SELIGMAN
MUNICIPAL
SERIES TRUST
[GRAPHIC OMITTED]
Mid-Year Report
March 31, 2000
Providing Income Exempt From Regular Income Tax
[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...
Established in 1864, Seligman has a history of providing financial services
marked not by fanfare, but rather by a quiet and firm adherence to financial
prudence. While the world has changed dramatically in the 136 years since
Seligman first opened its doors, the firm has continued to offer its clients
high-quality investment solutions through changing times.
In the late 19th century, as the country grew, Seligman helped finance the
westward expansion of the railroads, the construction of the Panama Canal, and
the launching of urban transit systems. In the first part of the 20th century,
as America became an industrial power, the firm helped fund the growing capital
needs of the nascent automobile and steel industries.
[PHOTO]
James, Jesse, and Joseph Seligman, 1870
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 launched 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 and Portfolio Summary.......... 4
Portfolios of Investments........................... 8
Statements of Assets and Liabilities................ 14
Statements of Operations............................ 15
Statements of Changes in Net Assets................. 16
Notes to Financial Statements....................... 18
Financial Highlights................................ 22
Report of Independent Auditors and
For More Information............................. 27
Trustees and Executive Officers .................... 28
Glossary of Financial Terms......................... 29
<PAGE>
TO THE SHAREHOLDERS
The past six months were difficult for fixed-income securities, including
municipal bonds. The continued strong pace of the US economic expansion -- which
in February became the longest in US history -- has caused the Federal Reserve
Board to act on its concern that the increasing demand for goods and services
would exceed the economy's ability to deliver them. The Federal Reserve Board
feared that this could produce an imbalance that could ignite inflation. In an
attempt to slow the economy and ease inflationary pressures, the Federal Reserve
Board raised the federal funds rate three times during this six-month period.
As short-term interest rates moved higher, and the economy showed no signs of
slowing in response, long-term rates increased significantly, and bond prices
fell accordingly. Municipal bonds, however, fared better than did other
fixed-income securities because of an accompanying slowdown in new-issue supply,
which provided some price support for the municipal market.
During the first quarter of 2000, notwithstanding the increases in short-term
rates, the long-term interest-rate environment improved. This was primarily the
result of investors looking for alternatives to the equity markets, which had
become increasingly volatile during this time.
As yet, it seems that the Federal Reserve Board's actions have not slowed the
economy -- indeed the consumer price index for March indicated a significant
increase in consumer prices. However, we believe that the Federal Reserve
Board's actions will ultimately be successful in keeping inflation at bay. Such
economic cooling should eventually place downward pressure on interest rates,
which could be positive for fixed-income securities over the long term.
In addition to our expectation that the interest-rate environment will
stabilize, we believe that municipal bonds have unique characteristics that
could allow them to deliver positive performance. First, we anticipate that
municipal new issuance will remain lower in 2000 than in 1999, which would
create a favorable supply and demand environment. Second, continued uncertainty
in the stock market may prompt investors to consider a wider range of securities
for their portfolios, and municipal bonds, which currently offer many investors
after-tax yield advantages over taxable bonds, may be an attractive choice.
Finally, we believe that recent shifts in the way business is conducted in the
municipal marketplace bode well for the long-term success of the industry.
We appreciate your confidence in Seligman Municipal Series Trust and look
forward to serving your investment needs for many years to come. A discussion
with your Portfolio Manager, as well as the Trust's portfolios of investments,
financial statements, and performance history, follows this letter.
By order of the Trustees,
/s/ William C. Morris
--------------------
William C. Morris
Chairman
/s/ Brian T. Zino
----------------------
Brian T. Zino
President
May 5, 2000
1
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
Thomas G. Moles
Q: What economic and market factors influenced Seligman Municipal Series Trust
during the past six months?
A: The primary factor affecting all fixed-income securities, including
municipal bonds, was the strong economy and the Federal Reserve Board's
response to the continued robust pace of growth. Beginning in 1999, a
number of economic indicators, particularly those related to employment
costs and consumer spending, heightened the Federal Reserve Board's
concern. At the same time, oil prices were on the rise, which exacerbated
inflation worries.
Since June 1999, in an attempt to prevent a resurgence in the rate of
inflation, the Federal Reserve Board has raised the federal funds rate five
times for a total of 125 additional basis points. This increase in
short-term rates pushed long-term yields higher, and bond prices lower.
However, during the first fiscal quarter of 2000, bonds rallied as equity
investors sought stability in the face of volatile equity markets.
Another factor that influenced municipal bond performance during
the past six months was the balance between supply and demand. Throughout
1999, a combination of rising municipal bond yields and strong equity
market returns pushed demand for municipal bonds considerably lower.
However, weak demand was accompanied by a slowdown in new municipal
issuances. Such issuances were down 21% in 1999 from 1998. Through March
31, 2000, issuances were down 32% versus the same period last year.
This slowdown in supply helped to stabilize the municipal market during
periods of Treasury market volatility. Over the past six months, long-term
municipal yields, as measured by the Bond Buyer 20-Bond General Obligation
Index, fluctuated within a narrow trading range of approximately 38 basis
points. In contrast, 10-year US Treasury note yields fluctuated within a
much wider range of 90 basis points. On March 31, 2000, long-term municipal
yields were nearly unchanged from those at the Trust's fiscal year end on
September 30, 1999.
The financial condition of the nation's states, cities, and municipalities
continues to improve. Credit-rating upgrades outnumbered downgrades by a
ratio of seven to one for calendar year 1999, and the first quarter of 2000
represented the 18th consecutive quarter in which upgrades exceeded
downgrades. An exception to this positive news has been the healthcare
sector, which remains under pressure due to merger activity, government
cutbacks, and the growth of managed care.
Q: Did the municipal market suffer any negative effects from the Year
2000 computer issue?
A: Through the coordinated efforts of governments, businesses, and
individuals, the municipal bond market entered the new millennium
uneventfully. The resources expended to prevent computer glitches may
have contributed to the strong economic reports released over the past
six months.
A TEAM APPROACH
Seligman Municipal Series Trust is managed by the Seligman Municipals Team,
headed by Thomas G. Moles. Mr. Moles is assisted in the management of the Trust
by a group of seasoned professionals who are responsible for research and
trading consistent with the Trust's investment objective.
[PHOTO]
Seligman Municipals Team: (standing, from left) Audrey Kuchyak, Theresa Barion,
Debra McGuinness, (seated) Eileen Comerford, Thomas G. Moles (Portfolio Manager)
2
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
Thomas G. Moles
Q: What was your investment strategy?
A: Over the past six months, long-term municipal yields rose
levels not seen in nearly two-and-one-half years. While such a rising-rate
environment is unfavorable for bonds, it provided some of the Series of the
Trust with buying opportunities to lock in higher yields for the long term
and to reduce positions in shorter-term and lower-yielding securities.
The higher yields that were available also facilitated our ongoing efforts
to improve call protection for the Trust. Many of the Trust's older,
higher-coupon bonds are at or near their optional call dates. (Callable
bonds can be redeemed by the issuer, prior to maturity on predetermined
dates and at specified prices.) Issuers generally call bonds when interest
rates have declined sufficiently to allow them to refinance their
outstanding debt at lower rates. Callable bonds thus pose a potential risk
to the Trust's dividend distributions because the proceeds from a called
bond must be reinvested at prevailing, typically lower, yields. By
selectively selling short-call positions and reinvesting the proceeds when
higher yields are available, we hope to protect the Trust's future dividend
distributions.
We believe that as a result of these actions the Trust is better positioned
for the long term. However, during periods of rising interest rates, the
Trust's net asset values declined more than they would have had we chosen
to retain short-term defensive holdings, which are less sensitive to
changes in interest rates.
As a result of the ongoing difficulties in the healthcare sector, we have
been particularly diligent in staying abreast of the current financial
status of our hospital credits. We have sold a number of declining credits
and have replaced them with securities showing greater stability.
Q: What is your outlook?
A: Municipal investment returns for the first quarter of 2000 have been
positive, with the municipal market outperforming the Treasury, agency, and
corporate sectors. We are optimistic that long-term municipal yields have
peaked and expect that the recent downward trend in yields will continue.
However, until the Federal Reserve Board appears satisfied that economic
growth has slowed to an acceptable rate, the bond markets may find it
difficult to sustain a prolonged rally.
Equity market volatility may continue over the near term, prompting some
investors to seek more stable alternatives for at least a portion of their
investment assets. We are optimistic that the municipal market's record of
safety and stability will spark renewed interest in municipal bonds. In
addition, for many investors, municipal securities currently offer
significant after-tax yield advantages relative to taxable bonds.
We are also encouraged by several positive long-term developments in the
municipal market, including improved disclosure, greater price
transparency, and the emergence of Internet underwriters and secondary
market makers. An open, accessible municipal market benefits all
participants by encouraging informed decision-making and, in our opinion,
is essential for the long-term viability of the municipal industry.
3
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
Investment Results per Share
California High-Yield Series
TOTAL RETURNS
For Periods Ended March 31, 2000
<TABLE>
<CAPTION>
AVERAGE ANNUAL
----------------------------------------------------------
CLASS C CLASS D
SIX SINCE INCEPTION ONE FIVE 10 SINCE INCEPTION
MONTHS* 5/27/99* YEAR YEARS YEARS 2/1/94
--------- ----------------- --------- --------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Class A**
With Sales Charge (2.54)% n/a (6.12)% 4.37% 6.01% n/a
Without Sales Charge (2.27) n/a (1.48) 5.39 6.52 n/a
Class C**
With Sales Charge and CDSC (0.29) (4.15)% n/a n/a n/a n/a
Without Sales Charge and CDSC 1.65 (2.21) n/a n/a n/a n/a
Class D**
With 1% CDSC 0.63 n/a (3.45) n/a n/a n/a
Without CDSC 1.65 n/a (2.52) 4.40 n/a 3.79%
Lehman Brothers Municipal
Bond Index*** 2.13 0.26++ (0.08) 6.08 7.15 4.97++++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 2000
3/31/00 9/30/99 3/31/99 DIVIDENDS++ CAPITAL GAIN++ Sec YIELD+++
-------- -------- -------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A $6.18 $6.28 $6.68 Class A $0.162 $0.076 5.13%
Class C 6.18 6.29 n/a Class C 0.134 0.076 4.46
Class D 6.18 6.29 6.69 Class D 0.134 0.076 4.50
HOLDINGS BY MARKET SECTOR 0 MOODY'S/S&P RATINGS 0
Revenue Bonds 98% Aaa/AAA 11%
General Obligation Bonds00 2 Aa/AA 17
A/A 56
Baa/BBB 16
WEIGHTED AVERAGE MATURITY 26.28 years
</TABLE>
----------------------------
See footnotes on page 7.
4
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
Investment Results per Share
California Quality Series
TOTAL RETURNS
For Periods Ended March 31, 2000
<TABLE>
<CAPTION>
AVERAGE ANNUAL
---------------------------------------------------------
CLASS C CLASS D
SIX SINCE INCEPTION ONE FIVE 10 SINCE INCEPTION
MONTHS* 5/27/99* YEAR YEARS YEARS 2/1/94
----------- ----------------- --------- --------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Class A**
With Sales Charge (2.17)% n/a (6.50)% 4.40% 6.03% n/a
Without Sales Charge 2.70 n/a (1.88) 5.43 6.56 n/a
Class C**
With Sales Charge and CDSC 0.31 (3.83)% n/a n/a n/a n/a
Without Sales Charge and CDSC 2.24 (1.89) n/a n/a n/a n/a
Class D**
With 1% CDSC 1.22 n/a (3.71) n/a n/a n/a
Without CDSC 2.24 n/a (2.78) 4.44 n/a 3.18%
Lehman Brothers Municipal
Bond Index*** 2.13 0.26++ (0.08) 6.08 7.15 4.97++++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE
DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 2000
3/31/00 9/30/99 3/31/99 DIVIDENDS++ CAPITAL GAIN++ SEC YIELD+++
-------- -------- -------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A $6.36 $6.42 $6.88 Class A $0.156 $0.072 4.54%
Class C 6.34 6.40 n/a Class C 0.127 0.072 3.84
Class D 6.34 6.40 6.86 Class D 0.127 0.072 3.88
HOLDINGS BY MARKET SECTOR 0 MOODY'S/S&P RATINGS 0
Revenue Bonds 87% Aaa/AAA 85%
General Obligation Bond 00 13 Aa/AA 14
A/A 1
WEIGHTED AVERAGE MATURITY 23.22 years
</TABLE>
---------------------------
See footnotes on page 7.
5
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
Investment Results per Share
Florida Series
TOTAL RETURNS
For Periods Ended March 31, 2000
<TABLE>
<CAPTION>
AVERAGE ANNUAL
---------------------------------------------------------
CLASS C CLASS D
SIX SINCE INCEPTION ONE FIVE 10 SINCE INCEPTION
MONTHS* 5/27/99* YEAR YEARS YEARS 2/1/94
--------- ----------------- --------- --------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Class A**
With Sales Charge (2.00)% n/a (6.01)% 4.16% 6.12% n/a
Without Sales Charge 2.90 n/a (1.37) 5.18 6.64 n/a
Class C**
With Sales Charge and CDSC 0.30 (3.61)% n/a n/a n/a n/a
Without Sales Charge and CDSC 2.38 (1.68) n/a n/a n/a n/a
Class D**
With 1% CDSC 1.35 n/a (3.16) n/a n/a n/a
Without CDSC 2.38 n/a (2.23) 4.40 n/a 3.39%
Lehman Brothers Municipal
Bond Index*** 2.13 0.26++ (0.08) 6.08 7.15 4.97++++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE
DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 2000
3/31/00 9/30/99 3/31/99 DIVIDENDS++ CAPITAL GAIN++ SEC YIELD+++
-------- -------- -------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A $7.39 $7.41 $7.91 Class A $0.188 $0.043 4.97%
Class C 7.40 7.43 n/a Class C 0.161 0.043 4.44
Class D 7.40 7.43 7.93 Class D 0.161 0.043 4.48
HOLDINGS BY MARKET SECTOR 0 MOODY'S/S&P RATINGS 0
Revenue Bonds 94% Aaa/AAA 67%
General Obligation Bonds 00 6 Aa/AA 23
A/A 10
WEIGHTED AVERAGE MATURITY 25.67 years
</TABLE>
-------------------------
See footnotes on page 7.
6
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
Investment Results per Share
North Carolina Series
TOTAL RETURNS
For Periods Ended March 31, 2000
<TABLE>
<CAPTION>
AVERAGE ANNUAL
--------------------------------------------------------
CLASS C CLASS A CLASS D
SIX SINCE INCEPTION ONE FIVE SINCE INCEPTION SINCE INCEPTION
MONTHS* 5/27/99* YEAR YEARS 8/27/90 2/1/94
--------- ----------------- --------- --------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Class A**
With Sales Charge (3.06)% n/a (6.68)% 4.05% 5.72% n/a
Without Sales Charge 1.79 n/a (2.06) 5.07 6.26 n/a
Class C**
With Sales Charge and CDSC (0.75) (4.29)% n/a n/a n/a n/a
Without Sales Charge and CDSC 1.27 (2.40) n/a n/a n/a n/a
Class D**
With 1% CDSC 0.26 n/a (3.73) n/a n/a n/a
Without CDSC 1.27 n/a (2.81) 4.27 n/a 3.19%
Lehman Brothers Municipal
Bond Index*** 2.13 0.26++ (0.08) 6.08 7.22+ 4.97++++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE
DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 2000
3/31/00 9/30/99 3/31/99 DIVIDENDS++ CAPITAL GAIN++ SEC YIELD+++
-------- -------- -------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A $7.45 $7.59 $8.07 Class A $0.176 $0.096 4.30%
Class C 7.44 7.59 n/a Class C 0.148 0.096 3.74
Class D 7.44 7.59 8.06 Class D 0.148 0.096 3.78
HOLDINGS BY MARKET SECTOR 0 MOODY'S/S&P RATINGS 0
Revenue Bonds 80% Aaa/AAA 49%
General Obligation Bonds 00 20 Aa/AA 32
A/A 19
WEIGHTED AVERAGE MATURITY 19.15 years
<FN>
------------------------------------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price and assume all distributions
within the period are invested in additional shares. Returns for Class A
shares are calculated with and without the effect of the initial 4.75%
maximum sales charge. Returns for Class C shares are calculated with and
without the effect of the initial 1% maximum sales charge and the 1%
contingent deferred sales charge ("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. No adjustment was
made to the performance of Class A shares for periods prior to commencement
dates December 27, 1990, in the case of the Florida Series, and January 1,
1993, in the case of the California High-Yield and California Quality
Series, for the annual Administration, Shareholder Services and
Distribution Plan fee of up to 0.25% of average daily net assets for each
Series. 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. A portion of each Series' income may be subject
to applicable state and local taxes, and any amount may be subject to the
federal alternative minimum tax. Past performance is not indicative of
future investment results.
*** The Lehman Brothers Municipal Bond Index is an unmanaged index that does
not include any fees or sales charges. It is composed of approximately 60%
revenue bonds and 40% state government obligations. Investors cannot invest
directly in an index.
++ From 5/31/99.
++++ From 1/31/94.
+ From 8/31/90.
++ Represents per share amount paid or declared for the six months ended March
31, 2000.
+++ Current yield, representing the annualized yield for the 30-day
period ended March 31, 2000, has been computed in accordance with SEC
regulations and will vary.
0 Percentages based on current market values of long-term holdings at March
31, 2000.
00 Includes pre-refunded and escrowed-to-maturity securities.
</FN>
</TABLE>
7
<PAGE>
PORTFOLIOS OF INVESTMENTS
March 31, 2000
CALIFORNIA HIGH-YIELD SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
---------- --------------------- ------------------------------
<S> <C> <C> <C>
$2,500,000 Alemeda, CA Certificates of Participation (City Hall Seimic
Upgrade Project), 6.20% due 5/1/2025...................................... NR/A $2,531,925
1,000,000 California Department of Veterans Affairs Rev. (Home Purchase),
5-1/2% due 12/1/2018*..................................................... Aa3/AA- 973,760
2,190,000 California Department of Water Resources Water System Rev.
(Central Valley Project), 6% due 12/1/2020................................ Aa2/AA 2,212,842
500,000 California Educational Facilities Authority Rev. (Los Angeles College
of Chiropractic Medicine), 5.60% due 11/1/2017............................ Baa2/NR 464,385
2,500,000 California Educational Facilities Authority Rev. (Loyola Marymount
University), 5-3/4% due 10/1/2024......................................... A2/NR 2,474,075
3,000,000 California Educational Facilities Authority Rev. (Pepperdine University),
5% due 11/1/2029.......................................................... A1/NR 2,658,450
2,500,000 California Health Facilities Financing Authority Rev. (Kaiser Permanente),.
5.40% due 5/1/2028........................................................ A3/A 2,167,975
3,000,000 California Health Facilities Financing Authority Rev. (Cedars-Sinai
Medical Center), 6-1/4% due 12/1/2034..................................... A2/NR 3,014,760
1,500,000 California Housing Finance Agency Home Mortgage Rev.,
6-3/8% due 8/1/2027*...................................................... Aa2/AA- 1,514,775
2,500,000 California Housing Finance Agency (Single Family Mortgage),
5.40% due 8/1/2028*....................................................... Aaa/AAA 2,321,600
2,500,000 California Housing Finance Agency (Multi-family Housing Rev.),
5-3/8% due 2/1/2036*..................................................... Aa3/AA- 2,254,825
2,500,000 California Pollution Control Financing Authority Rev. (San Diego
Gas & Electric Co.), 5.85% due 6/1/2021*.................................. Aa3/AA- 2,472,850
1,750,000 California Pollution Control Financing Authority Rev. (Pacific Gas &
Electric Co.), 5-7/8% due 6/1/2023*....................................... A1/AA- 1,737,785
1,000,000 California Pollution Control Financing Authority Rev. (Pacific Gas &
Electric Co.), 5.85% due 12/1/2023*....................................... A1/AA- 989,800
3,500,000 California Statewide Certificates of Participation (Children's Hospital
of Los Angeles), 5-1/4% due 8/15/2029..................................... A1/A+ 3,095,540
2,500,000 Cupertino, CA Certificates of Participation (Capital Improvement Projects),
5-3/4% due 1/1/2016....................................................... A1/A+ 2,501,800
3,000,000 Foothill/Eastern Transportation Corridor Agency, CA Toll Road Rev.,
5-3/4% due 1/15/2040...................................................... Baa3/BBB- 2,809,050
2,500,000 Los Angeles, CA Department of Water & Power Electric Plant Rev.,
5-1/2% due 6/15/2029...................................................... Aaa/AAA 2,425,575
3,000,000 Modesto, CA Irrigation District Certificates of Participation,
5.30% due 7/1/2022........................................................ A2/A+ 2,841,810
<FN>
-------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
</FN>
</TABLE>
8
<PAGE>
PORTFOLIOS OF INVESTMENTS
March 31, 2000
CALIFORNIA HIGH-YIELD SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
---------- --------------------- ---------------- ------------
<S> <C> <C> <C>
$ 645,000 Petaluma, CA Community Development Commission Tax Allocation Bonds
(Central Business District), 9.30% due 5/15/2010.......................... Baa1/NR $ 647,399
2,005,000 Pleasanton, CA Joint Powers Financing Authority Reassessment Rev.,
6.15% due 9/2/2012........................................................ Baa1/NR 2,055,827
3,000,000 Puerto Rico Highway & Transportation Authority Rev., 5-1/2% due 7/1/2036.... Baa1/A 2,843,700
2,500,000 Sacramento, CA Municipal Utility District Electric Rev.,
5-1/4% due 7/1/2028....................................................... A2/A 2,275,400
3,000,000 San Bernardino, CA Joint Powers Financing Authority (California Dept. of
Transportation Lease), 5-1/2% due 12/1/2020............................... A1/A 2,840,370
1,000,000 San Joaquin Hills, CA Transportation Corridor Agency Rev. (Orange County
Senior Lien Toll Road), 6-3/4% due 1/1/20320.............................. Aaa/AAA 1,077,630
2,000,000 Washington Township, CA Hospital District Hospital Healthcare System Rev.,
5-1/4% due 7/1/2029....................................................... A2/NR 1,718,420
-----------
TOTAL MUNICIPAL BONDS (Cost $56,700,512) -- 98.8%......................................... 54,922,328
VARIABLE RATE DEMAND NOTES (Cost $200,000) -- 0.3%........................................ 200,000
OTHER ASSETS LESS LIABILITIES -- 0.9%..................................................... 490,277
-----------
NET ASSETS -- 100.0%...................................................................... $55,612,605
===========
</TABLE>
CALIFORNIA QUALITY SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
---------- --------------------- --------------- -----------
<S> <C> <C> <C>
$3,000,000 California Department of Water Resources Water System Rev.
(Central Valley Project), 6.10% due 12/1/2029 0........................... Aaa/AA $3,261,660
3,440,000 California Educational Facilities Authority Rev. (Pomona College),
6% due 2/15/2017.......................................................... Aaa/AAA 3,511,002
2,000,000 California Educational Facilities Authority Rev. (Stanford University),
5.35% due 6/1/2027........................................................ Aaa/AAA 1,910,600
4,000,000 California Educational Facilities Authority Rev. (University of San Diego),
5% due 10/1/2028.......................................................... Aaa/NR 3,577,360
4,000,000 California Educational Facilities Authority Rev. (University of Southern
California), 5% due 10/1/2028............................................. Aa2/AA+ 3,567,120
360,000 California Housing Finance Agency (Housing Revenue Insured Bonds),
8-5/8% due 8/1/2015....................................................... Aaa/AAA 362,603
2,720,000 California Housing Finance Agency Home Mortgage Rev.,
6-3/4% due 2/1/2025*...................................................... Aa2/AA- 2,767,192
4,000,000 California Pollution Control Financing Authority Rev. (Mobil Oil Corporation
Project), 5-1/2% due 12/1/2029*............................................ Aa2/AA 3,776,760
<FN>
---------------------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
0 Pre-refunded security.
See Notes to Financial Statements.
</FN>
</TABLE>
9
<PAGE>
PORTFOLIOS OF INVESTMENTS
March 31, 2000
CALIFORNIA QUALITY SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
---------- --------------------- -------------- ---------
<S> <C> <C> <C>
$870,000 California Public Capital Improvements Financing Authority
(Pooled Projects), 8.10% due 3/1/2018................................... Aaa/AAA $ 881,179
4,000,000 California State GOs, 5% due 10/1/2023..................................... Aa3/AA- 3,620,720
2,500,000 California Statewide Communities Development Authority Certificates of
Participation (Citrus Valley Health Partners, Inc.), 5-1/8% due 4/1/2023. Aaa/AAA 2,302,025
3,000,000 California Statewide Communities Development Authority Certificates of
Participation (The Trustees of the J. Paul Getty Trust), 5% due 10/1/2023 Aaa/AAA 2,673,030
4,000,000 Contra Costa, CA Water District Rev., 5% due 10/1/2024..................... Aaa/AAA 3,598,680
3,500,000 East Bay, CA Municipal Utility District Water System Rev., 5% due 6/1/2026. Aaa/AAA 3,146,780
2,500,000 Eastern Municipal Water District Riverside County, CA Water and Sewer Rev.,
6-3/4% due 7/1/2012...................................................... Aaa/AAA 2,909,400
3,000,000 Fresno, CA Sewer System Rev., 5-1/4% due 9/1/2019.......................... Aaa/AAA 2,918,010
4,000,000 Los Angeles, CA Department of Water & Power Electric Plant Rev.,
5-1/2% due 6/15/2029..................................................... Aaa/AAA 3,880,920
1,000,000 Marin, CA Municipal Water District Water Rev., 5.65% due 7/1/202........... A1/AA 994,270
2,000,000 Metropolitan Water District of Southern California Waterworks GOs,
4-3/4% due 3/1/2037...................................................... Aaa/AAA 1,677,480
4,500,000 Orange County, CA Local Transportation Authority (Measure M Sales
Tax Rev.), 6% due 2/15/2009.............................................. Aaa/AAA 4,865,850
2,500,000 Rancho, CA Water District Financing Authority Rev., 5.90% due 11/1/2015.... Aaa/AAA 2,592,850
4,000,000 Regents of the University of California Rev. (Multiple Purpose Projects),
5-3/8% due 9/1/2024...................................................... Aaa/AAA 3,844,800
4,300,000 San Diego, CA Public Facilities Financing Authority Sewer Rev.,
5% due 5/15/2029......................................................... Aaa/AAA 3,840,932
4,250,000 San Francisco Bay Area Rapid Transit District, CA (Sales Tax Rev.),
5% due 7/1/2028.......................................................... Aaa/AAA 3,803,240
3,000,000 San Francisco, CA City and County Airports Commission Rev.
(International Airport), 6.60% due 5/1/2024*............................. Aaa/AAA 3,187,740
-----------
TOTAL MUNICIPAL BONDS (Cost $75,067,671) -- 97.2%........................................ 73,472,203
VARIABLE RATE DEMAND NOTES (Cost $900,000) -- 1.2% ...................................... 900,000
OTHER ASSETS LESS LIABILITIES -- 1.6%.................................................... 1,251,567
----------
NET ASSETS-- 100.0% ..................................................................... $75,623,770
===========
<FN>
----------------------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal alternative minimum tax.
See Notes to Financial Statements.
</FN>
</TABLE>
10
<PAGE>
PORTFOLIOS OF INVESTMENTS
March 31, 2000
FLORIDA SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
---------- --------------------- -------------- -------------
<S> <C> <C> <C>
$2,000,000 Broward County, FL Airport System Rev., 5% due 10/1/2023.................... Aaa/AAA $ 1,770,400
1,000,000 Broward County, FL Water & Sewer Utility Rev., 5% due 10/1/2018............. Aaa/AAA 920,610
1,000,000 Dade County, FL Aviation Rev., 6-1/8% due 10/1/2020*........................ Aaa/AAA 1,021,730
2,000,000 Dade County, FL Public Improvement GOs, 5-3/4% due 10/1/2016................ Aaa/AAA 2,043,120
1,750,000 Escambia County, FL Health Facilities Authority Rev. (Ascension
Health Credit Group), 6% due 11/15/2031..................................... Aa2/AA 1,762,285
945,000 Florida Housing Finance Agency Rev. (General Mortgage),
6.35% due 6/1/2014........................................................ NR/AAA 966,130
690,000 Florida Housing Finance Agency Rev. (Single Family Mortgage),
6.55% due 7/1/2014*....................................................... Aaa/AAA 708,803
1,000,000 Florida Housing Finance Agency Rev. (Homeowner Mortgage),
6.20% due 7/1/2027*....................................................... Aa3/AA 1,002,320
2,500,000 Florida Ports Financing Commission Rev. (State Transportation Trust Fund),
5-3/8% due 6/1/2027*...................................................... Aaa/AAA 2,335,325
2,500,000 Florida State Turnpike Authority Rev., 5-5/8% due 7/1/2025.................. Aaa/AAA 2,468,225
2,000,000 Greater Orlando Aviation Authority, FL Airport Facilities Rev.,
5-1/4% due 10/1/2023*..................................................... Aaa/AAA 1,845,380
2,500,000 Hillsborough County, FL Aviation Authority Rev. (Tampa International
Airport), 5-3/8% due 10/1/2023*........................................... Aaa/AAA 2,355,450
2,000,000 Hillsborough County, FL School Board (Certificates of.
Participation), 6% due 7/1/2025........................................... Aaa/AAA 2,053,700
2,000,000 Jacksonville Electric Authority, FL Rev. (Electric System),
5.10% due 10/1/2032....................................................... Aa2/AA 1,771,620
2,000,000 Jacksonville Electric Authority, FL Rev. (Water & Sewer System),
5-5/8% due 10/1/2037...................................................... Aa3/AA- 1,929,580
1,000,000 Jacksonville, FL Port Authority Airport Rev., 6-1/4% due 10/1/2024*......... Aaa/AAA 1,025,220
2,000,000 Jacksonville, FL Sewage & Solid Waste Disposal Facilities Rev.
(Anheuser-Busch Project), 5-7/8% due 2/1/2036*.......................... A1/A+ 1,949,640
1,000,000 Lee County, FL Transportation Facilities Rev., 6% due 10/1/2015............. Aaa/AAA 1,037,230
2,000,000 Marion County, FL Hospital District Health System Rev. (Munroe
Regional Health System), 5-5/8% due 10/1/2024............................. A2/NR 1,809,560
2,000,000 Polk County, FL Industrial Development Authority Solid Waste Disposal
Facilities Rev. (Tampa Electric Company Project), 5.85% due 12/1/2030*.... Aa2/A1+ 1,971,760
<FN>
------------------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal alternative minimum tax.
See Notes to Financial Statements.
</FN>
</TABLE>
11
<PAGE>
PORTFOLIOS OF INVESTMENTS
March 31, 2000
FLORIDA SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
---------- --------------------- -------------- -----------
<S> <C> <C> <C>
$2,000,000 Reedy Creek Improvement District, FL Utilities Rev., 5-1/8% due 10/1/2019... Aaa/AAA $ 1,861,220
1,750,000 Tampa Bay, FL Regional Water Supply Utility System Authority Rev.,
5-3/4% due 10/1/2029...................................................... Aaa/AAA 1,747,532
-----------
TOTAL MUNICIPAL BONDS (Cost $36,843,765) -- 97.3%......................................... 36,356,840
OTHER ASSETS LESS LIABILITIES -- 2.7%..................................................... 1,014,377
-----------
NET ASSETS -- 100.0%...................................................................... $37,371,217
===========
</TABLE>
NORTH CAROLINA SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
---------- --------------------- -------------- ------------
<S> <C> <C> <C>
$1,250,000 Appalachian State University, NC Housing & Student Center System Rev.,
5-5/8% due 7/15/2015 ..................................................... Aaa/AAA $1,258,675
1,250,000 Asheville, NC Water System Rev., 5.70% due 8/1/2025......................... Aaa/AAA 1,239,963
2,000,000 Charlotte-Mecklenberg Hospital Authority, NC Health Care System Rev.,
5-3/4% due 1/15/2021...................................................... Aa3/AA 1,971,200
1,000,000 Charlotte, NC Certificates of Participation (Charlotte-Mecklenburg Law
Enforcement Center Project), 5-3/8% due 6/1/2013.......................... Aa1/AA 1,001,040
2,000,000 Charlotte, NC Water & Sewer GOs, 5.90% due 2/1/2017 0....................... Aaa/AAA 2,107,960
1,000,000 Concord, NC Utilities System Rev., 5% due 12/1/2022......................... Aaa/AAA 898,570
1,500,000 Fayetteville, NC Public Works Commission Rev., 5-1/8% due 3/1/2............. Aaa/AAA 1,366,575
2,500,000 Martin County Industrial Facilities and Pollution Control Financing
Authority, NC Solid Waste Disposal Rev. (Weyerhaeuser Company
Project), 6% due 11/1/2025*............................................... A2/A 2,337,600
600,000 North Carolina Housing Finance Agency Rev. (Multi-Family),
5.80% due 7/1/2014........................................................ Aa2/AA 600,186
1,295,000 North Carolina Housing Finance Agency Rev. (Single Family),
6-1/2% due 3/1/2018....................................................... Aa2/AA 1,324,824
1,500,000 North Carolina Medical Care Commission Hospital Rev. (First Health
of the Carolinas Project), 5% due 10/1/2028............................... Aa3/AA- 1,280,280
1,500,000 North Carolina Medical Care Commission Hospital Rev. (Gaston Health
Care), 5% due 2/15/2029................................................... A1/A+ 1,218,285
1,500,000 North Carolina Municipal Power Agency No. 1 Catawba Electric Rev.,
5-3/4% due 1/1/2015....................................................... Aaa/AAA 1,507,035
3,000,000 North Carolina Municipal Power Agency No. 1 Catawba Electric Rev.,
5% due 1/1/2020 ++........................................................ Aaa/AAA 2,803,290
1,000,000 Orange, NC Water & Sewer Authority Rev., 5.20% due 7/1/2016................. Aa2/AA 959,760
<FN>
------------------------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
++ Escrowed-to-maturity security.
0 Pre-refunded security.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
</FN>
</TABLE>
12
<PAGE>
PORTFOLIOS OF INVESTMENTS
March 31, 2000
NORTH CAROLINA SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
---------- --------------------- -------------- -----------
<S> <C> <C> <C>
$1,250,000 University of North Carolina Charlotte Rev. (Student Activity Center),
5-1/2% due 6/1/2021....................................................... Aaa/AAA $1,217,887
500,000 University of North Carolina Hospitals at Chapel Hill Rev.,
6-3/8% due 2/15/2017 0.................................................... Aa3/AA 524,115
500,000 University of North Carolina Hospitals at Chapel Hill Rev.,
5% due 2/15/2024.......................................................... Aaa/AAA 445,660
1,000,000 University of North Carolina Hospitals at Chapel Hill Rev.,
5-1/4% due 2/15/2026...................................................... Aa3/A 903,220
1,550,000 Wake County Industrial Facilities & Pollution Control Financing Authority,
NC (Carolina Power & Light), 6.90% due 4/1/2009........................... A2/A1 1,583,743
-----------
TOTAL MUNICIPAL BONDS (Cost $27,015,885) -- 98.0%......................................... 26,549,868
VARIABLE RATE DEMAND NOTES (Cost $200,000) -- 0.7%........................................ 200,000
OTHER ASSETS LESS LIABILITIES -- 1.3%..................................................... 356,445
-----------
NET ASSETS -- 100.0%...................................................................... $27,106,313
===========
<FN>
---------------------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
0 Pre-refunded security.
See Notes to Financial Statements.
</FN>
</TABLE>
13
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
March 31, 2000
<TABLE>
<CAPTION>
CALIFORNIA CALIFORNIA NORTH
HIGH-YIELD QUALITY FLORIDA CAROLINA
SERIES SERIES SERIES SERIES
------------ -------------- ------------ -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(See Portfolios of Investments):
Long-term holdings...................... $54,922,328 $73,472,203 $36,356,840 $26,549,868
Short-term holdings..................... 200,000 900,000 -- 200,000
----------- ----------- ----------- -----------
55,122,328 74,372,203 36,356,840 26,749,868
Cash ...................................... 101,013 148,760 -- 111,886
Interest receivable........................ 985,358 1,334,427 912,987 408,265
Receivable for Shares of Beneficial
Interest sold........................... 74,752 29,719 17,988 143
Expenses prepaid to shareholder
service agent........................... 6,644 7,309 3,987 2,990
Receivable for securities sold............. -- -- 804,211 --
Other...................................... 21,103 6,584 21,210 8,577
----------- ----------- ----------- -----------
Total Assets............................... 56,311,198 75,899,002 38,117,223 27,281,729
=========== =========== =========== ===========
LIABILITIES:
Payable for Shares of Beneficial Interest
repurchased............................. 496,757 24,622 246,290 70,432
Dividends payable.......................... 111,997 138,100 71,976 47,915
Bank overdraft............................. -- -- 358,687 --
Accrued expenses and other................. 89,839 112,510 69,053 57,069
----------- ----------- ----------- -----------
Total Liabilities ......................... 698,593 275,232 746,006 175,416
----------- ----------- ----------- -----------
Net Assets................................. $55,612,605 $75,623,770 $37,371,217 $27,106,313
=========== =========== =========== ===========
COMPOSITION OF NET ASSETS:
Shares of Beneficial Interest, at par:
Class A................................. $ 7,813 $ 11,257 $ 4,817 $ 3,446
Class C................................. 201 21 38 1
Class D................................. 989 620 204 193
Additional paid-in capital................. 57,523,536 77,347,190 37,779,067 27,599,584
Undistributed/(dividends in excess of)
net investment income................... 19,848 (6,928) (618) (8,712)
Undistributed/accumulated net realized
gain (loss)............................. (161,598) (132,922) 74,634 (22,182)
Net unrealized depreciation of
investments............................. (1,778,184) (1,595,468) (486,925) (466,017)
----------- ----------- ----------- -----------
Net Assets................................. $55,612,605 $75,623,770 $37,371,217 $27,106,313
=========== =========== =========== ===========
NET ASSETS:
Class A................................. $48,253,743 $71,562,130 $35,580,713 $25,661,716
Class C................................. $ 1,245,140 $ 130,209 $ 277,945 $ 10,307
Class D................................. $ 6,113,722 $ 3,931,431 $ 1,512,559 $ 1,434,290
SHARES OF BENEFICIAL INTEREST
OUTSTANDING (Unlimited shares authorized;
$0.001 par value):
Class A................................. 7,812,525 11,257,303 4,816,887 3,445,795
Class C ............................... 201,343 20,538 37,555 1,385
Class D ............................... 988,740 620,126 204,358 192,699
NET ASSET VALUE PER SHARE:
Class A.................................... $6.18 $6.36 $7.39 $7.45
Class C.................................... $6.18 $6.34 $7.40 $7.44
Class D.................................... $6.18 $6.34 $7.40 $7.44
-------------------------------
See Notes to Financial Statements.
</TABLE>
14
<PAGE>
STATEMENTS OF OPERATIONS
For the Six Months Ended March 31, 2000
<TABLE>
<CAPTION>
CALIFORNIA CALIFORNIA NORTH
HIGH-YIELD QUALITY FLORIDA CAROLINA
SERIES SERIES SERIES SERIES
------------- ------------- ------------ ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ..................................... $1,816,462 $2,196,660 $1,133,689 $ 804,937
---------- ---------- ---------- ----------
Expenses:
Management fees............................... 149,888 188,974 96,478 69,365
Distribution and service fees................. 66,084 56,547 56,358 40,997
Shareholder account services.................. 42,722 51,356 28,442 21,725
Auditing and legal fees....................... 16,349 19,759 14,065 13,357
Custody and related services.................. 12,387 11,032 7,793 2,959
Trustees' fees and expenses................... 6,089 6,205 4,247 3,756
Registration.................................. 4,984 7,476 4,940 6,480
Shareholder reports and communications........ 3,895 4,852 3,333 3,070
Miscellaneous................................. 1,259 1,465 950 783
---------- ---------- ---------- ----------
Total Expenses Before Reimbursement........... 303,657 347,666 216,606 162,492
Reimbursement of expenses..................... (53,449) -- (66,897) --
---------- ---------- ---------- ----------
Total Expenses After Reimbursement............ 250,208 347,666 149,709 162,492
---------- ---------- ---------- ----------
Net Investment Income......................... 1,566,254 1,848,994 983,980 642,445
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments....... (150,264) 155,246 81,541 93,290
Net change in unrealized depreciation
of investments.............................. (407,527) (139,374) (60,950) (300,870)
---------- ---------- ---------- ----------
Net Gain (Loss) on Investments ............... (557,791) 15,872 20,591 (207,580)
---------- ---------- ---------- ----------
Increase in Net Assets from Operations........ $1,008,463 $1,864,866 $1,004,571 $ 434,865
========== ========== ========== ==========
-----------------------------
See Notes to Financial Statements.
</TABLE>
15
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CALIFORNIA HIGH-YIELD SERIES CALIFORNIA QUALITY SERIES
-------------------------------- ------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
3/31/00 9/30/99 3/31/00 9/30/99
----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................... $1,566,254 $3,122,968 $1,848,994 $3,911,860
Net realized gain (loss) on investments. (150,264) 848,260 155,246 967,560
Net change in unrealized appreciation/
depreciation of investments.......... (407,527) (6,115,178) (139,374) (8,037,661)
----------- ------------ ----------- -----------
Increase (Decrease) in Net Assets
from Operations...................... 1,008,463 (2,143,950) 1,864,866 (3,158,241)
----------- ------------ ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A.............................. (1,369,122) (2,825,817) (1,770,519 (3,747,630)
Class C.............................. (25,255) (7,503) (1,264) (114)
Class D.............................. (152,029) (289,648) (84,139) (164,116)
Net realized gain on investments:
Class A.............................. (681,175) (207,681) (824,137) (2,762,949)
Class C.............................. (14,435) -- (108) --
Class D.............................. (94,111) (23,942) (48,062) (100,451)
----------- ------------ ----------- -----------
Decrease in Net Assets
from Distributions................... (2,336,127) (3,354,591) (2,728,229) (6,775,260)
----------- ------------ ----------- -----------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST:
Net proceeds from sales of shares....... 2,375,704 21,297,184 1,137,692 6,015,293
Investment of dividends................. 880,880 1,817,908 861,752 1,932,726
Exchanged from associated Funds......... 2,332,044 6,342,123 2,453,678 2,462,908
Value of shares issued in payment of
gain distributions................... 557,051 162,740 503,970 1,751,037
----------- ------------ ---------- -----------
Total................................... 6,145,679 29,619,955 4,957,092 12,161,964
----------- ------------ ---------- -----------
Cost of shares repurchased.............. (10,568,110) (15,119,823) (5,977,934) (10,056,106)
Exchanged into associated Funds......... (5,143,543) (7,262,583) (1,581,049) (2,907,275)
----------- ------------ ---------- -----------
Total................................... (15,711,653) (22,382,406) (7,558,983) (12,963,381)
----------- ------------ ---------- -----------
Increase (Decrease) in Net Assets
from Transactions in Shares of
Beneficial Interest:................. (9,565,974) 7,237,549 (2,601,891) (801,417)
----------- ------------ ---------- -----------
Increase (Decrease) in Net Assets....... (10,893,638) 1,739,008 (3,465,254) (10,734,918)
NET ASSETS:
Beginning of period..................... 66,506,243 64,767,235 79,089,024 89,823,942
----------- ------------ ----------- -----------
End of Period........................... $55,612,605 $ 66,506,243 $75,623,770 $79,089,024
=========== ============ =========== ===========
-----------------------------
See Notes to Financial Statements.
</TABLE>
16
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FLORIDA SERIES NORTH CAROLINA SERIES
------------------------------------ -------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
3/31/00 9/30/99 3/31/00 9/30/99
--------------- ---------- --------- ----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................... $983,980 $1,935,557 $ 642,445 $1,399,334
Net realized gain on investments........ 81,541 232,488 93,290 253,645
Net change in unrealized appreciation/
depreciation of investments.......... (60,950) (3,636,357) (300,870) (2,615,290)
----------- ----------- ---------- -----------
Increase (Decrease) in Net Assets
from Operations...................... 1,004,571 (1,468,312) 434,865 (962,311)
----------- ----------- ---------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A.............................. (940,966) (1,853,149) (620,175) (1,341,165)
Class C.............................. (5,663) (2,744) (202) (113)
Class D.............................. (37,969) (79,664) (30,780) (58,056)
Net realized gain on investments:
Class A.............................. (222,212) (272,671) (342,478) (451,811)
Class C.............................. (1,469) -- (129) --
Class D.............................. (10,618) (14,496) (19,882) (20,721)
----------- ----------- ---------- -----------
Decrease in Net Assets
from Distributions................... (1,218,897) (2,222,724) (1,013,646) (1,871,866)
----------- ----------- ---------- -----------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST:
Net proceeds from sales of shares....... 1,389,805 4,498,419 323,548 1,889,423
Investment of dividends................. 337,748 732,052 323,195 747,439
Exchanged from associated Funds......... 1,663,042 3,209,545 421,172 221,185
Value of shares issued in payment of
gain distributions................... 113,527 163,562 265,268 351,195
----------- ----------- ---------- -----------
Total................................... 3,504,122 8,603,578 1,333,183 3,209,242
----------- ----------- ---------- -----------
Cost of shares repurchased.............. (4,126,195) (6,378,034) (2,433,823) (4,748,910)
Exchanges into associated Funds......... (1,494,658) (3,235,898) (131,228) (523,333)
----------- ----------- ---------- -----------
Total................................... (5,620,853) (9,613,932) (2,565,051) (5,272,243)
----------- ----------- ---------- -----------
ecrease in Net Assets from
Transactions in Shares of
Beneficial Interest.................. (2,116,731) (1,010,354) (1,231,868) (2,063,001)
----------- ----------- ----------- -----------
Decrease in Net Assets.................. (2,331,057) (4,701,390) (1,810,649) (4,897,178)
NET ASSETS:
Beginning of period..................... 39,702,274 44,403,664 28,916,962 33,814,140
----------- ----------- ----------- -----------
End of Period........................... $37,371,217 $39,702,274 $27,106,313 $28,916,962
=========== =========== =========== ===========
-----------------------------
See Notes to Financial Statements.
</TABLE>
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Multiple Classes of Shares -- Seligman Municipal Series Trust (the "Trust")
consists of four separate series: the "California High-Yield Series," the
"California Quality Series," the "Florida Series," and the "North Carolina
Series." Each Series of the Trust offers three 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 redemp tions within 18
months of purchase. The Trust 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 three classes of shares for
each Series 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 Trust:
a. Security Valuation -- All municipal securities and other short-term holdings
maturing in more than 60 days are
valued based upon quotations provided by an independent pricing service or,
in their absence, at fair value determined in accordance with procedures
approved by the Trustees. Short-term holdings maturing in 60 days or less
are generally valued at amortized cost.
b. Federal Taxes -- There is no provision for federal income tax. Each Series
has elected to be taxed as a regulated investment company and intends to
distribute sub stantially all taxable net income and net gain realized.
c. 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.
Interest income is recorded on the accrual basis. The Trust amortizes
original issue discounts and premiums paid on purchases of portfolio
securities. Discounts other than original issue discounts are not amortized.
d. Multiple Class Allocations -- Each Series' income, expenses (other than
class-specific expenses), and realized and unrealized gains or losses are
allocated daily to each class of shares of that Series 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 specifi-
cally attributable to a particular class, are charged directly to such
class. For the six months ended March 31, 2000, distribution and service
fees were the only class-specific expenses.
e. Distributions to Shareholders-- Dividends are declared daily and paid
monthly. Other distributions paid by the Trust are recorded on the
ex-dividend date. 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 value per share of any
series of the Trust.
3. Purchases and Sales of Securities -- Purchases and sales of portfolio
securities, excluding short-term investments, for the six months ended March 31,
2000, were as follows:
SERIES PURCHASES SALES
---------- ----------- ------------
California High-Yield $2,916,810 $12,453,710
California Quality -- 4,141,110
Florida 4,685,915 8,242,483
North Carolina -- 1,366,693
At March 31, 2000, each Series' 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 were as follows:
TOTAL TOTAL
UNREALIZED UNREALIZED
SERIES APPRECIATION DEPRECIATION
---------- ------------ ------------
California High-Yield $ 698,275 $2,476,459
California Quality 1,887,067 3,482,535
Florida 449,481 936,406
North Carolina 443,218 909,235
4. Management Fee, Distribution Services, and Other Transactions -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Trust and
provides the necessary personnel and facilities. Compensation of all officers of
the Trust, all trustees of the Trust who are employees or consultants of the
Manager, and all personnel of the Trust and the Manager is paid by the Manager.
The Manager's fee is calculated daily and payable monthly, equal to 0.50% per
annum of each Series' average daily net assets. Effective October 18, 1999, the
Manager, at its discretion, agreed to reimburse expenses, other than
distribution and service fees, that exceed 0.60% and 0.45% per annum of the
average daily net assets of California High-Yield Series and Florida Series,
respectively.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Seligman Advisors, Inc. (the "Distributor"), agent for the distribution of
each Series' shares and an affiliate of the Manager, received the following
concessions after commissions were paid to dealers for sales of Class A and
Class C shares:
DISTRIBUTOR DEALER
SERIES CONCESSIONS COMMISSIONS
---------- ----------- ------------
California High-Yield $2,864 $27,812
California Quality 1,935 14,976
Florida 1,292 9,380
North Carolina 678 4,698
The Trust 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 continuing fees of up to 0.25% on an annual basis,
payable quarterly, of the average daily net assets of the Class A shares
attributable to the particular service organizations for providing personal
services and/or the maintenance of shareholder accounts. The Distributor charges
such fees to the Trust pursuant to the Plan. For the six months ended March 31,
2000, for California High-Yield Series, California Quality Series, Florida
Series, and North Carolina Series, fees incurred under the Plan aggregated
$25,507, $35,473, $46,397, and $33,196, respectively, or 0.10%, 0.10%, 0.25%,
and 0.25%, respectively, per annum of average daily net assets of Class A
shares.
Under the Plan, with respect to Class C shares and Class D shares, service
organizations can enter into agreements with the Distributor and receive
continuing fees 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 C and Class D shares for which the organizations are
responsible, and 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 Trust to the Distributor pursuant to the Plan. For the six months ended
March 31, 2000, fees incurred under the Plan equivalent to 1% per annum of the
average daily net assets of Class C and Class D shares were as follows:
SERIES CLASS C CLASS D
---------- ----------- ------------
California High-Yield $5,744 $34,833
California Quality 311 20,763
Florida 1,289 8,672
North Carolina 50 7,751
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 redemptions of Class D shares occurring within one year of purchase. For the
six months ended March 31, 2000, such charges amounted to $19,093 for California
High-Yield Series, $26 for California Quality Series, $91 for Florida Series,
and $625 for North Carolina Series.
Seligman Services, Inc., an affiliate of the Manager, is eligible to receive
commissions from certain sales of Trust shares, as well as distribution and
service fees pursuant to the Plan. For the six months ended March 31, 2000,
Seligman Services, Inc. received commissions from the sales of shares of each
Series and distribution and service fees, pursuant to the Plan, as follows:
DISTRIBUTION AND
SERIES COMMISSIONS SERVICE FEES
---------- ------------ ------------
California High-Yield $ 41 $1,511
California Quality 449 1,158
Florida 210 1,870
North Carolina 1,725 1,242
Seligman Data Corp., which is owned by certain associated investment
companies, charged at cost for shareholder account services the following
amounts:
SERIES
----------
California High-Yield $42,722
California Quality 51,356
Florida 28,442
North Carolina 21,725
Certain officers and trustees of the Trust are officers or directors of the
Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
The Trust has a compensation agreement under which trustees who receive fees
may elect to defer receiving such fees. Trustees may elect to have their
deferred fees accrue interest or earn a return based on the performance of
selected Series of the Trust or other funds in the Seligman Group of Investment
Companies. Deferred fees and related accrued earnings are not deductible for
federal income tax purposes until such amounts are paid. The cost of such fees
and earnings accrued thereon is included in trustees' fees and expenses, and the
accumulated balances thereof at March 31, 2000, are included in other
liabilities as follows:
SERIES
----------
California High-Yield $25,937
California Quality 26,067
Florida 13,572
North Carolina 10,252
5. Committed Line of Credit -- The Trust is a participant in a joint $750
million committed line of credit that is shared by substantially all funds in
the Seligman Group of Investment Companies. Each Series' borrowings are limited
to 10% of its net assets. Borrowings pursuant to the credit facility are subject
to interest at a rate equal to the overnight federal funds rate plus 0.50%. Each
Series incurs a commitment fee of 0.08% 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 2000, but is renewable annually with
the consent of the participating banks. For the six months ended March 31, 2000,
the Trust did not borrow from the credit facility.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS
6. Transactions in Shares of Beneficial Interest -- Transactions in Shares of
Beneficial Interest were as follows:
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
3/31/00 9/30/99
-------------------------------- ----------------------------
CALIFORNIA HIGH-YIELD SERIES SHARES AMOUNT SHARES AMOUNT
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Sales of shares .............................. 334,003 $ 2,004,810 2,624,733 $17,491,961
Investment of dividends....................... 127,172 768,267 242,874 1,601,698
Exchanged from associated Funds .............. 245,382 1,484,764 861,977 5,696,785
Shares issued in payment of gain distributions 79,138 483,536 21,223 142,616
----------- ---------- ----------- -----------
Total......................................... 785,695 (4,741,377) 3,750,807 24,933,060
----------- ---------- ----------- -----------
Shares repurchased............................ (1,527,409) (9,210,443) (2,152,611) (14,122,052)
Exchanged into associated Funds............... (650,965) (3,946,686) (983,221) (6,519,246)
----------- ---------- ----------- -----------
Total ........................................ (2,178,374) (13,157,129) (3,135,832) (20,641,298)
----------- ---------- ----------- -----------
Increase (decrease)........................... (1,392,679) $(8,415,752) 614,975 $ 4,291,762
=========== =========== =========== ===========
CLASS A
-------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
3/31/00 9/30/99
-------------------------------- ----------------------------
CALIFORNIA QUALITY SERIES SHARES AMOUNT SHARES AMOUNT
------------ ---------- ----------- ----------
<S> <C> <C> <C> <C>
Sales of shares ............................. 160,358 $ 998,164 392,761 $ 2,663,057
Investment of dividends ..................... 134,938 835,276 272,151 1,853,060
Exchanged from associated Funds.............. 308,437 1,927,793 184,375 1,277,793
Shares issued in payment of gain distributions 77,695 487,923 242,713 1,679,573
----------- ---------- ----------- -----------
Total ....................................... 681,428 4,249,156 1,092,000 7,473,483
----------- ---------- ----------- -----------
Shares repurchased .......................... (864,352) (5,380,053) (1,304,849) (8,809,973)
Exchanged into associated Funds.............. (209,139) (1,292,443) (280,143) (1,967,426)
----------- ---------- ----------- -----------
Total ....................................... (1,073,491) (6,672,496) (1,584,992) (10,777,399)
----------- ---------- ----------- -----------
Increase (decrease) ......................... (392,063) $(2,423,340) (492,992) $(3,303,916)
=========== =========== =========== ===========
<CAPTION>
CLASS A
-------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
3/31/00 9/30/99
-------------------------------- ----------------------------
FLORIDA SERIES SHARES AMOUNT SHARES AMOUNT
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Sales of shares .............................. 173,894 $ 1,260,555 519,451 $ 4,068,773
Investment of dividends ...................... 45,653 329,760 88,673 692,647
Exchanged from associated Funds............... 197,666 1,433,437 307,595 2,411,983
Shares issued in payment of gain distributions 15,100 110,685 19,319 153,195
----------- ---------- ----------- -----------
Total......................................... 432,313 3,134,437 935,038 7,326,598
----------- ---------- ----------- -----------
Shares repurchased ........................... (513,581) (3,701,915) (726,633) (5,630,569)
Exchanged into associated Funds .............. (173,892) (1,261,160) (401,208) (3,048,712)
----------- ---------- ----------- -----------
Total......................................... (687,473) (4,963,075) (1,127,841) (8,679,281)
----------- ---------- ----------- -----------
Increase (decrease) .......................... (255,160) $(1,828,638) (192,803) $(1,352,683)
=========== =========== =========== ===========
<CAPTION>
CLASS A
-------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
3/31/00 9/30/99
-------------------------------- ----------------------------
NORTH CAROLINA SERIES SHARES AMOUNT SHARES AMOUNT
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Sales of shares .............................. 39,266 $ 287,744 175,103 $ 1,412,517
Investment of dividends ...................... 41,397 304,687 88,130 704,629
Exchanged from associated Funds............... 53,228 391,110 26,310 212,683
Shares issued in payment of gain distributions 33,442 248,811 40,880 331,130
----------- ---------- ----------- -----------
Total ........................................ 167,333 1,232,352 330,423 2,660,959
----------- ---------- ----------- -----------
Shares repurchased ........................... (295,272) (2,163,626) (578,427) (4,584,553)
Exchanged into associated Funds............... (11,999) (87,507) (64,700) (523,333)
----------- ---------- ----------- -----------
Total ........................................ (307,271) (2,251,133) (643,127) (5,107,886)
----------- ---------- ----------- -----------
Increase (decrease)........................... (139,938) $(1,018,781) (312,704) $(2,446,927)
=========== =========== =========== ===========
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------
SIX MONTHS ENDED 5/27/99* to
3/31/00 9/30/99
------------------------------- ----------------------------
CALIFORNIA HIGH-YIELD SERIES SHARES AMOUNT SHARES AMOUNT
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Sales of shares .............................. 39,338 $241,615 164,917 $1,063,949
Investment of dividends ...................... 3,039 18,360 707 4,509
Exchanged from associated Funds .............. -- -- -- --
Shares issued in payment of gain distributions 2,158 13,206 -- --
-------- -------- ------- ----------
Total ............ ........................... 44,535 273,181 165,624 1,068,458
-------- -------- ------- ----------
Shares repurchased............................ (7,280) (44,135) (3) (21)
Exchanged into associated Funds............... (1,533) (9,400) -- --
-------- -------- ------- ----------
Total ........................................ (8,813) (53,535) (3) (21)
-------- -------- ------- ----------
Increase (decrease)........................... 35,722 $219,646) 165,621 $1,068,437
======== ======== ======= ==========
<CAPTION>
CLASS C
-------------------------------------------------------------------
SIX MONTHS ENDED 5/27/99* to
3/31/00 9/30/99
-------------------------------------------------------------------
CALIFORNIA QUALITY SERIES SHARES AMOUNT SHARES AMOUNT
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Sales of shares .............................. 18,849 $117,503 1,474 $ 9,904
Investment of dividends ...................... 183 1,123 16 103
Exchanged from associated Funds............... -- -- -- --
Shares issued in payment of gain distributions 17 108 -- --
-------- -------- ------- ----------
Total ........................................ 19,049 118,734 1,490 10,007
-------- -------- ------- ----------
Shares repurchased ........................... (1) (6) -- --
Exchanged into associated Funds............... -- -- -- --
-------- -------- ------- ----------
Total ........................................ (1) (6) -- --
-------- -------- ------- ----------
Increase (decrease)........................... 19,048 $118,728 1,490 $ 10,007
======== ======== ======= ==========
<CAPTION>
CLASS C
-------------------------------------------------------------------
SIX MONTHS ENDED 5/27/99* to
3/31/00 9/30/99
-------------------------------- ----------------------------
FLORIDA SERIES SHARES AMOUNT SHARES AMOUNT
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Sales of shares .............................. 4,821 $ 34,716 34,107 $ 263,437
Investment of dividends ...................... 32 234 27 204
Exchanged from associated Funds............... -- -- -- --
Shares issued in payment of gain distributions -- -- -- --
-------- -------- ------- ----------
Total......................................... 4,853 34,950 34,134 263,641
-------- -------- ------- ----------
Shares repurchased ........................... (1) (7) -- --
Exchanged into associated Funds .............. (1,431) (10,279) -- --
-------- -------- ------- ----------
Total......................................... (1,432) (10,286) -- --
-------- -------- ------- ----------
Increase (decrease)........................... 3,421 $ 24,664 34,134 $ 263,641
======== ======== ======= ==========
<CAPTION>
CLASS C
-------------------------------------------------------------------
SIX MONTHS ENDED 5/27/99* to
3/31/00 9/30/99
-------------------------------------------------------------------
NORTH CAROLINA SERIES SHARES AMOUNT SHARES AMOUNT
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Sales of shares .............................. -- $ -- 1,329 $ 10,422
Investment of dividends ...................... 28 199 12 101
Exchanged from associated Funds .............. -- -- -- --
Shares issued in payment of gain distributions 17 129 -- --
-------- -------- ------- ----------
Total......................................... 45 328 1,341 10,523
-------- -------- ------- ----------
Shares repurchased ........................... (1) (8) -- --
Exchanged into associated Funds............... -- -- -- --
-------- -------- ------- ----------
Total......................................... (1) (8) -- --
-------- -------- ------- ----------
Increase (decrease)........................... 44 $ 320 1,341 $ 10,523
======== ======== ======= ==========
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
CLASS D
--------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
3/31/00 9/30/99
--------------------------------- -----------------------------
CALIFORNIA HIGH-YIELD SERIES SHARES AMOUNT SHARES AMOUNT
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Sales of shares............................... 21,077 $ 129,279 409,465 $ 2,741,274
Investment of dividends....................... 15,589 94,253 31,985 211,701
Exchanged from associated Funds............... 138,864 847,280 96,237 645,338
Shares issued in payment of gain distributions 9,854 60,309 2,990 20,124
----------- ----------- ----------- -----------
Total......................................... 185,384 1,131,121 540,677 3,618,437
----------- ----------- ----------- -----------
Shares repurchased ........................... (218,451) 1,313,532) (150,575) (997,750)
Exchanged into associated Funds .............. (196,456) (1,187,457) (111,644) (743,337)
----------- ----------- ----------- -----------
Total......................................... (414,907) (2,500,989) (262,219) (1,741,087)
----------- ----------- ----------- -----------
Increase (decrease)........................... (229,523) $(1,369,868) 278,458 $ 1,877,350
=========== =========== =========== ===========
<CAPTION>
CLASS D
-------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
3/31/00 9/30/99
-------------------------------- -----------------------------
CALIFORNIA QUALITY SERIES SHARES AMOUNT SHARES AMOUNT
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Sales of shares ............................. 3,513 $ 22,025 484,533 $ 3,342,332
Investment of dividends ..................... 4,104 25,353 11,719 79,563
Exchanged from associated Funds ............. 84,853 525,885 167,993 1,185,115
Shares issued in payment of gain distributions 2,546 15,939 10,357 71,464
----------- ----------- ----------- -----------
Total ....................................... 95,016 589,202 674,602 4,678,474
----------- ----------- ----------- -----------
Shares repurchased .......................... (97,894) (597,875) (183,777) (1,246,133)
Exchanged into associated Funds ............. (46,387) (288,606) (141,466) (939,849)
----------- ----------- ----------- -----------
Total ....................................... (144,281) (886,481) (325,243) (2,185,982)
----------- ----------- ----------- -----------
Increase (decrease) ......................... (49,265) $ (297,279) 349,359 $ 2,492,492
=========== =========== =========== ===========
<CAPTION>
CLASS D
-------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
3/31/00 9/30/99
-------------------------------- -----------------------------
FLORIDA SERIES SHARES AMOUNT SHARES AMOUNT
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Sales of shares ............................. 13,157 $ 94,534 20,914 $ 166,209
Investment of dividends...................... 1,073 7,754 4,975 39,201
Exchanged from associated Funds ............. 31,960 229,605 100,105 797,562
Shares issued in payment of gain distributions 387 2,842 1,306 10,367
----------- ----------- ----------- -----------
Total ....................................... 46,577 334,735 127,300 1,013,339
----------- ----------- ----------- -----------
Shares repurchased .......................... (59,114) (424,273) (95,272) (747,465)
Exchanged into associated Funds ............. (31,158) (223,219) (23,955) (187,186)
----------- ----------- ----------- -----------
Total ....................................... (90,272) (647,492) (119,227) (934,651)
----------- ----------- ----------- -----------
Increase (decrease) ......................... (43,695) $ (312,757) 8,073 $ 78,688
=========== =========== =========== ===========
<CAPTION>
CLASS D
-------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
3/31/00 9/30/99
-------------------------------- ----------------------------
NORTH CAROLINA SERIES SHARES AMOUNT SHARES AMOUNT
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Sales of shares ............................. 4,801 $ 35,804 58,041 $ 466,484
Investment of dividends ..................... 2,495 18,309 5,351 42,709
Exchanged from associated Funds ............. 4,135 30,062 1,053 8,502
Shares issued in payment of gain distributions 2,198 16,328 2,477 20,065
----------- ----------- ----------- -----------
Total ....................................... 13,629 100,503 66,922 537,760
----------- ----------- ----------- -----------
Shares repurchased .......................... (36,688) (270,189) (20,733) (164,357)
Exchanged into associated Funds ............. (5,959) (43,721) -- --
----------- ----------- ----------- -----------
Total ....................................... (42,647) (313,910) (20,733) (164,357)
----------- ----------- ----------- -----------
Increase (decrease).......................... (29,018) $ (213,407) 46,189 $ 373,403
=========== =========== =========== ===========
--------------------------------
* Commencement of offering of Class C shares.
</TABLE>
21
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below are intended to help you understand the financial
performance of each Class of each Series for the past five-and-one-half years or
from its inception if less than five-and-one-half years. Certain information
reflects financial results for a single share of a Class that was held
throughout the periods shown. Per share amounts are calculated using average
shares outstanding 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 dividend and capital gain distributions. Total returns do
not reflect any sales charges, and are not annualized for periods of less than
one year.
CALIFORNIA HIGH-YIELD SERIES
<TABLE>
<CAPTION>
CLASS A CLASS C
-------------------------------------------------------- -----------------
SIX SIX
MONTHS MONTHS 5/27/99*
ENDED YEAR ENDED SEPTEMBER 30, ENDED to
-----------------------------------------------
3/31/00 1999 1998 1997 1996 1995 3/31/00 9/30/99
PER SHARE DATA: -------- ------- ------- ------ ------- ------ ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period......... $6.28 $6.80 $6.61 $6.50 $6.47 $6.30 $6.29 $6.62
------- ------- ------- ------ ------ ------- ------- -------
Income from Investment Operations:
Net investment income ....................... 0.16 0.31 0.32 0.34 0.36 0.37 0.13 0.09
Net realized and unrealized gain (loss)
on investments ........................... (0.02) (0.50) 0.22 0.20 0.05 0.17 (0.03) (0.33)
------- ------- ------- ------ ------ ------- ------- -------
Total from Investment Operations............. 0.14 (0.19) 0.54 0.54 0.41 0.54 0.10 (0.24)
------- ------- ------- ------ ------ ------- ------- -------
Less Distributions:
Dividends from net investment income......... (0.16) (0.31) (0.32) (0.34) (0.36) (0.37) (0.13) (0.09)
Distributions from net realized capital gain. (0.08) (0.02) (0.03) (0.09) (0.02) -- (0.08) --
------- ------- ------- ------ ------ ------- ------- -------
Total Distributions ......................... (0.24) (0.33) (0.35) (0.43) (0.38) (0.37) (0.21) (0.09)
------- ------- ------- ------ ------ ------- ------- -------
Net Asset Value, End of Period .............. $6.18 $6.28 $6.80 $6.61 $6.50 $6.47 $6.18 $6.29
======= ======= ======= ====== ====== ======= ======= =======
TOTAL RETURN: 2.27% (2.82)% 8.45% 8.74% 6.49% 8.85% 1.65% (3.79)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted...... $48,254 $57,807 $58,374 $52,883 50,264 $51,504 $1,245 $1,041
Ratio of expenses to average net assets...... 0.72%+ 0.84% 0.82% 0.87% 0.84% 0.90% 1.62%+ 1.72%+
Ratio of net income to average net assets ... 5.36%+ 4.71% 4.81% 5.26% 5.49% 5.84 4.46%+ 3.95%+
Portfolio turnover rate ..................... 4.94% 27.61% 10.75% 22.42% 34.75% 17.64 4.94% 27.61%++
Without expense reimbursement:**
Net investment income per share ............. $0.15 $0.12
Ratio of expenses to average net assets ..... 0.90% 1.80%+
Ratio of net income to average net assets.... 5.18%+ 4.28%+
----------------------------
See footnotes on page 26.
</TABLE>
22
<PAGE>
FINANCIAL HIGHLIGHTS
CALIFORNIA HIGH-YIELD SERIES (continued)
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
---------------------------------------------------------------
3/31/00 1999 1998 1997 1996 1995
PER SHARE DATA: --------- ------- ------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ........ $6.29 $6.80 $6.61 $6.51 $6.48 $6.31
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Net investment income ....................... 0.13 0.25 0.26 0.28 0.30 0.31
Net realized and unrealized gain (loss)
on investments ........................... (0.03) (0.49) 0.22 0.19 0.05 0.17
------- ------- ------- ------- ------- -------
Total from Investment Operations ............ 0.10 (0.24) 0.48 0.47 0.35 0.48
------- ------- ------- ------- ------- -------
Less Distributions:
Dividends from net investment income ........ (0.13) (0.25) (0.26) (0.28) (0.30) (.31)
Distributions from net realized capital gain. (0.08) (0.02) (0.03) (0.09) (0.02) -
------- ------- ------- ------- ------- -------
Total Distributions ......................... (0.21) (0.27) (0.29) (0.37) (0.32) (0.31)
------- ------- ------- ------- ------- -------
Net Asset Value, End of Period .............. $6.18 $6.29 $6.80 $6.61 $6.51 $6.48
======= ======= ======= ======= ====== =======
TOTAL RETURN: ............................... 1.65% (3.54)% 7.47% 7.60% 5.53% 7.78%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted)..... $6,114 $7,658 $6,393 $3,320 $1,919 $1,277
Ratio of expenses to average net assets...... 1.62%+ 1.74% 1.73% 1.77% 1.74% 1.91%
Ratio of net income to average net assets.... 4.46%+ 3.81% 3.90% 4.36% 4.59% 4.84%
Portfolio turnover rate ..................... 4.94% 27.61% 10.75% 22.42% 34.75% 17.64%
Without expense reimbursement:**
Net investment income per share ............. $0.12
Ratio of expenses to average net assets ..... 1.80%+
Ratio of net income to average net assets.... 4.28%+
----------------------------
See footnotes on page 26.
</TABLE>
23
<PAGE>
FINANCIAL HIGHLIGHTS
CALIFORNIA QUALITY SERIES
<TABLE>
<CAPTION>
CLASS A CLASS C
----------------------------------------------- -----------------
SIX SIX
MONTHS MONTHS 5/27/99*
ENDED YEAR ENDED SEPTEMBER 30, ENDED to
-----------------------------------------------
3/31/00 1999 1998 1997 1996 1995 3/31/00 9/30/99
PER SHARE DATA: -------- ------- ------ ------ ------- ------ ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ........ $6.42 $7.21 $6.99 $6.75 $6.65 $6.39 $6.40 $6.75
------- ------- ------ ------- ------- ------ ------ -------
Income from Investment Operations:
Net investment income ....................... 0.16 0.31 0.33 0.34 0.35 0.34 0.13 0.09
Net realized and unrealized gain (loss)
on investments ........................... 0.01 (0.56) 0.25 0.24 0.11 0.32 0.01 (0.35)
------- ------- ------ ------- ------- ------ ------ -------
Total from Investment Operations............. 0.17 (0.25) 0.58 0.58 0.46 0.66 0.14 (0.26)
------- ------- ------ ------- ------- ------ ------ -------
Less Distributions:
Dividends from net investment income ........ (0.16) (0.31) (0.33) (0.34) (0.35) (0.34) (0.13) 0.09)
Distributions from net realized capital gain. (0.07) (0.23) (0.03) -- (0.01) (0.06) (0.07) --
------- ------- ------ ------- ------- ------ ------ -------
Total Distributions ......................... (0.23) (0.54) (0.36) (0.34) (0.36) (0.40) (0.20) (0.09)
------- ------- ------ ------- ------- ------ ------ -------
Net Asset Value, End of Period............... $6.36 $6.42 $7.21 $6.99 $6.75 $6.65 $6.34 $6.40
======= ======= ====== ======= ======= ====== ====== =======
TOTAL RETURN: ............................... 2.70% (3.68)% 8.67% 8.87% 7.00% 10.85% 2.24% (4.04)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) .... $71,562 $74,793 $87,522 $86,992 $95,560 $94,947 $130 $10
Ratio of expenses to average net assets...... 0.87%+ 0.82% 0.77% 0.82% 0.79% 0.89% 1.77%+ 1.72%+
Ratio of net income to average net assets.... 4.94%+ 4.56% 4.75% 4.99% 5.11% 5.34% 4.04%+ 3.80%+
Portfolio turnover rate ..................... -- 20.24% 30.82% 12.16% 12.84% 11.24% - 20.24%++
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------
3/31/00 1999 1998 1997 1996 1995
PER SHARE DATA: -------- ------- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period......... $6.40 $7.19 $6.97 $6.74 $6.63 $6.38
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Net investment income ....................... 0.13 0.25 0.27 0.28 0.28 0.28
Net realized and unrealized gain (loss)
on investments ........................... 0.01 (0.56) 0.25 0.23 0.12 0.31
------- ------- ------- ------- ------ -------
Total from Investment Operations ............ 0.14 (0.31) 0.52 0.51 0.40 0.59
------- ------- ------- ------- ------ -------
Less Distributions:
Dividends from net investment income ........ (0.13) (0.25) (0.27) (0.28) (0.28) (0.28)
Distributions from net realized capital gain. (0.07) (0.23) (0.03) -- (0.01) (0.06)
------- ------- ------- ------- ------ -------
Total Distributions ......................... (0.20) (0.48) (0.30) (0.28) (0.29) (0.34)
------- ------- ------- ------- ------ -------
Net Asset Value, End of Period............... $6.34 $6.40 $7.19 $6.97 $6.74 $6.63
======= ======= ======= ======= ====== =======
TOTAL RETURN:................................ 2.24% (4.58)% 7.71% 7.75% 6.20% 9.61%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted)..... $3,932 $4,286 $2,302 $1,677 $1,645 $863
Ratio of expenses to average net assets ..... 1.77%+ 1.72% 1.68% 1.72% 1.69% 1.88%
Ratio of net income to average net assets.... 4.04%+ 3.66% 3.84% 4.09% 4.21% 4.36%
Portfolio turnover rate...................... -- 20.24% 30.82% 12.16% 12.84% 11.24%
-------------------------
See footnotes on page 26.
</TABLE>
24
<PAGE>
FINANCIAL HIGHLIGHTS
FLORIDA SERIES
<TABLE>
<CAPTION>
CLASS A CLASS C
------------------------------------------------------- -----------------
SIX SIX
MONTHS MONTHS 5/27/99*
ENDED YEAR ENDED SEPTEMBER 30, ENDED to
-----------------------------------------------
3/31/00 1999 1998 1997 1996 1995 3/31/00 9/30/99
PER SHARE DATA: -------- ------- ------- ------ ------- ------ ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ........ $7.41 $8.07 $7.80 $7.67 $7.71 $7.34 $7.43 $7.83
------- ------- ------ ------- ------- ------- ------- -------
Income from Investment Operations:
Net investment income ....................... 0.19 0.34 0.35 0.36 0.38 0.40 0.16 0.10
Net realized and unrealized gain (loss)
on investments ........................... 0.02 (0.61) 0.34 0.23 0.04 0.37 0.01 (0.40)
------- ------- ------ ------- ------- ------ ------ -------
Total from Investment Operations ............ 0.21 (0.27) 0.69 0.59 0.42 0.77 0.17 (0.30)
------- ------- ------ ------- ------- ------ ------ -------
Less Distributions:
Dividends from net investment income......... (0.19) (0.34) (0.35) (0.36) (0.38) (0.40) (0.16) (0.10)
Distributions from net realized capital gain. (0.04) (0.05) (0.07) (0.10) (0.08) -- (0.04) --
------- ------- ------ ------- ------- ------ ------ -------
Total Distributions ......................... (0.23) (0.39) (0.42) (0.46) (0.46) (0.40) (0.20) (0.10)
------- ------- ------ ------- ------- ------ ------ -------
Net Asset Value, End of Period .............. $7.39 $7.41 $8.07 $7.80 $7.67 $7.71 $7.40 $7.43
======= ======= ====== ======= ======= ====== ====== =======
TOTAL RETURN:................................ 2.90% (3.42)% 9.16% 8.01% 5.54% 10.87% 2.38% (3.96)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted)..... $35,581 $37,606 $42,464 $42,024 $45,200 $49,030 $278 $254
Ratio of expenses to average net assets ..... 0.73%+ 1.03% 1.00% 1.04% 0.97% 0.72% 1.48%+ 1.78%+
Ratio of net income to average net assets.... 5.14%+ 4.38% 4.45% 4.70% 4.90% 5.38% 4.39%+ 3.82%+
Portfolio turnover rate ..................... 12.50% 18.31% 6.73% 33.68% 18.53% 11.82% 12.50% 18.31%++
Without reimbursement/
management fee waiver:**
Net investment income per share ............. $0.18 $0.38 $0.37 $0.15
Ratio of expenses to average net assets ..... 1.08%+ 0.97% 1.03% 1.83%+
Ratio of net income to average net assets.... 4.79%+ 4.90% 5.07% 4.04%+
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
---------------------------------------------------------------
3/31/00 1999 1998 1997 1996 1995
PER SHARE DATA: -------- ------- ------- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ........ $7.43 $8.08 $7.81 $7.68 $7.72 $7.34
------- ------- ------ ------ ----- ------
Income from Investment Operations:
Net investment income ....................... 0.16 0.28 0.29 0.30 0.32 0.34
Net realized and unrealized gain (loss)
on investments ........................... 0.01 (0.60) 0.34 0.23 0.04 0.38
------- ------- ------ ------ ----- ------
Less Distributions: 0.17 (0.32) 0.63 (0.53) (0.36) (0.72)
------- ------- ------ ------ ----- ------
Dividends from net investment income ........ (0.16) (0.28) (0.29) (0.30) (0.32) (0.34)
Distributions from net realized capital gain. (0.04 (0.05) (0.07) (0.10) (0.08) --
------- ------- ------ ------ ----- ------
Total Distributions ........................ (0.20) (0.33) (0.36) (0.40) (0.40) (0.34)
Net Asset Value, End of Period .............. $7.40 $7.43 $8.08 $7.81 $7.68 $7.72
======= ======= ====== ====== ===== =====
TOTAL RETURN:................................ 2.38% (4.01)% 8.32% 7.18% 4.74% 10.07%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted)..... $1,512 $1,843 $1,940 $1,678 $1,277 $603
Ratio of expenses to average net assets ..... 1.48%+ 1.78% 1.77% 1.81% 1.73% 1.66%
Ratio of net income to average net assets.... 4.39%+ 3.63% 3.68% 3.93% 4.14% 4.53%
Portfolio turnover rate ..................... 12.50% 18.31% 6.73% 33.68% 18.53% 11.82%
Without reimbursement/
management fee waiver:**
Net investment income per share ............. $0.15 $0.32 $0.31
Ratio of expenses to average net assets...... 1.83% 1.73% 1.97%
Ratio of net income to average net assets ... 4.04%+ 4.14% 4.22%
---------------------------
See footnotes on page 26.
</TABLE>
25
<PAGE>
FINANCIAL HIGHLIGHTS
NORTH CAROLINA SERIES
<TABLE>
<CAPTION>
CLASS A CLASS C
------------------------------------------------------- -----------------
SIX SIX
MONTHS MONTHS 5/27/99*
ENDED YEAR ENDED SEPTEMBER 30, ENDED to
---------------------------------------------------
3/31/00 1999 1998 1997 1996 1995 3/31/00 9/30/99
PER SHARE DATA: -------- ------- ------- ------ ------- ------ ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $7.59 $8.30 $8.05 $7.84 $7.74 $7.30 $7.59 $7.97
------- ------- ------- ------- ------- ------- ------- -------
Income from Investment Operations:
Net investment income ........................ 0.18 0.35 0.36 0.37 0.37 0.39 0.15 0.10
Net realized and unrealized gain (loss)
on investments ............................ (0.04) (0.59) 0.31 0.24 0.11 0.45 (0.05) (0.38)
------- ------- ------- ------- ------- ------- ------- -------
Total from Investment Operations ............. 0.14 (0.24) 0.67 0.61 0.48 0.84 0.10 (0.28)
------- ------- ------- ------- ------- ------- ------- -------
Less Distributions:
Dividends from net investment income ......... (0.18) (0.35) (0.36) (0.37) (0.37) (0.39) (0.15) (0.10)
Distributions from net realized capital gain . (0.10) (0.12) (0.06) (0.03) (0.01) (0.01) (0.10) --
------- ------- ------- ------- ------- ------- ------- -------
Total Distributions .......................... (0.28) (0.47) (0.42) (0.40) (0.38) (0.40) (0.25) (0.10)
------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of Period ............... $7.45 $7.59 $8.30 $8.05 $7.84 $7.74 $7.44 $7.59
======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURN:................................. 1.79% (3.07)% 8.60% 8.01% 6.39% 11.92% 1.27% (3.62)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted)...... $25,662 $27,224 $32,358 $32,684 $35,934 $37,446 $10 $10
Ratio of expenses to average net assets....... 1.13%+ 1.06% 1.05% 1.09% 1.05% 0.82% 1.88%+ 1.80%+
Ratio of net income to average net assets..... 4.67%+ 4.38% 4.41% 4.66% 4.75% 5.21% 3.92%+ 3.77%+
Portfolio turnover rate....................... -- 1.52% 20.37% 13.04% 15.12% 4.38% - 1.52%++
Without management fee waiver:**
Net investment income per share $0.37 0.36
Ratio of expenses to average net assets 1.06% 1.18%
Ratio of net income to average net assets 4.74% 4.85%
</TABLE>
<TABLE>
<CAPTION>
CLASS D
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
---------------------------------------------------------------
3/31/00 1999 1998 1997 1996 1995
PER SHARE DATA: -------- ------- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ......... $7.59 $8.30 $8.05 $7.83 $7.74 $7.29
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Net investment income ........................ 0.15 0.29 0.30 0.31 0.31 0.33
Net realized and unrealized gain (loss)
on investments ............................ (0.05) (0.59) 0.31 0.25 0.10 0.46
------- ------- ------- ------- ------ -------
Total from Investment Operations ............. 0.10 (0.30) 0.61 0.56 0.41 0.79
------- ------- ------- ------- ------ -------
Less Distributions:
Dividends from net investment income ......... (0.15) (0.29) (0.30) (0.31) (0.31) (0.33)
Distributions from net realized capital gain.. (0.10) (0.12) (0.06) (0.03) (0.01) (0.01)
------- ------- ------- ------- ------ -------
Total Distributions .......................... (0.25) (0.41) (0.36) (0.34) (0.32) (0.34)
------- ------- ------- ------- ------ -------
Net Asset Value, End of Period ............... $7.44 $7.59 $8.30 $8.05 $7.83 $7.74
======= ======= ======= ======= ====== =======
TOTAL RETURN:................................. 1.27% (3.79)% 7.77% 7.33% 5.45% 11.19%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted)...... $1,434 $1,682 $1,456 $1,217 $1,232 $1,257
Ratio of expenses to average net assets ...... 1.88%+ 1.81% 1.82% 1.85% 1.81% 1.64%
Ratio of net income to average net assets..... 3.92%+ 3.63% 3.64% 3.90% 3.99% 4.42%
Portfolio turnover rate ...................... - 1.52% 20.37% 13.04% 15.12% 4.38%
Without management fee waiver:**
Net investment income per share $0.31 $0.31
Ratio of expenses to average net assets ...... 1.82% 2.00%
3.98% 4.06%
Ratio of net income to average net assets.....
<FN>
------------------------------------
* Commencement of offering of Class C shares.
** During the periods stated, the Manager, at its discretion, reimbursed
expenses and/or waived a portion of its fees for California High-
Yield Series, Florida Series, and North Carolina Series.
+ Annualized.
++ For the year ended September 30, 1999.
See Notes to Financial Statements.
</FN>
</TABLE>
26
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Trustees and Shareholders,
Seligman Municipal Series Trust:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Seligman Municipal Series Trust (comprising,
respectively, California High-Yield, California Quality, Florida, and North
Carolina Series), as of March 31, 2000, and the related statements of operations
for the six months then ended, the statements of changes in net assets for the
six months then ended 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 Trust'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 March 31, 2000, by correspondence with
the Trust's custodian. 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
California High-Yield, California Quality, Florida, and North Carolina Series of
Seligman Municipal Series Trust as of March 31, 2000, the results of their
operations for the six months then ended, the changes in their net assets, and
their financial highlights for all the respective stated periods, in conformity
with accounting principles generally accepted in the United States of America.
/S/ DELOITTE & TOUCHE LLP
----------------------------------------
DELOITTE & TOUCHE LLP
New York, New York
May 5, 2000
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
(212) 682-7600 Outside the United States
(800) 622-4597 24-Hour Automated Telephone Access Service
27
<PAGE>
TRUSTEES
John R. Galvin 2, 4
Dean, Fletcher School of Law and Diplomacy at Tufts University
Director, Raytheon Company
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
Retired Chairman and Senior Partner, Sullivan & Cromwell, Law Firm
Director, Commonwealth Industries, Inc
Director, New York-Presbyterian Hospital
Betsy S. Michel 2, 4
Trustee, The Geraldine R. Dodge Foundation
William C. Morris 1
Chairman
Chairman of the Board,
J. & W. Seligman & Co. Incorporated
Chairman, Carbo Ceramics Inc.
Director, Kerr-McGee Corporation
James C. Pitney 3, 4
Retired Partner, Pitney, Hardin, Kipp & Szuch, Law Firm
James Q. Riordan 3, 4
Director, KeySpan Energy Corporation
Trustee, Committee for Economic Development
Richard R. Schmaltz 1
Managing Director, Director of Investments,
J. & W. Seligman & Co. Incorporated
Trustee Emeritus, Colby College
Robert L. Shafer 3, 4
Retired Vice President, Pfizer, Inc.
James N. Whitson 2, 4
Director and Consultant, Sammons Enterprises, Inc.
Director, CommScope, Inc.
Director, C-SPAN
Brian T. Zino 1
President
President, J. & W. Seligman & Co. Incorporated
Chairman, Seligman Data Corp.
Director, ICI Mutual Insurance Company
Member of the Board of Governors,
Investment Company Institute
Trustee Emeritus
Fred E. Brown
Director and Consultant,
J. & W. Seligman & Co. Incorporated
----------------
Member: 1 Executive Committee
2 Audit Committee
3 Trustee Nominating Committee
4 Board Operations Committee
EXECUTIVE OFFICERS
William C. Morris
Chairman
Brian T. Zino
President
Thomas G. Moles
Vice President
Lawrence P. Vogel
Vice President
Thomas G. Rose
Treasurer
Frank J. Nasta
Secretary
28
<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 compound ed, 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.
29
----------------
Adapted from the Investment Company Institute's 1999 Mutual Fund Fact Book.
<PAGE>
This Report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Beneficial Interest of
Seligman Municipal Series Trust, which contains information about the sales
charges, management fee, and other costs. Please read the prospectus carefully
before investing or sending money.
SELIGMAN ADVISORS, INC.
An affiliate of
[Logo omitted]
J. & W. SELIGMAN & CO.
INCORPORATED
Established 1864
100 Park Ave., New York, NY 10017
TEB 3/00 Recycle Logo Printed on Recycled Paper
