushing Financial* ........... 150,000 2,287,500
GCR Holdings* ................. 160,000 3,580,000
Jayhawk Acceptance* ........... 350,000 3,281,250
Klamath First Bancorp* ........ 150,000 2,034,375
Leasing Solutions* ............ 180,000 2,722,500
Meadowbrook* .................. 168,100 5,631,350
T. Rowe Price ................. 105,000 5,145,000
Roosevelt Financial Group ..... 300,000 5,775,000
Statewide Financial* .......... 150,000 1,950,000
-----------
38,150,412
-----------
FOOD AND BEVERAGEs 0.6%
Canandaigua Wine (Class A)* ... 100,000 3,275,000
-----------
GAMING 1.0%
GTECH Holdings* ............... 200,000 5,200,000
-----------
MEDICAL PRODUCTS AND
TECHNOLOGY 2.3%
Dentsply International ........ 215,000 8,586,562
Sybron International* ......... 150,000 3,562,500
-----------
12,149,062
-----------
SHARES OR
PRIN. AMT. VALUE
---------- -----
OIL AND GAS 2.0%
Falcon Drilling* .............. 330,000shs. $ 4,888,125
Pogo Producing ................ 200,000 5,650,000
------------
10,538,125
------------
RESTAURANTS 1.5%
Consolidated Products* ........ 114,000 1,702,875
Longhorn Steaks* .............. 335,000 6,071,875
------------
7,774,750
------------
RETAIL TRADE 0.9%
Casey's General Store ......... 220,000 4,798,750
------------
SPECIALTY CHEMICALS 1.9%
Mineral Technologies .......... 180,000 6,570,000
Sealed Air* ................... 130,000 3,656,250
------------
10,226,250
------------
UTILITIES 2.0%
California Energy* ............ 550,000 10,725,000
------------
TOTAL COMMON STOCKS
(Cost $423,263,631) .. 482,332,279
------------
SHORT-TERM HOLDINGS 9.2%
Bank of Montreal,
Toronto Fixed
Time Deposit 5 5/8%,
1/2/96 ...................... $23,240,000 23,240,000
First National Bank of
Chicago, Grand Cayman
Fixed Time Deposit
5 13/16%, 1/2/96 ............ 25,000,000 25,000,000
------------
TOTAL SHORT-TERM HOLDINGS
(Cost $48,240,000) ... 48,240,000
------------
TOTAL INVESTMENTS 100.8%
(Cost $471,503,631) .. 530,572,279
OTHER ASSETS LESS
LIABILITIES (0.8)% ......... (4,033,406)
------------
NET ASSETS 100.0% .......... $526,538,873
============
- --------------------
* 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.
3
<PAGE>
SELIGMAN FRONTIER FUND
INVESTMENT RESULTS
TOTAL RETURNS*
For Periods Ended December 31, 1995
AVERAGE ANNUAL
---------------------------------------------------
CLASS D
THREE ONE FIVE TEN SINCE
MONTHS YEAR YEARS YEARS INCEPTION+
------ ------ ------ ----- ---------
CLASS A
With Sales Charge (4.20)% 29.90% 24.97% 16.02% n/a
Without Sales Charge 0.57 36.43 26.19 16.59 n/a
CLASS D
With CDSL (0.61) 34.24 n/a n/a n/a
Without CDSL 0.36 35.24 n/a n/a 26.22%
RUSSELL 2000** 2.17 28.44 20.99 11.32 15.80
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
DECEMBER 31, 1995 SEPTEMBER 30, 1995 DECEMBER 31, 1994
CLASS A $13.64 $14.04 $10.35
CLASS D 13.18 13.61 10.10
- --------------------------------------------------------------------------------
* The returns for Class A shares are shown with and without the maximum
initial sales charge of 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
periods of one year or less 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.
** The Russell 2000 is an unmanaged index and assumes reinvestment of
estimated dividends and does not reflect fees and expenses. Investors may
not invest directly in an index.
+ May 3, 1993.
---------------------------------------------------------------------------
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.
4
<PAGE>
LARGEST PORTFOLIO CHANGES*
DURING PAST THREE MONTHS
SHARES
----------------------------
HOLDINGS
ADDITIONS INCREASE 12/31/95
- ------------ ----------- -------------
ADFlex Solutions .............. 183,000 183,000
Buckeye Cellulose ............. 350,000 350,000
Cypress Semiconductors ........ 450,000 450,000
DST Systems ................... 215,000 215,000
Microchip Technology .......... 139,000 139,000
Oakley ........................ 270,000 270,000
Total Renal Care Holdings ..... 310,000 310,000
United Transnet ............... 370,000 370,000
Vivra ......................... 202,500 202,500
Xilinx ........................ 100,000 100,000
HOLDINGS
REDUCTIONS DECREASE 12/31/95
- -------------- ----------- -------------
Electronics for Imaging ....... 91,000 120,000**
Holophane ..................... 127,000 --
Interim Services .............. 100,000 --
Kennametal .................... 100,000 --
Lincare Holdings .............. 120,000 --
Living Centers of America ..... 110,000 --
Martin Industries ............. 290,000 --
Nautica Enterprises ........... 87,000 --
Sirrom Capital ................ 250,000 --
USA Detergents ................ 167,000 33,000
- -------------------------
* Largest portfolio changes from the previous quarter to the current quarter
are based on cost of purchases and proceeds from sales of securities.
** Includes 61,000 shares received as a result of a 2-for-1 stock split.
MAJOR PORTFOLIO HOLDINGS
AT DECEMBER 31, 1995
SECURITY VALUE
- -------- -----------
Cognex ............................................... $13,300,000
California Energy .................................... 10,725,000
SITEL ................................................ 9,424,500
Oakley ............................................... 9,180,000
Total Renal Care Holdings ............................ 9,145,000
Dentsply International ............................... 8,586,562
Synopsys ............................................. 8,006,250
BDM International .................................... 7,975,000
US Office Products ................................... 7,896,875
Omnicare ............................................. 7,831,250
5
<PAGE>
FIRST QUARTER REPORT
SELIGMAN
FRONTIER
FUND, INC.
DECEMBER 31, 1995
[LOGO]
A CAPITAL APPRECIATION FUND
ESTABLISHED IN 1984
Seligman Financial Services, Inc.
an affiliate of
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.
EQFR3a 12/95
