SELIGMAN
-------------------
FRONTIER
FUND, INC.
[Graphic Omitted]
ANNUAL REPORT
OCTOBER 31, 2000
------o------
SEEKING GROWTH
IN CAPITAL VALUE
THROUGH
INVESTMENTS IN
SMALL-COMPANY
GROWTH STOCKS
[Logo Omitted]
J.& W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
SELIGMAN -- TIMES CHANGE...VALUES ENDURE
J. & W. SELIGMAN & CO. INCORPORATED IS A FIRM WITH A LONG TRADITION OF
INVESTMENT EXPERTISE, OFFERING A BROAD ARRAY OF INVESTMENT CHOICES TO HELP
TODAY'S INVESTORS SEEK THEIR LONG-TERM FINANCIAL GOALS.
TIMES CHANGE...
[graphic omitted] 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.
JAMES, JESSE, AND In the late 19th century, as the country grew, Seligman
JOSEPH SELIGMAN, helped finance the westward expansion of the railroads, the
1870 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 ............ 12
Statement of Operations ........................ 13
Statements of Changes in Net Assets ............ 14
Notes to Financial Statements .................. 15
Financial Highlights ........................... 18
Report of Independent Auditors ................. 20
Board of Directors ............................. 21
Executive Officers AND For More Information .... 22
Glossary of Financial Terms .................... 23
--------------------------------------------------------------------------------
<PAGE>
TO THE SHAREHOLDERS
The year ended October 31, 2000, saw a significant shift in the overall
investment environment. Small-capitalization stocks, particularly small-cap
growth stocks, performed strongly during the latter part of 1999 and through the
first quarter of 2000. However, the second and third quarters of 2000 were
volatile for all segments of the equity market, particularly technology, as
investors became nervous about inflation and decelerating corporate earnings. In
the fourth quarter, the technology-heavy Nasdaq Composite Index came under
renewed pressure, falling sharply in response to fresh signs of economic
weakening and to presidential election uncertainty.
Seligman Frontier Fund performed strongly over the one-year period ended October
31, 2000, delivering a 22.82% total return based on the net asset value of Class
A shares. By comparison, the broad market, as measured by the Standard & Poor's
500 Composite Stock Index (S&P 500), returned only 6.09% for the same period.
The Fund also outperformed its benchmark indices, with the Russell 2000 Index
returning 17.41%, and the Russell 2000 Growth Index returning 16.16%. The total
return of the Fund's peers, as measured by the Lipper Small Cap Funds Average,
was 31.19% for the same period.
While the Fund's returns for the twelve months ended October 31, 2000, were
strong, performance in the first ten months of the calendar year 2000 was
weaker. During this time, repeated interest rate increases, the collapse of the
dot-com sector, rising energy prices, and the prospects for slowing economic
growth led to sharp price declines over many different stocks and markets.
Economic indicators such as corporate earnings, industrial output, and new home
sales seem to point to a slowdown.
After repeated interest rate increases, the Federal Reserve Board left rates
untouched in June, August, and October of this year, and no further increases
are anticipated for the remainder of 2000. In fact, given the recent economic
weakness, the Fed may well change its current inflationary bias to neutral at
its December meeting.
The current market volatility began last spring, when the Nasdaq experienced a
major correction. On March 10, the Nasdaq reached an all-time high of 5049; by
October 12, it had lost 39% of its market value, and stood at 3075. The broader
market indices, such as the S&P 500, were also set back by earnings
disappointments, particularly during September and October.
In November 2000, further evidence of an economic slowdown, earnings warnings by
some large technology companies, and the continued presidential impasse pulled
financial markets down further. The Nasdaq shed 24% of its value between
November 7 and November 30. On November 30, the Commerce Department revised
downward its estimate of third quarter GDP growth from 2.7% to 2.4%, compared
with 5.6% in the second quarter. It also reported that after-tax corporate
profits rose a weak 0.6% in the third quarter. In response to these indicators,
the US dollar's strength versus the euro has begun to wane.
We believe that the economy is fundamentally sound. Also, equity valuations are
now more in line with earnings and company fundamentals, particularly in the
small-cap area. We are confident that the Federal Reserve Board will take
appropriate actions to help ensure that the economy continues to grow.
We appreciate your continued support of Seligman
Frontier Fund and look forward to serving your investment needs for many years
to come. A discussion with your Portfolio Manager regarding the Fund's
performance, as well as the Fund's investment results and portfolio of
investments, follows this letter.
By order of the Board of Directors,
/s/ WILLIAM C. MORRIS
---------------------
William C. Morris
Chairman /s/ BRIAN T. ZINO
-----------------
Brian T. Zino
President
December 8, 2000
1
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
MARK J. CUNNEEN
Q: HOW DID SELIGMAN FRONTIER FUND PERFORM DURING THE PAST YEAR?
A: Seligman Frontier Fund had strong performance for the year ended October 31,
2000. For this period, the Fund posted a total return of 22.82% based on the
net asset value of Class A shares. This return outpaced the 16.16% total
return of the Russell 2000 Growth Index, which represents small-cap growth
stocks, and the 17.41% total return of the Russell 2000 Index, which
represents the performance of small-cap growth and value stocks. The total
return of the Fund's peers, as measured by the Lipper Small Cap Funds
Average, was 31.19% for the same period.
Q: WHAT ECONOMIC AND MARKET FACTORS INFLUENCED SELIGMAN FRONTIER FUND DURING
THE YEAR ENDED OCTOBER 31, 2000?
A: Small-cap growth stocks benefited from the broadening of the stock market
toward the end of 1999 and during the first calendar quarter of 2000, with
their gains far outpacing those of the S&P 500. However, since the flight
from the technology sector in March 2000, and the general uncertainty that
has plagued investors, all segments of the equity market have suffered,
including small-cap stocks. This year's market volatility has been tied to
investors' fears of inflation and higher interest rates, and their reaction
to some corporate earnings disappointments. Economic indicators suggest that
the US economy is slowing, and the Federal Reserve Board has clearly taken
this into account. It declined to raise interest rates at meetings in June,
August, and October of this year, and we do not anticipate any rate hikes in
the near future.
We think that this year's market uncertainty and volatility will gradually
subside as market sentiment adjusts to the new reality of an economy that is
slowing, but still healthy. We view the prospect of economic growth at a
more sustainable pace as positive because it should produce stable interest
rates and a lowered risk of inflation.
Q: WHAT WAS YOUR INVESTMENT STRATEGY DURING THIS TIME?
A: In general terms, we have increased our emphasis on growth. As a result,
approximately one-half of the Fund's portfolio is now made up of technology
and telecommunications companies. We believe that these sectors contain a
great number of dynamic companies that are growing quickly and that have
substantial momentum in their businesses.
[Graphic Omitted ]
GLOBAL SMALL COMPANY GROWTH TEAM: (STANDING, FROM LEFT) TED HILLENMEYER, MIKE
CORCELL, MANDHIR UPPAL, MIKE SULLIVAN, MICHAEL ALPERT, (SEATED, FROM LEFT) BRUCE
ZIRMAN, SONIA THOMAS (ADMINISTRATIVE ASSISTANT), MARK CUNNEEN (PORTFOLIO
MANAGER)
A TEAM APPROACH
Seligman Frontier Fund is managed by the Seligman Global Small Company Growth
Team, headed by Mark J. Cunneen. Mr. Cunneen is assisted in the management of
the Fund by a group of seasoned research professionals who are responsible for
identifying small companies in specific industry groups that offer the greatest
potential for growth.
2
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
MARK J. CUNNEEN
Within the Fund's portfolio, we have added to the software sector in order
to participate in the growth of the Internet without investing in pure
dot-com companies, which are risky and which have experienced many problems
in 2000. Instead, we have invested in software companies that help other
companies do business over the Web and better utilize the Web as a business
tool. This strategy is based on the premise that the Internet is now an
integral component of the US economy, despite what has happened to many
dot-com companies this year. We expect that brick-and-mortar businesses will
increasingly use the Web and other technologies to increase their
productivity and earnings. We feel that investing in software companies that
cater to these businesses is an excellent way to participate in this sector
of the economy.
We have continued to add to our telecommunications holdings, with our focus
remaining on the wireless services area. Wireless companies are compelling
for a number of reasons, beginning with the fact that they represent a
business that has demonstrated rapid growth and long-term growth potential.
In addition, regional and rural wireless service companies seem particularly
desirable because subscriber growth continues to be very strong in these
smaller markets, and, more importantly, because the expansion of national
calling plans and the roaming revenues they generate continue to be a strong
engine for growth. We're also enthusiastic about the potential of the
wireless Web, which a number of carriers are starting to introduce. We think
that, in the near future, large numbers of people will use their cellular
phones to check e-mail and access the Internet, which will mean additional
increased revenue for wireless carriers.
Earlier this year, we sold a number of semiconductor stocks in the
portfolio. These stocks had made a substantial contribution to performance.
We determined, however, that valuations in this sector were at a high, and
that earnings growth for these companies was slowing. Additionally, after
experiencing good performance, we lowered our biotech weighting, bringing it
below our benchmark weighting.
Q: WHAT IS YOUR OUTLOOK FOR THE SMALL-CAP GROWTH SECTOR?
A: We remain enthusiastic about the small-cap sector, which, we believe, is
well positioned for success based on a number of factors. First, small
companies' earnings have been growing at a rate faster than large-cap
stocks, and we anticipate that this trend will continue. Second, the US
economy is still in good shape, and we believe that this provides a
constructive environment for the companies we target. Further, valuations of
small-cap stocks are quite compelling relative to large-cap stocks. Good
stock selection is crucial. We will continue to focus our research efforts
on uncovering companies with strong management, sound business models, and
clear earnings momentum.
3
<PAGE>
PERFORMANCE OVERVIEW
OCTOBER 31, 2000
This chart compares a $10,000 hypothetical investment made in Seligman
Frontier Fund Class A shares, with and without the initial 4.75% maximum sales
charge, and assumes the reinvestment of dividends, if any, for the 10-year
period beginning October 31, 1990 and ended October 31, 2000, to a $10,000
investment made in the Lipper Small Cap Funds Average (Lipper Average), the
Russell 2000 Growth Index, and the Russell 2000 Index for the same period. The
performances of Seligman Frontier Fund Class B, Class C, and Class D shares are
not shown in this chart but are included in the table on page 5. It is important
to keep in mind that the Lipper Average excludes the effect of sales charges,
and the Russell indices exclude the effect of any fees or sales charges.
PAST PERFORMANCE IS NO INDICATION OF FUTURE INVESTMENT RESULTS.
[Figures below represent line chart in its printed piece]
WITH WITHOUT LIPPER RUSSELL RUSSELL
LOAD LOAD SMCAP 2000 INDEX 2000 GROWTH
----- ------- ------ ---------- -----------
10/31/90 9524 10000 10000 10000 10000
11997 12597 12343 12193 12514
13762 14450 14212 14474 14757
14626 15357 14890 14787 15071
10/31/91 15828 16619 16113 15860 16653
17609 18490 18015 17662 18655
16241 17054 17005 16945 16738
15902 16697 16863 16933 16126
10/31/92 16751 17589 17527 17364 16593
19734 20721 19960 19999 18871
18529 19455 19369 19617 17725
20699 21734 20648 20896 19020
10/31/93 23582 25044 22598 22991 21185
25542 26819 23411 23723 21693
24688 25922 22239 22524 20302
23699 24883 21463 21873 19269
10/31/94 27049 28401 23049 22920 20991
25812 27103 22504 22298 20196
29096 30551 24349 24149 22074
34365 36084 27939 27327 25767
10/31/95 35511 37286 28118 27121 25313
35259 37022 29650 28974 26792
41214 43275 33978 32116 30761
36603 38433 31320 29215 26545
10/31/96 38579 40508 34253 31624 28686
40524 42550 36741 34465 30809
36494 38319 33483 32132 26594
46037 48339 41881 38969 33250
10/31/97 46905 49250 43956 40899 34759
45912 48207 43122 40693 33497
52932 55579 49052 45756 38216
46937 49284 43382 39871 32813
10/31/98 40227 42238 38416 36056 29247
43893 46087 44013 40828 35913
39450 41423 43938 41522 36774
42899 45043 47518 42825 37574
10/31/99 40165 42173 47447 41417 37810
52746 55383 56273 48072 48719
51845 54437 60154 49168 48314
50074 52578 60847 48721 45512
10/31/00 49329 51795 62243 48623 43919
An investment in the Fund is subject to certain risks, including the possible
loss of principal. The stocks of smaller companies may be subject to
above-average market price fluctuations.
The performances of Class B, Class C, and Class D shares will be greater than
or less than the performance shown for Class A shares, based on the differences
in sales charges and fees paid by shareholders.
4
<PAGE>
PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED OCTOBER 31, 2000
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------
CLASS B CLASS C CLASS D
SINCE SINCE SINCE
SIX ONE FIVE TEN 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 (9.36)% 17.02% 5.75% 17.30% n/a n/a n/a
Without Sales Charge (4.85) 22.82 6.79 17.88 n/a n/a n/a
CLASS B**
With CDSC+ (9.98) 16.78 n/a n/a 3.66% n/a n/a
Without CDSC (5.24) 21.78 n/a n/a 4.05 n/a n/a
CLASS C**
With Sales Charge and CDSC (7.21) 19.59 n/a n/a n/a 12.32% n/a
Without Sales Charge and CDSC (5.30) 21.78 n/a n/a n/a 13.75 n/a
CLASS D**
With 1% CDSC (6.25) 20.78 n/a n/a n/a n/a n/a
Without CDSC (5.30) 21.78 5.96 n/a n/a n/a 12.73%
LIPPER SMALL CAP FUNDS AVERAGE*** 3.47 31.19 17.23 20.06 14.37++ 25.99o 16.82+++
RUSSELL 2000 GROWTH INDEX*** (9.09) 16.16 11.65 15.95 8.24++ 13.23o 12.86+++
RUSSELL 2000 INDEX*** (1.11) 17.41 12.39 17.14 9.66++ 10.65o 12.87+++
<CAPTION>
NET ASSET VALUE CAPITAL GAIN INFORMATION
OCTOBER 31, 2000 APRIL 30, 2000 OCTOBER 31, 1999 FOR THE YEAR ENDED OCTOBER 31, 2000
---------------- -------------- ----------------
<S> <C> <C> <C> <C>
CLASS A $15.88 $16.69 $12.93 REALIZED $2.377
CLASS B 14.65 15.46 12.03 UNREALIZED 3.033oo
CLASS C 14.65 15.47 12.03
CLASS D 14.65 15.47 12.03
</TABLE>
Performance data quoted represent changes in prices and assume that all
distributions within the periods 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.
-------------
* 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 dividends 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 also reflect the effect of
the service fee of up to 0.25% under the Administration, Shareholder
Services and Distribution (12b-1) Plan after June 1, 1992, 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 Small Cap Funds Average (Lipper Average) is an average of all
funds that invest primarily in companies with market capitalizations of less
than $2 billion at the time of purchase. The Russell 2000 Growth Index
consists of small-company growth stocks. The Russell 2000 Index consists of
small-company, growth and value stocks. The Lipper Average, the Russell 2000
Growth Index, and the Russell 2000 Index are unmanaged benchmarks that
assume reinvestment of all distributions and exclude the effect of fees
and/or sales charges. The monthly performance of the Lipper Average is used
in the Performance Overview. 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 Represents the per share amount of net unrealized appreciation of portfolio
securities as of October 31, 2000.
5
<PAGE>
PORTFOLIO OVERVIEW
DIVERSIFICATION OF NET ASSETS
OCTOBER 31, 2000
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
--------------------------
OCTOBER 31,
--------------------------
ISSUES COST VALUE 2000 1999
------ --------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS:
Advertising .................................... -- -- -- -- 1.8
Business Goods and Services .................... 5 $ 7,179,382 $ 9,723,540 3.1 20.2
Capital Goods .................................. -- -- -- -- 4.7
Computer Hardware .............................. -- -- -- -- 0.5
Computer Software and Services ................. 15 48,244,538 63,487,428 20.4 15.3
Consulting Services ............................ 3 3,631,904 6,972,455 2.3 3.9
Consumer Goods and Services .................... 7 11,874,280 14,874,276 4.8 5.6
Drugs and Health Care .......................... 16 26,978,263 38,720,768 12.5 8.3
Electronics .................................... 5 3,168,985 3,762,995 1.2 13.3
Energy ......................................... 1 1,503,673 2,718,563 0.9 2.5
Environmental Management ....................... 2 3,691,600 4,791,028 1.5 0.1
Financial Services ............................. 4 11,598,574 17,580,325 5.7 2.8
Industrial Goods and Services .................. -- -- -- -- 0.8
Internet/Online ................................ 3 3,500,859 3,305,253 1.1 --
Leisure and Entertainment ...................... 2 2,474,344 2,755,409 0.9 2.9
Manufacturing .................................. -- -- -- -- 0.1
Media and Broadcasting ......................... 3 4,847,848 5,910,144 1.9 1.7
Medical Products and Technology ................ 5 10,570,478 15,305,837 4.9 3.4
Networking/Communications Infrastructure ....... 2 4,206,588 4,723,345 1.5 --
Real Estate Investment Trust ................... -- -- -- -- 1.1
Resources ...................................... 3 3,625,356 4,025,488 1.3 --
Schools ........................................ 4 3,986,137 9,359,138 3.0 3.4
Telecommunications ............................. 12 63,817,292 67,251,082 21.6 3.2
Transportation ................................. 2 1,883,890 3,097,047 1.0 1.0
-- ------------ ------------ ----- -----
94 216,783,991 278,364,121 89.6 96.6
SHORT-TERM HOLDINGS AND
OTHER ASSETS LESS LIABILITIES .................. 2 32,392,544 32,392,544 10.4 3.4
-- ------------ ------------ ----- -----
NET ASSETS........................................ 96 $249,176,535 $310,756,665 100.0 100.0
== ============ ============ ===== =====
</TABLE>
LARGEST INDUSTRIES
OCTOBER 31, 2000
[The table below represents a bar chart in the printed piece.]
Percent of
Industry Dollar Amount Net Assets
------------------------------- ------------- ----------
TELECOMMUNICATIONS $67,251,082 21.6
COMPUTER SOFTWARE AND SERVICES $63,487,428 20.4
DRUGS AND HEALTH CARE $38,720,768 12.5
FINANCIAL SERVICES $17,580,325 5.7
MEDICAL PRODUCTS AND TECHNOLOGY $15,305,837 4.9
6
<PAGE>
PORTFOLIO OVERVIEW
LARGEST PORTFOLIO CHANGES
DURING THE PAST SIX MONTHS
SHARES
-------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/00
--------- ----------- ----------
AirGate PCS .............. 90,100 115,200
Documentum ............... 77,700 111,200
Dycom Industries ......... 94,500 94,500
Powertel ................. 49,100 102,300
Proxim ................... 70,800 190,600(1)
Quest Software ........... 74,500 74,500
REMEC .................... 89,400 143,850(2)
Rural Cellular (Class A).. 54,400 139,300
SBA Communications ....... 116,100 145,800
Western Wireless ......... 148,600 250,500
SHARES
-------------------------
HOLDINGS
REDUCTIONS DECREASE 10/31/00
---------- -------------------------
Anadigics ................ 135,400 --
AVX ...................... 113,800(3) --
Burr-Brown ............... 143,575 --
Cognex ................... 89,200 --
Credence Systems ......... 63,800(4) --
CSG Systems International 159,700 --
Exar ..................... 60,000 12,100(5)
General Semiconductor .... 329,000 --
NOVA ..................... 297,205 --
Teva Pharmaceutical
Industries (ADRs) ...... 117,000 --
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 68,700 shares received as a result of a 2-for-1 stock split.
(2) Includes 54,450 shares received as a result of a 3-for-2 stock split.
(3) Includes 25,300 shares received as a result of a 2-for-1 stock split.
(4) Includes 26,400 shares received as a result of a 2-for-1 stock split.
(5) Includes 6,050 shares received as a result of a 2-for-1 stock split.
LARGEST PORTFOLIO HOLDINGS
OCTOBER 31, 2000
--------------------------------------------------------------------------------
SECURITY VALUE SECURITY VALUE
-------- ----------- -------- ----------
Western Wireless .......... $11,898,750 Advent Software ......... $8,330,250
Proxim .................... 11,549,169 Metris Companies ........ 7,685,825
Internet Security Systems . 10,401,737 Rural Cellular (Class A) 7,448,197
Documentum ................ 9,441,575 SBA Communications ...... 7,303,669
Powertel .................. 8,922,478 Actuate Software ........ 6,539,500
--------------------------------------------------------------------------------
7
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2000
SHARES VALUE
--------- ----------
COMMON STOCKS 89.6%
BUSINESS GOODS
AND SERVICES 3.1%
COPART*
Auctioneer of damaged vehicles
for insurance companies 155,800 $ 2,341,869
COSTAR GROUP*
Information provider for the
real estate industry 76,270 2,378,671
EDEN BIOSCIENCE*
Developer and manufacturer
of natural products
for agriculture 7,400 280,044
HENRY (JACK) & ASSOCIATES
Developer and installer of
integrated computer systems
for in-house data processing
to financial institutions 65,400 3,594,956
VERITAS DGC*
Provider of geophysical services 37,600 1,128,000
-----------
9,723,540
-----------
COMPUTER SOFTWARE
AND SERVICES 20.4%
ACTUATE*
Provider of applications software
that enables organizations to
uniformly extract, publish, and
disseminate information in both
Internet and client/server
computing environments 232,000 6,539,500
ADVENT SOFTWARE*
Provider of software products 139,200 8,330,250
ASPEN TECHNOLOGY*
Provider of computer software
products and services 73,600 3,038,300
DOCUMENTUM*
Provider of computer
software products 111,200 9,441,575
INFORMATICA*
Provider of software products
and services 12,000 1,134,375
INTERNET SECURITY SYSTEMS*
Provider of security management
solutions for the Internet 117,700 10,401,737
INTERWOVEN*
Provider of Internet software 23,600 2,379,912
MATRIXONE*
Provider of Internet business
collaboration software 90,300 2,692,069
NETIQ*
Provider of computer
software products 55,400 4,773,056
NYFIX*
Developer and marketer of
electronic trading systems to
brokerage firms, international
banks, and global exchanges
trading in equities, futures
and options, and currencies 33,837 1,335,505
ONYX SOFTWARE*
Provider of enterprise
relationship management software 23,000 364,406
QUEST SOFTWARE*
Provider of application and
information availability
software 74,500 3,229,109
SMARTFORCE (ADRS)* (Ireland)
Provider of educational
software 50,200 2,519,413
SUNGARD DATA SYSTEMS* Provider
of computer disaster recovery
services, as well as health care
information and investment
support systems 112,300 5,741,338
THQ*
Worldwide provider of inter-
active entertainment software 76,550 1,566,883
-----------
63,487,428
-----------
CONSULTING SERVICES 2.3%
CORPORATE EXECUTIVE BOARD*
Worldwide provider of consulting
services for corporations 69,200 3,202,662
FORRESTER RESEARCH*
Independent research company
which studies changes in future
technology and its impact on
businesses, consumers and
society 80,530 3,309,280
WATSON WYATT HOLDINGS
Provider of consulting services 26,600 460,513
-----------
6,972,455
-----------
CONSUMER GOODS
AND SERVICES 4.8%
BRINKER INTERNATIONAL*
Restaurant operator 102,500 4,023,125
MDC HOLDINGS
Single-family home builder
and seller under the name
Richmond American Homes 2,300 62,962
MEMBERWORKS*
Distributor of membership
service programs for
various industries 123,920 4,248,133
-----------
See footnotes on page 11.
8
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2000
SHARES VALUE
--------- ----------
CONSUMER GOODS AND
SERVICES (CONTINUED)
MSC INDUSTRIAL DIRECT*
Distributor of metalworking
and repair supplies 116,200 $ 1,728,475
PF CHANG'S CHINA BISTRO*
Restaurant operator 7,200 295,425
PRE-PAID LEGAL SERVICES*
Underwriter and marketer of
legal service plans 80,400 3,527,550
TOO*
Clothing retailer 43,100 988,606
-----------
14,874,276
-----------
DRUGS AND HEALTH CARE 12.5%
ALPHARMA (CLASS A)
International manufacturer of
human and animal health
products 32,700 1,269,169
AMERISOURCE HEALTH (CLASS A)*
Distributor of wholesale
pharmaceutical products 34,100 1,481,219
BARR LABORATORIES*
Developer, manufacturer, and
marketer of generic
prescription drugs 87,200 5,504,500
BINDLEY WESTERN INDUSTRIES*
Pharmaceutical distributor 44,400 1,595,625
CAREMARK RX*
Provider of pharmaceutical
services 149,300 1,866,250
CHARLES RIVER LABORATORIES
INTERNATIONAL*
Provider of research services
that enable drug discovery
and development 70,500 1,850,625
COMMUNITY HEALTH SYSTEMS*
Health care provider 138,700 3,909,606
KING PHARMACEUTICALS*
Manufacturer and marketer of
branded prescription
pharmaceutical products 69,350 3,107,747
MEDICHEM LIFE SCIENCES*
Provider of chemistry research
to pharmaceutical and
biotechnology companies 118,100 1,081,353
POLYMEDICA*
Provider of medical products
and services 35,100 2,017,153
PRAECIS PHARMACEUTICALS*
Developer of peptide-based
therapeutics for the treatment
of human diseases 89,100 2,255,344
PRIORITY HEALTHCARE (CLASS B)*
Pharmaceutical and medical
supply distributor to the
alternative health care industry 53,500 2,872,281
PROVINCE HEALTHCARE*
Provider of health care
services in non-urban markets 88,200 3,709,912
TANOX*
Developer of monoclonal
antibodies, which are used to
address unmet needs in the areas
of immunology, infectious
diseases, and cancer 66,800 2,496,650
UNITED THERAPEUTICS*
Developer of pharmaceuticals
for the treatment of vascular
diseases 39,300 2,101,322
UNIVERSAL HEALTH SERVICES*
Owner and operator of health
care institutions 19,100 1,602,012
-----------
38,720,768
-----------
ELECTRONICS 1.2%
ADVANCED POWER TECHNOLOGY*
Provider of semiconductors 41,900 1,339,491
AMERIGON*
Provider of high-technology
products for automotive
equipment manufacturers 406,052 1,573,451
EXAR*
Provider of integrated circuits
for communications and video
products 12,100 541,097
INTERCEPT GROUP*
Provider of electronic commerce
products and services for
financial institutions 300 8,109
IXYS*
Designer of power
semiconductors 11,900 300,847
-----------
3,762,995
-----------
ENERGY 0.9%
PRIDE INTERNATIONAL*
Provider of oil and gas
well services 107,400 2,718,563
-----------
-------------
See footnotes on page 11.
9
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2000
SHARES VALUE
--------- ----------
ENVIRONMENTAL MANAGEMENT 1.5%
CASELLA WASTE SYSTEMS*
Provider of non-hazardous solid
waste collection, disposal,
and recycling services 44,700 $ 389,728
WASTE CONNECTIONS*
Provider of solid waste collection,
disposal, and recycling services 172,600 4,401,300
-----------
4,791,028
-----------
FINANCIAL SERVICES 5.7%
AFFILIATED MANAGERS GROUP*
Holding company specializing
in asset management 85,000 5,110,625
AMERICAN CAPITAL STRATEGIES
Provider of commercial financing 117,600 2,590,875
AMERICREDIT
Provider of automobile loans 81,600 2,193,000
METRIS COMPANIES
Direct marketer of consumer
credit cards 237,400 7,685,825
-----------
17,580,325
-----------
INTERNET/ONLINE 1.1%
EVOLVE SOFTWARE*
Provider of Internet applications
for automating professional
services organizations 61,300 959,728
INTRANET SOLUTIONS*
Provider of E-services used
for intranets, extranets, and
the Internet 25,200 1,171,013
PURCHASEPRO.COM*
Provider of Internet business-
to-business electronic
commerce services 43,400 1,174,512
-----------
3,305,253
-----------
LEISURE AND ENTERTAINMENT 0.9%
ANCHOR GAMING*
Operator of casino games 13,100 1,112,272
STATION CASINOS*
Operator of casino hotels 101,900 1,643,137
-----------
2,755,409
-----------
MEDIA AND BROADCASTING 1.9%
CHARTER COMMUNICATIONS*
Owner and operator of cable
television systems 190,000 3,699,063
ENTRAVISION COMMUNICATIONS
(CLASS A)*
Diversified media company 78,700 1,392,006
PENTON MEDIA*
Provider of advertising services
for diversified industries 26,800 819,075
-----------
5,910,144
-----------
MEDICAL PRODUCTS AND
TECHNOLOGY 4.9%
CYTYC*
Provider of medical
diagnostic equipment 65,200 3,869,212
DURA PHARMACEUTICALS*
Developer and retailer of
prescription pharmaceutical
products for the treatment
of allergies, asthma, pneumonia,
and related respiratory conditions 113,400 3,901,669
ENDOCARE*
Developer and manufacturer of
medical devices for applications
in oncology and urology 108,900 1,936,378
GENOMIC SOLUTIONS*
Provider of genomic and
proteomic instrumentation,
software, and services 136,900 1,920,878
INTERMUNE PHARMACEUTICALS*
Developer of products for the
treatment of pulmonary and
infectious diseases and
congenital disorders 73,600 3,677,700
-----------
15,305,837
-----------
NETWORKING/COMMUNICATIONS
INFRASTRUCTURE 1.5%
ANDREW*
Provider of telecommunications
equipment 17,400 457,294
REMEC*
Designer and manufacturer of
multi-function modules for
microwave transmission systems 143,850 4,266,051
-----------
4,723,345
-----------
RESOURCES 1.3%
CAL DIVE INTERNATIONAL*
Provider of construction and
salvage services to the offshore
natural gas and oil industry in
the United States Gulf of Mexico 19,600 973,263
MITCHELL ENERGY & DEVELOPMENT
(CLASS A)
Explorer and producer of oil
and natural gas 40,600 1,867,600
----------
See footnotes on page 11.
10
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2000
SHARES VALUE
--------- ----------
RESOURCES (CONTINUED)
NATIONAL-OILWELL*
Provider of machinery, equipment,
and downhole products used
in oil and gas drilling
and production 40,500 $ 1,184,625
-----------
4,025,488
-----------
SCHOOLS 3.0%
CAREER EDUCATION*
Provider of private
post-secondary education 147,400 5,734,781
CORINTHIAN COLLEGES*
Provider of secondary education 21,200 1,460,150
DEVRY
Owner and manager of higher
education systems 29,700 1,097,044
LEARNING TREE INTERNATIONAL*
Provider of education and
training services for
information technology workers 23,600 1,067,163
-----------
9,359,138
-----------
TELECOMMUNICATIONS 21.6%
AIRGATE PCS*
Provider of wireless
telecommunication services 115,200 4,474,800
ALLEGIANCE TELECOM*
Provider of telecommunications
services 92,500 2,910,859
DYCOM INDUSTRIES*
Provider of construction and
maintenance services to
telecommunications providers 94,500 3,555,563
METAWAVE COMMUNICATIONS* Provider
of smart antenna systems, which
are used for wireless network
operators who encounter capacity
constraints within
their networks 133,730 1,759,385
PEGASUS COMMUNICATIONS*
Media company with operations
in broadcast satellite television,
such as DIRECTV 88,800 3,155,175
POWERTEL*
Provider of telecommunications
services 102,300 8,922,478
PRICE COMMUNICATIONS*
Provider of telecommunications
services 95,100 2,056,537
PROXIM*
Provider of wireless local area
networking products 190,600 11,549,169
RURAL CELLULAR (CLASS A)*
Provider of rural cellular
telephone services 139,300 7,448,197
SBA COMMUNICATIONS
Owner and operator of wireless
communications infrastructure 145,800shs. 7,303,669
WEST TELESERVICES*
Provider of telecommunications
services 88,000 2,216,500
WESTERN WIRELESS*
Provider of wireless
communications services 250,500 11,898,750
------------
67,251,082
------------
TRANSPORTATION 1.0%
EXPEDITORS INTERNATIONAL OF
WASHINGTON
Transportation provider 51,100 2,642,828
SKYWEST
Airline and car rental services
operator 9,000 454,219
------------
3,097,047
------------
TOTAL COMMON STOCKS
(Cost $216,783,991) 278,364,121
------------
FIXED TIME DEPOSITS 8.3%
CANADIAN IMPERIAL BANK OF
COMMERCE, Grand Cayman
6.563%, 11/1/2000 $10,000,000 10,000,000
BANK ONE, Grand Cayman
6.55%, 11/1/2000 15,800,000 15,800,000
------------
TOTAL fixed time
deposits
(Cost $25,800,000) 25,800,000
------------
Total Investments 97.9%
(Cost $242,583,991) 304,164,121
Other Assets
Less Liabilities 2.1% 6,592,544
------------
Net Assets 100.0% $310,756,665
============
-------------
* Non-income producing security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
11
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2000
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value:
Common stocks (cost $216,783,991)................ $278,364,121
Short-term holdings (cost $25,800,000)........... 25,800,000
------------
Total Investments ...................................................... $304,164,121
Cash ................................................................... 2,799
Receivable for securities sold ......................................... 8,103,904
Receivable for Capital Stock sold ...................................... 652,771
Expenses prepaid to shareholder service agent .......................... 72,959
Receivable for interest ................................................ 4,698
Other .................................................................. 12,710
------------
TOTAL ASSETS ........................................................... 313,013,962
------------
LIABILITIES:
Payable for Capital Stock repurchased .................................. 899,663
Payable for securities purchased ....................................... 708,066
Accrued expenses and other ............................................. 649,568
------------
TOTAL LIABILITIES ...................................................... 2,257,297
------------
NET ASSETS ............................................................. $310,756,665
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.10 par value;
500,000,000 shares authorized;
20,300,694 shares outstanding):
Class A .............................................................. $ 1,084,467
Class B .............................................................. 285,003
Class C .............................................................. 12,290
Class D .............................................................. 648,310
Additional paid-in capital ............................................. 220,215,160
Accumulated net investment loss ........................................ (54,036)
Undistributed net realized gain ........................................ 26,985,341
Net unrealized appreciation of investments ............................. 61,580,130
------------
NET ASSETS ............................................................. $310,756,665
============
NET ASSETS:
Class A .............................................................. $172,227,771
Class B .............................................................. $ 41,754,813
Class C .............................................................. $ 1,800,509
Class D .............................................................. $ 94,973,572
SHARES OF CAPITAL STOCK OUTSTANDING:
Class A .............................................................. 10,844,669
Class B .............................................................. 2,850,025
Class C .............................................................. 122,900
Class D .............................................................. 6,483,100
NET ASSET VALUE PER SHARE:
CLASS A .............................................................. $15.88
======
CLASS B .............................................................. $14.65
======
CLASS C .............................................................. $14.65
======
CLASS D .............................................................. $14.65
======
</TABLE>
-----------
See Notes to Financial Statements.
12
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2000
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest .................................................... $ 765,580
Dividends (net of foreign taxes withheld of $6,984) ......... 173,010
------------
TOTAL INVESTMENT INCOME ........................................................ $ 938,590
EXPENSES:
Management fee .............................................. 3,592,208
Distribution and service fees ............................... 2,219,915
Shareholder account services ................................ 1,122,338
Custody and related services ................................ 108,525
Registration ................................................ 87,540
Auditing and legal fees ..................................... 86,198
Shareholder reports and communications ...................... 78,010
Directors' fees and expenses ................................ 14,480
Miscellaneous ............................................... 107,600
------------
TOTAL EXPENSES ................................................................. 7,416,814
-----------
NET INVESTMENT LOSS ............................................................ (6,478,224)
NET REALIZED AND UNREALIZED GAINON INVESTMENTS:
Net realized gain on investments ............................ 48,261,416
Net change in unrealized appreciation of investments ........ 45,497,736
------------
NET GAIN ON INVESTMENTS ........................................................ 93,759,152
-----------
INCREASE IN NET ASSETS FROM OPERATIONS ......................................... $87,280,928
===========
</TABLE>
-------------
See Notes to Financial Statements.
13
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE ONE
YEAR ENDED MONTH ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 SEPTEMBER 30, 1999
---------------- ---------------- ------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment loss .................................. $ (6,478,224) $(618,500) $ (8,868,058)
Net realized gain on investments ..................... 48,261,416 586,290 1,718,133
Net change in unrealized appreciation/depreciation
of investments .................................... 45,497,736 (9,286,051) 48,514,019
------------- ------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS .... 87,280,928 (9,318,261) 41,364,094
------------- ------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS: ....................... -- -- --
------------- ------------- --------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares .................... 40,779,464 1,590,602 62,895,521
Exchanged from associated Funds ...................... 225,048,699 57,211,520 1,062,460,049
------------- ------------- --------------
Total ................................................ 265,828,163 58,802,122 1,125,355,570
------------- ------------- --------------
Cost of shares repurchased ........................... (145,191,803) (14,135,703) (348,573,441)
Exchanged into associated Funds ...................... (266,269,211) (64,559,329) (1,130,870,201)
------------- ------------- --------------
Total ................................................ (411,461,014) (78,695,032) (1,479,443,642)
------------- ------------- --------------
DECREASE IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS ......................... (145,632,851) (19,892,910) (354,088,072)
------------- ------------- --------------
DECREASE IN NET ASSETS ............................... (58,351,923) (29,211,171) (312,723,978)
NET ASSETS:
Beginning of period .................................. 369,108,588 398,319,759 711,043,737
------------- ------------- --------------
END OF PERIOD (including accumulated net investment
loss of $54,036, $58,123 and $56,400, respectively) $ 310,756,665 $ 369,108,588 $ 398,319,759
============= ============= ==============
</TABLE>
------------
See Notes to Financial Statements.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- Seligman Frontier 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. CHANGE IN FISCAL YEAR END -- Effective for the period ended October 31, 1999,
the Fund changed its fiscal year end for financial reporting and federal
income tax purposes to October 31 from September 30.
b. SECURITY VALUATION -- Investments in 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 national
exchanges 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.
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. 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 the 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 year ended October 31, 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 reclassifications
will have no effect on net assets, results of operations, or net asset values
per share of the Fund.
For the year ended October 31, 2000, the Fund redeemed 25,753,748 of its
shares from shareholders aggregating $411,461,014, of which approximately
$19,700,000 represents capital distributions. This information is provided
for federal income tax purposes only.
On November 16, 2000, the Fund declared a distribution of $1.386 per share
from net realized long-term gains from investment transactions. The
distribution was paid on November 22, 2000, to shareholders of record on
November 16, 2000.
15
<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 year ended October 31, 2000, aggregated $496,400,915 and $668,354,486,
respectively.
At October 31, 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 $70,416,299 and $8,836,169, respectively.
4. MANAGEMENT FEE, DISTRIBUTION SERVICES, AND OTHER TRANSACTIONS -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and
provides the necessary personnel and facilities. Compensation of all officers of
the Fund, all directors of the Fund who are employees 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 0.95% per annum
of the first $750 million of the Fund's average daily net assets and 0.85% per
annum of the Fund's average daily net assets in excess of $750 million. The
management fees reflected in the Statement of Operations represent 0.95% 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
$13,999 from sales of Class A shares. Commissions of $112,394 and $16,308 were
paid to dealers for 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 average daily net assets of 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 year ended October 31, 2000, fees incurred
under the Plan aggregated $499,929, or 0.24% per annum of 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 year ended October 31, 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 $503,883, $15,280, and $1,200,823, 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
year ended October 31, 2000, such charges amounted to $86,948.
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 B shares sold. The aggregate of such payments
retained by the Distributor, for the year ended October 31, 2000, amounted to
$5,098.
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 year ended October 31, 2000,
Seligman Services, Inc. received commissions of $2,777 from the sale of shares
of the Fund. Seligman Services, Inc. also received distribution and service fees
of $35,515, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged the Fund at cost $1,122,338 for shareholder account services.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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 October 31, 2000, of $54,036 is
included in other liabilities. Deferred fees and related accrued earnings are
not deductible for federal income tax purposes until such amounts are paid.
5. 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 per annum 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.
During the year ended October 31, 2000, the Fund periodically borrowed from
the credit facility. The average outstanding daily balance of bank loans (based
on the number of days the loans were outstanding during the period) was
$6,618,150, with a weighted average interest rate of 6.35%. The maximum
borrowing outstanding during the period was $19,075,000.
6. CAPITAL SHARE TRANSACTIONS -- The Fund has authorized 500,000,000 shares of
$0.10 par value Capital Stock. Transactions in shares of Capital Stock were as
follows:
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------
FOR THE ONE
YEAR ENDED MONTH ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 SEPTEMBER 30, 1999
-------------------------- --------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------------------------- --------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 1,743,462 $ 29,847,160 77,233 $ 980,390 3,193,205 $ 42,033,215
Exchanged from
associated
Funds 9,735,067 160,850,224 1,142,641 14,546,456 36,768,137 481,112,233
-------------------------- --------------------------- ---------------------------
Total 11,478,529 190,697,384 1,219,874 15,526,846 39,961,342 523,145,448
-------------------------- --------------------------- ---------------------------
Shares
repurchased (5,308,042) (88,709,992) (475,943) (6,018,651) (15,770,829) (203,299,642)
Exchanged into
associated
Funds (10,593,021) (175,761,951) (1,545,518) (19,845,440) (38,671,016) (509,317,966)
-------------------------- --------------------------- ---------------------------
Total (15,901,063) (264,471,943) (2,021,461) (25,864,091) (54,441,845) (712,617,608)
-------------------------- --------------------------- ---------------------------
Decrease (4,422,534) $(73,774,559) (801,587) $(10,337,245) (14,480,503) $(189,472,160)
========================== =========================== ============================
<CAPTION>
CLASS B
------------------------------------------------------------------------------
FOR THE ONE
YEAR ENDED MONTH ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 SEPTEMBER 30, 1999
------------------------- --------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------------------- --------------------- ------------------------
<S> <C> <C> <C> <C> <C>
226,548 $ 3,543,960 16,878 $ 198,226 635,500 $ 7,780,693
2,222,679 33,676,767 201,156 2,396,264 2,728,875 33,176,333
------------------------- --------------------- ------------------------
2,449,227 37,220,727 218,034 2,594,490 3,364,375 40,957,026
------------------------- --------------------- ------------------------
(768,985) (11,691,283) (72,018) (844,478) (1,340,058) (16,374,340)
(2,763,274) (42,222,113) (197,110) (2,350,985) (3,802,442) (46,598,505)
------------------------- --------------------- ------------------------
(3,532,259) (53,913,396) (269,128) (3,195,463) (5,142,500) (62,972,845)
------------------------- --------------------- ------------------------
(1,083,032) $(16,692,669) (51,094) $ (600,973) (1,778,125) $(22,015,819)
========================= ====================== =========================
<CAPTION>
Class C
------------------------------------------------------------
For the One May 27, 1999*
Year Ended Month Ended to
October 31, 2000 October 31, 1999 September 30, 1999
-------------------- ------------------ ------------------
Shares Amount Shares Amount Shares Amount
-------------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 114,756 $ 1,782,144 2,729 $ 31,419 33,815 $ 428,738
Exchanged from
associated Funds 72,130 1,116,976 169 2,000 884 11,107
-------------------- ----------------- ------------------
Total 186,886 2,899,120 2,898 33,419 34,699 439,845
-------------------- ----------------- ------------------
Shares repurchased (20,038) (300,979) (149) (1,820) (78) (948)
Exchanged into
associated Funds (78,805) (1,217,727) (605) (7,323) (1,908) (23,543)
-------------------- ----------------- ------------------
Total (98,843) (1,518,706) (754) (9,143) (1,986) (24,491)
-------------------- ----------------- ------------------
Increase (decrease) 88,043 $ 1,380,414 2,144 $ 24,276 32,713 $ 415,354
=================== ================ =================
<CAPTION>
Class D
--------------------------------------------------------------------------------
For the One
Year Ended Month Ended Year Ended
October 31, 2000 October 31, 1999 September 30, 1999
------------------------ ------------------------- -------------------------
Shares Amount Shares Amount Shares Amount
------------------------ ------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
365,264 $ 5,606,200 32,478 $ 380,567 1,035,938 $ 12,652,875
2,039,673 29,404,732 3,417,032 40,266,800 44,576,743 548,160,376
------------------------ ------------------------ -------------------------
2,404,937 35,010,932 3,449,510 40,647,367 45,612,681 560,813,251
------------------------ ------------------------ -------------------------
(2,936,043) (44,489,549) (614,365) (7,270,754) (10,620,686) (128,898,511)
(3,285,540) (47,067,420) (3,584,136) (42,355,581) (46,561,166) (574,930,187)
------------------------ ------------------------ -------------------------
(6,221,583) (91,556,969) (4,198,501) (49,626,335) (57,181,852) (703,828,698)
------------------------ ------------------------ -------------------------
(3,816,646) $(56,546,037) (748,991) $(8,978,968) (11,569,171) $(143,015,447)
======================== ======================== =========================
</TABLE>
*Commencement of offering of shares.
17
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below are intended to help you understand each Class's financial
performance for the past five years and one month or from its inception if less
than five years and one month. 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 during the period.
"Total return" shows the rate that you would have earned (or lost) on an
investment in each Class, assuming you reinvested all your 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
----------------------------------------------------------------
YEAR 10/1/99 YEAR ENDED SEPTEMBER 30,
ENDED TO ----------------------------------------
10/31/00 10/31/99 1999 1998 1997 1996
-------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ............................ $ 12.93 $ 13.23 $ 12.44 $ 17.55 $ 15.38 $ 14.04
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ............................................. (0.23) (0.02) (0.15) (0.16) (0.16) (0.13)
Net realized and unrealized
gain (loss) on investments .................................... 3.18 (0.28) 0.94 (3.32) 3.20 1.95
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS ................................ 2.95 (0.30) 0.79 (3.48) 3.04 1.82
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Distributions from net realized capital gain .................... -- -- -- (1.63) (0.87) (0.48)
------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS ............................................. -- -- -- (1.63) (0.87) (0.48)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD .................................. $ 15.88 $ 12.93 $ 13.23 $ 12.44 $ 17.55 $ 15.38
======= ======= ======= ======= ======= =======
TOTAL RETURN: 22.82% (2.27)% 6.35% (21.32)% 21.19% 13.40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ........................ $172,228 $197,424 $212,664 $379,945 $568,261 $523,737
Ratio of expenses to average net assets ......................... 1.62% 1.76%+ 1.62% 1.47% 1.52% 1.56%
Ratio of net loss to average net assets ......................... (1.37)% (1.63)%+ (1.16)% (1.05)% (1.10)% (0.91)%
Portfolio turnover rate ......................................... 133.44% 5.19% 56.31% 83.90% 97.37% 59.36%
<CAPTION>
CLASS B
----------------------------------------------------------------
YEAR 10/1/99 YEAR ENDED SEPTEMBER 30, 4/22/96*
ENDED TO ---------------------------- TO
10/31/00 10/31/99 1999 1998 1997 9/30/96
-------- -------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ............................ $12.03 $12.32 $11.66 $16.68 $14.78 $14.55
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ............................................. (0.32) (0.02) (0.23) (0.27) (0.27) (0.11)
Net realized and unrealized
gain (loss) on investments .................................... 2.94 (0.27) 0.89 (3.12) 3.04 0.34
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ................................ 2.62 (0.29) 0.66 (3.39) 2.77 0.23
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Distributions from net realized capital gain .................... -- -- -- (1.63) (0.87) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ............................................. -- -- -- (1.63) (0.87) --
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD .................................. $14.65 $12.03 $12.32 $11.66 $16.68 $14.78
====== ====== ====== ====== ====== ======
TOTAL RETURN: 21.78% (2.35)% 5.66% (21.95)% 20.17% 1.58%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ........................ $41,755 $47,310 $49,080 $67,199 $69,869 $24,016
Ratio of expenses to average net assets ......................... 2.38% 2.52%+ 2.38% 2.24% 2.30% 2.45%+
Ratio of net loss to average net assets ......................... (2.13)% (2.39)%+ (1.92)% (1.82)% (1.88)% (1.80)%+
Portfolio turnover rate ......................................... 133.44% 5.19% 56.31% 83.90% 97.37% 59.36%**
</TABLE>
----------
See footnotes on page 19.
18
<PAGE>
FINANCIAL HIGHLIGHTS
CLASS C
-------------------------------
YEAR 10/1/99 5/27/99*
ENDED TO TO
10/31/00 10/31/99 9/30/99
-------- -------- -------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ....... $12.03 $12.32 $12.18
------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ........................ (0.32) (0.02) (0.08)
Net realized and unrealized
gain (loss) on investments ............... 2.94 (0.27) 0.22
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ........... 2.62 (0.29) 0.14
------ ------ ------
LESS DISTRIBUTIONS:
Distributions from net realized
capital gain ............................. -- -- --
------ ------ ------
TOTAL DISTRIBUTIONS ........................ -- -- --
------ ------ ------
NET ASSET VALUE, END OF PERIOD ............. $14.65 $12.03 $12.32
====== ====== ======
TOTAL RETURN: 21.78% (2.35)% 1.15%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ... $1,801 $ 420 $ 403
Ratio of expenses to average net assets .... 2.38% 2.52%+ 2.36%+
Ratio of net loss to average net assets .... (2.13)% (2.39)%+ (1.84)%+
Portfolio turnover rate .................... 133.44% 5.19% 56.31%++
<TABLE>
<CAPTION>
CLASS D
-----------------------------------------------------------------
YEAR 10/1/99 YEAR ENDED SEPTEMBER 30,
ENDED TO ---------------------------------------
10/31/00 10/31/99 1999 1998 1997 1996
-------- -------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ....... $12.03 $12.32 $11.67 $16.69 $14.77 $13.61
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ........................ (0.32) (0.02) (0.23) (0.27) (0.27) (0.24)
Net realized and unrealized
gain (loss) on investments ............... 2.94 (0.27) 0.88 (3.12) 3.06 1.88
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ........... 2.62 (0.29) 0.65 (3.39) 2.79 1.64
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Distributions from net realized
capital gain ............................. -- -- -- (1.63) (0.87) (0.48)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ........................ -- -- -- (1.63) (0.87) (0.48)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ............. $14.65 $12.03 $12.32 $11.67 $16.69 $14.77
====== ====== ====== ====== ====== ======
TOTAL RETURN: 21.78% (2.35)% 5.57% (21.94)% 20.32% 12.47%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ... $94,974 $123,955 $136,173 $263,900 $390,904 $337,327
Ratio of expenses to average net assets .... 2.38% 2.52%+ 2.38% 2.24% 2.30% 2.35%
Ratio of net loss to average net assets .... (2.13)% (2.39)%+ (1.92)% (1.82)% (1.88)% (1.70)%
Portfolio turnover rate .................... 133.44% 5.19% 56.31% 83.90% 97.37% 59.36%
</TABLE>
----------
* Commencement of offering of shares.
** For the year ended September 30, 1996.
+ Annualized.
++ For the year ended September 30, 1999.
See Notes to Financial Statements.
19
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN FRONTIER FUND, INC.:
We have audited the accompanying statement of assets and liabilities of Seligman
Frontier Fund, Inc., including the portfolio of investments, as of October 31,
2000, and the related statements of operations for the year then ended and of
changes in net assets for the year then ended, for the one month ended October
31, 1999, and for the year ended September 30, 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 October 31, 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 Frontier Fund, Inc. as of October 31, 2000, the results of its
operations for the year 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
December 8, 2000
20
<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
Leroy C. Richie (4)
CHAIRMAN & CEO, Q Standards Worldwide, Inc.
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.
VICE CHAIRMAN, ICIMutual Insurance Company
MEMBER OF THE BOARD OF GOVERNORS,
Investment Company Institute
FRED E. BROWN
DIRECTOR EMERITUS
----------------
Member: (1) Executive Committee
(2) Audit Committee
(3) Director Nominating Committee
(4) Board Operations Committee
21
<PAGE>
EXECUTIVE OFFICERS
WILLIAM C. MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
MARK J. CUNNEEN
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
22
<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.
23
<PAGE>
SELIGMAN ADVISORS, INC.
AN AFFILIATE OF
[Logo omitted]
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 FRONTIER FUND, INC., WHICH CONTAINS INFORMATION ABOUT THE SALES
CHARGES, EXPENSES, AND ADDITIONAL RISK FACTORS. PLEASE READ THE PROSPECTUS
CAREFULLY BEFORE INVESTING OR SENDING MONEY.
EQF2 10/00 [RECYCLE LOGO] Printed on Recycled Paper
