1
File No. 33-15253
811-5221
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 16 [x]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 18 [x]
SELIGMAN PORTFOLIOS, INC.
(Exact name of registrant as specified in charter)
100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive office)
Registrant's Telephone Number: 212-850-1864 or Toll Free: 800-221-2450
THOMAS G. ROSE, Treasurer
100 Park Avenue
New York, New York 10017
(Name and address of agent for service)
It is proposed that this filing will become effective (check
appropriate box):
<TABLE>
<CAPTION>
<C> <C>
[ ] immediately upon filing pursuant to paragraph [ ] on (date) pursuant to paragraph (a)(i) of rule
(b) of rule 485 485
[x] on November 1, 1995 pursuant to paragraph (b) [ ] 75 days after filing pursuant to paragraph
of rule 485 (a)(ii) of rule 485
[ ] 60 days after filing pursuant to paragraph [ ] on (date) pursuant to paragraph (a)(ii) of rule
(a)(i) of rule 485 485.
</TABLE>
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-1 Notice
for Registrant's most recent fiscal year was filed with the Commission on
February 27, 1995.
<PAGE>
2
POST-EFFECTIVE AMENDMENT NO. 15
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
Item No. in Part A of Form N-1A Location in Prospectus
1. Cover Page Cover Page
2. Synopsis Not applicable
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Investment Objectives and
Policies
5. Management of Fund Management Services; Portfolio
Transactions, Portfolio Turnover
and Valuation
5a. Managers' Discussion of Fund Performance Management Services
6. Capital Stock and Other Securities Organization and Capitalization;
Other Investment Policies;
Dividends, Distributions and
Taxes
7. Purchase of Securities Being Offered Cover Page; Purchases and
Redemptions
8. Redemption or Repurchase Purchases and Redemptions
9. Pending Legal Proceedings Not applicable
Item No. in Part B of Form N-1A Location in Statement of
Additional Information
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Appendix C; Organization and
Capitalization (Prospectus)
13. Investment Objectives and Policies Investment Policies and
Restrictions
14. Management of the Registrant Management and Expenses
15. Control Persons and Principal Directors and Officers
Holders of Services
16. Investment Advisory and Other Management and Expenses;
Services Custodians and Independent
Auditors
17. Brokerage Allocation Portfolio Transactions, Valuation
and Redemption
18. Capital Stock and Other Securities Portfolio Transactions, Valuation
and Redemption
19. Purchase, Redemption and Pricing of Portfolio Transactions, Valuation
Securities Being Offered and Redemption
20. Tax Status Dividends, Distributions and
Taxes (Prospectus)
21. Underwriters Not applicable
22. Calculation of Performance Data Portfolio Transactions, Valuation
and Redemption
23. Financial Statements Financial Statements
<PAGE>
SELIGMAN PORTFOLIOS, INC.
100 Park Avenue
New York, New York 10017
800-221-7844 All Continental United States, except New York
212-850-1864 New York State
800-221-2783 Marketing Services
November 1, 1995
Seligman Portfolios, Inc. (the "Fund") is an open-end diversified management
investment company consisting of ten separate portfolios (the "Portfolios"),
each designed to meet different investment goals. Investment management services
for each of the Fund's Portfolios are provided by J. & W. Seligman & Co.
Incorporated (the "Manager"). Seligman Henderson Co. supervises and directs the
global investments of Seligman Henderson Global Portfolio (continued on page 2)
The Fund's ten Portfolios are:
/ / SELIGMAN CAPITAL PORTFOLIO: seeks to produce capital appreciation, not
current income, by investing in common stocks (primarily those with
strong near or intermediate-term prospects) and securities convertible
into or exchangeable for common stocks, in common stock purchase
warrants and rights, in debt securities and in preferred stocks
believed to provide capital appreciation opportunities.
/ / SELIGMAN CASH MANAGEMENT PORTFOLIO: seeks to preserve capital and to
maximize liquidity and current income by investing in a diversified
portfolio of high-quality money market instruments. Investments in
this Portfolio are neither insured nor guaranteed by the U.S.
Government and there is no assurance that this Portfolio will be able
to maintain a stable net asset value of $1.00 per share.
/ / SELIGMAN COMMON STOCK PORTFOLIO: seeks favorable, but not the highest,
current income and long-term growth of both income and capital value
without exposing capital to undue risk, primarily through equity
investments broadly diversified over a number of industries.
/ / SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO: seeks capital gain,
not income, by investing primarily in securities of companies in the
communications, information and related industries.
/ / SELIGMAN FIXED INCOME SECURITIES PORTFOLIO: seeks favorable current
income by investing in a diversified portfolio of debt securities,
primarily of investment grade, including convertible issues and
preferred stocks, with capital appreciation as a secondary
consideration.
/ / SELIGMAN FRONTIER PORTFOLIO: seeks growth in capital value; income may
be considered but will be only incidental to the Portfolio's
investment objective. In general, securities owned are likely to be
those issued by small to medium-sized companies selected for their
growth prospects.
/ / SELIGMAN HENDERSON GLOBAL PORTFOLIO: seeks long-term capital
appreciation primarily through global investments in securities of
medium- to large-sized companies.
/ / SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO: (formerly
Seligman Henderson Global Emerging Companies Portfolio), seeks
long-term capital appreciation primarily through global investments in
securities of companies with small to medium market capitalization.
/ / SELIGMAN HIGH-YIELD BOND PORTFOLIO: seeks to produce maximum current
income by investing primarily in high-yielding, high risk corporate
bonds and corporate notes, which, generally, are non-rated or carry
ratings lower than those assigned to investment grade bonds. The
Portfolio will invest up to 100% of its assets in lower rated bonds,
commonly known as "junk bonds," which are subject to a greater risk of
loss of principal and interest than higher rated investment grade
bonds. Purchasers should carefully assess the risks associated with an
investment in this Portfolio. See "Investment Objectives and
Policies--Seligman High-Yield Bond Portfolio."
/ / SELIGMAN INCOME PORTFOLIO: seeks primarily to produce high current
income consistent with what is believed to be prudent risk of capital
and secondarily to provide the possibility of improvement in income
and capital value over the longer term, by investing primarily in
income-producing securities.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
(continued from page 1)
and Seligman Henderson Global Smaller Companies Portfolio. Shares of the Fund
are currently provided as the investment medium for Canada Life of America
Variable Annuity Account 2 ("CLVA-2") and Canada Life of America Annuity Account
3 ("CLVA-3"), each established by Canada Life Insurance Company of America
("Canada Life").
CLVA-2 is registered as a unit investment trust under the Investment
Company Act of 1940 (the "1940 Act") and funds variable annuity contracts (the
"CLVA-2 Contracts") issued by Canada Life and distributed by Seligman Financial
Services, Inc. CLVA-3 is not registered or regulated as an investment company
under the 1940 Act in reliance on the exemption provided in Section 3(c)(11) of
the 1940 Act and funds variable annuity contracts (the "CLVA-3 Contracts")
issued by Canada Life and distributed by Seligman Financial Services, Inc.
CLVA-3 Contracts may be purchased only by pension or profit-sharing employee
benefit plans that satisfy the requirements for qualification set forth in
Section 401 of the Internal Revenue Code of 1986. Shares of the Fund are also
expected to be provided as the investment medium for other variable annuity
accounts to be established by Canada Life or its affiliates ("Canada Life
Separate Accounts"). Shares of the Seligman Capital Portfolio, Seligman Cash
Management Portfolio, Seligman Common Stock Portfolio, Seligman Fixed Income
Portfolio and Seligman Income Portfolio (but not the other Portfolios of the
Fund) are also provided as the investment medium for Mutual Benefit Variable
Contract Account-9 ("VCA-9") established by MBL Life Assurance Corporation ("MBL
Life") (formerly, The Mutual Benefit Life Insurance Company). VCA-9 is
registered as a unit investment trust under the 1940 Act and funds variable
annuity contracts (the "VCA-9 Contracts") issued by MBL Life.
This Prospectus sets forth concisely information about the Fund and its
Portfolios that a prospective investor should know before investing. Please read
it carefully before you invest and keep it for future reference. Additional
information about the Fund, including a Statement of Additional Information, has
been filed with the Securities and Exchange Commission (the "SEC"). The
Statement of Additional Information is available upon request and without charge
by calling or writing the Fund at the telephone numbers or address set forth
above. The Statement of Additional Information is dated the same date as this
Prospectus and is incorporated herein by reference in its entirety.
TABLE OF CONTENTS
Page
----
Financial Highlights................................ P-4
Investment Objectives And Policies.................. P-8
Seligman Capital Portfolio.......................... P-8
Seligman Cash Management Portfolio.................. P-8
Seligman Common Stock Portfolio..................... P-9
Seligman Communications and
Information Portfolio............................. P-9
Seligman Fixed Income Securities
Portfolio......................................... P-10
Seligman Frontier Portfolio......................... P-11
Seligman Henderson Global Portfolio................. P-12
Seligman Henderson Global Smaller
Companies Portfolio............................... P-12
Seligman High-Yield Bond Portfolio.................. P-14
Seligman Income Portfolio........................... P-15
Other Investment Policies........................... P-16
Management Services................................. P-18
Portfolio Transactions, Portfolio Turnover
And Valuation..................................... P-21
Dividends, Distributions And Taxes.................. P-22
Purchases And Redemptions........................... P-22
Custodians And Transfer Agent....................... P-22
Organization And Capitalization..................... P-23
Appendix............................................ P-24
P-2
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THIS PAGE INTENTIONALLY LEFT BLANK
P-3
<PAGE>
FINANCIAL HIGHLIGHTS
The following sets forth selected data for the periods indicated for a
single share outstanding of each of the Fund's Portfolios. The results shown
below for all periods through the year ended December 31, 1994 have been audited
in conjunction with the annual audits of the financial statements of Seligman
Portfolios, Inc. by Ernst & Young LLP, independent auditors. The 1994 financial
statements and independent auditors' report thereon and the unaudited financial
statements for the six-month period ended June 30, 1995 for each portfolio are
incorporated by reference in the Fund's Statement of Additional Information.
Unaudited financial statements of the Seligman High-Yield Bond Portfolio for the
period May 1, 1995 (commencement of operations) through September 30, 1995 are
included in the Fund's Statement of Additional Information.
The per share operating performance data is designed to allow investors to
trace the operating performance, on a per share basis, from a Portfolio's
beginning net asset value to its ending net asset value so that investors may
understand what effect the individual items have on their investment, assuming
it was held throughout the period. Generally, the per share amounts are derived
by converting the actual dollar amounts incurred for each item, as disclosed in
the financial statements, to their equivalent per share amount.
The total return based on net asset value measures a Portfolio's
performance assuming investors purchased shares at net asset value as of the
beginning of the period, reinvested dividends and capital gains paid at net
asset value, and then sold the shares at the net asset value per share on the
last day of the period. The total returns exclude the effect of all
administration fees and asset-based sales loads associated with variable annuity
contracts. The total returns for periods of less than one year are not
annualized.
<TABLE>
<CAPTION>
Increase
Net Asset Net Net Realized (Decrease) Net Increase Net Asset
Value Investment & Unrealized from Distributions (Decrease) in Value at
Per Share Operating at Beginning Income Gain (Loss) Investment Dividends from Net Net Asset End of
Performance: of Period (Loss)** on Investment Operations Paid Gain Realized Value Period
- ------------------- ------------ --------- ------------- ---------- --------- ------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CAPITAL PORTFOLIO
Six months ended 6/30/95. $12.700 $0.037 $1.563 $1.600 $-- $-- $1.600 $14.300
Year ended 12/31/94...... 14.950 0.015 (0.699) (0.684) (0.018) (1.548) (2.250) 12.700
Year ended 12/31/93...... 16.980 0.021 1.928 1.949 (0.021) (3.958) (2.030) 14.950
Year ended 12/31/92...... 17.740 (0.022) 1.202 1.180 -- (1.940) (0.760) 16.980
Year ended 12/31/91...... 11.230 0.079 6.547 6.626 (0.088) (0.028) 6.510 17.740
Year ended 12/31/90...... 11.620 0.044 (0.414) (0.370) (0.020) -- (0.390) 11.230
Year ended 12/31/89...... 10.060 (0.084) 1.739 1.655 -- (0.095) 1.560 11.620
6/21/88*-12/31/88........ 10.000 0.060 -- 0.060 -- -- 0.060 10.060
CASH MANAGEMENT PORTFOLIO
Six months ended 6/30/95. 1.000 0.027 -- 0.027 (0.027) -- -- 1.000
Year ended 12/31/94...... 1.000 0.040 -- 0.040 (0.040) -- -- 1.000
Year ended 12/31/93...... 1.000 0.030 -- 0.030 (0.030) -- -- 1.000
Year ended 12/31/92...... 1.000 0.035 -- 0.035 (0.035) -- -- 1.000
Year ended 12/31/91...... 1.000 0.056 -- 0.056 (0.056) -- -- 1.000
Year ended 12/31/90...... 1.000 0.075 -- 0.075 (0.075) -- -- 1.000
Year ended 12/31/89...... 1.000 0.075 -- 0.075 (0.075) -- -- 1.000
6/21/88*-12/31/88........ 1.000 0.020 -- 0.020 (0.020) -- -- 1.000
COMMON STOCK PORTFOLIO
Six months ended 6/30/95. 13.780 0.178 1.742 1.920 -- -- 1.920 15.700
Year ended 12/31/94...... 14.980 0.365 (0.356) 0.009 (0.385) (0.824) (1.200) 13.780
Year ended 12/31/93...... 15.600 0.392 1.479 1.871 (0.394) (2.097) (0.620) 14.980
Year ended 12/31/92...... 14.740 0.346 1.445 1.791 (0.369) (0.562) 0.860 15.600
Year ended 12/31/91...... 11.580 0.362 3.459 3.821 (0.355) (0.306) 3.160 14.740
Year ended 12/31/90...... 12.260 0.356 (0.743) (0.387) (0.263) (0.030) (0.680) 11.580
Year ended 12/31/89...... 10.150 0.248 2.195 2.443 (0.179) (0.154) 2.110 12.260
6/21/88*-12/31/88........ 10.000 0.120 0.060 0.180 (0.030) -- 0.150 10.150
COMMUNICATIONS AND
INFORMATION PORTFOLIO
Six months ended 6/30/95. 10.440 (0.052) 4.302 4.250 -- -- 4.250 14.690
10/11/94* to 12/31/94.... 10.000 (0.016) 0.456 0.440 -- -- 0.440 10.440
FIXED INCOME
SECURITIES PORTFOLIO
Six months ended 6/30/95. 9.270 0.309 0.671 0.980 -- -- 0.980 10.250
Year ended 12/31/94...... 10.110 0.499 (0.841) (0.342) (0.498) -- (0.840) 9.270
Year ended 12/31/93...... 10.660 0.713 0.142 0.855 (0.711) (0.694) (0.550) 10.110
Year ended 12/31/92...... 10.990 0.706 (0.092) 0.614 (0.772) (0.172) (0.330) 10.660
Year ended 12/31/91...... 10.310 0.798 0.699 1.497 (0.817) -- 0.680 10.990
Year ended 12/31/90...... 10.220 0.680 (0.054) 0.626 (0.536) -- 0.090 10.310
Year ended 12/31/89...... 9.930 0.658 0.208 0.866 (0.576) -- 0.290 10.220
6/21/88*-12/31/88........ 10.000 0.262 (0.162) 0.100 (0.170) -- (0.070) 9.930
FRONTIER PORTFOLIO
Six months ended 6/30/95. 10.580 (0.034) 1.714 1.680 -- -- 1.680 12.260
10/11/94* to 12/31/94.... 10.000 (0.012) 0.592 0.580 -- -- 0.580 10.580
</TABLE>
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*Commencement of Operations.
**The Manager, at its discretion, waived its management fee and/or reimbursed
expenses for certain periods presented.
+Annualized
P-4
<PAGE>
<TABLE>
<CAPTION>
Without Management Fee Waiver and/or
Expense Reimbursement**
Ratios/Supplemental Data** ---------------------------------------------
-------------------------------------------------------- Ratios of
Total Return Expenses Net Investment Ratios of Net Investment
Based on to Income (Loss) Net Assets at Net Investment Expenses to Income (Loss)
Net Asset Average to Average Portfolio End of Period Income (Loss) Average Net to Average
Value Net Assets Net Assets Turnover (000's omitted) Per Share Assets Net Assets
- ------------ ---------- -------------- --------- --------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
12.60% 0.60%+ 0.55%+ 47.95% $6,721 $0.027 0.76%+ 0.39%+
(4.59) 0.60 0.10 67.39 5,942 (0.036) 0.96 (0.26)
11.65 0.71 0.09 65.30 5,886 (0.003) 0.83 (0.03)
6.80 0.91 (0.14) 54.95 5,497
59.05 0.60 0.56 31.44 5,812 (0.035) 1.37 (0.21)
(3.18) 2.15 0.18 28.94 3,560
16.47 3.55 (0.88) 32.55 2,577 (0.092) 3.80 (1.12)
0.60 6.99+ (0.11)+ -- 890
2.77 -- 5.59+ -- 4,003 0.022 1.08+ 4.51+
4.03 -- 3.98 -- 3,230 0.025 1.48 2.50
3.00 -- 2.96 -- 3,102 0.019 1.07 1.89
3.53 -- 3.50 -- 4,230 0.025 0.97 2.53
5.70 -- 5.49 -- 5,849 0.048 0.83 4.66
7.79 -- 7.53 -- 3,994 0.045 2.97 4.56
7.81 -- 7.72 -- 908 (0.019) 9.57 (1.85)
2.35 .95+ 5.83+ -- 283 (0.050) 20.02+ (13.24)+
13.93 0.57+ 2.43+ 39.34 23,422
0.04 0.60 2.45 15.29 20,168 0.361 0.62 2.43
11.94 0.55 2.10 10.70 21,861
12.14 0.56 2.21 12.57 24,987
33.16 0.60 2.63 27.67 26,103 0.350 0.71 2.52
(3.15) 0.88 3.01 13.78 18,030
24.11 1.59 2.32 37.56 9,332 0.236 1.67 2.23
1.80 3.62+ 1.65+ 14.40 2,476
40.71 0.95+ (0.92)+ 6.03 12,171 (0.088) 1.58+ (1.55)+
4.40 0.95+ (0.95)+ -- 495 (0.436) 13.96+ (13.96)+
10.57 0.60+ 6.41+ 95.59 3,781 0.288 1.04+ 5.97+
(3.39) 0.60 5.12 237.23 3,606 0.430 1.31 4.41
7.98 0.74 5.41 33.21 3,775 0.675 1.07 5.08
5.60 1.00 6.22 23.40 4,750
14.58 0.60 7.30 6.34 5,369 0.712 1.42 6.48
6.14 1.73 6.59 6.62 4,600
8.70 2.13 6.51 49.92 4,129 0.643 2.27 6.37
1.01 2.99+ 5.25+ 144.21 2,223
15.88 0.95+ (0.67)+ 38.74 2,456 (0.206) 4.38+ (4.10)+
5.80 0.95+ (0.70)+ -- 169 (1.319) 40.47+ (40.22)+
</TABLE>
P-5
<PAGE>
<TABLE>
<CAPTION>
Net Realized
& Unrealized Increase Net
Net Asset Net Realized Gain (Loss) (Decrease) Increase
Value Net & Unrealized from Foreign from Distributions (Decrease)
Per Share Operating at Beginning Investment Gain (Loss) Currency Investment Dividends from Net in Net
Performance: of Period Income** on Investment Transactions Operations Paid Gain Realized Asset Value
- ------------------- ------------ --------- ------------- ----------- ---------- --------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GLOBAL PORTFOLIO
Six months ended 6/30/95. $11.340 $0.083 $(0.149) $0.236 $0.170 $-- $-- $0.170
Year ended 12/31/94...... 11.370 0.131 (0.306) 0.325 0.150 (0.064) (0.116) (0.030)
5/3/93*-12/31/93......... 10.000 0.021 1.518 (0.099) 1.440 (0.053) (0.017) 1.370
GLOBAL SMALLER COMPANIES
PORTFOLIO
Six months ended 6/30/95. 10.310 0.075 0.262 0.193 0.530 -- -- 0.530
10/11/94*-12/31/94....... 10.000 0.058 0.266 0.029 0.353 (0.043) -- 0.310
HIGH-YIELD BOND PORTFOLIO
5/1/95*-9/30/95.......... 10.000 0.128 0.172 -- 0.300 -- -- 0.300
INCOME PORTFOLIO
Six months ended 6/30/95. 9.970 0.295 0.765 -- 1.060 -- -- 1.060
Year ended 12/31/94...... 11.380 0.689 (1.369) -- (0.680) (0.730) -- (1.410)
Year ended 12/31/93...... 11.390 0.828 0.576 -- 1.404 (0.828) (0.586) (0.010)
Year ended 12/31/92...... 11.250 0.862 0.896 -- 1.758 (0.987) (0.631) 0.140
Year ended 12/31/91...... 9.500 0.896 2.024 -- 2.920 (0.904) (0.266) 1.750
Year ended 12/31/90...... 10.780 0.829 (1.487) -- (0.658) (0.622) -- (1.280)
Year ended 12/31/89...... 10.040 0.634 0.834 -- 1.468 (0.419) (0.309) 0.740
6/21/88*-12/31/88........ 10.000 0.142 (0.032) -- 0.110 (0.070) -- 0.040
</TABLE>
- ------------
*Commencement of Operations.
**The Manager, (and Subadviser in the case of the Global Smaller Companies
Portfolio), at their discretion, waived management fees and/or reimbursed
expenses for certain periods presented.
+Annualized
P-6
<PAGE>
<TABLE>
<CAPTION>
Without Management Fee Waiver
and/or Expense Reimbursement**
Ratios/Supplemental Data** ---------------------------------------
------------------------------------------------------ Ratios of Net
Total Return Expenses Net Investment Net Ratios of Investment
Net Asset Based on to Income (Loss) Net Assets at Investment Expenses to Income (Loss)
Value at Net Asset Average to Average Portfolio End of Period Income (Loss) Average Net to Average
End of Period Value Net Assets Net Assets Turnover (000's omitted) Per Share Assets Net Assets
- ------------- ------------- ---------- ------------- --------- --------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$11.510 1.50% 1.27%+ 1.41%+ 31.72% $2,215 $(0.071) 4.07%+ (1.39)%+
11.340 1.32 1.20 1.17 47.34 1,776 (0.419) 6.12 (3.75)
11.370 14.40 1.20+ 1.30+ 2.82 648 (1.004) 17.94+ (15.44)+
10.840 5.14 1.31+ 1.61+ 9.83 1,295 (0.315) 9.67+ (6.75)+
10.310 3.53 1.20+ 3.14+ -- 132 (1.225) 37.25+ (32.91)+
10.300 3.00 0.70+ 4.19+ 5.73 1,577 (0.153) 9.90+ (5.01)+
11.030 10.63 0.60+ 5.70+ 24.71 11,469 0.293 0.64+ 5.66+
9.970 (5.96) 0.60 6.34 29.76 10,050 0.670 0.77 6.17
11.380 12.37 0.64 6.40 38.38 11,220 0.826 0.65 6.39
11.390 15.72 0.68 7.53 39.46 11.363
11.250 30.89 0.60 8.05 43.67 11,509 0.867 0.93 7.72
9.500 (6.10) 1.40 8.19 21.64 7,419
10.780 14.61 2.69 5.95 60.10 4,085 0.610 2.88 5.77
10.040 1.10 5.02+ 2.46+ -- 1,265 0.089 5.42+ 2.07+
</TABLE>
P-7
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
Set forth below is a description of the investment objective of each of the
Fund's Portfolios and their investment policies. Of course, because any
investment involves risk, there can be no assurance that any of the Portfolios
will meet its objective. The investment objective(s) of each Portfolio may not
be changed without the affirmative vote of the holders of a majority of the
voting securities of that Portfolio; however, unless otherwise noted, the
investment policies of each Portfolio are not fundamental and may be changed by
the Fund's Board of Directors without a vote of shareholders. A more detailed
description of each Portfolio's investment policies, including a list of those
restrictions on each Portfolio's investment activities which cannot be changed
without such a vote, appears in the Statement of Additional Information.
Information regarding the various rating categories used by the Standard &
Poor's Corporation ("S&P") and Moody's Investors Services, Inc. ("Moody's"), and
referred to in the following descriptions, is included in the Appendix to this
Prospectus.
SELIGMAN CAPITAL PORTFOLIO
The investment objective of this Portfolio is to produce capital
appreciation for its shareholders. Current income is not an objective. The
Portfolio will seek to achieve its objective by investing in common stocks and
securities convertible into or exchangeable for common stocks, in common stock
purchase warrants and rights, in debt securities and in preferred stocks
believed to provide capital appreciation opportunities. Common stocks, for the
most part, are selected for their near or intermediate-term prospects. They may
be stocks believed to be underpriced or stocks of growth companies, cyclical
companies, or companies believed to be undergoing a basic change for the better.
They may be stocks of established, well-known companies or of newer,
less-seasoned companies believed to have better-than-average prospects. The
principal criterion for choice of investments is capital appreciation potential.
The Portfolio may, pending investment and for temporary defensive purposes,
hold cash and invest without limitation in high-grade, short-term money market
instruments, including repurchase agreements, of the types listed under
"Seligman Cash Management Portfolio."
The Seligman Capital Portfolio may borrow money to increase its portfolio
of securities. Investing for capital appreciation and borrowing ordinarily
expose capital to added risk, and investment in the Portfolio should be
considered only by persons who are able and willing to take such risk.
SELIGMAN CASH MANAGEMENT PORTFOLIO
The investment objective of this Portfolio is to preserve capital and to
maximize liquidity and current income by investing in a diversified portfolio of
high-quality money market instruments consisting of United States ("U.S.")
Government obligations, U.S. dollar-denominated bank obligations (including
those issued by U.S. banks, their foreign branches and U.S. branches of foreign
banks), prime commercial paper, high-grade, short-term corporate obligations and
repurchase agreements with respect to the above types of instruments. The
Portfolio seeks to maintain a constant net asset value of $1.00 per share; there
can be no assurance that the Portfolio will be able to do so. In an effort to
maintain a stable net asset value, the Portfolio uses the amortized cost method
of valuing its securities.
The Portfolio will invest only in U.S. dollar-denominated securities having
a remaining maturity of 13 months (397 days) or less and will maintain a
dollar-weighted average portfolio maturity of 90 days or less. The Portfolio
will limit its investments to those securities that, in accordance with
guidelines adopted by the Board of Directors, present minimal credit risks.
Accordingly, the Portfolio will not purchase any security (other than a U.S.
Government obligation) unless (i) it is rated in one of the two highest rating
categories assigned to short-term debt securities by at least two nationally
recognized statistical rating organizations ("NRSROs") such as Moody's and S&P,
or (ii) if not so rated, it is determined to be of comparable quality.
Determinations of comparable quality will be made in accordance with procedures
established by the Directors. These standards must be satisfied at the time an
investment is made. If the quality of the investment later declines, the
Portfolio may continue to hold the investment, subject in certain circumstances
to a finding by the Board of Directors that disposing of the investment would
not be in the Portfolio's best interest.
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Presently, the Portfolio only invests in either U.S. Government obligations
or securities that are rated in the top rating category by Moody's and S&P.
However, the Portfolio is permitted to invest up to 5% of its assets in
securities rated in the second highest rating category by two NRSROs, provided
that not more than the greater of 1% of its total assets or $1,000,000 is
invested in any one such security.
U.S. GOVERNMENT OBLIGATIONS in which the Portfolio invests include
obligations issued or guaranteed as to both principal and interest by the U.S.
Government or backed by the full faith and credit of the United States, such as
U.S. Treasury bills, securities issued or guaranteed by a U.S. Government agency
or instrumentality, and securities supported by the right of the issuer to
borrow from the U.S. Treasury.
BANK OBLIGATIONS purchased by the Portfolio include U.S. dollar-denominated
certificates of deposit, banker's acceptances, fixed time deposits and
commercial paper of domestic banks, including their branches located outside the
United States, and of domestic branches of foreign banks. Investments in bank
obligations will be limited at the time of investment to the obligations of the
100 largest domestic banks in terms of assets which are subject to regulatory
supervision by the U.S. Government or state governments, and the obligations of
the 50 largest foreign banks in terms of assets with branches or agencies in the
United States.
COMMERCIAL PAPER AND SHORT-TERM CORPORATE DEBT SECURITIES include
short-term unsecured promissory notes with maturities not exceeding nine months
issued in bearer form by bank holding companies, corporations and finance
companies. Investments in commercial paper issued by bank holding companies will
be limited at the time of investment to the 100 largest U.S. bank holding
companies in terms of assets.
YIELD INFORMATION. Investors should recognize that, in periods of declining
interest rates, yields will tend to be somewhat higher than prevailing market
rates, and in periods of rising interest rates, the yield of the Portfolio will
tend to be somewhat lower. Also, when interest rates are falling, the inflow of
new money to the Portfolio from the continuous sale of its shares will likely be
invested in portfolio instruments producing lower yields than the balance of the
Portfolio assets, thereby reducing the current yield of the Portfolio. In
periods of rising interest rates, the opposite can be true. The Seligman Cash
Management Portfolio may attempt to increase yields on its investments by using
trading techniques designed to take advantage of short-term market variations.
This policy, together with the short maturities of the securities in which the
Portfolio invests, would result in high portfolio turnover. The Portfolio does
not anticipate incurring significant brokerage or transaction expenses since
portfolio transactions ordinarily will be made directly with the issuer, money
market dealer, or other financial institution on a net price basis.
SELIGMAN COMMON STOCK PORTFOLIO
The investment objective of this Portfolio is to produce favorable, but not
the highest, current income and long-term growth of both income and capital
value, without exposing capital to undue risk. The Seligman Common Stock
Portfolio seeks to achieve its objective primarily through equity investments,
and in general, investments will be broadly diversified over a number of
industries. The Seligman Common Stock Portfolio may, pending investment and for
temporary defensive purposes, invest without limitation in high-grade,
short-term money market instruments, including repurchase agreements, of the
types listed under "Seligman Cash Management Portfolio."
SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO
The investment objective of this Portfolio is to produce capital gain.
Income is not an objective. The Portfolio seeks to achieve its objective by
investing in a portfolio consisting of securities of companies operating in
virtually all aspects of the communications, information and related industries.
It invests at least 80% of its net assets, exclusive of government securities,
short-term notes, cash and cash equivalents, in securities of companies engaged
in these industries.
The value of Portfolio shares may be susceptible to factors affecting the
communications, information and related industries. As such, this Portfolio is
not an appropriate investment for individuals who require safety of principal or
stable income from their investments. These industries may be subject to greater
governmental regulation than many other industries and changes in governmental
policies and the need for regulatory approvals may have a material effect on the
products and services of these industries. Although securities of large
companies that now are well established in the world communications and
information market and can be expected to grow with the market are held by this
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Portfolio, rapidly changing technologies and the expansion of the
communications, information and related industries provide a favorable
environment for investing in companies of small to medium size. Securities of
smaller, less-seasoned companies may be subject to greater price fluctuation,
limited liquidity and above-average investment risk.
This Portfolio invests primarily in common stocks. It also may invest in
securities convertible into or exchangeable for common stocks, in warrants and
rights to purchase common stocks and in debt securities or preferred stocks
believed to provide opportunities for capital gain. It is this Portfolio's
present intention to invest not more than 5% of its net assets in debt
securities that are not rated within the four highest rating categories by S&P
or by Moody's.
SELIGMAN FIXED INCOME SECURITIES PORTFOLIO
The investment objective of this Portfolio is to achieve favorable current
income by investing in debt securities, including convertible issues and
preferred stock, diversified over a number of industries. Capital appreciation
will be a secondary consideration in selecting portfolio securities. As a matter
of fundamental policy, the Portfolio will invest at least 80% of its assets in
securities that are rated investment grade.
The Portfolio's assets may be invested in (l) corporate debt securities,
including bonds and debentures convertible into common stock or with warrants
and rights; (2) debt securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities; or (3) mortgage-backed debt securities, including
securities issued by the Government National Mortgage Association ("GNMA") and
debt obligations secured by commercial or residential real estate, rated within
one of the three highest rating categories by S&P or, if unrated, of comparable
quality in the opinion of the Manager; (4) preferred stock; and (5) commercial
paper rated within one of the three highest rating categories by S&P or Moody's.
The Portfolio may also hold or sell any securities obtained through the exercise
of conversion rights or warrants, or as a result of reorganization,
recapitalization, or liquidation proceedings of any issuer of securities owned
by the Portfolio. Long-term debt securities normally will be held when it is
believed that the trend of interest rates is down and prices of such securities
will increase; conversely, when it is believed that long-term interest rates
will rise, the Portfolio may attempt to shift into short-term debt securities
that are generally not as volatile as longer-term securities in periods of
rising interest rates. The Portfolio may, pending investment and for temporary
defensive purposes, invest without limitation in high-grade short-term money
market instruments, including repurchase agreements, of the types listed under
"Seligman Cash Management Portfolio."
Corporate debt securities purchased by the Portfolio will, in order to meet
the Portfolio's fundamental policy, be investment grade bonds that are rated
within one of the four highest rating categories by S&P or Moody's. To the
extent that the Portfolio may invest in lower-rated bonds, an investor should be
aware that while providing higher yields, such lower-rated bonds generally are
subject to greater market fluctuations and risks of loss of income and principal
than higher-rated (and lower-yielding) bonds. A description of the credit
ratings and the risks associated with such investments is contained in the
Appendix to this Prospectus. U.S. Government and agency obligations in which the
Portfolio invests may include direct obligations of the U.S. Treasury, such as
bills, notes and bonds, and marketable obligations issued by a U.S. Government
agency or instrumentality. Agency securities include those issued by the Small
Business Administration, General Services Administration and Farmers Home
Administration, which are guaranteed by the U.S. Treasury. Other such securities
are supported by the right of the issuer to borrow from the Treasury, such as
securities issued by the Federal Home Loan Mortgage Corporation ("FHLMC"), while
certain other securities are supported only by the credit of the agency or
instrumentality itself, such as securities issued by the Federal National
Mortgage Association ("FNMA"). Commercial paper includes unsecured promissory
notes of corporate issuers, which securities generally have remaining maturities
not exceeding nine months.
The mortgage-backed securities in which the Portfolio invests will include
securities that represent interests in pools of mortgage loans made by lenders
such as savings and loan institutions, mortgage bankers, and commercial banks.
Such securities provide a "pass-through" of monthly payments of interest and
principal made by the borrowers on their residential mortgage loans (net of any
fees paid to the issuer or guarantor of such securities). Although the
residential mortgages underlying a pool may have maturities of up to 30 years, a
pool's effective maturity may be reduced by prepayments of principal on the
underlying mortgage obligations. Factors affecting mortgage prepayments include,
among other things, the level of interest rates, general economic and social
conditions and the location and age of the mortgages. High interest rate
mortgages are more likely to be prepaid than lower-rate mortgages; consequently,
the effective maturities of mortgage-related obligations that pass-through
payments of higher-rate mortgages are likely to be shorter than those of
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obligations that pass-through payments of lower-rate mortgages. If such
prepayment of mortgage-related securities in which the Portfolio invests occurs,
the Portfolio may have to invest the proceeds in securities with lower yields.
GNMA is a U.S. Government corporation within the Department of Housing and
Urban Development, authorized to guarantee, with the full faith and credit of
the U.S. Government, the timely payment of principal and interest on securities
issued by institutions approved by GNMA (such as savings and loan institutions,
commercial banks and mortgage bankers) and backed by pools of Federal Housing
Administration insured or Veterans Administration guaranteed residential
mortgages. These securities entitle the holder to receive all interest and
principal payments owed on the mortgages in the pool, net of certain fees,
regardless of whether or not the mortgagors actually make the payments. Other
government-related issuers of mortgage-related securities include FNMA, a
government-sponsored corporation subject to general regulation by the Secretary
of Housing and Urban Development but owned entirely by private stockholders, and
FHLMC, a corporate instrumentality of the U.S. Government created for the
purpose of increasing the availability of mortgage credit for residential
housing that is owned by the twelve Federal Home Loan Banks. FHLMC issues
Participation Certificates ("PCs"), which represent interests in mortgages from
FHLMC's national portfolio. FHLMC guarantees the timely payment of interest and
ultimate collection of principal, but PCs are not backed by the full faith and
credit of the U.S. Government. Pass-through securities issued by FNMA are backed
by residential mortgages purchased from a list of approved seller/servicers and
are guaranteed as to timely payment of principal and interest by FNMA, but are
not backed by the full faith and credit of the U.S. Government.
Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers also create
pass-through securities based on pools of conventional residential mortgage
loans. Securities created by such non-governmental issuers may offer a higher
rate of interest than government-related securities; however, timely payment of
interest and principal may or may not be supported by insurance or guarantee
arrangements, and there can be no assurance that the private issuers can meet
their obligations.
SELIGMAN FRONTIER PORTFOLIO
The investment objective of this Portfolio is to produce growth in capital
value; income may be considered but will be only incidental to the Portfolio's
investment objective. This Portfolio seeks to achieve its objective by investing
in a portfolio consisting of securities of companies selected for their growth
prospects. It invests primarily in common stocks, and may also invest in
securities that may be exchanged for or converted into common stock, preferred
stock and common stock purchase warrants and rights believed by the Manager to
provide capital growth opportunities.
Stocks of companies believed by the Manager to have special characteristics
(such as a high growth rate of unit sales, an important opportunity in a
developing industry or a distinct competitive advantage) are favored by this
Portfolio. In general, securities owned are likely to be those issued by
companies of small to medium size with annual revenue of $400 million or less.
Except when investing for temporary defensive purposes, this Portfolio will
invest at least 65% of its net assets, exclusive of government securities,
short-term notes, cash and cash items, in securities of such companies.
Securities of smaller or medium-sized companies may be subject to above-average
market price fluctuation and business risk; however, the Manager will seek to
temper such risks by diversification of investments and by avoiding
concentration of investments in any one industry.
This Portfolio's investments, other than in securities of the companies
discussed above, will be substantially in securities issued or guaranteed by the
U.S. Government (such as Treasury bills, notes and bonds), its agencies,
instrumentalities or authorities, highly-rated corporate debt securities (rated
AA-, or better, by S&P or Aa3, or better, by Moody's); prime commercial paper
(rated A-1+/A-1 by S&P or P-1 by Moody's) and certificates of deposit of the 100
largest (based on assets) banks that are subject to regulatory supervision by
the U.S. Government or state governments and the 50 largest (based on assets)
foreign banks with branches or agencies in the United States.
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SELIGMAN HENDERSON GLOBAL PORTFOLIO
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO
Unless otherwise indicated, the following description of investment
objectives and policies applies to both the Seligman Henderson Global Portfolio
("Global Portfolio") and the Seligman Henderson Global Smaller
Companies Portfolio ("Global Smaller Companies Portfolio").
The investment objective of the Global Portfolio is long-term capital
appreciation primarily through global investments in securities of medium- to
large-sized companies. Under normal market conditions, the Global Port-folio
will invest 65% of its assets in securities of issuers located in at least three
different countries, one of which may be the U.S.
The investment objective of the Global Smaller Companies Portfolio is
long-term capital appreciation primarily through global investments in
securities of companies with small to medium market capitalizations. Under
normal market conditions, the Global Smaller Companies Portfolio will invest its
assets in securities of issuers located in at least three different countries,
one of which may be the U.S., and will invest at least 65% of its assets in
securities of small to medium-sized companies with market capitalization up to
$750 million.
Seligman Henderson Co. (the "Subadviser") will supervise and direct the
investments of both Portfolios. While each Portfolio may invest in securities of
issuers domiciled in any country, under normal conditions investments will be
made in four principal regions: The United Kingdom/Continental Europe, North
America, the Pacific Basin and Latin America. Continental European countries
include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland,
Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and Turkey.
Pacific Basin countries include Australia, Hong Kong, Indonesia, Japan, Korea,
Malaysia, New Zealand, Pakistan, The Philippines, Singapore, Sri Lanka, and
Thailand. North America includes the United States and Canada. Latin American
countries include Argentina, Brazil, Chile, Mexico and Venezuela.
In allocating investments among geographic regions and individual
countries, the Subadviser will consider such factors as the relative economic
growth potential of the various economies and securities markets; expected
levels of inflation; financial, social and political conditions influencing
investment opportunities; and the outlook for currency relationships.
These Portfolios may invest in all types of securities, most of which will
be denominated in currencies other than the U.S. dollar. Since opportunities for
long-term growth are primarily expected from equity securities, the Portfolios
will normally invest substantially all of their assets in such securities,
including common stock, securities convertible into common stock, depository
receipts for these securities and warrants. These Portfolios may, however,
invest up to 25% of their assets in preferred stock and debt securities if the
Subadviser believes that the capital appreciation available from an investment
in such securities will equal or exceed the capital appreciation available from
an investment in equity securities. Dividends or interest income are considered
only when the Subadviser believes that such income will have a favorable
influence on the market value of a security in light of the Portfolios'
objective of capital appreciation.
There is no requirement that the debt securities in which the Portfolios
may invest be rated by a recognized rating agency. However, it is the
Portfolios' policy that investments in debt securities, whether rated or
unrated, will be made only if they are, in the opinion of the Subadviser, of
equivalent quality to "investment grade" securities. "Investment grade"
securities are those rated within the four highest quality grades as determined
by Moody's or S&P. Debt securities are interest-rate sensitive, so that their
value will tend to decrease when interest rates rise and increase when interest
rates fall.
DEPOSITORY RECEIPTS. The Portfolios may invest in securities represented by
American Depository Receipts ("ADRs"), American Depository Shares ("ADSs"),
European Depository Receipts ("EDRs") or Global Depository Receipts ("GDRs").
ADRs and ADSs are instruments generally issued by domestic banks or trust
companies that represent the deposit of a security of a foreign issuer. ADRs and
ADSs may be publicly traded on exchanges or over-the-counter in the United
States and are quoted and settled in dollars at a price that generally reflects
the dollar equivalent of the home country share price. EDRs and GDRs are
typically issued by foreign banks or trust companies and traded in Europe. ADRs,
ADSs, EDRs and GDRs may be issued under sponsored or unsponsored programs. In
sponsored programs, the issuer has made arrangements to have its securities
trade in the form of ADRs, ADSs, EDRs or GDRs. In unsponsored programs, the
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issuer may not be directly involved in the creation of the program. Although
regulatory requirements with respect to sponsored and unsponsored programs are
generally similar, the issuers of unsponsored ADRs, ADSs, EDRs or GDRs are not
obligated to disclose material information in the U.S., and therefore, the
import of such information may not be reflected in the market value of such
receipts.
By investing in foreign securities, the Portfolios will attempt to take
advantage of differences among economic trends and the performance of securities
markets in various countries. To date, the market values of securities of
issuers located in different countries have moved relatively independently of
each other. During certain periods, the return on equity investments in some
countries has exceeded the return on similar investments in the U.S. The
Subadviser believes that, in comparison with investment companies investing
solely in domestic securities, it may be possible to obtain significant
appreciation from a portfolio of foreign investments and securities from various
markets that offer different investment opportunities and are affected by
different economic trends. Global diversification reduces the effect that events
in any one country will have on the entire investment portfolio. Of course, a
decline in the value of a Portfolio's investments in one country may offset
potential gains from investments in another country.
RISK FACTORS. Investments in securities of foreign issuers may involve
risks that are not associated with domestic investments, and there can be no
assurance that either of the Portfolios' foreign investments will present less
risk than a portfolio of domestic securities. Foreign issuers may lack uniform
accounting, auditing and financial reporting standards, practices and
requirements, and there is generally less publicly available information about
foreign issuers than there is about U.S. issuers. Governmental regulation and
supervision of foreign stock exchanges, brokers and listed companies may be less
pervasive than is customary in the U.S. Securities of some foreign issuers are
less liquid and their prices are more volatile than securities of comparable
domestic issuers. Foreign securities settlements may in some instances be
subject to delays and related administrative uncertainties which could result in
temporary periods when assets of a Portfolio are uninvested and no return is
earned thereon and may involve a risk of loss to a Portfolio. Foreign securities
markets may have substantially less volume than U.S. markets and far fewer
traded issues. Fixed brokerage commissions on foreign securities exchanges are
generally higher than in the U.S., and transaction costs with respect to smaller
capitalization companies may be higher than those of larger capitalization
companies. Income from foreign securities may be reduced by a withholding tax at
the source or other foreign taxes. In some countries, there may also be the
possibility of nationalization, expropriation or confiscatory taxation, (in
which a Portfolio could lose its entire investment in a certain market),
limitations on the removal of monies or other assets of the Portfolios, higher
rates of inflation, political or social instability or revolution, or diplomatic
developments that could affect investments in those countries. In addition, it
may be difficult to obtain and enforce a judgement in a court outside the U.S.
Some of the risks described in the preceding paragraph may be more severe
for investments in emerging or developing countries. By comparison with the
United States and other developed countries, emerging or developing countries
may have relatively unstable governments, economies based on a less diversified
industrial base and securities markets that trade a smaller number of
securities. Companies in emerging markets may generally be smaller, less
experienced and more recently organized than many domestic companies. Prices of
securities traded in the securities markets of emerging or developing countries
tend to be volatile. Furthermore, foreign investors are subject to many
restrictions in emerging or developing countries. These restrictions may
require, among other things, governmental approval prior to making investments
or repatriating income or capital, or may impose limits on the amount or type of
securities held by foreigners or on the companies in which the foreigners may
invest.
Investments in foreign securities will usually be denominated in foreign
currencies, and each Portfolio may temporarily hold funds in foreign currencies.
The value of a Portfolio's investments denominated in foreign currencies may be
affected, favorably or unfavorably, by the relative strength of the U.S. dollar,
changes in foreign currency and U.S. dollar exchange rates and exchange control
regulations. A Portfolio may incur costs in connection with conversions between
various currencies. A Portfolio's net asset value per share will be affected by
changes in currency exchange rates. Changes in foreign currency exchange rates
may also affect the value of dividends and interest earned, gains and losses
realized on the sale of securities and net investment income and gains, if any,
to be distributed to shareholders by the Portfolios. The rate of exchange
between the U.S. dollar and other currencies is determined by the forces of
supply and demand in the foreign exchange markets (which in turn are affected by
interest rates, trade flows and numerous other factors, including, in some
countries, local governmental intervention).
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With regard to the Global Smaller Companies Portfolio, the Subadviser
believes that smaller companies generally have greater earnings and sales growth
potential than larger companies. However, investments in such companies may
involve greater risks, such as limited product lines, markets and financial or
managerial resources. Less frequently traded securities may be subject to more
abrupt price movements than securities of larger companies.
FORWARD CURRENCY EXCHANGE CONTRACTS. The Subadviser will consider changes
in exchange rates in making investment decisions. As one way of managing
exchange rate risk, each Portfolio may enter into forward currency exchange
contracts (agreements to purchase or sell foreign currencies at a future date).
A Portfolio will usually enter into these contracts to fix the U.S. dollar value
of securities that it has agreed to buy or sell for the period between the date
the trade was entered into and the date the security is delivered and paid for.
A Portfolio may also use these contracts to hedge the U.S. dollar value of
securities it already owns. A Portfolio may be required to cover certain forward
currency exchange contract positions by establishing a segregated account with
its custodian that will contain only liquid assets, such as U.S. Government
securities or other liquid high-grade debt obligations. Under normal
circumstances, the portfolio manager will limit forward currency contracts to
not greater than 75% of the Portfolio's position in any one country as of the
date the contract is entered into.
Although the Portfolios will seek to benefit by using forward contracts,
anticipated currency movements may not be accurately predicted and the
Portfolios may therefore incur a gain or loss on a forward contract. A forward
contract may help reduce the Portfolios' losses on securities denominated in
foreign currency, but it may also reduce the potential gain on the securities
depending on changes in the currency's value relative to the U.S. dollar or
other currencies.
TEMPORARY INVESTMENTS. When the Subadviser believes that market conditions
warrant a temporary defensive position, a Portfolio may invest up to 100% of its
assets in short-term instruments such as commercial paper, bank certificates of
deposit, bankers' acceptances, or repurchase agreements for such securities and
securities of the U.S. Government and its agencies and instrumentalities, as
well as cash and cash equivalents denominated in foreign currencies. Investments
in domestic bank certificates of deposit and bankers' acceptances will be
limited to banks that have total assets in excess of $500 million and are
subject to regulatory supervision by the U.S. Government or state governments. A
Portfolio's investments in commercial paper of U.S. issuers will be limited to
(a) obligations rated Prime-1 by Moody's or A-1 by S&P or (b) unrated
obligations issued by companies having an outstanding unsecured debt issue
currently rated A or better by S&P. A description of various commercial paper
ratings and debt securities ratings appears in the Appendix to this Prospectus.
A Portfolio's investments in foreign short-term instruments will be limited to
those that, in the opinion of the Subadviser, equate generally to the standards
established for U.S. short-term instruments.
SELIGMAN HIGH-YIELD BOND PORTFOLIO
The objective of this Portfolio is to produce maximum current income. The
Portfolio seeks to achieve its objective by following a policy of investing in a
diversified range of high-yield, high-risk, medium and lower quality corporate
bonds and notes, commonly referred to as "junk bonds". Generally, bonds and
notes providing the highest yield are unrated or carry lower ratings (Baa or
lower by Moody's or BBB or lower by S&P) than those assigned by S&P or Moody's
to investment-grade bonds and notes. A description of the S&P and Moody's rating
categories is set forth in the Appendix to this Prospectus. While providing
higher yields, these bonds and notes are subject to greater risks of loss of
principal and income than higher-rated bonds and notes and are considered to be
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal. They are also generally considered to be subject to greater
price volatility due to market risks than higher rated bonds and notes.
The amount of outstanding high-yield, lower-rated corporate securities has
recently proliferated. Based on industry estimates, the market grew from $20
billion in outstanding securities to in excess of $270 billion, principally over
the past ten years, a period of national economic expansion. An economic
downturn could adversely impact issuers' abilities to pay interest and repay
principal and could result in issuers' defaulting on such payments. The value of
the Portfolio's bonds and notes will be affected like all fixed-income
securities by market conditions relating to changes in prevailing interest
rates. However, the value of lower-rated or unrated corporate bonds and notes is
also affected by investors' perceptions. When economic conditions appear to be
deteriorating, lower-rated or unrated corporate bonds and notes may decline in
market value due to investors' heightened concerns and perceptions over credit
quality. If the security is downgraded, the Portfolio may retain the security.
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The Portfolio may invest in "zero coupon" (interest payments accrue until
maturity) and "pay-in-kind" (interest payments are made in cash or additional
shares) bonds. Such securities may be subject to greater fluctuations in value
as they tend to be more speculative than income bearing securities. Fluctuations
in the market prices of the securities owned by the Portfolio result in
corresponding fluctuations and volatility in the net asset value of the shares
of the Portfolio.
Lower-rated and non-rated corporate bonds and notes in which the Portfolio
invests are traded principally by dealers in the over-the-counter market. The
market for these securities may be less active and less liquid than for higher
rated securities. Under adverse market or economic conditions, the secondary
market for these bonds and notes could contract further, causing the Portfolio
difficulties in valuing and selling the securities in its portfolio.
The ratings of fixed-income securities by Moody's and S&P are a generally
accepted barometer of credit risk. They are, however, subject to certain
limitations from an investor's standpoint. The rating of an issuer is heavily
weighted by past developments and does not necessarily reflect probable future
conditions. There is frequently a lag between the time the rating is assigned
and the time it is updated. In addition there may be varying degrees of
difference in credit risk of securities within each rating category.
The Manager will try to minimize the risk inherent in the Portfolio's
investment objective through credit analysis, diversification and attention to
current developments and trends in interest rates and economic conditions.
However, there can be no assurance that losses will not occur and an investment
in the Portfolio is appropriate for you only if you can bear the high risk
inherent in seeking maximum current income by investing in high-yielding
corporate bonds and notes which are unrated or carry lower ratings than those
assigned by S&P or Moody's to investment-grade bonds.
Except for temporary defensive purposes, at least 80% of the value of the
Portfolio's total assets will be invested in high-yielding, income-producing
corporate bonds. This investment policy is a fundamental policy and may not be
changed by the Board of Directors of the Fund without the vote of a majority of
the Portfolio's outstanding voting securities. The Portfolio may invest up to
20% of the value of its total assets in a range of high-yield, medium and lower
quality corporate notes, short-term money market instruments, including
certificates of deposit of banks having total assets of more than $1 billion and
which are members of the FDIC, bankers' acceptances and interest-bearing savings
or time deposits of such banks, commercial paper of prime quality rated A-1 or
higher by S&P or Prime-1 or higher by Moody's or, if not rated, issued by
companies which have an outstanding debt issue rated AA or higher by S&P or Aa
or higher by Moody's, securities issued, guaranteed or insured by the U.S.
Government, its agencies and instrumentalities and other income-producing cash
items. The Portfolio may invest temporarily for defensive purposes without limit
in the foregoing securities.
SELIGMAN INCOME PORTFOLIO
The primary investment objective of this Portfolio is to provide
shareholders with high current income consistent with what is believed to be
prudent risk of capital; secondarily, the Portfolio seeks to provide the
possibility of improvement in income and capital value over the longer term.
Assets are invested in securities carefully selected in light of the Portfolio's
investment objectives and diversified to limit risk. The distribution of
investments between different types of securities is governed by a fundamental
policy, which can be changed only by the vote of the shareholders, that at least
25% of the market value of gross assets must at all times be in cash, bonds
and/or preferred stocks. Under an investment policy established by the Board of
Directors, at least 80% of assets will be invested in income-producing
securities.
Subject to that limitation, assets may be invested in many different types
of securities, including money market instruments, fixed-income securities such
as bonds, debentures and preferred stocks, senior securities convertible into
common stocks, and common stocks.
Convertible bonds are convertible at a stated exchange rate or price into
common stock. Before conversion, convertible securities are similar to
non-convertible debt securities in that they provide a steady stream of income
with generally higher yields than an issuer's equity securities. The market
value of all debt securities, including convertible securities, tends to decline
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<PAGE>
as interest rates increase and to increase as interest rates decline. In
general, convertible securities may provide lower interest or dividend yields
than non-convertible debt securities of similar quality, but they may also allow
investors to benefit from increases in the market price of the underlying common
stock. When the market price of the underlying common stock increases, the price
of the convertible security tends to reflect the increase. When the market price
of the underlying common stock declines, the convertible security tends to trade
on the basis of yield, and may not depreciate to the same extent as the
underlying common stock. In an issuer's capital structure, convertible
securities are senior to common stocks. They are therefore of higher quality and
involve less risk than the issuer's common stock, but the extent to which risk
is reduced depends largely on the extent to which the convertible security sells
above its value as a fixed-income security. In selecting convertible securities
for the Portfolio, the Manager evaluates such factors as economic and business
conditions involving the issuer, future earnings growth potential of the issuer,
potential for price appreciation of the underlying equity, the value of
individual securities relative to other investment alternatives, trends in the
determinants of corporate profits and capability of management. In evaluating a
convertible security, the Manager gives emphasis to the attractiveness of the
underlying common stock and the capital appreciation opportunities that the
convertible bonds present. Convertible securities can be callable or redeemable
at the issuer's discretion, in which case the Manager would be forced to seek
alternative investments. The Portfolio may invest in debt securities convertible
into equity securities rated as low as CC by S&P or Ca by Moody's. Debt
securities rated below investment grade (frequently referred to as "junk bonds")
often have speculative characteristics and will be subject to greater market
fluctuations and risk of loss of income and principal than higher-rated
securities. A description of credit ratings and risks associated with
lower-rated debt securities is set forth in the Appendix to this Prospectus. The
Manager does not rely on the ratings of these securities in making investment
decisions but performs its own analysis, based on the factors described above,
in light of the Portfolio's investment objectives.
The Portfolio does not expect to invest more than 5% of its assets in
non-convertible bonds, notes and debentures ("bonds") rated below BBB by S&P or
Baa by Moody's. Although bonds rated in the fourth credit rating category (BBB
or Baa) are commonly referred to as investment grade, they may have speculative
characteristics. The Appendix to this Prospectus contains a description of
credit ratings and the risks associated with lower-rated debt securities, which
tend to be more speculative and riskier than higher-rated debt securities.
The following table sets forth the weighted average ratings of the
Portfolio invested in debt securities, including convertible bonds, for the year
ended December 31, 1994. The balance of the Portfolio is invested in equity
securities. When securities received different ratings from S&P and Moody's, the
table reflects the higher rating.
AAA/Aaa..................................... 2.9%
AA/Aa....................................... --
A/A......................................... 5.1%
BBB/Baa..................................... 25.6%
BB/Ba....................................... 5.4%
B/B......................................... 17.9%
CCC/Caa..................................... --
CC/Ca....................................... --
Non-rated................................... 4.5%
OTHER INVESTMENT POLICIES
The Fund's Portfolios may invest for either the long or short term in their
efforts to attain their objectives, and changes in investments may be made
whenever considered advisable by the Manager or, in the case of the Global
Portfolio and the Global Smaller Companies Portfolio, the Subadviser. Except as
otherwise noted, each of the Portfolios may engage in transactions involving the
types of securities and investment strategies described below. Further
information about these strategies is included in the Fund's Statement of
Additional Information.
REPURCHASE AGREEMENTS. Each Portfolio may hold cash or cash equivalents and
may enter into repurchase agreements with respect to securities; normally
repurchase agreements relate to money market obligations backed by the full
faith and credit of the U.S. Government. Repurchase agreements are transactions
in which an investor (e.g., any of the Fund's Portfolios) purchases a security
from a bank, recognized securities dealer, or other financial institution and
simultaneously commits to resell that security to such institution at an agreed
upon price, date and market rate of interest unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement thus involves the
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<PAGE>
obligation of the bank or securities dealer to pay the agreed upon price on the
date agreed to, which obligation is in effect secured by the value of the
underlying security held by the Portfolio. Repurchase agreements could involve
certain risks in the event of bankruptcy or other default by the seller,
including possible delays and expenses in liquidating the securities underlying
the agreement, decline in value of the underlying securities and loss of
interest. Although repurchase agreements carry certain risks not associated with
direct investments in securities, each Portfolio intends to enter into
repurchase agreements only with financial institutions believed to present
minimum credit risks in accordance with guidelines established by the Fund's
Board of Directors. The creditworthiness of such institutions will be reviewed
and monitored under the general supervision of the Board of Directors. The
Portfolios will invest only in repurchase agreements collateralized in an amount
at least equal at all times to the purchase price plus accrued interest.
Repurchase agreements usually are for short periods, such as one week or less,
but may be for longer periods. No Portfolio will enter into a repurchase
agreement with a maturity of more than seven days if, as a result, more than 15%
of the value of its net assets would then be invested in such repurchase
agreements and other illiquid investments.
ILLIQUID SECURITIES. Other than the Seligman Cash Management Portfolio,
each Portfolio may invest up to 15% of its net assets in illiquid securities,
including restricted securities (i.e., securities not readily marketable without
registration under the Securities Act of 1933 (the "1933 Act")) and other
securities that are not readily marketable. Each Portfolio, other than the
Seligman Cash Management Portfolio, may purchase restricted securities that can
be offered and sold to "qualified institutional buyers" under Rule 144A of the
1933 Act, and the Fund's Board of Directors may determine, when appropriate,
that specific Rule 144A securities are liquid and not subject to the 15%
limitation on illiquid securities. Should the Board of Directors make this
determination, it will carefully monitor the security (focusing on such factors,
among others, as trading activity and availability of information) to determine
that the Rule 144A security continues to be liquid. It is not possible to
predict with assurance exactly how the market for restricted securities offered
and sold under Rule 144A will develop. This investment practice could have the
effect of increasing the level of illiquidity in a Portfolio to the extent that
qualified institutional buyers become for a time uninterested in purchasing Rule
144A securities.
SHORT SALES. The Global Smaller Companies Portfolio may sell securities
short "against-the-box." A short sale "against-the-box" is a short sale in which
the Portfolio owns an equal amount of the securities sold short or securities
convertible into or exchangeable without payment of further consideration for
securities of the same issue as, and equal in amount to, the securities sold
short.
FOREIGN SECURITIES. Each of the Fund's Portfolios may invest in commercial
paper and certificates of deposit issued by foreign banks and may invest in
other securities of foreign issuers directly or through ADRs, ADSs, EDRs or
GDRs. Foreign investments may be affected favorably or unfavorably by changes in
currency rates and exchange control regulations. There may be less information
available about a foreign company than about a U.S. company and foreign
companies may not be subject to reporting standards and requirements comparable
to those applicable to U.S. companies. Foreign securities may not be as liquid
as U.S. securities. Securities of foreign companies may involve greater market
risk than securities of U.S. companies, and foreign brokerage commissions and
custody fees are generally higher than in the U.S. Investments in foreign
securities may also be subject to local economic or political risks, political
instability and possible nationalization of issuers. A Portfolio may invest up
to 10% of its total assets in foreign securities (except the Global Portfolio
and the Global Smaller Companies Portfolio, which may invest up to 100% of their
total assets in foreign securities), except that this 10% limit does not apply
to foreign securities held through ADRs, ADSs, EDRs or GDRs or to commercial
paper and certificates of deposit issued by foreign banks.
LENDING OF PORTFOLIO SECURITIES AND BORROWING. Other than the Seligman Cash
Management Portfolio, each of the Fund's Portfolios may lend portfolio
securities to banks or other institutional borrowers. The Fund's Portfolios will
not lend portfolio securities to any institutions affiliated with the Fund. The
borrower must maintain with the Fund's custodian bank cash or equivalent
collateral equal to at least 100% of the market value of the securities loaned.
During the time portfolio securities are on loan, the borrower is required to
pay an amount equal to any dividends or interest paid on the securities to the
lending Portfolio. In addition, the lending Portfolio may invest the cash
collateral and earn additional income or may receive an agreed upon amount of
interest income from the borrower.
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<PAGE>
Except as noted below, a Portfolio may not borrow money except from banks
for temporary purposes (but not for the purpose of purchasing portfolio
securities) in an amount not to exceed 10% of the value of the total assets of
that Portfolio. In addition, the Seligman Frontier Portfolio and the Seligman
High-Yield Bond Portfolio will not purchase additional portfolio securities if
that Portfolio has outstanding borrowings in excess of 5% of the value of its
total assets.
The Seligman Capital Portfolio, the Seligman Common Stock Portfolio and the
Seligman Communications and Information Portfolio may from time to time borrow
money in order to purchase securities. Borrowings may be made only from banks
and each of these Portfolios may not borrow in excess of one-third of the market
value of its assets, less liabilities other than such borrowing, or pledge more
than 10% of its total assets, taken at cost, to secure the borrowing. Current
asset value coverage of three times any amount borrowed by the respective
Portfolio is required at all times. Borrowed money creates an opportunity for
greater capital appreciation, but at the same time increases exposure to capital
risk. The net cost of any money borrowed would be an expense that otherwise
would not be incurred, and this expense will reduce the Portfolio's net
investment income in any given period. Any gain in the value of securities
purchased with money borrowed to an amount in excess of amounts borrowed plus
interest would cause the net asset value of the Portfolio's shares to increase
more than otherwise would be the case. Conversely, any decline in the value of
securities purchased to an amount below the amount borrowed plus interest would
cause the net asset value to decrease more than would otherwise be the case.
The Global Portfolio and the Global Smaller Companies Portfolio may from
time to time borrow money for temporary, extraordinary or emergency purposes and
may invest the funds in additional securities. Borrowings for the purchase of
securities will not exceed 5% of the Portfolio's total assets and will be made
at prevailing interest rates.
WHEN-ISSUED SECURITIES. The Seligman Fixed Income Securities Portfolio and
the Seligman High-Yield Bond Portfolio may purchase securities on a when-issued
basis. Settlement of such transactions (i.e., delivery of securities and payment
of purchase price) normally takes place within 45 days after the date of the
commitment to purchase. Although the Seligman High-Yield Bond Portfolio will
purchase a security on a when-issued basis only with the intention of actually
acquiring the securities, the Portfolio may sell these securities before the
purchase settlement date if it is deemed advisable.
At the time a Portfolio enters into such a commitment both payment and
interest terms will be established prior to settlement; there is a risk that
prevailing interest rates on the settlement date will be greater than the
interest rate terms established at the time the commitment was entered into.
When-issued securities are subject to changes in market value prior to
settlement based upon changes, real or anticipated, in the level of interest
rates or creditworthiness of the issuer. If a Portfolio remains substantially
fully invested at the same time that it has purchased securities on a
when-issued basis, the market value of that Portfolio's assets may fluctuate
more than otherwise would be the case. For this reason, accounts for each
Portfolio will be established with the Fund's custodian consisting of cash
and/or liquid high-grade debt securities equal to the amount of each Portfolio's
when-issued commitment; these accounts will be valued each day and additional
cash and/or liquid high-grade debt securities will be added to an account in the
event that the current value of the when-issued commitment increases. When the
time comes to pay for when-issued securities, a Portfolio will meet its
respective obligations from then available cash flow, sale of securities held in
the separate account, sale of other securities, or from the sale of the
when-issued securities themselves (which may have a value greater or less than a
Portfolio's payment obligations). Sale of securities to meet when-issued
commitments carries with it a greater potential for the realization of capital
gain or loss.
MANAGEMENT SERVICES
The Board of Directors provides broad supervision over the affairs of the
Fund. Pursuant to management agreements approved by the Board of Directors (the
"Management Agreements"), the Manager manages the investments of each Portfolio
and administers its business and other affairs. The address of the Manager is
100 Park Avenue, New York, New York 10017.
Mr. William C. Morris is Chairman and President of the Manager and Chairman
of the Board and Chief Executive Officer of the Fund. Mr. Morris owns a majority
of the outstanding voting securities of the Manager.
For its services under the Management Agreements, the Manager receives a
fee, calculated daily and payable monthly, at an annual rate of .40% of the
average daily net assets of the Seligman Capital Portfolio, the Seligman Cash
Management Portfolio, the Seligman Common Stock Portfolio, the Seligman Fixed
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<PAGE>
Income Securities Portfolio, and the Seligman Income Portfolio, at an annual
rate of .50% of the average daily net assets of the Seligman High-Yield Bond
Portfolio, and at an annual rate of .75% of the average daily net assets of the
Seligman Communications and Information Portfolio and the Seligman Frontier
Portfolio.
The Global Portfolio and the Global Smaller Companies Portfolio each pay
the Manager a management fee, calculated daily and payable monthly, equal to an
annual rate of 1.00% of the average daily net assets of each Portfolio, of which
.90% is paid to the Subadviser for the services described below. This management
fee is higher than that of the other Portfolios of the Fund and of most
investment companies but is comparable to that of most global equity funds.
The Manager voluntarily has agreed to waive its management fee and to
reimburse all expenses for the Seligman Cash Management Portfolio, and has
voluntarily agreed to reimburse annual expenses (other than the management fee)
that exceed .20% of average net assets for each of the Seligman Capital,
Seligman Common Stock, Seligman Communications and Information, Seligman Fixed
Income Securities, Seligman Frontier, Seligman High-Yield Bond and Seligman
Income Portfolios. There is no assurance that the Manager will continue this
policy in the future.
For the year/period ended December 31, 1994, the Subadviser voluntarily
agreed to reimburse certain annual expenses (other than the management fee) that
exceeded .20% of average net assets for the Global Portfolio and the Global
Smaller Companies Portfolio and will continue to do so for the period prior to
May 1, 1995. Effective May 1, 1995, the Subadviser has agreed to reimburse
annual expenses (other than the management fee) that exceed .40% of average net
assets.
The management fee paid by each Portfolio expressed as a percentage of
average daily net assets of that Portfolio is presented in the following table
for the fiscal year/period ended December 31, 1994. Total expenses for each
Portfolio's shares, expressed as an annualized percentage of average daily net
assets, are also presented in the following table for the year/period ended
December 31, 1994.
<TABLE>
<CAPTION>
Annualized Expense
Management Fee Rate Ratios for
for the year ended the year/period ended
Portfolio 12/31/94 12/31/94*
------- ------------------- -----------------------
<S> <C> <C>
Capital Portfolio.................................... .40% .60%
Cash Management Portfolio............................ -* -
Common Stock Portfolio............................... .40 .60
Communications and Information Portfolio............. .75+ .95
Fixed Income Securities Portfolio.................... .40 .60
Frontier Portfolio................................... .75+ .95
Global Portfolio..................................... 1.00 1.20
Global Smaller Companies Portfolio................... 1.00+ 1.20
Income Portfolio..................................... .40 .60
</TABLE>
-------------
* During the year/period ended December 31, 1994, the Manager, at its
discretion, waived all of its fees for the Seligman Cash Management
Portfolio, and the Manager or Subadviser elected to reimburse all or a
portion of the expenses for each Portfolio.
+ Annualized.
The High-Yield Bond Portfolio commenced operations on May 1, 1995. The
Management Fee Rate and the Annualized Expense Ratio for the High-Yield Bond
Portfolio for the period May 1, 1995 through September 30, 1995, on an
annualized basis, was .50% and .70%, respectively, of the average daily net
assets of the Portfolio.
The Manager also serves as manager of sixteen other investment companies,
which, together with the Fund, make up the "Seligman Group." The aggregate
assets of the Seligman Group are approximately $11 billion. The Manager also
provides investment management or advice to individual and institutional
accounts having an aggregate value of approximately $3.8 billion.
The Fund bears all expenses of its organization, operations, and business
not specifically assumed or agreed to be paid by the Manager as provided in the
Management Agreements. In particular, but without limiting the generality of the
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<PAGE>
foregoing, the Fund pays brokerage commissions, custody expenses and expenses
relating to computation of the Fund's net asset value per share, including the
cost of any equipment or services used for obtaining price quotations; legal and
accounting fees and expenses; fees and expenses of registering the Fund under
the federal securities laws; taxes or governmental fees payable by or with
respect to the Fund to federal, state, or other governmental agencies, domestic
or foreign, including stamp or other transfer taxes; fees, dues, and other
expenses incurred in connection with the Fund's membership in any trade
association or other investment organization; and such nonrecurring expenses as
may arise, including litigation costs.
THE SUBADVISER. Seligman Henderson Co. serves as Subadviser to the Global
Portfolio and the Global Smaller Companies Portfolio pursuant to Subadvisory
Agreements between the Manager and the Subadviser (the "Subadvisory
Agreements"). The Subadvisory Agreements provide that the Subadviser will
supervise and direct the Portfolios' international investments in accordance
with the Portfolios' investment objectives, policies and restrictions. Seligman
Henderson Co. was created to provide international and global investment
management services to institutional and individual investors and investment
companies in the U.S. The address of the Subadviser is 100 Park Avenue, New
York, New York 10017.
PORTFOLIO MANAGERS. Loris D. Muzzatti, a Managing Director of the Manager,
serves as Vice President of the Fund and has been the Portfolio Manager of the
Seligman Capital Portfolio since December 1988. Mr. Muzzatti, who joined the
Manager in 1985, also manages a portion of the Manager's leading institutional
accounts. The Portfolio Manager's discussion of the Portfolio's performance, as
well as a line graph illustrating comparative performance information between
the Portfolio, the Standard & Poor's 500 Composite Stock Price Index and the
Lipper Capital Appreciation Fund Average, is included in the Fund's 1994 Annual
Report to Shareholders.
Charles C. Smith, Jr., a Managing Director of the Manager since January 1,
1994, serves as Vice President of the Fund and has been Portfolio Manager of the
Seligman Common Stock Portfolio and the Seligman Income Portfolio since December
1991. Mr. Smith, who joined the Manager in 1985 as Vice President, Investment
Officer and became Senior Vice President, Senior Investment Officer in 1992,
also manages Seligman Common Stock Fund, Inc. and Seligman Income Fund, Inc.
Stacey G. Navin, Vice President of the Manager, serves as Vice President of the
Fund and has been a Co-Portfolio Manager of the Seligman Common Stock Portfolio
and the Seligman Income Portfolio since December 1991. Ms. Navin, who joined the
Manager in 1986 and assumed her current responsibilities in 1988, also
co-manages Seligman Common Stock Fund, Inc. and Seligman Income Fund, Inc. The
Portfolio Manager's discussion of the Seligman Common Stock Portfolio's
performance, as well as a line graph illustrating comparative performance
information between the Seligman Common Stock Portfolio, the Standard & Poor's
500 Composite Stock Price Index and the Lipper Growth and Income Fund Average,
is included in the Fund's 1994 Annual Report to Shareholders. The Portfolio
Manager's discussion of the Seligman Income Portfolio's performance, as well as
a line graph illustrating comparative performance information between the
Seligman Income Portfolio, the Standard & Poor's 500 Composite Stock Price
Index, and the Lipper Income Fund Average, is included in the Fund's 1994 Annual
Report to Shareholders.
Paul H. Wick, a Managing Director of the Manager, serves as Vice President
of the Fund and is the Portfolio Manager of the Seligman Communications and
Information Portfolio and the Seligman Frontier Portfolio. Mr. Wick, who joined
the Manager in 1987, also manages Seligman Communications and Information Fund,
Inc. and Seligman Frontier Fund, Inc., and co-manages Seligman Henderson Global
Technology Fund, a series of Seligman Henderson Global Fund Series, Inc. The
Portfolio Manager's discussion of the Seligman Communications and Information
Portfolio's performance, as well as a line graph illustrating comparative
information between the Seligman Communications and Information Portfolio, the
Standard & Poor's 500 Composite Stock Price Index and the Lipper Science and
Technology Fund Average, is included in the Fund's 1994 Annual Report to
Shareholders. The Portfolio Manager's discussion of the Seligman Frontier
Portfolio's performance, as well as a line graph illustrating comparative
information between the Seligman Frontier Portfolio, the National Association of
Securities Dealers Automated Quotations ("NASDAQ") and the Lipper Small Company
Fund Average, is included in the Fund's 1994 Annual Report to Shareholders.
Leonard J. Lovito, a Vice President of the Manager, serves as Vice
President of the Fund and has been Portfolio Manager of the Seligman Fixed
Income Securities Portfolio since January 1, 1994 and of the Seligman Cash
Management Portfolio and Seligman Cash Management Fund, Inc. since January 1,
1995. Mr. Lovito, who joined the Manager in 1984, manages the Seligman U.S.
Government Securities Series of Seligman High Income Fund Series. The Portfolio
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<PAGE>
Manager's discussion of the Seligman Fixed Income Securities Portfolio's
performance, as well as a line graph illustrating comparative performance
information between the Seligman Fixed Income Securities Portfolio, the Standard
& Poor's 500 Composite Stock Price Index, the Lehman Brothers Government Bond
Index, and the Lipper Fixed Income Fund Average, is included in the Fund's 1994
Annual Report to Shareholders.
Daniel J. Charleston, a Vice President of the Manager, serves as a Vice
President of the Fund and is the Portfolio Manager of the Seligman High-Yield
Bond Portfolio. Mr. Charleston, who joined the Manager in 1987, has also managed
the Seligman High-Yield Bond Series of Seligman High Income Fund Series since
1989.
The Subadviser's International Policy Group has overall responsibility for
directing and overseeing all aspects of investment activity for the Global
Portfolio and the Global Smaller Companies Portfolio and provides international
investment policy, including country weightings, asset allocations and industry
sector guidelines, as appropriate. Mr. Iain C. Clark, a Managing Director and
the Chief Investment Officer of the Subadviser, is responsible for the
day-to-day investment activity of the Global Portfolio and the Global Smaller
Companies Portfolio. Mr. Clark, who joined the Subadviser in 1992, has been a
Director of Henderson Administration Group plc and Henderson International, Ltd.
and Secretary, Treasurer and Vice President of Henderson International, Inc.
since 1985. Mr. Clark's discussion of the Global Portfolio's performance, as
well as a line graph illustrating comparative performance information between
the Global Portfolio, the Morgan Stanley Capital International ("MSCI") World
Index and the MSCI Europe-Asia-Far East Index, is included in the Fund's 1994
Annual Report to Shareholders. Mr. Clark's discussion of the Global Smaller
Companies Portfolio's performance, as well as a line graph illustrating
comparative information between the Global Smaller Companies Portfolio, the MSCI
World Index, and the Lipper Global Small Company Fund Average, is included in
the Fund's 1994 Annual Report to Shareholders.
Copies of the Fund's 1994 Annual Report to Shareholders may be obtained,
without charge, by calling or writing the Fund at the telephone numbers or
address listed on the front page of this Prospectus.
PORTFOLIO TRANSACTIONS, PORTFOLIO TURNOVER AND VALUATION
PORTFOLIO TRANSACTIONS. In directing transactions involving exchange-listed
securities, the Manager (or in the case of the Global Portfolio and the Global
Smaller Companies Portfolio, the Manager or the Subadviser) will seek the most
favorable price and execution, and consistent with that policy may give
consideration to the research, statistical, and other services furnished by
brokers or dealers to the Manager or the Subadviser for its use. In addition,
the Manager and Subadviser are authorized to place orders with brokers who
provide supplemental investment and market research and security and economic
analysis, although the use of such brokers may result in a higher brokerage
charge to a Portfolio than the use of brokers selected solely on the basis of
seeking the most favorable price and execution although such research and
analysis received may be useful to the Manager or the Subadviser in connection
with their services to other clients as well as to the Portfolios. Portfolio
transactions for the Seligman Cash Management Portfolio, Seligman Fixed Income
Securities Portfolio and Seligman High-Yield Bond Portfolio, which invest in
debt securities generally traded in the over-the-counter market, and
transactions by any of the other Portfolios in debt securities traded on a
"principal basis" in the over-the-counter market are normally directed by the
Manager or the Subadviser to dealers in the over-the-counter market, which
dealers generally act as principals for their own accounts.
Consistent with the rules of the National Association of Securities
Dealers, Inc. and subject to seeking the most favorable price and execution
available and such other policies as the Directors may determine, the Manager or
Subadviser may consider sales of the variable contracts which are funded though
CLVA-2, CLVA-3, Canada Life Separate Accounts (collectively, "Canada Life
Accounts") and, if permitted by applicable laws, of the other Funds in the
Seligman Group as a factor in the selection of brokers or dealers to execute
portfolio transactions for the Fund.
PORTFOLIO TURNOVER. A change in securities held by any Portfolio is known
as "portfolio turnover" and may involve the payment by the Fund of dealer
spreads or underwriting commissions and other transactions costs on the sale of
securities as well as on the reinvestment of the proceeds in other securities.
Changes will be made whenever the Manager or, in the case of the Global
Portfolio and the Global Smaller Companies Portfolio, the Subadviser, believes
such changes will strengthen any Portfolio's position. Portfolio turnover will
vary from year to year as well as within a year and may exceed 100%.
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<PAGE>
VALUATION. The net asset value of the shares of each Portfolio will be
computed each day, Monday through Friday, as of the close of the New York Stock
Exchange (usually 4:00 p.m., New York City time), on days the New York Stock
Exchange is open for trading. Securities of each Portfolio (except Seligman Cash
Management Portfolio) are valued at current market value, or in the absence
thereof, at fair value in accordance with procedures approved by the Board of
Directors. For purposes of determining the net asset value per share of the
Global Portfolio and the Global Smaller Companies Portfolio, securities traded
on a foreign exchange or over-the-counter market are valued at the last sales
price on the primary exchange or market on which they are traded. United Kingdom
securities and securities for which there are no recent sales transactions are
valued based on quotations provided by primary market makers in such securities.
Any securities for which recent market quotations are not readily available are
valued at fair value determined in accordance with procedures approved by the
Board of Directors. Short-term holdings maturing in 60 days or less are
generally valued at amortized cost if their original maturity was 60 days or
less. Short-term holdings with more than 60 days remaining to maturity will be
valued at current market value until the 61st day prior to maturity, and will
then be valued on an amortized cost basis based on the value of such date unless
the Board determines that this amortized cost value does not represent fair
market value.
Securities held by the Seligman Cash Management Portfolio are valued using
the amortized cost method. This method is designed to stabilize the net asset
value of that Portfolio at $1.00 per share. The Board of Directors will monitor
closely the stabilization of the net asset value at $1.00 per share and has
adopted procedures to facilitate such stabilization. More information regarding
this method of valuation is contained in the Statement of Additional
Information.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Portfolio of the Fund intends to qualify as a "regulated investment
company" under certain provisions of the Internal Revenue Code of 1986, as
amended (the "Code"). Under such provisions, the Fund's Portfolios will be
subject to federal income tax only with respect to undistributed net investment
income and net realized capital gain. Each of the Fund's Portfolios will be
treated as a separate entity. Dividends on the Seligman Cash Management
Portfolio will be declared daily and reinvested monthly in additional full and
fractional shares of the Seligman Cash Management Portfolio; it is not expected
that this Portfolio will realize capital gains. Dividends and capital gain
distributions from each of the other Portfolios will be declared and paid
annually and will be reinvested at the net asset value of such shares of the
Portfolio that declared such dividend or gain distribution. Dividend and gain
distributions are generally not currently taxable to owners of the CLVA-2,
CLVA-3 or VCA-9 Contracts; further information regarding the tax consequences of
an investment in the Fund is contained in the separate prospectus or disclosure
documents of the Canada Life Accounts and VCA-9.
PURCHASES AND REDEMPTIONS
Shares of the Portfolios will be offered only to Canada Life Accounts and
VCA-9. Shares of the Fund will be purchased and redeemed by Canada Life Accounts
and VCA-9 at net asset value, without charge. However, the Canada Life Accounts
and VCA-9 Contracts are sold subject to certain fees and charges. These fees and
charges for the Canada Life Accounts and VCA-9 Contracts are more fully
described in the prospectuses or disclosure documents for Canada Life Accounts
and VCA-9 which should be read together with this Prospectus, as applicable.
Purchase or redemption requests received by the Fund prior to 4:00 p.m., New
York City time are effected at the applicable Portfolio's net asset value per
share calculated on the date such purchase or redemption requests are received.
Any inquiries regarding the Fund should be directed in writing to Seligman
Financial Services, Inc., 100 Park Avenue, New York, New York 10017, or by
calling the telephone numbers listed on the front page of the Prospectus.
Seligman Financial Services, Inc. is an affiliate of the Manager and distributor
of the contracts funded through the Canada Life Accounts.
CUSTODIANS AND TRANSFER AGENT
Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City,
Missouri 64105, acts as custodian of the Fund's assets, except for the assets of
the Global Portfolio and the Global Smaller Companies Portfolio, as well as
transfer and dividend disbursing agent.
P-22
<PAGE>
Morgan Stanley Trust Company, One Pierrepont Plaza, Brooklyn, New York
11201, acts as custodian of the assets of the Global Portfolio and the Global
Smaller Companies Portfolio.
ORGANIZATION AND CAPITALIZATION
The Fund is an open-end diversified management investment company
incorporated under the laws of the state of Maryland on June 24, 1987 under the
name Seligman Mutual Benefit Portfolios, Inc. The Fund's name was changed to
Seligman Portfolios, Inc. on April 15, 1993. Directors of the Fund have
authority to issue a total of 1,000,000,000 shares, each with a par value of
$.001. The Fund presently has ten separate series of common stock, each of which
maintains a separate investment portfolio, designated as follows: Seligman
Capital Portfolio; Seligman Cash Management Portfolio; Seligman Common Stock
Portfolio; Seligman Communications and Information Portfolio; Seligman Fixed
Income Securities Portfolio; Seligman Frontier Portfolio; Seligman Henderson
Global Portfolio; Seligman Henderson Global Smaller Companies Portfolio;
Seligman High-Yield Bond Portfolio; and Seligman Income Portfolio. Each share
represents an equal proportionate interest in the respective series and shares
entitle their holders to one vote per share. Shares have noncumulative voting
rights, do not have preemptive or subscription rights, are transferable and are
fully paid and non-assessable. In accordance with current policy of the SEC,
holders of the Canada Life Accounts and VCA-9 Contracts have the right to
instruct Canada Life and MBL Life, respectively, as to voting Fund shares held
by such Canada Life Accounts and VCA-9, respectively, on all matters to be voted
on by Fund shareholders. Such rights may change in accordance with changes in
policies of the SEC. Voting rights of the participants in the Canada Life
Accounts and VCA-9 are more fully set forth in the prospectus or disclosure
document relating to that account, as applicable, which should be read together
with this Prospectus. The Directors of the Fund have authority to create
additional portfolios and to classify and reclassify shares of capital stock
without further action by shareholders and additional series may be created in
the future. Under Maryland corporate law, the Fund is not required to hold
annual meetings and it is the intention of the Fund's Directors not to do so.
However, special meetings of shareholders will be held for action by
shareholders as may be required by the 1940 Act, the Fund's Articles of
Incorporation and By-Laws, or Maryland corporate law.
P-23
<PAGE>
APPENDIX
MOODY'S INVESTORS SERVICE (MOODY'S)
DEBT SECURITIES
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk. Interest payments are protected by
a large or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than Aaa bonds because margins of
protection may not be as large or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be characteristically lacking or may be unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact may have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during other good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in
high degree. Such issues are often in default or have other marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Moody's applies numerical modifiers (1, 2 and 3) in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; modifier 2 indicates a mid-range ranking; and modifier 3
indicates that the issuer ranks in the lower end of its generic rating category.
COMMERCIAL PAPER
Moody's Commercial Paper Ratings are opinions of the ability of issuers to
repay punctually promissory senior debt obligations not having an original
maturity in excess of one year. Issuers rated "Prime-1" or "P-1" indicates the
highest quality repayment ability of the rated issue.
The designation "Prime-2" or "P-2" indicates that the issuer has a strong
ability for repayment of senior short-term promissory obligations. Earnings
trends and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternative liquidity is maintained.
The designation "Prime-3" or "P-3" indicates that the issuer has an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market compositions may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and may require relatively high
financial leverage. Adequate alternate liquidity is maintained.
P-24
<PAGE>
Issues rated "Not Prime" do not fall within any of the Prime rating
categories.
STANDARD & POOR'S CORPORATION ("S&P")
DEBT SECURITIES
AAA: Debt issues rated AAA are highest grade obligations. Capacity to pay
interest and repay principal is extremely strong.
AA: Debt issues rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in small degree.
A: Debt issues rated A are regarded as upper medium grade. They have a
strong capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
BBB: Debt issues rated BBB are regarded as having an adequate capacity to
pay interest and re-pay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and re-pay principal
for bonds in this category than for bonds in higher rated categories.
BB, B, CCC, CC: Debt issues rated BB, B, CCC and CC are regarded on
balance, as predominantly speculative with respect to capacity to pay interest
and pre-pay principal in accordance with the terms of the bond. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposure to adverse
conditions.
C: The rating C is reserved for income bonds on which no interest is being
paid.
D: Debt issues rated D are in default, and payment of interest and/or
repayment of principal is in arrears.
NR: Indicates that no rating has been requested, that there is insufficient
information on which to base a rating or that S&P does not rate a particular
type of bond as a matter of policy.
COMMERCIAL PAPER
S&P Commercial Paper ratings are current assessments of the likelihood of
timely payment of debts having an original maturity of no more than 365 days.
A-1: The A-1 designation indicates that the degree of safety regarding
timely payment is very strong.
A-2: Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."
A-3: Issues carrying this designation have adequate capacity for timely
payment. They are, however more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.
B: Issues rated B" are regarded as having only a speculative capacity for
timely payment.
C: This rating is assigned to short-term debt obligations with a doubtful
capacity of payment.
D: Debt rated "D is in payment default.
The ratings assigned by S&P may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within its major rating categories.
P-25
<PAGE>
<PAGE>
1
STATEMENT OF ADDITIONAL INFORMATION
November 1, 1995
SELIGMAN PORTFOLIOS, INC.
100 Park Avenue
New York, New York 10017
800-221-7844 - all continental United States, except New York
212-850-1864 - New York State
800-221-2783 - Marketing Services
This Statement of Additional Information expands upon and supplements
the information contained in the current Prospectus of Seligman Portfolios,
Inc. (the "Fund"), dated November 1, 1995. It should be read in
conjunction with the Prospectus, which may be obtained by contacting the
Fund at the telephone numbers or address set forth above. This Statement
of Additional Information, although not in itself a Prospectus, is
incorporated by reference into the Prospectus in its entirety.
TABLE OF CONTENTS
INVESTMENT POLICIES AND RESTRICTIONS . . . . . . . . . . . . . 2
DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . 6
MANAGEMENT AND EXPENSES . . . . . . . . . . . . . . . . . . . . 10
PORTFOLIO TRANSACTIONS, VALUATION AND REDEMPTION . . . . . . . 13
CUSTODIANS AND INDEPENDENT AUDITORS . . . . . . . . . . . . . . 15
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . 15
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . 24
<PAGE>
2
INVESTMENT POLICIES AND RESTRICTIONS
The Prospectus discusses the investment objectives of each of the
Fund's Portfolios and the policies it employs to achieve those objectives.
The following information regarding the Fund's investment policies
supplements the information contained in the Prospectus.
Lending of Portfolio Securities
Certain of the Fund's Portfolios may lend portfolio securities to
certain institutional borrowers of securities and may invest the cash
collateral and obtain additional income or receive an agreed-upon amount of
interest from the borrower. Loans made will generally be short-term and
are subject to termination at the option of the Fund or the borrower. The
lending Portfolio may pay reasonable administrative and custodial fees in
connection with a loan and may pay a negotiated portion of the interest
earned on the cash or equivalent collateral to the borrower or placing
broker. The lending Portfolio does not have the right to vote securities
during the period of the loan, but would terminate the loan and regain the
right to vote if that were considered important with respect to the
investment.
Repurchase Agreements
Each of the Portfolios may enter into repurchase agreements with
commercial banks and with broker/dealers to invest cash for the short term.
A repurchase agreement is an agreement under which a Portfolio acquires a
money market instrument, generally a U.S. Government obligation, subject to
resale at an agreed-upon price and date. Such resale price reflects an
agreed-upon interest rate effective for the period of time the instrument
is held by a Portfolio and is unrelated to the interest rate on the
instrument.
Each of the Portfolios has the right to sell securities subject to re-
purchase agreements but would be required to deliver identical securities
upon maturity of the repurchase agreement unless the seller failed to pay
the repurchase price. It is not anticipated that securities subject to
repurchase agreements will be sold except in the case of default on the
obligation to repurchase. To the extent that the proceeds from any sale
upon a default in the obligation to repurchase were less than the
repurchase price, a Portfolio would suffer a loss. In addition, the law is
unsettled regarding the rights of a Portfolio if the financial institution
that is party to the repurchase agreement petitions for bankruptcy or
otherwise becomes subject to the United States Bankruptcy Code. As a
result, under these extreme circumstances, there may be restrictions on the
ability to sell the collateral, and losses could be incurred.
Illiquid Securities
Other than the Seligman Cash Management Portfolio, each Portfolio of
the Fund may invest up to 15% of its net assets in illiquid securities,
including restricted securities (i.e., securities subject to restrictions
on resale because they have not been registered under the Securities Act of
1933 (the "1933 Act")) and other securities that are not readily
marketable.
Foreign Currency Transactions.
A forward foreign currency exchange contract is an agreement to
purchase or sell a specific currency at a future date and at a price set at
the time the contract is entered into. The Seligman Henderson Global
Portfolio or the Seligman Henderson Global Smaller Companies Portfolio will
generally enter into forward foreign currency exchange contracts to fix the
US dollar value of a security it has agreed to buy or sell for the period
between the date the trade was entered into and the date the security is
delivered and paid for, or, to hedge the US dollar value of securities it
owns.
The Fund may enter into a forward contract to sell or buy the amount of
a foreign currency it believes may experience a substantial movement
against the US dollar. In this case the contract would approximate the
value of some or all of the Fund's portfolio securities denominated in such
foreign currency. Under normal circumstances, the portfolio manager will
limit forward currency contracts to not greater than 75% of a Fund's
portfolio position in any one country as of the date the contract is
entered into. This limitation will be measured at the point the hedging
transaction is entered into by the Fund. Under extraordinary
circumstances, the Subadviser may enter into forward currency contracts in
excess of 75% of a Fund's portfolio position in any one country as of the
date the contract is entered into. The precise matching of the forward
contract amounts and the value of securities involved will not generally be
possible since the future value of such securities in foreign
<PAGE>
3
currencies will change as a consequence of market movement in the value of
those securities between the date the forward contract is entered into and
the date it matures. The projection of short-term currency market movement
is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain. Under certain circumstances, a
Portfolio may commit a substantial portion or the entire value of its
assets to the consummation of these contracts. The Subadviser will
consider the effect a substantial commitment of its assets to forward
contracts would have on the investment program of a Portfolio and its
ability to purchase additional securities.
Except as set forth above and immediately below, each Portfolio will
also not enter into such forward contracts or maintain a net exposure to
such contracts where the consummation of the contracts would oblige the
Portfolio to deliver an amount of foreign currency in excess of the value
of the Portfolio's portfolio securities or other assets denominated in that
currency. A Portfolio, in order to avoid excess transactions and
transaction costs, may nonetheless maintain a net exposure to forward
contracts in excess of the value of the Portfolio's portfolio securities or
other assets denominated in that currency provided the excess amount is
"covered" by cash and/or liquid, high-grade debt securities, denominated in
any currency, having a value at least equal at all times to the amount of
such excess. Under normal circumstances, consideration of the prospect for
currency parties will be incorporated into the longer term investment
decisions made with regard to overall diversification strategies. However,
the Subadviser believes that it is important to have the flexibility to
enter into such forward contracts when it determines that the best
interests of the Portfolio will be served.
At the maturity of a forward contract, a Portfolio may either sell the
portfolio security and make delivery of the foreign currency, or it may
retain the security and terminate its contractual obligation to deliver the
foreign currency by purchasing an "offsetting" contract obligating it to
purchase, on the same maturity date, the same amount of the foreign
currency.
As indicated above, it is impossible to forecast with absolute
precision the market value of portfolio securities at the expiration of the
forward contract. Accordingly, it may be necessary for a Portfolio to
purchase additional foreign currency on the spot market (and bear the
expense of such purchase) if the market value of the security is less than
the amount of foreign currency the Fund is obligated to deliver and if a
decision is made to sell the security and make delivery of the foreign
currency. Conversely, it may be necessary to sell on the spot market some
of the foreign currency received upon the sale of the portfolio security if
its market value exceeds the amount of foreign currency a Portfolio is
obligated to deliver. However, a Portfolio may use liquid, high-grade debt
securities, denominated in any currency, to cover the amount by which the
value of a forward contract exceeds the value of the securities to which it
relates.
If a Portfolio retains the portfolio security and engages in offsetting
transactions, the Portfolio will incur a gain or a loss (as described
below) to the extent that there has been movement in forward contract
prices. If the Portfolio engages in an offsetting transaction, it may
subsequently enter into a new forward contract to sell the foreign
currency. Should forward prices decline during the period between the
Portfolio's entering into a forward contract for the sale of a foreign
currency and the date it enters into an offsetting contract for the
purchase of the foreign currency, the Portfolio will realize a gain to the
extent the price of the currency it has agreed to sell exceeds the price of
the currency it has agreed to purchase. Should forward prices increase,
the Portfolio will suffer a loss to the extent the price of the currency it
has agreed to purchase exceeds the price of the currency it has agreed to
sell.
Each Portfolio's dealing in forward foreign currency exchange contracts
will be limited to the transactions described above. Of course, a
Portfolio is not required to enter into forward contracts with regard to
its foreign currency-denominated securities and will not do so unless
deemed appropriate by the Subadviser. It also should be realized that this
method of hedging against a decline in the value of a currency does not
eliminate fluctuations in the underlying prices of the securities. It
simply establishes a rate of exchange at a future date. Additionally,
although such contracts tend to minimize the risk of loss due to a decline
in the value of a hedged currency, at the same time, they tend to limit any
potential gain which might result from an increase in the value of that
currency.
Shareholders should be aware of the costs of currency conversion.
Although foreign exchange dealers do not charge a fee for conversion, they
do realize a profit based on the difference (the "spread") between the
prices at which they are buying and selling various currencies. Thus, a
dealer may offer to sell a foreign currency to a Portfolio at one rate,
while offering a lesser rate of exchange should the Portfolio desire to
resell that currency to the dealer.
<PAGE>
4
Portfolio Turnover.
The portfolio turnover rate for each Portfolio is calculated by
dividing the lesser of purchases or sales of portfolio securities for the
fiscal year by the monthly average of the value of the portfolio securities
owned during the fiscal year. Securities whose maturity or expiration date
at the time of acquisition were one year or less are excluded from the cal-
culation. The portfolio turnover rates for the years 1994 and 1993 of the
Seligman Capital Portfolio, Seligman Common Stock Portfolio, Seligman Fixed
Income Securities Portfolio and Seligman Income Portfolio were 67.39% and
65.30%; 15.29% and 10.70%; 237.23% and 33.21%; and 29.76% and 38.38%,
respectively. The portfolio turnover rates for the Seligman Henderson
Global Portfolio for the year 1994 and from May 3, 1993 (commencement of
operations) through December 31, 1993 was 47.34% and 2.82%. For the period
from October 11, 1994 (commencement of operations) through December 31,
1994, the portfolio turnover rate of Seligman Communications and
Information Portfolio, Seligman Frontier Portfolio and Seligman Henderson
Global Smaller Companies Portfolio, respectively, was 0%, 0%, and 0%,
respectively. The increase in portfolio turnover for the Seligman Fixed
Income Securities Portfolio during 1994 was due to a rising interest rate
environment throughout the year. In response to this, the portfolio
manager shortened the maturity of the portfolio by selling long-term bonds
and purchased shorter maturity securities in order to reduce the interest
rate exposure of the portfolio. The fluctuation in the portfolio turnover
rate for the Seligman Henderson Global Portfolio during the years 1994 and
1993 was due to short length of time the Portfolio was in operation in
1993.
Investment Restrictions
The Fund has adopted the several investment restrictions enumerated
below. Except as otherwise indicated below, restrictions No. 1 through 9
may not be changed without the affirmative vote of the holders of a
majority of the Fund's outstanding voting securities; restrictions No. 10
through 16 may be changed by the Fund's Board of Directors. Under these
restrictions, none of the Portfolios may:
1. Borrow money, except from banks for temporary purposes (but not for
the purpose of purchasing portfolio securities) in an amount not to
exceed 10% of the value of the total assets of the Portfolio; except
that the Seligman Capital Portfolio, Seligman Common Stock Portfolio
and Seligman Communications and Information Portfolio may borrow to
purchase securities provided that such borrowings are made only from
banks, do not exceed one-third of the respective Portfolio's net
assets (taken at market) and are secured by not more than 10% of
such assets (taken at cost); except that the Seligman Frontier
Portfolio and the Seligman High-Yield Bond Portfolio will not
purchase additional portfolio securities if it has outstanding
borrowings in excess of 5% of the value of its total assets; and
except that each of Seligman Henderson Global Portfolio and Seligman
Henderson Global Smaller Companies Portfolio may borrow money from
banks to purchase securities in amounts not in excess of 5% of its
total assets.
2. Mortgage, pledge or hypothecate any of its assets, except to secure
borrowings permitted by paragraph 1 and provided that this limita-
tion does not prohibit escrow, collateral or margin arrangements in
connection with (a) the purchase or sale of covered options (includ-
ing stock index options), (b) the purchase or sale of interest rate
or stock index futures contracts or options on such contracts by any
of the Fund's Portfolios otherwise permitted to engage in trans-
actions involving such instruments or (c) in connection with the
Fund's purchase of fidelity insurance and errors and omissions
insurance, and provided, further, that Seligman High-Yield Bond
Portfolio may mortgage, pledge or hypothecate its assets, but the
value of such encumbered assets may not exceed 10% of that
Portfolio's net asset value. This investment restriction No. 2 may
be changed, with respect to the Seligman High-Yield Bond Portfolio,
by the Fund's Board of Directors.
3. Make "short" sales of securities (except that the Seligman Henderson
Global Smaller Companies Portfolio may make short sales "against-
the-box"), or purchase securities on "margin" except for short-term
credits necessary for the purchase or sale of securities, provided
that for purposes of this limitation, initial and variation payments
or deposits in connection with transactions involving interest rate
or stock index futures contracts and options on such contracts by
any Portfolio permitted to engage in transactions involving such
instruments will not be deemed to be the purchase of securities on
margin.
4. With respect to 75% of its securities portfolio (or 100% of its
securities portfolio, in the case of the Seligman High-Yield Bond
Portfolio), purchase securities of any issuer if immediately
thereafter more than 5% of its total assets valued at market would
be invested in the securities of any one issuer, other than
securities issued or guaranteed by the U.S. Government, its agencies
or instrumentalities; or buy more than 10% of the voting securities
of any one issuer.
5. Invest more than 25% of the market value of its total assets in
securities of issuers in any one industry, provided that for
<PAGE>
5
the purpose of this limitation, mortgage-related securities do not
constitute an industry; provided further that Seligman Communications
and Information Portfolio will invest at least 65% of the value of its
total assets in securities of companies principally engaged in the
communications, information and related industries, except when
investing for temporary defensive purposes; and provided further that
the Seligman Cash Management Portfolio may invest more than 25% of its
gross assets: (i) in the banking industry; (ii) in the personal credit
institution or business credit institution industries; or (iii) in any
combination of (i) and (ii).
6. Purchase or hold any real estate, except that the Seligman Fixed
Income Securities Portfolio and the Seligman Henderson Global
Smaller Companies Portfolio may engage in transactions involving
securities secured by real estate or interests therein, and the
Seligman Henderson Global Smaller Companies Portfolio may purchase
securities issued by companies or investment trusts that invest in
real estate or interests therein.
7. Purchase or sell commodities and commodity futures contracts except
that the Board of Directors may authorize any Portfolio other than
the Seligman Cash Management Portfolio and the Seligman High-Yield
Bond Portfolio to engage in transactions involving interest rate
and/or stock index futures and related options solely for the
purposes of reducing investment risk and not for speculative
purposes.
8. Underwrite the securities of other issuers, provided that the dispo-
sition of investments otherwise permitted to be made by any Portfo-
lio (such as investments in securities that are not readily market-
able without registration under the Securities Act of 1933 and re-
purchase agreements with maturities in excess of seven days) will
not be deemed to render a Portfolio engaged in an underwriting in-
vestment if not more than 10% of the value of such Portfolio's total
assets (taken at cost) would be so invested and except that in con-
nection with the disposition of a security a Portfolio may be deemed
to be an underwriter as defined in the 1933 Act.
9. Make loans, except loans of securities, provided that purchases of
notes, bonds or other evidences of indebtedness, including repur-
chase agreements, are not considered loans for purposes of this
restriction.
10. Purchase illiquid securities for any Portfolio including repurchase
agreements maturing in more than seven days and securities that
cannot be sold without registration or the filing of a notification
under Federal or state securities laws, if, as a result, such in-
vestment would exceed 15% of the value of such Portfolio's net
assets.
11. Invest in oil, gas or other mineral exploration or development pro-
grams; provided, however, that this investment restriction shall not
prohibit a Portfolio from purchasing publicly-traded securities of
companies engaging in whole or in part in such activities.
12. Purchase securities of any other investment company, except in
connection with a merger, consolidation, acquisition or reorganiza-
tion and except to the extent permitted by Section 12 of the Invest-
ment Company Act of 1940 (the "1940 Act").
13. Purchase securities of companies which, together with predecessors,
have a record of less than three years' continuous operation, if as
a result of such purchase, more than 5% of such Portfolio's net
assets would then be invested in such securities; except that the
Seligman Communications and Information Portfolio, the Seligman
Frontier Portfolio, the Seligman Henderson Global Smaller Companies
Portfolio, and Seligman High-Yield Bond Portfolio may each invest no
more than 5% of total assets, at market value, in securities of
companies which, with their predecessors, have been in operation
less than three continuous years, excluding from this limitation
securities guaranteed by a company that, including predecessors, has
been in operation at least three continuous years.
14. Purchase securities of companies for the purpose of exercising
control.
15. Purchase securities from or sell securities to any of its officers
or Directors, except with respect to its own shares and as permissi-
ble under applicable statutes, rules and regulations. In addition,
Seligman High-Yield Bond Portfolio may not purchase or hold the
securities of any issuer if, to its knowledge, directors or officers
of the Fund individually owning beneficially more than 0.5% of the
securities of that issuer own in the aggregate more than 5% of such
securities.
16. Invest more than 5% of the value of its net assets, valued at the
lower of cost or market, in warrants, of which no more than 2% of
net assets may be invested in warrants and rights not listed on the
New York or American Stock Exchange. For this purpose, warrants
acquired by the Fund in units or attached to securities may be
deemed to have been purchased
<PAGE>
6
without cost.
If a percentage restriction is adhered to at the time of an investment,
a later increase or decrease in such percentage resulting from a change in
the value of assets will not constitute a violation of such restriction.
In order to permit the sale of the Fund's shares in certain states, the
Fund may make commitments more restrictive than the investment restrictions
described above. Should the Fund determine that any such commitment is no
longer in the best interest of the Fund it will revoke the commitment by
terminating sales of its shares in the state involved. The Fund also
intends to comply with the diversification requirements under Section
817(h) of the Internal Revenue Code of 1986, as amended. For a description
of these requirements see the Prospectus of Canada Life of America Variable
Annuity Account 2 and the Disclosure Statement of Canada Life of America
Annuity Account 3, each established by Canada Life Insurance Company of
America ("Canada Life") or the Prospectus of the Variable Contract Account-
9 established by MBL Life Assurance Corporation ("MBL Life").
Under the 1940 Act, a "vote of a majority of the outstanding voting se-
curities" of the Fund or of a particular Portfolio means the affirmative
vote of the lesser of (1) more than 50% of the outstanding shares of the
Fund or of such Portfolio or (2) 67% or more of the shares of the Fund or
of such Portfolio present at a shareholder's meeting if more than 50% of
the outstanding shares of the Fund or of such Portfolio are represented at
the meeting in person or by proxy.
DIRECTORS AND OFFICERS
Directors and Officers. Directors and officers of the Fund, together with
information as to their principal business occupations during the past five
years, are shown below. The age of each Director and officer is indicated
in parentheses. Each Director who is an "interested person" of the Fund,
as defined in the 1940 Act, is indicated by an asterisk. Unless otherwise
indicated, the address of each is 100 Park Avenue, New York, New York
10017.
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief Executive
Officer and Chairman of the
(57) Executive Committee
Managing Director, Chairman and President, J. & W.
Seligman & Co. Incorporated, investment managers and
advisors; and Seligman Advisors, Inc., advisors;
Chairman and Chief Executive Officer, the Seligman
Group of Investment Companies; Chairman, Seligman
Financial Services, Inc., distributor; Seligman
Holdings, Inc, holding company; Seligman Services,
Inc., broker/dealer; J. & W. Seligman Trust Company,
trust company; and Carbo Ceramics Inc., ceramic
proppants for oil and gas industry; Director or
Trustee, Seligman Data Corp. (formerly Union Data
Service Center, Inc.), shareholder service agent;
Daniel Industries, Inc., manufacturer of oil and gas
metering equipment; Kerr-McGee Corporation, diversi-
fied energy company; and Sarah Lawrence College; and
a Member of the Board of Governors of the Investment
Company Institute; formerly, Chairman, Seligman
Securities, Inc., broker/dealer.
RONALD T. SCHROEDER* Director and Member of the Executive Committee
(47)
Director, Managing Director and Chief Investment Of-
ficer, J. & W. Seligman & Co. Incorporated, invest-
ment managers and advisors; Managing Director and
Chief Investment Officer, Seligman Advisors, Inc.,
advisors; Director or Trustee and Chief Investment
Officer, Tri-Continental Corporation, closed-end in-
vestment company and the open-end investment com-
panies in the Seligman Group of Investment
Companies; Director and President, Seligman
Holdings, Inc., holding company; Director, Seligman
Financial Services, Inc., distributor; Seligman Data
Corp., shareholder service agent; Seligman Quality
Municipal Fund, Inc. and Seligman Select Municipal
Fund, Inc., closed-end investment companies;
Seligman Henderson Co., advisors; and Seligman
Services, Inc., broker/dealer; formerly, Director,
J. & W. Seligman Trust Company, trust company; and
Seligman Securities, Inc., broker/dealer; President,
Tri-Continental Corporation, closed-end investment
company and the open-end investment companies in the
Seligman Group of Investment Companies.
FRED E. BROWN* Director
(82)
Director and Consultant, J. & W. Seligman & Co.
Incorporated, investment managers and
<PAGE>
7
advisors; Director or Trustee, Tri-Continental Cor-
poration, closed-end investment company; and the
open-end investment companies in the Seligman Group
of Investment Companies; Director, Seligman
Financial Services, Inc., distributor; Seligman
Quality Municipal Fund, Inc. and Seligman Select Mu-
nicipal Fund, Inc., closed-end investment companies;
Seligman Services Inc., broker/dealer; Trustee,
Trudeau Institute, nonprofit bio-medical research or-
ganization; Lake Placid Center for the Arts,
cultural organization; Lake Placid Education
Foundation, education foundation; formerly,
Director, J. & W. Seligman Trust Company, trust
company; and Seligman Securities, Inc.,
broker/dealer.
JOHN R. GALVIN Director
(66)
Dean, The Fletcher School of Law and Diplomacy at
Tufts University; Director or Trustee, the Seligman
Group of Investment Companies; Chairman of the
American Council on Germany; a Governor of the
Center for Creative Leadership; Director of USLIFE
and the Institute for Defense Analysis; Consultant,
Thomson CSF; Formerly, Ambassador, U.S. State
Department; Distinguished Policy Analyst, Ohio State
University; Olin Distinguished Professor of National
Security Studies, United States Military Academy;
Supreme Allied Commander, Europe; Commander-in-
Chief, United States European Command.
Tufts University, Packard Avenue, Medford, MA 02155
ALICE S. ILCHMAN Director
(60)
President, Sarah Lawrence College; Director or
Trustee, the Seligman Group of Investment Companies;
NYNEX (formerly, New York Telephone Company),
telephone company; The Rockefeller Foundation,
charitable foundation; and The Committee for
Economic Development; formerly, Trustee, The Markle
Foundation, philanthropic organization; and
Director, International Research and Exchange Board,
intellectual exchanges.
Sarah Lawrence College, Bronxville, NY 10708
FRANK A. McPHERSON Director
(62)
Chairman of the Board and Chief Executive Officer,
Kerr-McGee Corporation; Director or Trustee of the
Seligman Group of Investment Companies; Chairman,
Oklahoma City Public Schools Foundation; Director,
Kimberly-Clark Corporation; Baptist Medical Center;
Bank of Oklahoma Holding Company; American Petroleum
Institute; Oklahoma City Chamber of Commerce;
Oklahoma Chapter of the Nature Conservancy; Oklahoma
Medical Research Foundation; and United Way Advisory
Board; Member, the Business Roundtable; and National
Petroleum Council.
Kerr-McGee Corporation, P.O. Box 25861, Oklahoma
City, OK 73102
JOHN E. MEROW* Director
(65)
Partner, Sullivan & Cromwell, law firm; Director or
Trustee, the Commonwealth Aluminum Corporation; the
Seligman Group of Investment Companies; the Munici-
pal Art Society of New York; the U. S. Council for
International Business and the U. S.-New Zealand
Council; Chairman, American Australian Association;
the Municipal Art Society of New York; and Member of
the Board of Governors of the Foreign Policy
Association and New York Hospital.
125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(53)
Attorney; Director or Trustee, the Seligman Group of
Investment Companies; National Association of
Independent Schools (Washington, D.C.), education;
Chairman of the Board of Trustees of St. George's
School (Newport, RI).
St. Bernard's Road, P.O. Box 449, Gladstone, NJ
07934
<PAGE>
8
JAMES C. PITNEY Director
(69)
Partner, Pitney, Hardin, Kipp & Szuch, law firm; Di-
rector or Trustee, the Seligman Group of Investment
Companies; Public Service Enterprise Group, public
utility.
Park Avenue at Morris County, P.O. Box 1945,
Morristown, NJ 07962-1945
JAMES Q. RIORDAN Director
(68)
Director, Various Corporations; Director or Trustee,
the Seligman Group of Investment Companies; The
Brooklyn Museum; The Brooklyn Union Gas Company; The
Committee for Economic Development; Dow Jones & Co.,
Inc.; Public Broadcasting Service; formerly, Co-
Chairman of the Policy Council of the Tax
Foundation; Director and Vice Chairman, Mobil
Corporation; Director, Tesoro Petroleum Companies,
Inc.; and Director and President, Bekaert
Corporation.
675 Third Avenue, Suite 3004, New York, NY 10017
ROBERT L. SHAFER Director
(63)
Vice President, Pfizer Inc., pharmaceuticals;
Director or Trustee, the Seligman Group of
Investment Companies; and USLIFE Corporation, life
insurance.
235 East 42nd Street, New York, NY 10017
JAMES N. WHITSON Director
(60)
Executive Vice President, Chief Operating Officer
and Director, Sammons Enterprises, Inc.; Director or
Trustee, Red Man Pipe and Supply Company, piping and
other materials; the Seligman Group of Investment
Companies; Director, C-SPAN.
300 Crescent Court, Suite 700, Dallas, TX 75201
BRIAN T. ZINO* Director, President and Member of the Executive
Committee
(43)
Managing Director (formerly, Chief Administrative
and Financial Officer), J. & W. Seligman & Co.
Incorporated, investment managers and advisors;
Director or Trustee, the Seligman
Group of Investment Companies; President, Tri-
Continental Corporation, closed-end investment company
and the open-end investment companies in the Selgiman
Group of Investment Companies; Chairman, Seligman
Data Corp., shareholder service agent; Director,
Seligman Financial Services, Inc., distributor;
Seligman Services, Inc., broker/dealer; and J. & W.
Seligman Trust Company, trust company; Senior Vice
President, Seligman Henderson Co., advisors;
formerly, Director and Secretary, Chuo Trust - JWS
Advisors, Inc., advisors; and Director, Seligman
Securities, Inc., broker/dealer.
DANIEL J. CHARLESTON Vice President and Portfolio Manager
(35)
Vice President, Investment Officer, J. & W. Seligman
& Co. Incorporated, investment managers and
advisors; and Vice President and Portfolio Manager
of one other open-end investment company in the
Seligman Group of Investment Companies.
LEONARD J. LOVITO Vice President and Portfolio Manager
(35)
Vice President, Investment Officer, J. & W. Seligman
& Co. Incorporated, investment managers and
advisors; Vice President and Portfolio Manager, two
other open-end investment companies in the Seligman
Group of Investment Companies.
LORIS D. MUZZATTI Vice President and Portfolio Manager
(38)
Managing Director (formerly, Vice President and
Portfolio Manager), J. & W. Seligman & Co. Incorpor-
ated, investment managers and advisors; Vice
President and Portfolio Manager, one other open-end
investment company in the Seligman Group of
Investment Companies.
<PAGE>
9
STACEY G. NAVIN Co-Portfolio Manager
(30)
Vice President, Investment Officer, J. & W. Seligman
& Co. Incorporated, investment managers and
advisors; Co-Portfolio Manager, two other open-end
investment companies in the Seligman Group of
Investment Companies.
CHARLES C. SMITH, JR. Vice President and Portfolio Manager
(38)
Managing Director (formerly, Senior Vice President
and Senior Investment Officer), J. & W. Seligman &
Co. Incorporated, investment managers and advisors;
Vice President and Portfolio Manager, two other
open-end investment companies in the Seligman Group
of Investment Companies and Tri-Continental
Corporation, closed-end investment company.
PAUL H. WICK Vice President and Portfolio Manager
(33)
Managing Director (formerly, Vice President,
Investment Officer), J. & W. Seligman & Co.
Incorporated, investment managers and advisors; Vice
President and Portfolio Manager, three other open-
end investment companies in the Seligman Group of
Investment Companies; Portfolio Manager, Seligman
Henderson Co., advisor; formerly, Senior Vice
President, Portfolio Management, Chuo Trust-JWS
Advisors, Inc., advisor.
LAWRENCE P. VOGEL Vice President
(39)
Senior Vice President, Finance, J. & W. Seligman &
Co. Incorporated, investment managers and advisors;
Seligman Financial Services, Inc., distributor; and
Seligman Advisors, Inc., advisors; Vice President,
the Seligman Group of Investment Companies; Senior
Vice President, Finance (formerly, Treasurer),
Seligman Data Corp., shareholder service agent;
Treasurer, Seligman Holdings, Inc., holding company;
and Seligman Henderson Co., advisors; formerly, Sen-
ior Audit Manager at Price Waterhouse, independent
accountants.
FRANK J. NASTA Secretary
(31)
Secretary, the Seligman Group of Investment
Companies; J. & W. Seligman & Co., Incorporated,
investment managers and advisers; Seligman Financial
Services, Inc., distributor; Seligman Henderson Co.,
advisers; Seligman Services, Inc., broker/dealers;
Seligman Data Corp.; Vice President, Law and
Regulation, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; formerly,
attorney, Seward & Kissel.
THOMAS G. ROSE Treasurer
(37)
Treasurer, the Seligman Group of Investment
Companies; and Seligman Data Corp., shareholder
service agent; formerly, Treasurer, American
Investors Advisors, Inc.
The Executive Committee of the Board acts on behalf of the Board between
meetings to determine the value of securities and assets owned by the Fund
for which no market valuation is available and to elect or appoint officers
of the Fund to serve until the next meeting of the Board.
<PAGE>
10
Compensation Table
<TABLE>
<CAPTION>
Pension or
Aggregate Retirement Benefits Total Compensation
Compensation Accrued as part of from Fund and
Position With Registrant from Fund (1) Fund Expenses Fund Complex (2)
<S> <C> <C> <C>
William C. Morris, Director N/A N/A N/A
Ronald T. Schroeder, Director N/A N/A N/A
Fred E. Brown, Director N/A N/A N/A
Alice S. Ilchman, Director $2,396.09 N/A $67,000.00
John E. Merow, Director 2,360.38(d) N/A 66,000.00(d)
Betsy S. Michel, Director 2,360.38 N/A 66,000.00
James C. Pitney, Director 2,396.09 N/A 67,000.00
James Q. Riordan, Director 2,360.38 N/A 66,000.00
Robert L. Shafer, Director 2,360.38 N/A 66,000.00
James N. Whitson, Director 2,360.38(d) N/A 66,000.00(d)
Brian T. Zino, Director N/A N/A N/A
______________________
(1) Based on remuneration received by the Directors of the Fund for the
year ended December 31, 1994.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of seventeen investment companies.
(d) Deferred. The total amounts of deferred compensation (including
interest) payable to Messrs. Merow, Pitney and Whitson as of December 31,
1994 were $8,033, $3,346 and $3,861, respectively. Mr. Pitney no longer
defers current compensation.
</TABLE>
General Galvin and Mr. McPherson became Directors on May 18, 1995.
The Fund has a compensation arrangement under which outside directors may
elect to defer receiving their fees. Under this arrangement, interest is
accrued on the deferred balances. The annual cost of such fees and
interest is included in the director's fees and expenses and the accumulat-
ed balance thereof is included in "Liabilities" in the Fund's financial
statements.
Directors and officers of the Fund are also trustees, directors and of-
ficers of some or all of the other investment companies in the Seligman
Group. As of March 31, 1995, no Directors or officers of the Fund owned
directly or indirectly shares of any of the Portfolios.
MANAGEMENT AND EXPENSES
As indicated in the Prospectus, under the Management Agreements and
subject to the control of the Board of Directors, the Manager (or in the
case of Seligman Henderson Global Portfolio and Seligman Henderson Global
Smaller Companies Portfolio, the Manager and Seligman Henderson Co. (the
"Subadviser")) manages the investment of the assets of the Fund, including
making purchases and sales of portfolio securities consistent with the
Fund's investment objectives and policies, and administers its business and
other affairs. The Manager provides the Fund with such office space,
administrative and other services and executive and other personnel as are
necessary for Fund operations. The Manager pays all of the compensation of
directors and/or officers of the Fund who are employees or advisors of the
Manager.
The Management Agreements (and the Subadvisory Agreements, in the case
of Seligman Henderson Global Portfolio and Seligman Henderson Global
Smaller Companies Portfolio) provide that the Manager (and the Subadviser,
in the case of Seligman Henderson Global Portfolio and Seligman Henderson
Global Smaller Companies Portfolio) will not be liable to the Fund for any
error of judgment or mistake of law, or for any loss arising out of any
investment, or for any act or omission in performing their duties under the
Management (and Subadvisory) Agreements, except for willful misfeasance,
bad faith, gross negligence, or reckless disregard of their obligations and
duties under the Management (and Subadvisory) Agreements.
The Fund pays all its expenses other than those assumed by the Manager
or Subadviser, including fees and expenses of
<PAGE>
11
independent attorneys and auditors, taxes and governmental fees (including
fees and expenses for qualifying the Fund and its shares under Federal and
state securities laws), expenses of printing and distributing reports,
notices and proxy materials to shareholders, expenses of printing and
filing reports and other documents with governmental agencies, fees and
expenses of directors of the Fund not employed by the Manager or any of its
affiliates (including the Subadviser), insurance premiums and extraordinary
expenses such as litigation expenses.
Seligman Capital Portfolio, Seligman Cash Management Portfolio, Seligman
Common Stock Portfolio, Seligman Fixed Income Securities Portfolio, and
Seligman Income Portfolio each pay the Manager a management fee for its
services, calculated daily and payable monthly, at an annual rate of .40%
of the daily net assets of each Portfolio. Seligman High-Yield Bond
Portfolio pays the Manager a management fee for its services calculated
daily and payable monthly at an annual rate of .50% of the daily net assets
of the Portfolio. Seligman Communications and Information Portfolio and
Seligman Frontier Portfolio each pay the Manager a management fee for its
services, calculated daily and payable monthly, at an annual rate of .75%
of the daily net assets of each Portfolio. Seligman Henderson Global
Portfolio and Seligman Henderson Global Smaller Companies Portfolio each
pay the Manager a management fee, calculated daily and payable monthly,
equal to an annual rate of 1.00% of the average daily net assets of each
Portfolio, of which .90% is paid to the Subadviser for the services
described below. The following table indicates the management fees paid or
reimbursed, in the case of Seligman Cash Management Portfolio, for the year
1994, 1993 and 1992:
1994 1993 1992
Seligman Capital Portfolio $ 23,120 $ 21,941 $ 20,551
Seligman Cash Management Portfolio* 12,837 14,216 19,150
Seligman Common Stock Portfolio 84,124 93,118 100,502
Seligman Communications and Information Portfolio** 349 N/A N/A
Seligman Fixed Income Securities Portfolio 14,043 17,252 20,226
Seligman Frontier Portfolio** 99 N/A N/A
Seligman Henderson Global Portfolio** 11,417 1,656 N/A
Seligman Henderson Global Smaller Companies
Portfolio** 159 N/A N/A
Seligman High-Yield Bond Portfolio N/A N/A N/A
Seligman Income Portfolio 42,854 45,567 45,673
________________________
* The Manager, at its discretion, waived all of its fees.
** Fees paid from commencement of operations.
N/A - Portfolio did not exist.
The Manager is a successor firm to an investment banking business
founded in 1864 which has thereafter provided investment services to
individuals, families, institutions and corporations. See Appendix A for
further information about the Manager.
On December 29, 1988, a majority of the outstanding voting securities of
the Manager was purchased by Mr. William C. Morris and a simultaneous re-
capitalization of the Manager occurred.
The Management Agreement with respect to Seligman Capital Portfolio,
Seligman Cash Management Portfolio, Seligman Common Stock Portfolio,
Seligman Fixed Income Portfolio and Seligman Income Portfolio was approved
by the Board of Directors on September 30, 1988 and by shareholders at a
Special Meeting held on December 16, 1988. The Management Agreement with
respect to the Seligman Henderson Global Portfolio was approved by the
Board of Directors on March 18, 1993. The Management Agreements with
respect to the Seligman Communications and Information Portfolio, the
Seligman Frontier Portfolio, and the Seligman Henderson Global Smaller
Companies Portfolio were approved by the Board of Directors on July 21,
1994. The Management Agreement with respect to the Seligman High-Yield
Bond Portfolio was approved by the Board of Directors on March 16, 1995.
The Management Agreements will continue in effect until December 31 of each
year, with respect to each portfolio (except Seligman Communications and
Information Portfolio, Seligman Frontier Portfolio, and Seligman Henderson
Global Smaller Companies Portfolio, the Management Agreements with respect
to which are in effect until December 31, 1995 and then December 31 of each
year thereafter; and except Seligman High-Yield Bond Portfolio, which
Management Agreement is in effect until December 31, 1996 and December 31
of each year thereafter), if (1) such continuance is approved in the manner
required by the 1940 Act (by a vote of a majority of the Board of Directors
or of the
<PAGE>
12
outstanding voting securities of the Portfolio and by a vote of a majority
of the Directors who are not parties to the Management Agreements or
interested persons of any such party) and (2) if the Manager shall not have
notified the Fund at least 60 days prior to the anniversary date of the
previous continuance that it does not desire such continuance. The
Management Agreements may be terminated at any time with respect to any or
all Portfolios, by the Fund, without penalty, on 60 days' written notice to
the Manager. The Manager may terminate the Management Agreements at any
time upon 60 days written notice to the Fund. The Management Agreements
will terminate automatically in the event of their assignment. The Fund
has agreed to change its name upon termination of the Management Agreements
if continued use of the name would cause confusion in the context of the
Manager's business.
Under the Subadvisory Agreements between the Manager and the Subadviser,
the Subadviser supervises and directs the investment of the assets of the
Seligman Henderson Global Portfolio and the Seligman Henderson Global
Smaller Companies Portfolio, including making purchases and sales of
portfolio securities consistent with each Portfolio's investment objectives
and policies. For these services the Subadviser is paid a fee equal to an
annual rate of .90% of each Portfolio's average daily net assets. The
Subadvisory Agreement with respect to Seligman Henderson Global Portfolio
was approved by the Board of Directors at a meeting held on March 18, 1993.
The Subadvisory Agreement with respect to Seligman Henderson Global Smaller
Companies Portfolio was approved by the Board of Directors at a meeting
held on July 21, 1994. The Subadvisory Agreements will continue in effect
until December 31 (in the case of the Seligman Henderson Global Smaller
Companies Portfolio until December 31, 1995), and from year to year
thereafter if such continuance is approved in the manner required by the
1940 Act (by a vote of a majority of the Board of Directors or of the
outstanding voting securities of the Portfolio and by a vote of a majority
of the Directors who are not parties to the Subadvisory Agreement or
interested persons of any such party) and (2) if the Subadviser shall not
have notified the Manager in writing at least 60 days prior to such
December 31 or prior to December 31 of any year thereafter that it does not
desire such continuance. The Subadvisory Agreements may be terminated at
any time by the Fund, on 60 days written notice to the Subadviser. The
Subadvisory Agreements will terminate automatically in the event of their
assignment or upon the termination of the relevant Management Agreement.
The Subadviser is a New York general partnership formed by the Manager
and Henderson International, Inc., a controlled affiliate of Henderson
Administration Group plc (the "Firm"). Henderson Administration Group plc,
headquartered in London, is one of the largest independent money managers
in Europe. The Firm currently manages approximately $18.5 billion in
assets, and is recognized as a specialist in global equity investing.
Officers, directors and employees of the Manager are permitted to engage
in personal securities transactions, subject to the Manager's Code of
Ethics (the "Code"). The Code proscribes certain practices with regard to
personal securities transactions and personal dealings, provides a
framework for the reporting and monitoring of personal securities
transactions by the Manager's Director of Compliance, and sets forth a
procedure of identifying, for disciplinary action, those individuals who
violate the Code. The Code prohibits each of the officers, directors and
employees (including all portfolio managers) of the Manager from purchasing
or selling any security that the officer, director or employee knows or
believes (i) was recommended by the Manager for purchase or sale by any
client, including the Fund, within the preceding two weeks, (ii) has been
reviewed by the Manager for possible purchase or sale within the preceding
two weeks, (iii) is being purchased or sold by any client, (iv) is being
considered by a research analyst, (v) is being acquired in a private
placement, unless prior approval has been obtained from the Manager's
Director of Compliance, or (vi) is being acquired during an initial or
secondary public offering. The Code also imposes a strict standard of
confidentiality and requires portfolio managers to disclose any interest
they may have in the securities or issuers that they recommend for purchase
by any client.
The Code also prohibits (i) each portfolio manager or member of an
investment team from purchasing or selling any security within seven
calendar days of the purchase or sale of the security by a client's account
(including investment company accounts) for which the portfolio manager or
investment team manages and (ii) each employee from engaging in short-term
trading (a purchase and sale or vice-versa within 60 days). Any profit
realized pursuant to either of these prohibitions must be disgorged.
Officers, directors and employees are required, except under very
limited circumstances, to engage in personal securities transactions
through the Manager's order desk. In turn, the order desk maintains a list
of securities that may not be purchased due to a possible conflict with
clients. All officers, directors and employees are also required to
disclose all securities beneficially owned by them on December 31 of each
year.
<PAGE>
13
PORTFOLIO TRANSACTIONS, VALUATION AND REDEMPTION
As provided in the Management Agreements, the Manager (or in the case of
the Seligman Henderson Global Portfolio and the Seligman Henderson Global
Smaller Companies Portfolio, the Manager or the Subadviser) purchases and
sells securities for the Fund. Purchase and sale orders are placed by the
Manager or the Subadviser.
The Management Agreements and the Subadvisory Agreements recognize that
in the purchase and sale of portfolio securities the Manager or the
Subadviser will seek the most favorable price and execution, and,
consistent with that policy, may give consideration to the research, sta-
tistical and other services furnished by brokers or dealers to the manager
for its use, as well as to the general attitude toward and support of
investment companies demonstrated by such brokers or dealers. Such
services include supplemental investment research, analysis and reports
concerning issuers, industries and securities deemed by the Manager or
Subadviser to be beneficial to the Fund. In addition, the Manager or the
Subadviser is authorized to place orders with brokers who provide
supplemental investment and market research and statistical and economic
analysis although the use of such brokers may result in a higher brokerage
charge to the Fund that the use of brokers selected solely on the basis of
seeking the most favorable price and execution and although such research
and analysis may be useful to the Manager or the Subadviser in connection
with its services to clients other than the Fund.
In over-the-counter markets, the Fund deals with primary market makers
unless a more favorable execution or price is believed to be obtainable.
The Fund may buy securities from or sell securities to dealers acting as
principal, except dealers with which its directors and/or officers are
affiliated.
Brokerage commissions of each Portfolio (except Seligman Cash Management
Portfolio, Seligman Fixed Income Securities Portfolio and Seligman High-
Yield Bond Portfolio) for the years 1994, and if applicable, 1993 and 1992,
are set forth in the following table:
<TABLE>
<CAPTION>
Brokerage Commissions
Paid to Others for
Total Brokerage Commissions Execution and
Brokerage Commissions Paid to Statistical Services
Execution(2) Paid (1) Seligman Securities(2)
1994 1993 1992 1994 1993 1992 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Seligman Capital Portfolio $ 8,412 $ 7,285 $ 5,853 --- $ 275 $2,832 $ 8,412 $7,010 $3,021
Seligman Common
Stock Portfolio 12,559 12,006 11,418 --- 1,984 6,987 12,559 10,022 4,431
Seligman Communications
and Information
Portfolio 134 --- --- --- --- --- 134 --- ---
Seligman Frontier
Portfolio 111 --- --- --- --- --- 111 --- ---
Seligman Henderson
Global Portfolio 5,503 824 --- --- --- --- 5,503 824 ---
Seligman Henderson
Global Smaller
Companies Portfolio 180 --- --- --- --- --- 180 --- ---
Seligman Income Portfolio 2,839 2,152 5,404 --- 635 1,765 2,839 1,517 3,639
<FN>
_______________
Notes:
(1) Not including any spreads on principal transactions on a net basis.
(2) Brokerage commissions paid by Seligman Capital Portfolio, Seligman
Common Stock Portfolio, and Seligman Income Portfolio, respectively,
to Seligman Securities, Inc. were 4%, 48% and 30%; and 17%, 61% and
61%, respectively, of total brokerage commissions paid for 1993 and
1992. The aggregate dollar amount of each Portfolio's transactions
for which Seligman Securities, Inc. acted as broker was 2%, 51% and
40%; and 13%, 61% and 58%, respectively, of the total dollar amount
of all commission transactions for 1993 and 1992. Under procedures
adopted by the Board of Directors, and in accordance with Section
17(e) under the 1940 Act, Seligman Securities, Inc., an affiliate of
the Manager, acted as broker, for the Fund. Section 11(a) of the Se-
curities Exchange Act of 1934 prohibits members of U.S.
<PAGE>
14
securities exchanges from executing exchange transactions for their
affiliates and institutional accounts. Under this provision,
Seligman Securities, Inc. acted as broker for any of the Portfolios
only as permitted under regulations adopted by the SEC. In accor-
dance with such regulations, the Management Agreement permitted
Seligman Securities, Inc. to effect such transactions except on the
floor of a national securities exchange and to retain compensation
in connection with such transactions. As of March 31, 1993, Seligman
Securities, Inc. ceased functioning as a broker for the Fund and its
clients.
</FN>
</TABLE>
When two or more of the investment companies in the Seligman Group or
other investment advisory clients of the Manager desire to buy or sell the
same security at the same time, the securities purchased or sold are
allocated by the Manager in a manner believed to be equitable to each.
There may be possible advantages or disadvantages of such transactions with
respect to price or the size of positions readily obtainable or saleable.
Valuation. As noted in the Prospectus the net asset value per share of
each Portfolio is determined as of the close of trading on the New York
Stock Exchange, currently 4:00 p.m. New York City time, each day that the
New York Stock Exchange is open. Currently, the New York Stock Exchange is
closed on New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The
following supplements information contained in the Prospectus regarding the
manner in which securities are valued.
It is the policy of the Seligman Cash Management Portfolio to use its
best efforts to maintain a constant per share price equal to $1.00. In-
struments held by the Seligman Cash Management Portfolio are valued on the
basis of amortized cost. This involves valuing an instrument at its cost
initially and, thereafter, assuming a constant amortization to maturity of
any discount or premium, regardless of the impact of fluctuating interest
rates on the market value of the instrument. While this method provides
certainty in valuation, it may result in periods during which the value, as
determined by amortized cost, is higher or lower than the price the
Portfolio would receive if it sold the instrument.
The foregoing method of valuation is permitted by Rule 2a-7 adopted by
the SEC. Under this rule, the Seligman Cash Management Portfolio must
maintain an average-weighted portfolio maturity of 90 days or less, pur-
chase only instruments having remaining maturities of one year or less, and
invest only in securities determined by the Fund's Directors to be of high
quality with minimal credit risks. In accordance with the rule, the
Directors have established procedures designed to stabilize, to the extent
reasonably practicable, the price per share as computed for the purpose of
sales and redemptions of the Seligman Cash Management Portfolio at $1.00.
Such procedures include review of the portfolio holdings by the Seligman
Cash Management Portfolio and determination as to whether the net asset
value of the Seligman Cash Management Portfolio, calculated by using
available market quotations or market equivalents, deviates from $1.00 per
share based on amortized cost. The rule also provides that the extent of
any deviation between the net asset value based upon available market
quotations or market equivalents, and $1.00 per share net asset value,
based on amortized cost, must be examined by the Directors. In the event
that a deviation of .5 of 1% or more exists between the Portfolio's $1.00
per share net asset value and the net asset value calculated by reference
to market gestations, or if there is any deviation which the Board of
Directors believes would result in a material dilution to shareholders or
purchasers, the Board of Directors will promptly consider what action, if
any, should be initiated. Any such action may include: selling portfolio
instruments prior to maturity to realize capital gains or losses or to
shorten average portfolio maturity; withholding dividends or paying distri-
butions from capital or capital gains; redeeming shares in kind; or
establishing a net asset value per share by using available market
quotations.
With respect to the Seligman Henderson Global Portfolio and the Seligman
Henderson Global Smaller Companies Portfolio, portfolio securities,
including open short positions, are valued at the last sale price on the
securities exchange or securities market on which such securities primarily
are traded. Securities traded on a foreign exchange or over-the-counter
market are valued at the last sales price on the primary exchange or market
on which they are traded. United Kingdom securities and securities for
which there are not recent sales transactions are valued based on
quotations provided by primary market makers in such securities. Any
securities for which recent market quotations are not readily available,
including restricted securities, are valued at fair value determined in
accordance with procedures approved by the Board of Directors. Short-term
obligations with less than sixty days remaining to maturity are generally
valued at amortized cost. Short-term obligations with more than sixty days
remaining to maturity will be valued at current market value until the
sixtieth day prior to maturity, and will then be valued on an amortized
cost basis based on the value on such date unless the Board of Directors
determines that this amortized cost value does not represent fair market
value.
Generally, trading in foreign securities, as well as U.S. Government
securities, money market instruments and repurchase agreements, is
substantially completed each day at various times prior to the close of the
New York Stock Exchange. The values
<PAGE>
15
of such securities used in computing the net asset value of the shares of
the Portfolio are determined as of such times. Foreign currency exchange
rates are also generally determined prior to the close of the New York
Stock Exchange. Occasionally, events affecting the value of such
securities and such exchange rates may occur between the times at which
they are determined and the close of the New York Stock Exchange, which
will not be reflected in the computation of net asset value. If during
such periods events occur which materially affect the value of such
securities, the securities will be valued at their fair market value as
determined in accordance with procedures approved by the Board of
Directors.
For purposes of determining the net asset value per share of the
Portfolio all assets and liabilities initially expressed in foreign
currencies will be converted into U.S. dollars at the mean between the bid
and offer prices of such currencies against U.S. dollars quoted by a major
bank that is a regular participant in the foreign exchange market or on the
basis of a pricing service that takes into account the quotes provided by a
number of such major banks.
Redemption. The procedures for redemption of Fund shares under ordinary
circumstances are set forth in the Prospectus. In unusual circumstances,
payment may be postponed, if the orderly liquidation of portfolio
securities is prevented by the closing of, or restricted trading on the New
York Stock Exchange during periods of emergency, or such other periods as
ordered by the SEC. It is not anticipated that shares will be redeemed for
other than cash or its equivalent. However, the Fund reserves the right to
pay the redemption price to the Canada Life Accounts and VCA-9 in whole or
in part, by a distribution in kind from the Fund's investment portfolio, in
lieu of cash, taking the securities at their value employed for determining
such redemption price, and selecting the securities in such manner as the
Board of Directors may deem fair and equitable. If shares are redeemed in
this way, brokerage costs will ordinarily be incurred by the Canada Life
Accounts and VCA-9 in converting such securities into cash.
CUSTODIANS AND INDEPENDENT AUDITORS
Custodians. With the exception of the Seligman Henderson Global
Portfolio and the Seligman Henderson Global Smaller Companies Portfolio,
Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City,
Missouri 64105, serves as custodian for the Fund, and in such capacity
holds in a separate account assets received by it from or for the account
of each of the Fund's Portfolios.
Morgan Stanley Trust Company, One Pierrepont Plaza, Brooklyn, New York
11201, serves as custodian for the Seligman Henderson Global Portfolio and
the Seligman Henderson Global Smaller Companies Portfolio, and in such
capacity holds in a separate account assets received by it from or for the
account of each of these two Portfolios of the Fund.
Independent Auditors. Ernst & Young LLP, independent auditors, have
been selected as auditors of the Fund and certify the annual financial
statements of the Fund. Their address is 787 Seventh Avenue, New York, New
York 10019.
FINANCIAL STATEMENTS
Audited financial statements as of December 31, 1994 and unaudited
financial statements for the six months ended June 30, 1995 for all
Portfolios are incorporated herein by reference from the Fund's audited
1994 Annual Report and unaudited June 30, 1995 Mid-Year Report to
Policyholders. Unaudited financial statements for the period May 1, 1995 to
September 30, 1995 for the High-Yield Bond Portfolio are included herein.
<PAGE>
16
Seligman Portfolios, Inc.
SELIGMAN HIGH-YIELD BOND PORTFOLIO
Portfolio of Investments (unaudited) September 30, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
CORPORATE BONDS -- 86.9%
AUTOMOTIVE -- 1.1%
$ 17,500
Venture Holdings 9 3/4%, due 4/1/2004 . . . . . . . . . . . . . . . . . . . . . . . . $ 20,000
BROADCASTING -- 8.3%
Allbritton Communications 11 1/2%, due 8/15/2004 . . . . . . . . . . . . . . . . . . 7,000 7,455
NWCG Holdings 0%/13 1/2%#, due 6/15/1999 . . . . . . . . . . . . . . . . . . . . . . 110,000 74,250
49,187
Paxson Communications 11 5/8%, due 10/1/2002* . . . . . . . . . . . . . . . . . . . . 50,000
130,892
CABLE SYSTEMS -- 13.4%
Cablevision Systems 10 3/4%, due 4/1/2004 . . . . . . . . . . . . . . . . . . . . . . 20,000 21,175
Comcast 10 5/8%, due 7/15/2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000 8,780
Le Groupe Videotron Ltee 10 5/8%, due 2/15/2005 . . . . . . . . . . . . . . . . . . . 50,000 52,875
People's Choice Television 0% 13 1/8%, due 6/1/2004+ . . . . . . . . . . . . . . . . 100,000 53,500
Rogers Communications 10 7/8%, due 4/15/2004 . . . . . . . . . . . . . . . . . . . . 15,000 15,600
60,000
Telewest Communications 0%/11%#, due 10/12/2007 . . . . . . . . . . . . . . . . . . . 100,000
211,930
CELLULAR -- 1.3%
20,200
Centennial Cellular 10 1/8%, due 5/15/2005 . . . . . . . . . . . . . . . . . . . . . 20,000
CHEMICALS -- 6.7%
Arcadian Partnership L.P. 10 3/4%, due 5/1/2005 . . . . . . . . . . . . . . . . . . . 50,000 52,750
53,000
NL Industries 11 3/4%, due 10/15/2003 . . . . . . . . . . . . . . . . . . . . . . . . 50,000
105,750
ENERGY -- 5.0%
78,750
TransTexas Gas 11 1/2%, due 6/15/2002 . . . . . . . . . . . . . . . . . . . . . . . . 75,000
GAMING/HOTEL -- 6.5%
Aztar 11%, due 10/1/2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000 47,875
Hollywood Casino 14%, due 4/1/1998 . . . . . . . . . . . . . . . . . . . . . . . . . 8,000 8,860
46,375
Trump Plaza Funding 10 7/8%, due 6/15/2001 . . . . . . . . . . . . . . . . . . . . . 50,000
103,110
HEALTH CARE -- 2.1%
Dade International, 13%, due 2/1/2005* . . . . . . . . . . . . . . . . . . . . . . . 20,000 21,400
11,050
OrNda Healthcorp. 12 1/4%, due 5/15/2002 . . . . . . . . . . . . . . . . . . . . . . 10,000
32,450
HOME BUILDING AND LAND DEVELOPMENT -- 0.5%
8,360
Continental Homes Holdings 12%, due 8/1/1999 . . . . . . . . . . . . . . . . . . . . 8,000
</TABLE>
____________
* Rule 144A security.
+ Deferred-interest debentures pay no interest for a stipulated number of
years, after which they pay the indicated coupon rate.
# Represents effective yield on zero coupon bond.
See notes to financial statements
<PAGE>
17
Portfolio of Investments (unaudited) (continued) September 30, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
INFORMATION SERVICES -- 3.1%
$ 49,350
SHL Systemhouse, 12 1/4%, due 9/1/2001 . . . . . . . . . . . . . . . . . . . . . . . $ 40,000
LEISURE -- 3.3%
51,250
Premier Parks 12%, due 8/15/2003* . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
MANUFACTURING -- 2.9%
46,250
Jordan Industries 10 3/8%, due 8/1/2003 . . . . . . . . . . . . . . . . . . . . . . . 50,000
PAGING -- 8.2%
Metrocall 10 3/8%, due 10/1/2007 . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000 76,125
53,375
ProNet 11 7/8%, due 6/15/2005* . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
129,500
PAPER AND PACKAGING -- 7.9%
Portola Packaging 10 3/4%, due 10/1/2005 . . . . . . . . . . . . . . . . . . . . . . 50,000 51,422
Stone Container 9 7/8%, due 2/1/2001 . . . . . . . . . . . . . . . . . . . . . . . . 20,000 19,900
52,125
Stone Container 10 3/4%, due 10/1/2002 . . . . . . . . . . . . . . . . . . . . . . . 50,000
123,447
PUBLISHING -- 1.0%
15,975
K-111 Commercial 10 5/8%, due 5/1/2002 . . . . . . . . . . . . . . . . . . . . . . . 15,000
RETAILING -- 4.0%
Thrifty Payless 11 3/4%, due 4/15/2003 . . . . . . . . . . . . . . . . . . . . . . . 10,000 10,475
51,750
Thrifty Payless 12 1/4%, due 4/15/2004 . . . . . . . . . . . . . . . . . . . . . . . 50,000
62,225
SUPERMARKETS -- 6.5%
Pathmark Stores 11 5/8%, due 6/15/2002 . . . . . . . . . . . . . . . . . . . . . . . 50,000 53,125
49,125
Ralph's Groceries 10.45%, due 6/15/2004 . . . . . . . . . . . . . . . . . . . . . . . 50,000
102,250
TELECOMMUNICATIONS -- 1.8%
Mobile Telecommunication Technologies 13 1/2%,
28,063
due 12/15/2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
UTILITIES -- 3.3%
52,442
Midland Cogeneration Venture 11 3/4%, due 7/23/2005 . . . . . . . . . . . . . . . . . 50,000
Total Investments -- 86.9% (Cost $1,353,359) . . . . . . . . . . . . . . . . . . . . 1,369,694
207,162
Other Assets Less Liabilities -- 13.1% . . . . . . . . . . . . . . . . . . . . . . .
$1,576,856
Net Assets -- 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
____________
* Rule 144A security.
See notes to financial statements
<PAGE>
18
Statement of Assets and Liabilities (unaudited) September 30, 1995
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments, at value:
Corporate bonds (cost $1,353,359) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,369,694
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479,223
Interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,981
Receivable for Capital Stock sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,638
Receivable from associated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,719
5,500
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,915,755
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LIABILITIES:
Payable for securities purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328,634
10,265
Accrued expenses, taxes, and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
338,899
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,576,856
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COMPOSITION OF NET ASSETS:
Capital Stock, at par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 153
Additional paid-in-capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,551,889
Undistributed net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,696
Accumulated net realized loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (217)
16,335
Net unrealized appreciation of investments . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,576,856
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares of Capital Stock 153,059
$.001 par value; (20,000,000 shares authorized) outstanding . . . . . . . . . . . . . . . . . . .
$10.30
Net Asset Value per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
____________
See notes to financial statements
<PAGE>
19
Statement of Operations (unaudited)
For the period May 1, 1995* to September 30, 1995
<TABLE>
<CAPTION>
<S> <C>
Investment Income:
$10,150
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses:
Auditing fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,924
Legal fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,244
Shareholder reports and communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,263
Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,288
Directors' fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,094
Management fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,039
728
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total expenses before reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,580
(19,126)
Reimbursement of expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,454
Total expenses after reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,696
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gain (loss) on investments:
Net realized loss on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (217)
16,335
Net change in unrealized appreciation of investments . . . . . . . . . . . . . . . . . . . . . .
16,118
Net gain on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$24,814
Increase in net assets from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
____________
* Commencement of operations.
See notes to financial statements
<PAGE>
20
Statements of Changes in Net Assets (unaudited)
<TABLE>
<CAPTION>
5/1/95*
to
9/30/95
<S> <C>
Operations:
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,696
Net realized loss on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (217)
16,335
Net change in unrealized appreciation of investments . . . . . . . . . . . . . . . . . . . . . .
24,814
Increase in net assets from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions to shareholders:
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --------
Realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --------
Decrease in net assets from distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . --------
Capital share transactions: Shares
Net proceeds from sale of shares . . . . . . . . . . . . . . . . . . . . . . . 156,768 1,589,692
(3,709) (37,650)
Cost of shares repurchased . . . . . . . . . . . . . . . . . . . . . . . . . .
1,552,042
153,059
Increase in net assets from capital share transactions
1,576,856
Increase in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Assets: --------
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,576,856
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
____________
* Commencement of operations.
See notes to financial statements
<PAGE>
21
Notes to Financial Statements (unaudited)
1. Seligman High-Yield Bond Portfolio (the "Portfolio") is one of the
ten separate portfolios of Seligman Portfolios, Inc. (the "Fund"). Shares
of the portfolio are currently provided as the investment medium for Canada
Life of America Variable Annuity Account 2 ("CLVA-2") and Canada Life of
America Annuity Account 3 ("CLVA-3"), each established by Canada Life
Insurance Company of America ("Canada Life").
2. Significant accounting policies followed, all in conformity with
generally accepted accounting principles, are given below:
a. Investments in U.S. Government securities, bonds, convertible
securities, and stocks are valued at the current market values or, in
their absence, at fair market values determined in accordance with
procedures approved by the Board of Directors. Securities traded on
national exchanges are valued at the last sales prices or, in their
absence and in the case of over-the-counter securities, a mean of
closing bid and asked prices. Short-term holdings maturing in 60 days
or less are valued at amortized cost.
b. The Portfolio's policy is to comply with the requirements of the
Internal Revenue Code applicable to Regulated Investment Companies and
to distribute substantially all of their taxable net income and net gain
realized to shareholders.
c. Investment transactions are recorded on trade dates. Interest income
is recorded on the accrual basis. The Portfolio amortizes market
discounts and premiums on purchases of portfolio securities. Dividends
payable are recorded on ex-dividend dates. The Portfolio may enter into
repurchase agreements with commercial banks and with broker/dealers
deemed to be creditworthy by the Manager. Securities purchased subject
to repurchase agreement, must have an aggregate market value greater
than or equal to the repurchase price plus accrued interest at all
times. Procedures have been established to monitor, on a daily basis,
the market value of the repurchase agreements' underlying securities to
ensure the existence of the proper level of collateral.
d. Expenses directly attributable to the Portfolio are charged to such,
and expenses that are applicable to more than one portfolio of the Fund
are allocated among them.
e. The treatment for financial statement purposes of distributions made
during the year from net investment income or net realized gains may
differ from their ultimate treatment for federal income tax purposes.
These differences primarily are caused by differences in the timing of
the recognition of certain components of income, expense or capital
gain. 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
reclassification will have no effect on net assets, results of
operations, or net asset values per share of the Portfolio.
<PAGE>
22
Notes to Financial Statements (unaudited) (continued)
3. Purchases and sales of portfolio securities, excluding short-term
investments, for the period from May 1, 1995 (commencement of operations)
to September 30, 1995, amounted to $1,384,890 and $30,718, respectively.
Identified cost of investments sold is used for both financial statement
and federal income tax purposes.
At September 30, 1995, the cost of investments for federal income tax
purposes was substantially the same as the cost for financial reporting
purposes, and the tax basis gross unrealized appreciation and depreciation
of portfolio securities amounted to $19,333 and $2,998, respectively.
4. J. & W. Seligman & Co. Incorporated (the "Manager") manages the
affairs of the Portfolio and provides the necessary personnel and
facilities, exclusive of and in addition to those retained by the
Portfolio. Compensation of all officers of the Portfolio, all directors of
the Portfolio who are employees or consultants of the Manager, and all
personnel of the Portfolio 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 the average daily net assets. The Manager, at its discretion, has
agreed to reimburse expenses, other than management fee, which exceed 0.20%
per annum of the average daily net assets of the Portfolio. For the period
from May 1, 1995 (commencement of operations) to September 30, 1995, the
Manager reimbursed expenses of $19,126 for the Portfolio.
Seligman Financial Services, Inc. (the "Distributor"), agent for the CLVA-2
contracts and CLVA-3 contracts and an affiliate of the Manager, receives
commissions from Canada Life. Such commissions paid during the period
ended September 30, 1995 with respect to the Portfolio were not
significant.
Certain officers and directors of the Portfolio are officers or directors
of the Manager, the Distributor, and/or the Subadviser.
Fees of $7,300 were incurred by the Portfolio for the legal services of
Sullivan & Cromwell, a member of which firm is a director of the Portfolio.
The Portfolio has a compensation arrangement under which directors who
receive fees may elect to defer receiving such fees. Interest is accrued
on the deferred balances. The cost of such fees and interest is included
in directors' fees and expenses, and the accumulated balance thereof at
September 30, 1995, is included in other liabilities. Deferred fees and
the related accrued interest are not deductible for federal income tax
purposes until such amounts are paid.
<PAGE>
23
Financial Highlights (unaudited)
The Portfolio's financial highlights are presented below. The per share
operating performance data is designed to allow investors to trace the
operating performance, on a per share basis from a Portfolio's beginning
net asset value to the ending net asset value so that they can understand
what effect the individual items have on their investment, assuming it was
held throughout the period. Generally, the per share amounts are derived
by converting the actual dollar amounts incurred for each item, as
disclosed in the financial statements, to their equivalent per share
amounts.
The total return based on net asset value measures a Portfolio's
performance assuming investors purchased shares of a Portfolio at net asset
value as of the beginning of the period, reinvested dividends and capital
gains paid at net asset value, and then sold their shares at the net asset
value per share on the last day of the period. The total returns for the
periods of less than one year are not annualized.
<TABLE>
<CAPTION>
5/1/95*
to
9/30/95
<S> <C>
Per Share Operating Performance:
Net asset value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10.000
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.128
Net realized and unrealized gain on investments . . . . . . . . . . . . . . . . . . . . . . . . . 0.172
Increase from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.300
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions from net gain realized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase in net asset value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.300
Net asset value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10.300
Total return based on net asset value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.00%
Ratios/Supplemental Data:
Expenses to average net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.70%+
Net investment income to average net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.19%+
Portfolio turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.73%
Net assets, end of period (000's omitted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,577
Without management fee waiver and expense reimbursement:**
Net investment income (loss) per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ($0.153)
Ratios:
Expenses to average net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.90%+
Net investment loss to average net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5.01)%+
</TABLE>
____________
* Commencement of operations.
** The Manager, at its discretion, reimbursed expenses for the period presented.
+ Annualized.
<PAGE>
24
APPENDIX A
HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED
Seligman's beginnings date back to 1837, when Joseph Seligman, the
oldest of eight brothers, arrived in the United States from Germany. He
earned his living as a pack peddler in Pennsylvania, and began sending for
his brothers. The Seligmans became successful merchants, establishing
businesses in the South and East.
Backed by nearly thirty years of business success - culminating in
the sale of government securities to help finance the Civil War - Joseph
Seligman, with his brothers, established the international banking and
investment firm of J. & W. Seligman & Co. In the years that followed,
Seligman played a major role in the geographical expansion and industrial
development of the United States.
Seligman:
.... Prior to 1900
- - Helps finance America's fledgling railroads through underwriting.
- - Is admitted to the New York Stock Exchange in 1869. Seligman
remained a member of the N\YSE until 1993, when the evolution of its
business made it unnecessary.
- - Becomes a prominent underwriter of corporate securities, including
New York Mutual Gas Light Company, later part of Consolidated Edison.
- - Provides financial assistance to Mary Todd Lincoln and urges the
Senate to award her a pension.
- - Is appointed U.S. Navy fiscal agent by President Grant.
- - Plays a significant role in raising capital for America's industrial
and urban development.
...1900-1910
- - Helps Congress finance the building of the Panama Canal.
...1910s
- - Participates in raising billions for Great Britain, France and Italy,
helping finance World War I.
...1920s
- - Participates in hundreds of underwritings including those for some of
the country's largest companies: Briggs Manufacturing, Dodge
Brothers, General Motors, Minneapolis-Honeywell Regulatory Company,
Maytag Company, United Artists Theater Circuit and Victor Talking
Machine Company.
- - Forms Tri-Continental Corporation in 1929, today the nation's
largest, diversified closed-end equity investment company, with over
$2 billion in assets, and one of its oldest.
...1930s
- - Assumes management of Broad Street Investing Co. Inc., its first
mutual fund, today known as Seligman Common Stock Fund.
- - Establishes Investment Advisory Service.
<PAGE>
25
...1940s
- - Helps shape the Investment Company Act of 1940.
- - Leads in the purchase and subsequent sale to the public of Newport
News Shipbuilding and Dry Dock Company, a prototype transaction for
the investment banking industry.
- - Assumes management of National Investors Corporation, today Seligman
Growth Fund.
- - Establishes Whitehall Fund, Inc., today Seligman Income Fund.
...1950-1989
- - Develops new open-end investment companies. Today, manages 43 mutual
fund portfolios with combined assets of $6.6 billion.
- - Helps pioneer state-specific, tax-exempt municipal bond funds, today
managing a national and 18 state-specific tax-exempt funds.
- - Establishes J. & W. Seligman Trust Company, and J. & W. Seligman
Valuations Corporation.
- - Establishes Seligman Portfolios, Inc., an investment vehicle offered
through variable annuity products.
...1990s
- - Introduces Seligman Select Municipal Fund and Seligman Quality
Municipal Fund, two closed-end funds that invest in high-quality
municipal bonds.
- - In 1991 establishes a joint venture with Henderson Administration
Group plc, of London, known as Seligman Henderson Co., to offer
global investment products.
- - Introduces two small-cap mutual funds: Seligman Frontier Fund and
Seligman Henderson Global Smaller Companies Fund.
- - Launches Seligman Henderson Global Fund Series, Inc., which today
offers three separate series: Seligman Henderson International Fund,
Seligman Henderson Global Smaller Companies Fund and Seligman
Henderson Global Technology Fund.
<PAGE>
1
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements and Schedules:
Part A - Financial Highlights from June 21, 1988 (commencement of
operations) to June 30, 1995 for Seligman Capital Portfolio,
Seligman Cash Management Portfolio, Seligman Common Stock
Portfolio, Seligman Fixed Income Portfolio and Seligman Income
Portfolio; from May 3, 1993 (commencement of operations) to June
30, 1995 for the Seligman Henderson Global Portfolio and from
October 11, 1994 (commencement of operations) to June 30, 1995 for
Seligman Communications and Information Portfolio, Seligman
Frontier Portfolio and Seligman Henderson Global Smaller Companies
Portfolio; from May 1, 1995 (commencement of operations) to
September 30, 1995 for Seligman High-Yield Bond Portfolio.
Part B - Required Financial Statements are included in the Fund's
audited 1994 Annual Report and unaudited 1995 Mid-Year Report
which are incorporated by reference in the Fund's Statement of
Additional Information. These Financial Statements are:
Portfolios of Investments as of December 31, 1994 and June 30,
1995; Statements of Assets and Liabilities as of December 31, 1994
and June 30, 1995; Statements of Operations for the year ended
December 31, 1994 and the six months ended June 30, 1995;
Statements of Changes in Net Assets for the years ended December
31, 1994 and 1993 and the six months ended June 30, 1994 and 1995;
Notes to Financial Statements; Financial Highlights from June 21,
1988, May 3, 1993 and October 11, 1994 (commencement of
operations) to December 31, 1994 and to June 30, 1995; Report of
Independent Auditors. Also included in the Fund's Statement of
Additional Information are financial statements for the period May
1, 1995 (commencement of operations) to September 30, 1995 for the
Seligman High-Yield Bond Portfolio.
(b) Exhibits: All Exhibits have been filed previously except
where otherwise noted and Exhibits marked with an asterisk
(*) are filed herewith.
(1) Form of Articles of Amendment and Restatement of Articles
of Incorporation. (Incorporated by reference to Post-
Effective Amendment No. 14 filed on February 14, 1995.)
(2) By-laws of Registrant. (Incorporated by reference to Pre-
Effective Amendment No. 2 filed on May 24, 1988.)
(3) N/A.
(4) N/A.
(5) (a) Form of Management Agreement in respect of Seligman
High-Yield Bond Portfolio. (Incorporated by
reference to Post-Effective Amendment No. 14 filed
on February 14, 1995.)
(b) Management Agreement in respect of Seligman
Communications and Information and Seligman
Frontier Portfolios. (Incorporated by reference to
Post-Effective Amendment No. 15 filed on March 31,
1995.)
(c) Management Agreement in respect of Seligman
Henderson Global Smaller Companies Portfolio
(formerly, Seligman Henderson Global Emerging
Companies Portfolio). (Incorporated by reference to
Post-Effective Amendment No. 15 filed on March 31,
1995.)
(d) Subadvisory Agreement in respect of Seligman
Henderson Global Smaller Companies Portfolio.
(Incorporated by reference to Post-Effective
Amendment No. 15 filed on March 31, 1995.)
<PAGE>
2
(e) Management Agreement in respect of Seligman
Henderson Global Portfolio. (Incorporated by
reference to Post-Effective Amendment No. 15 filed
on March 31, 1995.)
(f) Subadvisory Agreement in respect of Seligman
Henderson Global Portfolio. (Incorporated by
reference to Post-Effective Amendment No. 15 filed
on March 31, 1995.)
(g) Management Agreement in respect of Seligman
Capital, Seligman Cash Management, Seligman Common
Stock, Seligman Fixed Income Securities, and
Seligman Income Portfolios. (Incorporated by
reference to Post-Effective Amendment No. 15 filed
on March 31, 1995.)
(6) N/A.
(7) N/A.
(8) (a) Custodian Agreement and Sub-Custodian Agreement in
respect of Seligman Capital, Seligman Cash
Management, Seligman Common Stock, Seligman Fixed
Income Securities, and Seligman Income Portfolios.
(Incorporated by reference to Pre-Effective
Amendment No. 2 filed on May 24, 1988.)
(b) Custodian Agreement in respect of Seligman
Henderson Global Portfolio. (Incorporated by
reference to Post-Effective Amendment No. 10 filed
on April 26, 1993.)
(c) Form of First Amendment to Custodian Agreement in
respect of Seligman Communications and Information
and Seligman Frontier Portfolios. (Incorporated by
reference to Post-Effective Amendment 13 filed on
September 30, 1994.)
(d) Form of Custodian Agreement in respect of Seligman
Henderson Global Smaller Companies Portfolio.
(Incorporated by reference to Post-Effective
Amendment No. 13 filed on September 30, 1994.)
(e) Recordkeeping Agreement in respect of Seligman
Henderson Global Portfolio. (Incorporated by
reference to Post-Effective Amendment No. 10 filed
on April 26, 1993.)
(f) Form of Amendment to Recordkeeping Agreement in
respect of Seligman Henderson Global Smaller
Companies Portfolio. (Incorporated by reference to
Post-Effective Amendment No. 13 filed on September
30, 1994.)
(g) Form of Amendment to Custodian Agreement in respect
of Seligman High-Yield Bond Portfolio. (To be filed
by amendment.)
(9) Other Material Contracts.
(a) Waiver of Buy/Sell Agreement between the Registrant
and The Mutual Benefit Life Insurance Company.
(Incorporated by reference to Post-Effective
Amendment No. 10 filed on April 26, 1993.)
(b) Buy/Sell Agreement between Registrant and Canada
Life Insurance Company of America. (Incorporated by
reference to Post-Effective Amendment No. 10 filed
on April 26, 1993.)
(c) Buy/Sell Agreement between Registrant and Canada
Life Insurance Company of America. (Incorporated by
reference to Post-Effective Amendment No. 13 filed
on September 30, 1994.)
(d) Agency Agreement between Investors Fiduciary Trust
Company, acting as Transfer and Dividend Disbursing
Agent, and the Fund in respect of Seligman Capital,
Seligman Cash Management, Seligman Common Stock,
Seligman Fixed Income Securities, and Seligman
Income Portfolios. (Incorporated by reference to
Pre-Effective Amendment No. 2 filed on May 24,
1988.)
<PAGE>
3
(e) First Amendment to Agency Agreement between
Investors Fiduciary Trust Company, acting as
Transfer and Dividend Disbursing Agent, and the
Fund in respect of Seligman Henderson Global
Portfolio. (Incorporated by reference to Post-
Effective Amendment No. 10 filed on April 26,
1993.)
(f) Second Amendment to Agency Agreement between
Investors Fiduciary Trust Company, acting as
Transfer and Dividend Disbursing Agent, and the
Fund in respect of Seligman Communications and
Information, Seligman Frontier, and Seligman
Henderson Global Smaller Companies Portfolios.
(Incorporated by reference to Post-Effective
Amendment No. 13 filed on September 30, 1994.)
(g) Third Amendment to Agency Agreement between
Investors Fiduciary Trust Company, acting as
Transfer and Dividend Disbursing Agent, and the
Fund in respect of Seligman High-Yield Bond
Portfolio. (To be filed by amendment.)
(10) Opinion and Consent of Counsel. (Incorporated by reference
to Post-Effective Amendment No. 15 filed on March 31,
1995.)
(11) Consent of independent auditors. (Incorporated by reference
to Post-Effective Amendment No. 15 filed on March 31,
1995.)
(12) N/A.
(13) (a) Representation Re: Initial Capital (Purchase
Agreement for Seligman Capital, Seligman Cash
Management, Seligman Common Stock, Seligman Fixed
Income Securities, and Seligman Income Portfolios).
(Incorporated by reference to Pre-Effective
Amendment No. 2 filed on May 24, 1988.)
(b) Representation Re: Initial Capital (Purchase
Agreement for Seligman Henderson Global Portfolio).
(Incorporated by reference to Post-Effective
Amendment No. 10 filed on April 26, 1993.)
(c) Representation Re: Initial Capital (Purchase
Agreement for Seligman High-Yield Bond Portfolio).
(Incorporated by reference to Post-Effective
Amendment No. 15 filed on March 31, 1995.)
(14) The Seligman 401(K) Retirement Plan Marketing.
(Incorporated by reference to Post-Effective Amendment No.
3 filed on May 1, 1989.)
(15) N/A.
Item 25. Persons Controlled by or Under Common Control with Registrant
None.
Item 26. Number of Holders of Securities
As of November 1, 1995, there were four record holders of Capital
Stock of the Registrant.
Item 27. Indemnification - Incorporated by reference to Registrant's
Post-Effective Amendment #6 (File No. 33-15253) as filed with
the Commission on May 1, 1991.
Item 28. Business and Other Connections of Investment Adviser
J. & W. Seligman & Co. Incorporated, a Delaware Corporation
("Manager"), is the Registrant's investment manager. The Manager
also serves as investment manager to sixteen associated
<PAGE>
4
investment companies. They are Seligman Capital Fund, Inc.,
Seligman Cash Management Fund, Inc., Seligman Common Stock Fund,
Inc., Seligman Communications and Information Fund, Inc., Seligman
Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman
Henderson Global Fund Series, Inc., Seligman High Income Fund
Series, Seligman Income Fund, Inc., Seligman New Jersey Tax-Exempt
Fund, Inc., Seligman Pennsylvania Tax-Exempt Fund Series, Seligman
Quality Municipal Fund, Inc., Seligman Select Municipal Fund,
Inc., Seligman Tax-Exempt Fund Series, Inc., Seligman Tax-Exempt
Series Trust and Tri-Continental Corporation.
The Subadviser also serves as subadviser to five other associated
investment companies. They are Seligman Capital Fund, Seligman
Common Stock Fund, Seligman Communications and Information Fund,
Seligman Growth Fund, Seligman Henderson Global Fund Series,
Seligman Income Fund, the Global and Global Smaller Companies
Portfolios of Seligman Portfolios, Inc. and Tri-Continental
Corporation.
The Manager and Subadviser have an investment advisory service
division which provides investment management or advice to private
clients. The list required by this Item 28 of officers and
directors of the Manager and the Subadviser, respectively,
together with information as to any other business, profession,
vocation or employment of a substantial nature engaged in by such
officers and directors during the past two years, is incorporated
by reference to Schedules A and D of Form ADV, filed by the
Manager and the Subadviser, respectively, pursuant to the
Investment Advisers Act of 1940 (SEC File Nos. 801-5798 and
801-4067), both of which were filed on March 31, 1995.
Item 29. N/A
Item 30. Location of Accounts and Records - All accounts, books and
other documents required to be maintained by Section 31(a) of
the 1940 Act and the Rules (17 CFR 270.31a-1 to 31a-3)
promulgated thereunder will be maintained by the following:
Custodian and Recordkeeping Agent for Seligman Capital, Seligman
Cash Management, Seligman Common Stock, Seligman Communications
and Information, Seligman Fixed Income Securities, Seligman
Frontier, Seligman High-Yield Bond, and Seligman Income
Portfolios: Investors Fiduciary Trust Company, 127 West 10th
Street, Kansas City, Missouri 64105.
Custodian for Seligman Henderson Global Smaller Companies and
Seligman Henderson Global Portfolios: Morgan Stanley Trust
Company, One Pierrepont Plaza, Brooklyn, New York 11201.
Recordkeeping Agent for Seligman Henderson Global Smaller
Companies and Seligman Henderson Global Portfolios: Investors
Fiduciary Trust Company, 127 West 10th Street, Kansas City,
Missouri 64105.
Transfer, Redemption and Other Shareholder Account Services for
all Portfolios: Investors Fiduciary Trust Company, 127 West 10th
Street, Kansas City, Missouri 64105.
Item 31. Management Services - None not discussed in the Prospectus or
Statement of Additional Information for the Registrant.
Item 32. Undertakings -
(1) The Registrant undertakes to furnish to each person to whom
a prospectus is delivered a copy of the Registrant's latest
annual report to shareholders, upon request and without
charge.
<PAGE>
5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Post-Effective Amendment
pursuant to Rule 485(b) of the Securities Act of 1933 and has duly caused
this Post-Effective Amendment #16 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on the 1st day of November, 1995.
SELIGMAN PORTFOLIOS, INC.
By: /s/ WILLIAM C. MORRIS
William C. Morris, Chairman
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment #16 to the Registration Statement has been signed below
by the following persons, in the capacities indicated on October 30, 1995.
Signature Title
/s/ WILLIAM C. MORRIS Chairman of the Board (Principal
William C. Morris executive officer) and Director
/s/ BRIAN T. ZINO Director and President
Brian T. Zino
/s/ THOMAS G. ROSE Treasurer
Thomas G. Rose
Fred E. Brown, Director )
John R. Galvin, Director )
Alice S. Ilchman, Director )
Frank A. McPherson, Director )
John E. Merow, Director ) /s/ BRIAN T. ZINO
Betsy S. Michel, Director ) *Brian T. Zino, Attorney-In-Fact
James C. Pitney, Director )
James Q. Riordan, Director )
Ronald T. Schroeder, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
Brian T. Zino, Director )
<PAGE>
6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Post-Effective Amendment
pursuant to Rule 485(b) of the Securities Act of 1933 and has duly caused
this Post-Effective Amendment #16 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on the 1st day of November, 1995.
SELIGMAN PORTFOLIOS, INC.
By:
William C. Morris, Chairman
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment #16 to the Registration Statement has been signed below
by the following persons, in the capacities indicated on October 30, 1995.
Signature Title
Chairman of the Board (Principal
William C. Morris executive officer) and Director
Director and President
Brian T. Zino
Treasurer
Thomas G. Rose
Fred E. Brown, Director )
John R. Galvin, Director )
Alice S. Ilchman, Director )
Frank A. McPherson, Director )
John E. Merow, Director )
Betsy S. Michel, Director ) *Brian T. Zino, Attorney-In-Fact
James C. Pitney, Director )
James Q. Riordan, Director )
Ronald T. Schroeder, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
Brian T. Zino, Director )
