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. 18 |X|
---
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 20 |X|
--
- - --------------------------------------------------------------------------------
SELIGMAN PORTFOLIOS, INC.
(Exact name of registrant as specified in charter)
- - --------------------------------------------------------------------------------
100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive offices)
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):
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-2 Notice for
Registrant's most recent fiscal year was filed with the Commission on February
20, 1996.
<PAGE>
POST-EFFECTIVE AMENDMENT NO. 18
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. Manager's Discussion of Fund Management Services
Performance
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
May 1, 1996
Seligman Portfolios, Inc. (the "Fund") is an open-end diversified management
investment company consisting of twelve 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
continued on page 2
The Fund's twelve Portfolios are:
o 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.
o 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.
o 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.
o Seligman Communications and Information Portfolio: seeks capital gain,
not income, by investing primarily in securities of companies in the
communications, information and related industries.
o 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.
o 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.
o Seligman Henderson Global Growth Opportunities Portfolio: seeks to
achieve its objective of long-term capital appreciation by investing
primarily in equity securities of companies that have the potential to
benefit from global economic or social trends.
o Seligman Henderson Global Portfolio: seeks long-term capital
appreciation primarily through global investments in securities of
medium- to large-sized companies.
o Seligman Henderson Global Smaller Companies Portfolio: seeks long-term
capital appreciation primarily through global investments in
securities of companies with small to medium market capitalization.
o Seligman Henderson Global Technology Portfolio: seeks long-term
capital appreciation by making global investments of at least 65% of
its assets in securities of companies with business operations in
technology and technology-related industries.
o 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."
o 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)
Growth Opportunities Portfolio, Seligman Henderson Global Portfolio, Seligman
Henderson Global Smaller Companies Portfolio and Seligman Henderson Global
Technology Portfolio (collectively, the "Seligman Henderson Global Portfolios").
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 Growth
Opportunities Portfolio........................... P-12
Seligman Henderson Global Portfolio................. P-12
Seligman Henderson Global Smaller
Companies Portfolio............................... P-12
Seligman Henderson Global Technology
Portfolio......................................... P-12
Seligman High-Yield Bond Portfolio.................. P-16
Seligman Income Portfolio........................... P-17
Other Investment Policies........................... P-18
Management Services................................. P-21
Portfolio Transactions, Portfolio Turnover
And Valuation..................................... P-24
Dividends, Distributions And Taxes.................. P-24
Purchases And Redemptions........................... P-25
Custodians And Transfer Agent....................... P-25
Organization And Capitalization..................... P-25
Appendix............................................ P-26
P-2
<PAGE>
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 except for Seligman
Henderson Global Growth Opportunities Portfolio and Seligman Henderson Global
Technology Portfolio, which are new Portfolios. The results shown below for all
periods through the year ended December 31, 1995 have been audited in
conjunction with the annual audits of the financial statements of Seligman
Portfolios, Inc. by Ernst & Young LLP, independent auditors. The 1995 financial
statements and independent auditors' report thereon for each portfolio are
incorporated by reference in the Fund's Statement of Additional Information.
<TABLE>
<CAPTION>
Increase
Net Realized (Decrease) Net Asset
Net Asset Value Net & Unrealized from Distributions Net Increase Value at
Per Share Operating at Beginning Investment Gain (Loss) Investment Dividends from Net (Decrease) in End of
Performance: of Period Income(Loss)** on Investment Operations Paid Gain Realized Net Asset Value Period
- - ------------------- -------------- -------------- ------------- ---------- --------- ------------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Capital Portfolio
Year ended 12/31/95 ... $12.700 $ 0.048 $3.385 $3.433 $(0.047) $(1.176) $2.210 $14.910
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
Year ended 12/31/95 ... 1.000 0.055 -- 0.055 (0.055) -- -- 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 ...
Year ended 12/31/95 ... 13.780 0.349 3.400 3.749 (0.345) (1.744) 1.660 15.440
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
Year ended 12/31/95 ... 10.440 -- 4.015 4.015 -- (0.955) 3.060 13.500
10/11/94* to 12/31/94.. 10.000 (0.016) 0.456 0.440 -- -- 0.440 10.440
Fixed Income
Securities Portfolio
Year ended 12/31/95 ... 9.270 0.605 1.171 1.776 (0.606) -- 1.170 10.440
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
Year ended 12/31/95 ... 10.580 (0.001) 3.512 3.511 -- (0.531) 2.980 13.560
10/11/94* to 12/31/94.. 10.000 (0.012) 0.592 0.580 -- -- 0.580 10.580
</TABLE>
- - ----------
* Commencement of Operations.
** The Manager, at its discretion, waived its management fee and/or reimbursed
expenses for certain periods presented.
+ Annualized
P-4
<PAGE>
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>
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)
Per Share Operating Net Asset Average to Average Portfolio End of Period Income (Loss) Average Net to Average
Performance: Value Net Assets Net Assets Turnover (000's omitted) Per Share Assets Net Assets
- - ------------------- ------------ ---------- ------------- --------- --------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Capital Portfolio
Year ended 12/31/95 ... 27.17% 0.60% 0.32% 122.20% $ 9,294 $0.035 0.71% 0.21%
Year ended 12/31/94.... (4.59) 0.60 0.10 67.39 5,942 (0.036) 0.96 (0.26)
Year ended 12/31/93.... 11.65 0.71 0.09 65.30 5,886 (0.003) 0.83 (0.03)
Year ended 12/31/92.... 6.80 0.91 (0.14) 54.95 5,497
Year ended 12/31/91.... 59.05 0.60 0.56 31.44 5,812 (0.035) 1.37 (0.21)
Year ended 12/31/90.... (3.18) 2.15 0.18 28.94 3,560
Year ended 12/31/89.... 16.47 3.55 (0.88) 32.55 2,577 (0.092) 3.80 (1.12)
6/21/88*-12/31/88...... 0.60 6.99+ (0.11)+ -- 890
Cash Management Portfolio
Year ended 12/31/95 ... 5.60 -- 5.48 -- 7,800 0.046 0.87 4.61
Year ended 12/31/94.... 4.03 -- 3.98 -- 3,230 0.025 1.48 2.50
Year ended 12/31/93.... 3.00 -- 2.96 -- 3,102 0.019 1.07 1.89
Year ended 12/31/92.... 3.53 -- 3.50 -- 4,230 0.025 0.97 2.53
Year ended 12/31/91.... 5.70 -- 5.49 -- 5,849 0.048 0.83 4.66
Year ended 12/31/90.... 7.79 -- 7.53 -- 3,994 0.045 2.97 4.56
Year ended 12/31/89.... 7.81 -- 7.72 -- 908 (0.019) 9.57 (1.85)
6/21/88*-12/31/88...... 2.35 .95+ 5.83+ -- 283 (0.050) 20.02+ (13.24)+
Common Stock Portfolio ..
Year ended 12/31/95 ... 27.28 0.54 2.42 55.48 28,836
Year ended 12/31/94.... 0.04 0.60 2.45 15.29 20,168 0.361 0.62 2.43
Year ended 12/31/93.... 11.94 0.55 2.10 10.70 21,861
Year ended 12/31/92.... 12.14 0.56 2.21 12.57 24,987
Year ended 12/31/91.... 33.16 0.60 2.63 27.67 26,103 0.350 0.71 2.52
Year ended 12/31/90.... (3.15) 0.88 3.01 13.78 18,030
Year ended 12/31/89.... 24.11 1.59 2.32 37.56 9,332 0.236 1.67 2.23
6/21/88*-12/31/88...... 1.80 3.62+ 1.65+ 14.40 2,476
Communications and
Information Portfolio
Year ended 12/31/95 ... 38.55 0.95 (0.89) 96.62 38,442
10/11/94* to 12/31/94.. 4.40 0.95+ (0.95)+ -- 495 (0.436) 13.96+ (13.96)+
Fixed Income
Securities Portfolio
Year ended 12/31/95 ... 19.18 0.60 6.22 114.42 4,497 0.571 0.99 5.83
Year ended 12/31/94.... (3.39) 0.60 5.12 237.23 3,606 0.430 1.31 4.41
Year ended 12/31/93.... 7.98 0.74 5.41 33.21 3,775 0.675 1.07 5.08
Year ended 12/31/92.... 5.60 1.00 6.22 23.40 4,750
Year ended 12/31/91.... 14.58 0.60 7.30 6.34 5,369 0.712 1.42 6.48
Year ended 12/31/90.... 6.14 1.73 6.59 6.62 4,600
Year ended 12/31/89.... 8.70 2.13 6.51 49.92 4,129 0.643 2.27 6.37
6/21/88*-12/31/88...... 1.01 2.99+ 5.25+ 144.21 2,223
Frontier Portfolio
Year ended 12/31/95 ... 33.28 0.95 (0.55) 106.48 12,476 (0.019) 1.37 (0.97)
10/11/94* to 12/31/94.. 5.80 0.95+ (0.70)+ -- 169 (1.319) 40.47+ (40.22)+
</TABLE>
- - ----------
* Commencement of Operations.
** The Manager, at its discretion, waived its management fee and/or reimbursed
expenses for certain periods presented.
+ Annualized
P-5
<PAGE>
<TABLE>
<CAPTION>
Net Realized
& Unrealized Increase
Net Realized Gain (Loss) (Decrease)
Net Asset Value Net & Unrealized from Foreign from Distributions Net Increase
Per Share Operating at Beginning Investment Gain (Loss) Currency Investment Dividends from Net (Decrease) in
Performance: of Period Income** on Investment Transactions Operations Paid Gain Realized Net Asset Value
- - ------------------- --------------- ---------- ------------- ------------ ---------- --------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Global Portfolio
Year ended 12/31/95.... $11,340 $0.154 $0.896 $0.236 $1.286 $(0.151) $ (0.085) $1.050
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
Year ended 12/31/95.... 10.310 0.051 2.037 (0.301) 1.787 (0.052) (0.375) 1.360
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*-12/31/95....... 10.000 0.218 0.519 -- 0.737 (0.219) (0.018) 0.500
Income Portfolio
Year ended 12/31/95.... 9.970 0.604 1.187 -- 1.791 (0.604) (0.597) 0.590
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, at its discretion, waived its management fee and/or reimbursed
expenses for certain periods presented.
+ Annualized
P-6
<PAGE>
<TABLE>
<CAPTION>
Without Management Fee Waiver
Ratios/Supplemental Data** and/or Expense Reimbursement**
---------------------------------------------- --------------------------------
Ratios of
Expenses Net
Total Return Expenses Net Investment Net Assets Net to Investment
Net Asset Based on to Income (Loss) at End of Investment Average Income(Loss)
Per Share Operating Value at Net Asset Average to Average Portfolio Period (000's Income (Loss) Net to Average
Performance: End of Period Value Net Assets Net Assets Turnover omitted) Per Share Assets Net Assets
- - ------------------- ------------- ---------------------- ------------- --------- ----------- ----------- ------- -----------
Global Portfolio
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year ended 12/31/95 .. $12.390 11.34% 1.35% 1.01% 41.40% $4,183 $0.001 3.40% (1.04)%
Year ended 12/31/94 .. 11.340 1.32 1.20 1.17 47.34 1,776 (0.419) 6.12 (3.75)
5/3/93*-12/31/93 ..... 11.370 14.40 1.20+ 1.30+ 2.82 648 (1.004) 17.94+ (15.44)+
Global Smaller
Companies
Portfolio
Year ended 12/31/95 .. 11.670 17.38 1.39 0.64 55.65 4,837 (0.051) 3.84 (1.81)
10/11/94*-12/31/94 ... 10.310 3.53 1.20+ 3.14+ -- 132 (1.225) 37.25+ (32.91)+
High-Yield Bond
Portfolio
5/1/95*-12/31/95 ..... 10.500 7.37 0.70+ 7.46+ 67.55 3,009 0.117 4.38+ 3.78+
Income Portfolio
Year ended 12/31/95 .. 10.560 17.98 0.60 5.55 51.22 12,619 0.602 0.62 5.53
Year ended 12/31/94 .. 9.970 (5.96) 0.60 6.34 29.76 10,050 0.670 0.77 6.17
Year ended 12/31/93 .. 11.380 12.37 0.64 6.40 38.38 11,220 0.826 0.65 6.39
Year ended 12/31/92 .. 11.390 15.72 0.68 7.53 39.46 11.363
Year ended 12/31/91 .. 11.250 30.89 0.60 8.05 43.67 11,509 0.867 0.93 7.72
Year ended 12/31/90 .. 9.500 (6.10) 1.40 8.19 21.64 7,419
Year ended 12/31/89 .. 10.780 14.61 2.69 5.95 60.10 4,085 0.610 2.88 5.77
6/21/88*-12/31/88 .... 10.040 1.10 5.02+ 2.46+ -- 1,265 0.089 5.42+ 2.07+
</TABLE>
- - ----------
* Commencement of Operations.
** The Manager and/or Subadviser (in the case of the Global Portfolio and
Global Smaller Companies Portfolio), at their discretion, waived management
fees and/or reimbursed expenses for certain periods presented.
+ Annualized
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.
P-8
<PAGE>
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
P-9
<PAGE>
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
P-10
<PAGE>
payments of higher-rate mortgages are likely to be shorter than those of
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.
P-11
<PAGE>
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO
SELIGMAN HENDERSON GLOBAL PORTFOLIO
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO
Unless otherwise indicated, the following description of investment
objectives and policies applies to each of the Seligman Henderson Global Growth
Opportunities Portfolio ("Global Growth Opportunities Portfolio"), the Seligman
Henderson Global Portfolio ("Global Portfolio"), the Seligman Henderson Global
Smaller Companies Portfolio ("Global Smaller Companies Portfolio") and the
Seligman Henderson Global Technology Portfolio ("Global Technology Portfolio").
The investment objective of the Global Growth Opportunities Portfolio is
long-term capital appreciation. The Global Growth Opportunities Portfolio seeks
to achieve its objective by investing primarily in equity securities of
companies that have the potential to benefit from global economic or social
trends. The Subadviser believes that such trends are reshaping the world as it
moves towards the new millennium. The trends that will be initially focused on
will include global economic liberalization and the flow of capital through
trade and investment; the globalization of the world's economy; the expansion of
technology as an increasingly important influence on society; the increased
awareness of the importance of protecting the environment; and the increase in
life expectancy leading to changes in consumer demographics and a greater need
for healthcare, security and leisure.
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
$1 billion.
The investment objective of the Global Technology Portfolio is long-term
capital appreciation. The Global Technology Portfolio seeks to achieve its
objective by making global investments of at least 65% of its assets in
securities of companies with business operations in technology and
technology-related industries. The Global Technology Portfolio defines
technology as the use of science to create new products and services. As such
the industry comprises not only information technology and communications but
also medical, environmental and bio-technology. The Global Technology Portfolio
expects to invest in a broad range of technologies. The technology market is
global in its scope and has exhibited and continues to demonstrate rapid growth
both through increasing demand for existing products and services and the
broadening of the technology market. Penetration rates remain low while emerging
technologies such as multimedia and genetic engineering are opening up whole new
markets. The application of new technology to traditional industries is, in many
cases, revolutionizing both manufacturing and distribution industries.
Nonetheless, older technologies such as photography and print may also be
represented. The Subadviser expects to take advantage of valuation anomalies in
international markets created by the emergence of established U.S. technology
trends in overseas markets and the relative immaturity of the technology sectors
in those countries' securities markets. Securities of large companies that are
well established in the world technology market can be expected to grow with the
market and will frequently be held by the Global Technology Portfolio; however,
rapidly changing technologies and the expansion of technology and
technology-related industries provide a favorable environment for investment in
companies of small- to medium-size. Consequently, the Global Technology
Portfolio's investments are not subject to any minimum capitalization
requirement, and the Global Technology Portfolio may invest in securities
without regard to the capitalization of the issuer.
Seligman Henderson Co. (the "Subadviser") will supervise and direct the
investments of each of the 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, Luxembourg, the Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland and Turkey. Pacific Basin countries include
Australia, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand,
P-12
<PAGE>
Pakistan, The People's Republic of China, The Philippines, Singapore, Sri Lanka,
Taiwan 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. Equity securities in which each of the
Portfolios will invest may be listed on a U.S. or foreign stock exchange or
traded in U.S. or foreign over-the-counter markets.
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"), Global Depository Receipts ("GDRs") or
Global Depository Shares ("GDSs"). 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, GDRs and GDSs are typically issued by foreign banks or trust
companies and traded in Europe. ADRs, ADSs, EDRs, GDRs and GDSs 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,
GDRs or GDSs. In unsponsored programs, the 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, GDRs and GDSs 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.
Foreign Investment 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
P-13
<PAGE>
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.
The economies of individual emerging countries may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross domestic
product, rates of inflation, currency depreciation, capital reinvestment,
resource self-sufficiency and balance of payment position and may be based on a
substantially less diversified industrial base. Further, the economies of
developing countries generally are heavily dependent upon international trade
and, accordingly, have been, and may continue to be, adversely affected by trade
barriers, exchange controls, managed adjustments in relative currency values and
other protectionist measures imposed or negotiated by the countries with which
they trade. These economies also have been, and may continue to be, adversely
affected by economic conditions in the countries with which they trade.
Foreign Currency Risk Factors. 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).
Technology Investment Risk Factors. The value of the Global Technology
Portfolio shares may be susceptible to factors affecting technology and
technology-related industries and to greater risk and market fluctuation than an
investment in a fund that invests in a broader range of portfolio securities. As
such, the Global Technology Portfolio is not an appropriate investment for
individuals who require safety of principal or stable income from their
investments. Technology and technology-related industries may be subject to
greater governmental regulation than many other industries in certain countries;
changes in governmental policies and the need for regulatory approvals may have
a material adverse effect on these industries. Additionally, these companies may
be subject to risks of developing technologies, competitive pressures and other
factors and are dependent upon consumer and business acceptance as new
technologies evolve. Securities of smaller, less experienced companies also may
P-14
<PAGE>
involve greater risks, such as limited product lines, markets and financial or
managerial resources, and trading in such securities may be subject to more
abrupt price movements than trading in the securities of larger companies.
Smaller Company Investment Risk Factors. With regard to the Global Smaller
Companies Portfolio, and the Global Technology Portfolio, the Subadviser
believes that smaller companies generally have greater earnings and sales growth
potential than larger companies. In addition, the Global Growth Opportunities
Portfolio may also invest in securities without regard to the minimum
capitalization of issuers. 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.
Derivatives. Each of the Seligman Henderson Global Portfolios may invest in
financial instruments commonly known as "derivatives" only for hedging or
investment purposes. A Portfolio will not invest in derivatives for speculative
purposes, i.e., where the derivative investment exposes the Portfolio to undue
risk of loss, such as where the risk of loss is greater than the cost of the
investment.
A derivative is generally defined as an instrument whose value is derived
from, or based upon, some underlying index, reference rate (e.g., interest rates
or currency exchange rates), security, commodity or other asset. A Portfolio
will not invest in a specific type of derivative without prior approval from its
Board of Directors, after consideration of, among other things, how the
derivative instrument serves the Portfolio's investment objective, and the risk
associated with the investment. The only types of derivatives in which the
Portfolios are currently permitted to invest are stock purchase rights and
warrants, and, as described more fully below, forward currency exchange
contracts and put options.
A Portfolio may not invest in rights and warrants, if, at the time of
acquisition, the investment in rights and warrants would exceed 5% of the
Portfolio's net assets (valued at the lower of cost or market). In addition, no
more than 2% of net assets may be invested in warrants not listed on the New
York or American Stock Exchanges. For purposes of this restriction, warrants
acquired in units or attached to securities will be deemed to have been
purchased without cost.
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.
Options Transactions. Each of the Seligman Henderson Global Portfolios may
purchase put options on portfolio securities in an attempt to provide a hedge
against a decrease in the price of a security held by the Portfolio. A Portfolio
will not purchase options for speculative purposes. Purchasing a put option
gives a Portfolio the right to sell, and obligates the writer to buy, the
underlying security at the exercise price at any time during the option period.
When a Portfolio purchases an option, it is required to pay a premium to
the party writing the option and a commission to the broker selling the option.
If the option is exercised by the Portfolio, the premium and the commission paid
may be greater than the amount of the brokerage commission charged if the
security were to be purchased or sold directly. See "Investment Policies and
Restrictions" in the Statement of Additional Information.
P-15
<PAGE>
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 $300 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.
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.
P-16
<PAGE>
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, 1995. When securities received different ratings from S&P and
Moody's, the table reflects the lower rating.
AAA/Aaa..................................... --
AA/Aa....................................... --
A/A......................................... --
BBB/Baa..................................... --
BB/Ba....................................... 4.6%
B/B......................................... 89.5%
CCC/Caa..................................... 1.9%
CC/Ca....................................... 3.6%
Non-rated................................... 0.4%
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.
In accordance with its objective of producing maximum current income, the
Portfolio may invest up to 10% of its total assets in preferred stock, including
non-investment grade preferred stock. Certain preferred stock issues may offer
higher yields than similar bond issues because their rights are subordinated to
the bonds. Consequently, such preferred stock issues will have a greater risk
potential. The Manager will try to minimize this greater risk potential through
its investment process. However, there can be assurance that losses will not
occur and, as stated above, an investment in the Portfolio is appropriate only
for an investor who can bear the high risk in seeking maximum current income by
investing in high-yielding securities, including non-investment grade preferred
stock.
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.
P-17
<PAGE>
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
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, 1995. 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..................................... 5.7%
AA/Aa....................................... --
A/A......................................... 10.0%
BBB/Baa..................................... 20.7%
BB/Ba....................................... 4.9%
B/B......................................... 11.8%
CCC/Caa..................................... 0.5%
CC/Ca....................................... --
Non-rated................................... 3.2%
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.
P-18
<PAGE>
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
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. Each of the Seligman Henderson Global Portfolios 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, provided that securities
loaned by each of the Seligman Henderson Global Portfolios may not exceed 331/3%
of the Portfolios' total assets taken at market value. The Fund's Portfolios
will not lend portfolio securities to any institutions affiliated with the Fund.
P-19
<PAGE>
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. The lending of portfolio securities could
involve the risk of delays in receiving additional collateral or in the recovery
of securities and possible loss of rights in collateral in the event that a
borrower fails financially.
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.
Each of the Seligman Henderson Global Portfolios 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.
P-20
<PAGE>
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
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.
Each of the Seligman Henderson Global Portfolios 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.
From January 1 through April 30, 1995, the Subadviser voluntarily agreed to
reimburse certain annual expenses (other than the management fee) that exceeded
.20% of average net assets for each of the Seligman Henderson Global Portfolios.
From May 1 through December 31, 1995, the Subadviser agreed to reimburse annual
expenses (other than the management fee) that exceeded .40% of average net
assets for these portfolios. There is no assurance that the Subadvisor will
continue this policy in the future.
The management fee paid by each Portfolio (except Global Growth
Opportunities and Global Technology Portfolios) 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, 1995. 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, 1995.
<TABLE>
<CAPTION>
Management Fee Rate Expense Ratios for
for the year/period ended the year/period ended
Portfolio 12/31/95 12/31/95
- - --------- ------------------------- -----------------------
<S> <C> <C>
Seligman Capital Portfolio........................... .40% .60%*
Seligman Cash Management Portfolio................... -* -*
Seligman Common Stock Portfolio...................... .40 .54
Seligman Communications and Information
Portfolio.......................................... .75 .95
Seligman Fixed Income Securities Portfolio........... .40 .60*
Seligman Frontier Portfolio.......................... .75 .95
Seligman Henderson Global Portfolio.................. 1.00 1.35*
Seligman Henderson Global Smaller
Companies Portfolio .............................. 1.00 1.39*
Seligman High-Yield Bond Portfolio
(annualized)....................................... .50 .70*
Seligman Income Portfolio............................ .40 .60*
</TABLE>
- - ----------
* During the year ended December 31, 1995, 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 these Portfolios (except Seligman Common Stock Portfolio and
Seligman Communications and Information Portfolio).
P- 21
<PAGE>
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 $11.9 billion. The Manager also
provides investment management or advice to institutional accounts having an
aggregate value of approximately $3.9 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
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 each of the
Seligman Henderson Global Portfolios 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
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,
has served 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. Mr. Muzzatti is also Vice President and Portfolio Manager of Seligman
Capital Fund, Seligman Growth Fund and a co-manager of the Global Growth
Opportunities Portfolio. 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 1995 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 1995 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 1995 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 a co-manager of the Global Technology Portfolio. Mr.
Wick, who joined the Manager in 1987, also manages Seligman Communications and
Information 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 1995 Annual Report to Shareholders.
P-22
<PAGE>
Arsen Mrakovcic, a Managing Director of the Manager, is Vice President of the
Fund and Portfolio Manager of the Frontier Portfolio since October 1, 1995. Mr.
Mrakovcic who joined the Manager in 1992 as a Portfolio Assistant, was named
Vice President, Investment Officer on January 1, 1995 and Managing Director on
January 1, 1996. Mr. Mrakovcic also manages the Seligman Frontier Fund and the
domestic portion of the Seligman Henderson Global Smaller Companies Fund, a
series of Seligman Henderson Global Fund Series, Inc. 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
1995 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
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 Lehman
Brothers Government Bond Index and the Lipper Fixed Income Fund Average, is
included in the Fund's 1995 Annual Report to Shareholders.
Daniel J. Charleston, a Managing Director of the Manager, is 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 managed the
Seligman High-Yield Bond Series of Seligman High Income Fund Series since 1989.
The Portfolio Manager's discussion of the Seligman High-Yield Bond Portfolio's
performance, as well as a line graph illustrating comparative information
between the Seligman High-Yield Bond Portfolio, the Lipper High-Yield Bond Index
and the Merrill Lynch Master Index, is included in the Fund's 1995 Annual Report
to Shareholders.
The Subadviser's International Policy Group has overall responsibility for
directing and overseeing all aspects of investment activity for each of the
Seligman Henderson Global Portfolios 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 1995 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 1995 Annual
Report to Shareholders.
Brian Ashford-Russell, a Portfolio Manager with Henderson Administration
Group plc since February 1993, is the co-manager of the Global Technology
Portfolio. Mr. Ashford-Russell and Mr. Wick have responsibility for directing
and overseeing the international and domestic investments, respectively, of the
Global Technology Portfolio including the selection of individual securities for
purchase or sale. Mr. Ashford-Russell was previously a Portfolio Manager with
Touche Remnant & Co.
Nitin Mehta, a Portfolio Manager with Henderson Administration Group plc
since September 1994, is the co-manager of the Global Growth Opportunities
Portfolio. Mr. Mehta and Mr. Muzzatti have responsibility for directing and
overseeing the international and domestic investments, respectively, of the
Global Growth Opportunities Portfolio including the selection of individual
securities for purchase or sale. From May 1993 to September, 1994, Mr. Mehta was
Head of Currency Management and Derivatives at Quorum Capital Management. From
February 1993 to May 1993 he was a consultant with International Finance
Corporation. From 1986 through 1992, he was Head of Equity Investments at
Shearson Lehman Global Asset Management.
Copies of the Fund's 1995 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.
P-23
<PAGE>
PORTFOLIO TRANSACTIONS, PORTFOLIO TURNOVER AND VALUATION
Portfolio Transactions. In directing transactions involving exchange-listed
securities, the Manager (or in the case of the Seligman Henderson Global
Portfolios, 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 Seligman
Henderson Global Portfolios, 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%.
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 each of
the Seligman Henderson Global Portfolios, 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
P-24
<PAGE>
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
each of the Seligman Henderson Global Portfolios, as well as transfer and
dividend disbursing agent.
Morgan Stanley Trust Company, One Pierrepont Plaza, Brooklyn, New York
11201, acts as custodian of the assets of each of the Seligman Henderson Global
Portfolios.
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 twelve 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 Growth Opportunities Portfolio,
Seligman Henderson Global Smaller Companies Portfolio, Seligman Henderson Global
Technology 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-25
<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.
Issues rated "Not Prime" do not fall within any of the Prime rating
categories.
P-26
<PAGE>
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-27
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1996
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 May 1, 1996. 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............................... 11
PORTFOLIO TRANSACTIONS, VALUATION AND REDEMPTION...... 13
CUSTODIANS AND INDEPENDENT AUDITORS................... 16
FINANCIAL STATEMENTS.................................. 16
APPENDIX A............................................ 19
1
<PAGE>
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.
Purchasing Put Options on Securities
The Seligman Henderson Global Portfolio, the Seligman Henderson Global
Growth Opportunities Portfolio, the Seligman Henderson Global Smaller Companies
Portfolio and the Seligman Henderson Global Technology Portfolio (collectively,
the "Seligman Henderson Global Portfolios") may purchase put options to protect
its portfolio holdings in an underlying security against a decline in market
value. This hedge protection is provided during the life of the put option since
a Portfolio, as holder of the put option, can sell the underlying security at
the put exercise price regardless of any decline in the underlying security's
market price. In order for a put option to be profitable, the market price of
the underlying security must decline sufficiently below the exercise price to
cover the premium and transaction costs. By using put options in this manner, a
Portfolio will reduce any profit it might otherwise have realized in the
underlying security by the premium paid for the put option and by transaction
costs.
Because a purchased put option gives the purchaser a right and not an
obligation, the purchaser is not required to exercise the option. If the
underlying position incurs a gain, a Portfolio would let the put option expire
resulting in a reduced profit on the underlying security equal to the cost of
the put option. The cost of the put option is limited to the premium plus
commission paid. A Portfolio's maximum financial exposure will be limited to
these costs.
A Portfolio may purchase options listed on public exchanges as well as
over-the-counter. Options listed on an exchange are generally considered very
liquid. OTC options are considered less liquid, and therefore, will only be
considered where there is not a comparable listed option. Because options will
be used solely for hedging and due to their relatively low cost and short
duration, liquidity is not a significant concern.
A Portfolio's ability to engage in option transactions may be limited
by tax considerations.
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
repurchase 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.
2
<PAGE>
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. Each of the Seligman Henderson Global
Portfolios 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 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
3
<PAGE>
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.
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 calculation. The
portfolio turnover rates for the years 1995 and 1994 of the Seligman Capital
Portfolio, Seligman Common Stock Portfolio, Seligman Fixed Income Securities
Portfolio, Seligman Henderson Global Portfolio and Seligman Income Portfolio
were 122.20% and 67.39%; 55.48% and 15.29%; 114.42% and 237.23%; 41.40% and
47.34%; and 51.22% and 29.76%, respectively. For the year 1995 and the period
from October 11, 1994 (commencement of operations) through December 31, 1994,
the portfolio turnover rates of Seligman Communications and Information
Portfolio, Seligman Frontier Portfolio and Seligman Henderson Global Smaller
Companies Portfolio, respectively, were 96.62% and 0%; 106.48% and 0%; and
55.65% and 0%, respectively. For the period from May 1, 1995 (commencement of
operations) through December 31, 1995, the portfolio turnover rate of Seligman
High-Yield Bond Portfolio was 67.55%. 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.
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
the Seligman Henderson Global Portfolios 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 limitation
does not prohibit escrow, collateral or margin arrangements in
connection with (a) the purchase or sale of covered options (including
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 transactions
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
4
<PAGE>
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 each of the Seligman
Henderson Global Portfolios 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 (except securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities),
provided that for the purpose of this limitation, mortgage-related
securities do not constitute an industry; provided further that the
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 each of the Seligman Henderson Global
Portfolios may engage in transactions involving securities secured by
real estate or interests therein, and each of the Seligman Henderson
Global Portfolios 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
disposition of investments otherwise permitted to be made by any
Portfolio (such as investments in securities that are not readily
marketable without registration under the Securities Act of 1933 and
repurchase agreements with maturities in excess of seven days) will
not be deemed to render a Portfolio engaged in an underwriting
investment 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
connection 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 repurchase
agreements, are not considered loans for purposes of this restriction;
provided further that each of the Seligman Henderson Global Portfolios
may not make loans of money or securities other than (a) through the
purchase of securities in accordance with the Fund's investment
objective, (b) through repurchase agreements and (c) by lending
portfolio securities in an amount not to exceed 33 1/3% of the funds
total assets.
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 investment
would exceed 15% of the value of such Portfolio's net assets.
11. Invest in oil, gas or other mineral exploration or development
programs; 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 reorganization
and except to the extent permitted by Section 12 of the Investment
Company Act of 1940 (the "1940 Act").
5
<PAGE>
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, each of the Seligman Henderson Global Portfolios and the
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 permissible
under applicable statutes, rules and regulations. In addition, the
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 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
securities" 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 of the Fund, together with information as to
their principal business occupations during the past five years, are shown
below. Each Director who is an "interested person" of the Fund, as defined in
the 1940 Act, is indicated by an asterisk. Unless otherwise indicated, their
addresses are 100 Park Avenue, New York, New York 10017.
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief
(57) Executive Officer and Chairman of the
Executive Committee
Managing Director, Chairman and President,
J. & W. Seligman & Co. Incorporated,
investment managers and advisers; and
Seligman Advisors, Inc., advisers; Chairman
and Chief Executive Officer, the Seligman
Group of Investment Companies; Chairman,
Seligman Financial Services, Inc.,
broker/dealer; Seligman Holdings, Inc.,
holding company; Seligman Services, Inc.,
broker/dealer; and Carbo Ceramics Inc.,
ceramic proppants for oil and gas industry;
Director or Trustee, Seligman Data Corp.,
shareholder service agent; Kerr-McGee
Corporation, diversified 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; and J. & W.
Seligman Trust Company; and Director, Daniel
Industries, Inc., manufacturer of oil and
gas metering equipment.
6
<PAGE>
BRIAN T. ZINO* Director, President and Member of the
(43) Executive Committee
Director and Managing Director (formerly,
Chief Administrative and Financial Officer),
J. & W. Seligman & Co. Incorporated,
investment managers and advisers; and
Seligman Advisors, Inc., advisers; Director
or Trustee , the Seligman Group of
Investment Companies; President, the
Seligman Group of Investment Companies,
except Seligman Quality Municipal Fund, Inc.
and Seligman Select Municipal Fund, Inc.;
Chairman, Seligman Data Corp., shareholder
service agent; Director, Seligman Financial
Services, Inc., broker/dealer; Seligman
Services, Inc., broker/dealer; Senior Vice
President, Seligman Henderson Co., advisers;
formerly, Director and Secretary, Chuo Trust
- JWS Advisors, Inc., advisers; and
Director, Seligman Securities, Inc.,
broker/dealer; and J. & W. Seligman Trust
Company.
FRED E. BROWN* Director
(82)
Director and Consultant, J. & W. Seligman &
Co. Incorporated, investment managers and
advisers; and Seligman Advisors, Inc.,
advisers; Director or Trustee, the Seligman
Group of Investment Companies; Seligman
Financial Services, Inc., broker/dealer;
Seligman Services Inc., broker/dealer;
Trudeau Institute, nonprofit biomedical
research organization; Lake Placid Center
for the Arts, cultural organization; and
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, 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, insurance;
National Committee on U.S.-China Relations,
National Defense University; the Institute
for Defense Analysis; and Raytheon Co.,
electronics. Formerly, Ambassador, U.S.
State Department; Distinguished Policy
Analyst at Ohio State University and Olin
Distinguished Professor of National Security
Studies at the United States Military
Academy. From June, 1987 to June, 1992, he
was the Supreme Allied Commander, Europe and
the 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; Chairman, The Rockefeller
Foundation, charitable foundation; and
Director, NYNEX, telephone company; 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, energy and
chemicals; Director or Trustee, the Seligman
Group of Investment Companies; Director of
Kimberly-Clark Corporation, consumer
products, Bank of Oklahoma Holding Company,
American Petroleum Institute, Oklahoma City
Chamber of Commerce, Baptist Medical Center,
Oklahoma Chapter of the Nature Conservancy,
Oklahoma Medical Research Foundation and
United Way Advisory Board; Chairman of
Oklahoma City Public Schools Foundation; and
Member of the Business Roundtable and
National Petroleum Council. 123 Robert S.
Kerr Avenue, Oklahoma City, OK 73102
7
<PAGE>
JOHN E. MEROW* Director
(66)
Chairman and Senior Partner, Sullivan &
Cromwell, law firm; Director or Trustee, the
Seligman Group of Investment Companies; The
Municipal Art Society of New York;
Commonwealth Aluminum Corporation; the U.S.
Council for International Business; and the
U.S.-New Zealand Council; Chairman, American
Australian Association; Member of the
American Law Institute and Council on
Foreign Relations; 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; Chairman of
the Board of Trustees of St. George's School
(Newport, RI); formerly, Director, the
National Association of Independent Schools
(Washington, DC) St. Bernard's Road, P.O.
Box 449, Gladstone, NJ 07934
JAMES C. PITNEY Director
(69)
Partner, Pitney, Hardin, Kipp & Szuch, law
firm; Director 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.;
and 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
RONALD T. SCHROEDER* Director and Member of the Executive
(48) Committee
Director, Managing Director and Chief
Investment Officer, Institutional, J. & W.
Seligman & Co. Incorporated, investment
managers and advisors; and Seligman
Advisors, Inc., advisors; Director or
Trustee, the Seligman Group of Investment
Companies; Director, Seligman Holdings,
Inc., holding company; Seligman Financial
Services, Inc., distributor; Seligman
Henderson Co., advisors; and Seligman
Services, Inc., broker/dealer; formerly,
President, the Seligman Group of Investment
Companies, except Seligman Quality Municipal
Fund, Inc. and Seligman Select Municipal
Fund, Inc.; and Director, J. & W. Seligman
Trust Company; Seligman Data Corp.,
shareholder service agent; and Seligman
Securities, Inc., broker/dealer.
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
(61)
Executive Vice President, Chief Operating
Officer and Director, Sammons Enterprises,
Inc.; Director or Trustee, the Seligman
Group of Investment Companies; Red Man Pipe
and Supply Company, piping and other
materials; and C-SPAN. 300 Crescent Court,
Suite 700, Dallas, TX 75201
8
<PAGE>
LORIS D. MUZZATTI Vice President and Portfolio Manager
(39)
Managing Director (formerly, Vice President
and Portfolio Manager), J. & W. Seligman &
Co. Incorporated, investment managers and
advisers; Vice President and Portfolio
Manager, two other open-end investment
companies in the Seligman Group of
Investment Companies.
CHARLES C. SMITH, JR. Vice President and Portfolio Manager
(39)
Managing Director (formerly, Senior Vice
President and Senior Investment Officer), J.
& W. Seligman & Co. Incorporated, investment
managers and advisers; 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
(34)
Managing Director (formerly, Vice President,
Investment Officer), J. & W. Seligman & Co.
Incorporated, investment managers and
advisers; Vice President and Portfolio
Manager, one other open-end investment
company in the Seligman Group of Investment
Companies; and Portfolio Manager, Seligman
Henderson Co., adviser; formerly, Senior
Vice President, Portfolio Management, Chuo
Trust-JWS Advisors, Inc., adviser.
ARSEN MRAKOVCIC Vice President and Portfolio Manager
(31)
Managing Director (formerly, Vice President,
Investment Officer), J. & W. Seligman & Co.
Incorporated, investment managers and
advisers; and Vice President and Portfolio
Manager, one other open-end investment
company in the Seligman Group of Investment
Companies; formerly, Portfolio Assistant, J.
& W. Seligman & Co. Incorporated.
LEONARD J. LOVITO Vice President and Portfolio Manager
(35)
Vice President, Investment Officer, J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; Vice President and
Portfolio Manager, two other open-end
investment companies in the Seligman Group
of Investment Companies.
DANIEL J. CHARLESTON Portfolio Manager
(36)
Vice President, Investment Officer, J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; and Vice President
and Portfolio Manager of one other open-end
investment company in the Seligman Group of
Investment Companies.
LAWRENCE P. VOGEL Vice President
(39)
Senior Vice President, Finance, J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; Seligman Financial
Services, Inc., broker/dealer; and Seligman
Advisors, Inc., advisers; 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., advisers; formerly, Senior
Vice President, Seligman Securities, Inc.,
broker/dealer; and Vice President, Finance
J. & W. Seligman Trust Company, trust
company.
9
<PAGE>
FRANK J. NASTA Secretary
(31)
Senior Vice President, Law and Regulation,
and Corporate Secretary, J. & W. Seligman &
Co. Incorporated, investment managers and
advisers; and Seligman Advisors, Inc.,
advisers; Corporate Secretary, the Seligman
Group of Investment Companies; Seligman
Financial Services, Inc., broker/dealer
Seligman Henderson Co., advisers; Seligman
Services, Inc., broker/dealer and Seligman
Data Corp., shareholder service agent;
formerly, Secretary, J. & W. Seligman Trust
Company, trust company; and attorney, Seward
and Kissel, law firm.
THOMAS G. ROSE Treasurer
(38)
Treasurer, the Seligman Group of Investment
Companies; and Seligman Data Corp.,
shareholder service agent; formerly,
Treasurer, American Investors Advisors, Inc.
and the American Investors Family of Funds.
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.
<TABLE>
<CAPTION>
Compensation Table
Pension or Total Compensation
Aggregate Retirement Benefits from Registrant
Name and Compensation From Accrued as part of and Fund Complex
Position with Registrant Registrant (1) Fund Expenses Paid to Directors (2)
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President 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
<S> <C> <C> <C>
John R. Galvin, Director 1,470.28 N/A $ 41,252.75
Alice S. Ilchman, Director 2,423.68 N/A 68,000.00
Frank A. McPherson, Director 1,470.28 N/A 41,252.75
John E. Merow, Director 2,352.26 N/A 66,000.00(d)
Betsy S. Michel, Director 2,316.55 N/A 67,000.00
Douglas R. Nichols, Jr., Director* 881.98 N/A 24,747.25
James C. Pitney, Director 2,423.68 N/A 68,000.00
James Q. Riordan, Director 2,423.68 N/A 70,000.00
Herman J. Schmidt, Director* 881.98 N/A 24,747.25
Robert L. Shafer, Director 2,423.68 N/A 70,000.00
James N. Whitson, Director 2,352.26 N/A 68,000.00(d)
</TABLE>
(1) Based on remuneration received by the Directors of the Fund for the
year ended December 31, 1995.
(2) As defined in the Fund's Prospectus, the Seligman Group of
Investment Companies consists of seventeen investment companies.
* Retired May 18, 1995.
(d) Deferred. The total amounts of deferred compensation (including
interest) payable to Messrs. Merow, Pitney and Whitson as of
December 31, 1995 were $10,892, $3,536 and $6,483, respectively. Mr.
Pitney no longer defers current compensation.
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 accumulated balance thereof is included
in "Liabilities" in the Fund's financial statements.
10
<PAGE>
Directors and officers of the Fund are also trustees, directors and
officers of some or all of the other investment companies in the Seligman Group.
As of December 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
each of the Seligman Henderson Global Portfolios, 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 each of the Seligman Henderson Global Portfolios) provide that the Manager
(and the Subadviser, in the case of each of the Seligman Henderson Global
Portfolios) 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 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.
Each of the Seligman Henderson Global Portfolios 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 1995, 1994 and 1993:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Seligman Capital Portfolio .......................... $ 28,551 $ 23,120 $ 21,941
Seligman Cash Management Portfolio* ................. 18,365 12,837 14,216
Seligman Common Stock Portfolio ..................... 94,380 84,124 93,118
Seligman Communications and Information Portfolio ... 123,216 349** N/A
Seligman Fixed Income Securities Portfolio .......... 15,262 14,043 17,252
Seligman Frontier Portfolio ......................... 29,219 99** N/A
Seligman Henderson Global Portfolio** ............... 25,312 11,417 1,656
Seligman Henderson Global Smaller Companies Portfolio 17,210 159** N/A
Seligman High-Yield Bond Portfolio .................. 3,941** N/A N/A
Seligman Income Portfolio ........................... 45,797 42,854 45,567
</TABLE>
- - ------------------------
* The Manager, at its discretion, waived all of its fees.
** Fees paid from commencement of operations.
11
<PAGE>
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
recapitalization 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 Agreement with respect to the Seligman Henderson
Global Growth Opportunities Portfolio and the Seligman Henderson Global
Technology Portfolio was approved by the Board of Directors on March 21, 1996.
The Management Agreements will continue in effect until December 31 of each
year, with respect to each portfolio (except Seligman High-Yield Bond Portfolio,
which Management Agreement is in effect until December 31, 1996 and December 31
of each year thereafter; and except for Seligman Henderson Global Growth
Opportunities Portfolio and Seligman Henderson Global Technology Portfolio, the
Management Agreement with respect to which is in effect until December 31, 1997
and then 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 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 each of the Seligman Henderson Global Portfolios, 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 with respect to Seligman Henderson
Global Growth Opportunities Portfolio and Seligman Henderson Global Technology
Portfolio were approved by the Board of Directors at a meeting held on March 21,
1996. The Subadvisory Agreements will continue in effect until December 31 (in
the case of the Seligman Henderson Global Growth Opportunities Portfolio and the
Seligman Henderson Global Technology Portfolio until December 31, 1996), 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 $19 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
12
<PAGE>
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.
PORTFOLIO TRANSACTIONS, VALUATION AND REDEMPTION
As provided in the Management Agreements, the Manager (or in the case
of each of the Seligman Henderson Global Portfolios, 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, statistical 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, Seligman
Henderson Global Growth Opportunities Portfolio, Seligman Henderson Global
Technology Portfolio and Seligman High-Yield Bond Portfolio) for the years 1995,
and if applicable, 1994 and 1993, are set forth in the following table:
13
<PAGE>
<TABLE>
<CAPTION>
Brokerage Commissions
Total Brokerage Commission Paid to Others for
Brokerage Commissions Paid to Execution and
Execution (2) Paid (1) Seligman Securities (2) Statistical Services
- - ------------- -------- ----------------------- --------------------
1995 1994 1993 1995 1994 1993 1995 1994 1993
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Seligman Capital Portfolio $20,041 $ 8,412 $ 7,285 N/A N/A $ 275 $ 20,041 $ 8,412 $7,010
Seligman Common
Stock Portfolio 34,600 12,559 12,006 N/A N/A 1,984 34,600 12,559 10,022
Seligman Communications
and Information Portfolio 32,247 134 N/A N/A N/A N/A 32,247 134 N/A
Seligman Frontier
Portfolio 12,086 111 N/A N/A N/A N/A 12,086 111 N/A
Seligman Henderson
Global Portfolio 12,389 5,503 824 N/A N/A N/A 12,389 5,503 824
Seligman Henderson
Global Smaller
Companies Portfolio 12,794 180 N/A N/A N/A N/A 12,794 180 N/A
Seligman Income Portfolio 6,746 2,839 2,152 N/A N/A 635 6,746 2,839 1,517
</TABLE>
- - ---------------
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%, respectively, of total
brokerage commissions paid for 1993. The aggregate dollar amount of
each Portfolio's transactions for which Seligman Securities, Inc. acted
as broker was 2%, 51% and 40%, respectively, of the total dollar amount
of all commission transactions for 1993. 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 Securities Exchange Act
of 1934 prohibits members of U.S. 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 accordance 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.
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. Instruments
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.
14
<PAGE>
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, purchase 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 distributions 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 each of the Seligman Henderson Global Portfolios,
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 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.
15
<PAGE>
CUSTODIANS AND INDEPENDENT AUDITORS
Custodians. With the exception of each of the Seligman Henderson Global
Portfolios, 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 each of the Seligman Henderson Global Portfolios,
and in such capacity holds in a separate account assets received by it from or
for the account of each of these four 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, 1995 for all Seligman
Portfolios, Inc. (except Seligman Henderson Global Growth Opportunities
Portfolio and Seligman Henderson Global Technology Portfolio which had not
commenced operations) are incorporated herein by reference from the Fund's
audited 1995 Annual Report. The Statement of Assets and Liabilities of the
Seligman Henderson Global Growth Opportunities Portfolio and Seligman Henderson
Global Technology Portfolio included herein have been audited by Ernst & Young
LLP, independent auditors.
16
<PAGE>
<TABLE>
<CAPTION>
SELIGMAN PORTFOLIOS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
April 26, 1996
Seligman Henderson Seligman Henderson
Global Growth Global Technology
Opportunities Portfolio Portfolio
ASSETS
<S> <C> <C>
Cash ........................................................................... $10 $10
--- ---
Total Assets ................................................................... 10 10
--- ---
LIABILITIES .................................................................... 0 0
--- ---
Net assets equivalent to $10.00 per share (applicable to 1 share of
Capital Stock, $.001 par value; 20,000,000 shares each authorized) ............. $10 $10
=== ===
</TABLE>
Note 1. Organization
Seligman Henderson Global Growth Opportunities Portfolio and Seligman
Henderson Global Technology Portfolio (the "Portfolios") are portfolios of
Seligman Portfolios, Inc. (the "Fund"). The Fund is an open-end diversified
management investment company consisting of twelve separate portfolios. The
Portfolios had no operations other than the sale and issuance of one share each
of capital stock for $10 to Seligman Financial Services, Inc. the Fund's
Distributor, on April 26, 1996.
Note 2. Agreement
Under the Management Agreement, the Portfolios will pay J. & W.
Seligman & Co. Incorporated (the "Manager") a management fee for its services,
calculated daily and payable monthly, equal to 1.00% per annum of its average
daily net assets of which 0.90% is paid to Seligman Henderson Co. (the
"Subadviser"), a 50% owned affiliate of the Manager.
Note 3. Taxes
The Portfolios intend to meet the requirements of the Internal Revenue
Code of 1986, as amended, applicable to regulated investment companies and
intends to distribute substantially all of its taxable income. As such, the
Portfolios will not be subject to federal income taxes or excise taxes.
17
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders of
Seligman Portfolios, Inc. -
Seligman Henderson Global Growth Opportunities Portfolio and
Seligman Henderson Global Technology Portfolio
We have audited the accompanying statement of assets and liabilities of
Seligman Henderson Global Growth Opportunities Portfolio and Seligman Henderson
Global Technology Portfolio (two of the portfolio's comprising Seligman
Portfolios, Inc.) (the "Fund") as of April 26, 1996. This statement of assets
and liabililties is the responsibility of the Fund's management. Our
responsibility is to express an opinion on this statement of assets and
liabilities based on our audit.
We conducted our audit in accordance with generally accepted audited
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of assets and liabilities is
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosure in the statement of assets and
liabilities. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
statement of assets and liabilities presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to
above presents fairly, in all material respects, the financial position of
Seligman Portfolios, Inc. - Seligman Henderson Global Growth Opportunities
Portfolio and Seligman Henderson Global Technology Portfolio at April 26, 1996,
in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
April 29, 1996
18
<PAGE>
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, the Seligman Complex played a
major role in the geographical expansion and industrial development of the
United States.
The Seligman Complex:
.... Prior to 1900
o Helps finance America's fledgling railroads through underwriting.
o Is admitted to the New York Stock Exchange in 1869. Seligman remained
a member of the NYSE until 1993, when the evolution of its business
made it unnecessary.
o Becomes a prominent underwriter of corporate securities, including New
York Mutual Gas Light Company, later part of Consolidated Edison.
o Provides financial assistance to Mary Todd Lincoln and urges the
Senate to award her a pension.
o Is appointed U.S. Navy fiscal agent by President Grant.
o Becomes a leader in raising capital for America's industrial and urban
development.
...1900-1910
o Helps Congress finance the building of the Panama Canal.
...1910s
o Participates in raising billions for Great Britain, France and Italy,
helping to finance World War I.
...1920s
o Participates in hundreds of successful 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.
o 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
o Assumes management of Broad Street Investing Co. Inc., its first
mutual fund, today known as Seligman Common Stock Fund, Inc.
o Establishes Investment Advisory Service.
19
<PAGE>
...1940s
o Helps shape the Investment Company Act of 1940.
o 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.
o Assumes management of National Investors Corporation, today Seligman
Growth Fund, Inc.
o Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
...1950-1989
o Develops new open-end investment companies. Today, manages more than
40 mutual fund portfolios.
o Helps pioneer state-specific, tax-exempt municipal bond funds, today
managing a national and 18 state-specific tax-exempt funds.
o Establishes J. & W. Seligman Trust Company, and J. & W. Seligman
Valuations Corporation.
o Establishes Seligman Portfolios, Inc., an investment vehicle offered
through variable annuity products.
...1990s
o Introduces Seligman Select Municipal Fund, Inc. and Seligman Quality
Municipal Fund, Inc. two closed-end funds that invest in high quality
municipal bonds.
o In 1991 establishes a joint venture with Henderson Administration
Group plc, of London, known as Seligman Henderson Co., to offer global
and international investment products.
o Introduces Seligman Frontier Fund, Inc., a small capitalization mutual
fund.
o Launches Seligman Henderson Global Fund Series, Inc., which today
offers four separate series: Seligman Henderson International Fund,
Seligman Henderson Global Smaller Companies Fund, Seligman Henderson
Global Technology Fund and Seligman Henderson Global Growth
Opportunities Fund.
20
<PAGE>
- - --------------------------------------------------------------------------------
A N N U A L R E P O R T
- - --------------------------------------------------------------------------------
------------------------------------
SELIGMAN
--------
PORTFOLIOS,
-----------
INC.
----
[LOGO]
December 31, 1995
------------------------------------
<PAGE>
=============================
SELIGMAN
PORTFOLIOS,
INC.
-----------------------------
-----------------------------
-----------------------------
February 2, 1996
<PAGE>
Dear Contract Owner:
J. & W. Seligman & Co. Incorporated, as Manager of Seligman Portfolios,
Inc., is pleased to provide the enclosed audited financial statements and
accompanying information for Seligman Portfolios, Inc., the underlying
investment vehicle for your policy, for the 12 months ended December 31, 1995.
It can be unanimously concluded that 1995 was a banner year for the US
financial markets. After a pessimistic start, many factors including low
inflation, falling interest rates, and strong corporate earnings paved the way
for a memorable year.
Overall, the market indices tell the best story. The Standard & Poor's 500
Composite Stock Price Index, the Ibbotson Long-Term Government Bond Index, and
the Wilshire 5000 were up 30% or more for the year. The leading market indices
have only twice, since the end of World War II, risen more than 1995's strong
advance.
In spite of the historic advances, the financial markets did teeter towards
the end of the year due to the Federal budget stalemate between the White House
and Congress. Nevertheless, the deadlock in Washington did not deter the Federal
Reserve Board from lowering short-term interest rates on December 19 -- a move
that quickly rejuvenated the financial markets.
Looking forward, the slowing economy, the budget negotiations, and the 1996
Presidential election are a few of the factors that may create somewhat more
volatile markets in the year ahead. We remain optimistic about each portfolio's
performance and will continue to search for, and invest in, those companies that
can sustain earnings growth in a challenging and competitive global business
environment -- a strategy we believe is key to investment performance.
We thank you for your continued confidence in Seligman Portfolios, Inc.,
and look forward to serving your investment needs in 1996 and the years ahead.
Respectfully,
/s/ WILLIAM MORRIS
William C. Morris
Chairman
J. & W. Seligman & Co. Incorporated
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Largest Portfolio Changes* (unaudited)
- - --------------------------------------------------------------------------------
During the six months ended December 31, 1995
<TABLE>
<CAPTION>
Shares or Shares or
Additions Principal Amount Reductions Principal Amount
--------------------- --------------------- --------------------- ---------------------
Holdings Holdings
Increase 12/31/95 Decrease 12/31/95
-------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
SELIGMAN CAPITAL PORTFOLIO
Common Stocks Common Stocks
Comshare ....................... 7,000 shs. 7,000 shs. Borders Group .................. 10,000 shs. --
Donaldson, Lufkin & Jenrette ... 6,000 6,000 Bristol-Myers Squibb ........... 2,000 --
Guidant ........................ 5,000 5,000 Ceridian ....................... 5,400 --
Hart Brewing ................... 10,650 10,650 Chrysler ....................... 2,100 --
Mid Atlantic Medical Services .. 7,400 7,400 DSC Communications ............. 3,400 --
Minerals Technologies .......... 5,000 5,000 EMC ............................ 6,300 --
Olin ........................... 2,300 2,300 HFS Group ...................... 2,000 2,400 shs.
Oxford Health Plans ............ 2,500 2,500 Motorola ....................... 2,400 --
Progressive (Ohio) ............. 3,700 3,700 Phelps Dodge ................... 2,100 --
WorldCom ....................... 5,100 5,100 USF&G .......................... 7,900 --
- - ------------------------------------------------------------------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO
Common Stocks Common Stocks
Applied Materials .............. 3,400 3,400 Ahmanson (H.F.) ................ 8,300 --
Disney, Walt ................... 2,400 2,400 American International Group ... 2,900 4,000(1)
FPL Group ...................... 6,000 6,000 Chubb .......................... 4,000 --
Harley-Davidson ................ 5,200 5,200 Dow Chemical ................... 3,900 3,900
Hasbro ......................... 9,400 9,400 GTE ............................ 6,200 --
Hewlett-Packard ................ 1,700 1,700 International Business Machines 5,200 --
Morton International ........... 4,200 4,200 KeyCorp ........................ 5,100 --
Texaco ......................... 4,800 4,800 Minnesota Mining & Manufacturing 4,000 4,200
Travelers ...................... 2,500 2,500 PacifiCorp ..................... 9,500 --
Union Pacific Resources ........ 13,800 13,800 Pennzoil ....................... 4,300 --
- - ------------------------------------------------------------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO
Common Stocks Common Stocks
Altera ......................... 17,000 17,000 Advanced Micro Devices ......... 5,500 --
KLA Instruments ................ 17,200 25,000(2) Aspect Telecommunications ...... 16,500(3) --
LSI Logic ...................... 22,000 22,000 Bell Microproducts ............. 20,000 --
Microsoft ...................... 10,000 10,000 BMC Software ................... 2,000 --
Silicon Valley Group ........... 25,000 25,000 Cognex ......................... 5,500(4) --
Simware ........................ 100,000 100,000 Mattson Technology ............. 3,500 --
Tekelec ........................ 50,000 50,000 Premisys Communications ........ 2,700 --
Tencor Instruments ............. 27,000 27,000 PRI Automation ................. 4,000 --
Teradyne ....................... 30,000 30,000 Softkey International .......... 8,000 --
Tower Semiconductor ............ 26,500 26,500 Submicron Systems .............. 20,000 --
- - ------------------------------------------------------------------------------------------------------------------------------------
SELIGMAN FIXED INCOME SECURITIES PORTFOLIO
U.S. Government Securities U.S. Government Securities
U.S. Treasury Bonds 8 7/8%, U.S. Treasury Notes 8 7/8%,
2/15/2019 .................... $300,000 $1,200,000 2/15/1996 .................... $300,000 --
Corporate Bonds Corporate Bonds
First Union 6.55%, 10/15/2035 200,000 200,000 James River 6.70%, 11/15/2003 . 150,000 --
</TABLE>
See footnotes on page P-3.
-- P-1 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Largest Portfolio Changes* (unaudited) (continued)
- - --------------------------------------------------------------------------------
During the six months ended December 31, 1995
<TABLE>
<CAPTION>
Additions Shares Reductions Shares
--------------------- --------------------- --------------------- ---------------------
Holdings Holdings
Increase 12/31/95 Decrease 12/31/95
-------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
SELIGMAN FRONTIER PORTFOLIO
Common Stocks Common Stocks
Amisys Managed Care Systems .... 20,000 20,000 Benson Eyecare ................. 2,250 --
California Energy .............. 10,160 12,060 C*ATS Software ................. 2,500 --
Ceridian ....................... 4,300 4,300 Expert Software ................ 1,500 --
Cognex ......................... 7,080 9,060(5) EZ Communications (Class A) .... 1,000 --
Credence Systems ............... 5,640 5,640 Lincare Holdings ............... 1,100 --
Cypress Semiconductor .......... 7,780 10,900(6) Living Centers of America ...... 710 --
Lam Research ................... 3,460 3,960 Patterson Dental ............... 680 --
Planar Systems ................. 9,010 9,010 Premisys Communications ........ 850 --
Tencor Instruments ............. 4,600 4,600 Trigen Energy .................. 860 --
Vicor .......................... 6,580 8,760(7) U.S. Xpress Enterprises (Class A) 2,510 --
- - ------------------------------------------------------------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL PORTFOLIO
Common Stocks Common Stocks
Cie Generale des Eaux .......... 652 652 Akzo Nobel ..................... 190 --
East Japan Railway ............. 13 25 BTR ............................ 6,600 --
Mitsui Marine & Fire ........... 8,000 8,000 Daiwa House Industry ........... 2,000 --
Mitsui O.S.K. Lines ............ 20,000 20,000 Fuji Bank ...................... 1,000 --
Nipppon Telegraph & Telephone .. 8 15 Groupe Danone .................. 150 --
Pioneer Electronics ............ 3,000 6,000 L'Oreal ........................ 95 --
Roussel ........................ 383 383 Legal & General Group .......... 3,000 --
Samsung Electronics ............ 1,000 1,000 Mitsubishi High-Tech ........... 1,000 --
Sumitomo Metal Industries ...... 21,000 21,000 Nippon Paper ................... 5,000 --
Zurich Versicherung ............ 173 193 Yamaha ......................... 1,000 4,000
- - ------------------------------------------------------------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER
COMPANIES PORTFOLIO
Common Stocks Common Stocks
Amisys Managed Care Systems .... 5,000 5,000 Adelsten (Class B) ............. 30 --
Bau Holdings ................... 1,380 1,380 Exar ........................... 435 --
BT Industries .................. 5,000 5,000 F.H. Faulding .................. 1,100 --
Electro Scientific Industries .. 1,750 1,890 FSI International .............. 300 --
Fotolabo Club .................. 175 175 General Nutrition .............. 130 --
Hornbach Baumarkt .............. 1,034 1,530(8) International House of Pancakes 145 --
Iro ............................ 4,700 4,700 Life Sciences International .... 4,000 --
Opta Food Ingredients .......... 3,700 3,700 PRI Automation ................. 230 --
Otra N.V ....................... 270 3,640(9) Speedway Motorsports ........... 275 --
Plettac ........................ 240 240 Valmet Oy ...................... 910 --
</TABLE>
See footnotes on page P-3.
-- P-2 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
During the six months ended December 31, 1995
<TABLE>
<CAPTION>
Principal Amount Principal Amount
Additions or Shares Reductions or Shares
--------------------- --------------------- --------------------- ---------------------
Holdings Holdings
Increase 12/31/95 Decrease 12/31/95
-------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
SELIGMAN HIGH-YIELD BOND PORTFOLIO
Corporate Bonds Corporate Bonds
Comcast 10 5/8%, 7/15/2012 ..... $92,000 $100,000 Cablevision Systems 10 3/4%,
Fonorola 12 1/2%, 8/15/2002 .... 100,000 100,000 4/1/2004 ....................... $8,000 --
IXC Communications 13%, Continental Homes Holdings 12%,
10/15/2005 ................... 100,000 100,000 8/1/1999 ....................... 8,000 --
Midland Cogeneration Hollywood Casino 14%,
Venture 11 3/4%, 4/1/1998 ....................... 8,000 --
7/23/2005 .................... 100,000 100,000 K-III Communications 10 5/8%,
Mobile Telecommunication 5/1/2002 ....................... 8,000 --
Technologies Kaiser Aluminum 12 3/4%,
13 1/2%, 12/15/2002 .......... 92,000 100,000 2/1/2003 ....................... 8,000 --
Premier Parks 12%, 8/15/2003 ... 100,000 100,000 NWCG Holdings 0%/13 1/2%,
Rogers Cable Systems 11%, 6/15/1999 ...................... 10,000 --
12/1/2015 .................... 100,000 100,000 OrNda Healthcorp 12 1/4%,
TransTexas Gas 11 1/2%, 5/15/2002 ...................... 8,000 --
6/15/2002 .................... 100,000 100,000 Stone Container 9 7/8%,
United Meridian 10 3/8%, 2/1/2001 ....................... 8,000 --
10/15/2005 ................... 100,000 100,000
Williamhouse-Regency 13%,
11/15/2005 ................... 100,000 100,000
- - ------------------------------------------------------------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO
Common Stocks Common Stocks
FPL Group ...................... 3,000 shs. 3,000 shs. Bank of Boston ................. 8,539 shs. --
Network Equipment Technologies . 4,857 4,857 Century Telephone .............. 5,921 --
Chemical Banking ............... 3,820 --
Convertible Preferred Stocks Dow Chemical ................... 3,500 --
American General 3% ............ 4,500 4,500 New England Electric ........... 3,000 --
International Paper Capital 5 1/4% 3,000 3,000
St. Paul Capital 6% ............ 4,500 4,500 Convertible Preferred Stocks
Snyder Oil (Class A) 6% ........ 5,000 5,000 Browning-Ferris 7 1/4% ........ 3,000 --
Subordinated Convertible Bonds Subordinated Convertible Bonds
TriMas 5%, 8/1/2003 ............ $200,000 $200,000 Bay Networks 5 1/4%, 5/15/2003 $100,000 --
Corporate Bonds James River 6.70%, 11/15/2003 .. 350,000 --
MBNA 6.15%, 10/1/2003 .......... 500,000 500,000
USA Waste Services 8 1/2%,
U.S. Government Securities 10/15/2002 ................... 200,000 --
U.S. Treasury Notes 7 3 1/44%,
12/31/1999 ................... 500,000 500,000 U.S. Government Securities
U.S. Treasury Notes 6 1 1/42%, U.S. Treasury Notes 7 1/4%,
5/15/2005 .................... 500,000 500,000 11/15/1996 ................... 500,000 --
</TABLE>
- - --------------------------------------------------------------------------------
* Largest portfolio changes from the previous midyear to the current year-end
are based on cost of purchases and proceeds from sales of securities.
(1) Includes 2,300 shares received as a result of a 3-for-2 stock split.
(2) Includes 6,000 shares received as a result of a 2-for-1 stock split.
(3) Includes 11,500 shares received as a result of a 2-for-1 stock split.
(4) Includes 2,000 shares received as a result of a 2-for-1 stock split.
(5) Includes 1,580 shares received as a result of a 2-for-1 stock split.
(6) Includes 2,500 shares received as a result of a 2-for-1 stock split.
(7) Includes 2,180 shares received as a result of a 2-for-1 stock split.
(8) Includes 477 shares received as a result of a 10-for-1 stock split.
(9) Includes 3,276 shares received as a result of a 10-for-1 stock split.
-- P-3 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Annual Performance Overview
- - --------------------------------------------------------------------------------
The following charts compare a $10,000 hypothetical investment made in each of
the Portfolios of Seligman Portfolios, Inc. (with the exception of Seligman Cash
Management Portfolio), since inception through December 31, 1995, to a $10,000
hypothetical investment made in the appropriate benchmark indices and/or
averages for the same period. Accompanying each chart is a discussion of the
economic factors, investment strategy, and sector performance that affected the
Portfolio during the past year.
Seligman Capital Portfolio
The chart and total returns do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
- - ----------------------------------------------
Average Annual Total Returns+
One Five Since
Year Yrs. Inception
---- ---- ---------
Seligman Capital 27.17% 18.14% 13.59%
Portfolio
Lipper Capital
Appreciation 30.40 17.62 13.60*
S&P 500 37.58 16.59 14.95*
*From June 30, 1988.
- - ----------------------------------------------
The following table is represented as a line chart in the printed material
Seligman Lipper
Capital Capital
Date Porftolio Appreciation S&P 500
---- --------- ------------ -------
6/21/88 ........ $10,000 $10,000 $10,000
6/30/88 ........ $10,000 $10,000 $10,000
9/30/88 ........ $10,090 $ 9,871 $10,034
12/31/88 ....... $10,060 $ 9,954 $10,344
3/31/89 ........ $10,240 $10,724 $11,077
6/30/89 ........ $10,840 $11,606 $12,055
9/30/89 ........ $12,040 $12,807 $13,346
12/31/89 ....... $11,717 $12,600 $13,621
3/31/90 ........ $11,344 $12,298 $13,211
6/30/90 ........ $12,715 $13,060 $14,042
9/30/90 ........ $ 9,720 $10,833 $12,113
12/31/90 ....... $11,344 $11,561 $13,199
3/31/91 ........ $13,596 $13,731 $15,116
6/30/91 ........ $13,778 $13,539 $15,081
9/30/91 ........ $15,455 $14,728 $15,888
12/31/91 ....... $18,042 $16,105 $17,220
3/31/92 ........ $16,842 $16,187 $16,785
6/30/92 ........ $15,601 $15,591 $17,104
9/30/92 ........ $16,791 $15,937 $17,643
12/31/92 ....... $19,268 $17,625 $18,531
3/31/93 ........ $19,904 $18,286 $19,341
6/30/93 ........ $19,552 $18,794 $19,435
9/30/93 ........ $20,846 $20,106 $19,938
12/31/93 ....... $21,514 $20,562 $20,340
3/31/94 ........ $20,837 $19,884 $19,626
6/30/94 ........ $19,010 $19,029 $19,708
9/30/94 ........ $20,736 $20,304 $20,672
12/31/94 ....... $20,526 $19,959 $20,669
3/31/95 ........ $21,802 $21,286 $22,681
6/30/95 ........ $23,112 $23,238 $24,847
9/30/95 ........ $25,196 $25,478 $26,821
12/31/95 ....... $26,102 $26,026 $28,436
Strong growth in corporate profits, with modest inflation and lower interest
rates, provided a beneficial economic environment for the strong US equity
markets in 1995. These favorable economic factors helped your portfolio's
technology and interest-sensitive issues post significant gains during the year.
On the other hand, poor retail sales, including the downhearted holiday period,
made it very difficult for retailers and industries associated with this sector.
Overweighting the technology sector of your portfolio, when the end-markets in
telecommunications and computer-related products were strong, contributed
positively to performance. Conversely, our underweighting of the utilities
sector, which benefited from the decline in interest rates, negatively affected
performance.
The financial sector was the strongest performing sector, benefiting from both a
favorable economic environment and strong individual company performance. The
basic materials sector, however, was the weakest sector, due mainly to declining
steel prices and generally poor earnings results.
Looking ahead, your portfolio is well positioned to take advantage of continued
strength in the US equity markets. Our well-diversified portfolio of strong,
profitable companies should provide good relative earnings gains in an
environment where the S&P 500 earnings growth is expected to slow.
Seligman Common Stock Portfolio
The chart and total returns do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
- - ----------------------------------------------
Average Annual Total Returns+
One Five Since
Year Yrs. Inception
---- ---- ---------
Seligman Common 27.28% 16.31% 13.55%
Stock Portfolio
Lipper Capital
Appreciation 30.75 15.32 12.82*
S&P 500 37.58 16.59 14.95*
*From June 30, 1988.
- - ----------------------------------------------
The following table is represented as a line chart in the printed material
Seligman Lipper
Common Growth
Stock and
Date Portfolio Income S&P 500
---- --------- ------ -------
6/21/88 ........ $10,000 $10,000 $10,000
6/30/88 ........ $10,000 $10,000 $10,000
9/30/88 ........ $10,190 $10,031 $10,034
12/31/88 ....... $10,180 $10,231 $10,344
3/31/89 ........ $10,581 $10,889 $11,077
6/30/89 ........ $11,223 $11,663 $12,055
9/30/89 ........ $12,317 $12,664 $13,346
12/31/89 ....... $12,635 $12,659 $13,621
3/31/90 ........ $12,522 $12,352 $13,211
6/30/90 ........ $13,315 $12,979 $14,042
9/30/90 ........ $10,965 $11,289 $12,113
12/31/90 ....... $12,237 $12,117 $13,199
3/31/91 ........ $14,425 $13,860 $15,116
6/30/91 ........ $14,287 $13,802 $15,081
9/30/91 ........ $15,281 $14,574 $15,888
12/31/91 ....... $16,295 $15,622 $17,220
3/31/92 ........ $16,604 $15,629 $16,785
6/30/92 ........ $16,472 $15,656 $17,104
9/30/92 ........ $17,146 $16,066 $17,643
12/31/92 ....... $18,272 $17,029 $18,531
3/31/93 ........ $18,928 $17,820 $19,341
6/30/93 ........ $19,127 $17,979 $19,435
9/30/93 ........ $19,608 $18,626 $19,938
12/31/93 ....... $20,454 $19,055 $20,340
3/31/94 ........ $19,621 $18,470 $19,626
6/30/94 ........ $19,730 $18,409 $19,708
9/30/94 ........ $20,727 $19,204 $20,672
12/31/94 ....... $20,463 $18,902 $20,669
3/31/95 ........ $21,933 $20,411 $22,681
6/30/95 ........ $23,314 $22,066 $24,847
9/30/95 ........ $24,769 $23,644 $26,821
12/31/95 ....... $26,044 $24,715 $28,436
Stable economic growth in the US, coupled with declining interest rates,
provided a positive backdrop for strong performance by financial markets in
1995. Also, the con tinuation of low inflation bene fited both stocks and bonds,
which made these in vestments more attractive relative to real assets such as
gold or real estate.
Our decision to modestly over weight financial stocks, based on our expectation
for a decline in interest rates in 1995, contributed greatly to your portfolio's
strong performance. We continue to remain broadly diversified in our stock
selection. While a strategy of betting heavily on individual sectors might have
improved near-term performance, we believe it would have jeopardized your
portfolio's long-term performance.
-- P-4 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
Looking forward, we believe that continued low inflation and modest economic
growth should provide a positive environment for investors in 1996. Stock
selection, though, will be an important factor in performance. We are committed
to the maintenance of a broadly diversified portfolio, focusing on companies
with reasonable current income and good earnings and dividend growth prospects.
Seligman Communications and Information Portfolio
The chart and total returns do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
- - ----------------------------------------------
Average Annual Total Returns+
One Since
Year Inception
---- ---------
Seligman Communications 38.55% 35.26%
and Information Portfolio
Lipper Science and
Technology 37.68 34.16*
S&P 500 37.58 29.23*
*From September 30, 1994.
- - ----------------------------------------------
The following table is represented as a line chart in the printed material
Seligman
Communications Lipper
and Science
Information and
Date Portfolio Technology S&P 500
---- --------- ---------- -------
10/11/94 ....... $10,000 $10,000 $10,000
12/31/94 ....... $10,440 $10,514 $10,020
3/31/95 ........ $11,030 $11,188 $10,996
6/30/95 ........ $14,690 $13,367 $12,046
9/30/95 ........ $16,950 $15,421 $13,003
12/31/95 ....... $14,464 $14,447 $13,786
Virtually every major segment of technology experienced robust growth during the
year: the global personal computer market grew 23% to a record 64 million units;
wireless telephone handsets and infrastructure equipment sales expanded by 35%;
the global semiconductor industry grew 40% to a record $150 billion; and the
Internet was transformed from a small on-line community of scien tists and
academics into a mass-market information super highway.
The fourth quarter however, witnessed a decline in technology stock prices. We
believe a number of factors were responsible, including pricing pressure on
certain types of memory chips, a slower than expected start for Microsoft's new
operating system, Windows 95, and slower unit growth in the US cellular phone
market.
In spite of the recent adversity in the technology sector, we remain optimistic
regarding the appreciation potential of your portfolio's holdings in 1996. Large
segments of the US technology sector are trading at unusually low relative
valuations to the broader market indices. In the past, such valuations have
augured favorably for subsequent returns. Therefore, we remain as enthused as
ever about the prospects for technology - the world's fastest growing major
industry. If anything, the pace of change has accelerated, and with it, the
potential opportunities.
Seligman Fixed Income Securities Portfolio
The chart and total returns do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
- - --------------------------------------------------
Average Annual Total Returns+
One Five Since
Year Yrs. Inception
---- ---- ---------
Seligman Fixed Income 19.18% 8.51% 7.74%
Securities Portfolio
Lipper Fixed Income
Average 15.31 9.01 8.44*
Lehman Brothers Gov't
Bond Index 18.34 9.37 9.64*
*From June 30, 1988.
- - --------------------------------------------------
The following table is represented as a line chart in the printed material
Lehman
Seligman Brothers Lipper
Fixed Government Fixed
Income Bond Income
Date Portfolio Index Average
---- --------- ----- -------
6/21/88 ........ $10,000 $10,000 $10,000
6/30/88 ........ $10,000 $10,000 $10,000
9/30/88 ........ $10,100 $10,169 $10,172
12/31/88 ....... $10,101 $10,265 $10,301
3/31/89 ........ $10,121 $10,373 $10,405
6/30/89 ........ $10,670 $11,207 $11,000
9/30/89 ........ $10,691 $11,300 $11,077
12/31/89 ....... $10,979 $11,725 $11,312
3/31/90 ........ $10,797 $11,580 $11,170
6/30/90 ........ $11,119 $11,985 $11,551
9/30/90 ........ $11,162 $12,085 $11,532
12/31/90 ....... $11,653 $12,748 $11,933
3/31/91 ........ $11,924 $13,025 $12,393
6/30/91 ........ $12,094 $13,201 $12,648
9/30/91 ........ $12,727 $13,953 $13,348
12/31/91 ....... $13,352 $14,701 $13,990
3/31/92 ........ $13,121 $14,444 $13,966
6/30/92 ........ $13,485 $15,016 $14,473
9/30/92 ........ $14,081 $15,757 $14,984
12/31/92 ....... $14,099 $15,764 $14,981
3/31/93 ........ $14,548 $16,476 $15,587
6/30/93 ........ $14,879 $16,952 $15,993
9/30/93 ........ $15,249 $17,503 $16,385
12/31/93 ....... $15,224 $17,444 $16,511
3/31/94 ........ $14,787 $16,919 $16,108
6/30/94 ........ $14,622 $16,725 $15,900
9/30/94 ........ $14,742 $16,796 $15,991
12/31/94 ....... $14,708 $16,855 $15,927
3/31/95 ........ $15,215 $17,648 $16,541
6/30/95 ........ $16,263 $18,743 $17,388
9/30/95 ........ $16,596 $19,074 $17,717
12/31/95 ....... $17,530 $19,946 $18,360
One of the key factors to your portfolio's performance is the movement of
interest rates. In 1995, moderating economic growth, subdued inflation, and the
potential for a credible deficit reduction accord helped lower interest rates.
The Federal Reserve Board (FRB) reduced the federal funds rate twice during the
year, resulting in a rally in bond prices. This led to a positive total return
for your portfolio.
We were neutral as we entered 1995, and began extending the maturities of the
issues in the portfolio by purchasing long-term bonds when economic growth
started to moderate and bring down the rate of inflation and interest rates. We
used this strategy in order to take advantage of declining interest rates, as
long-term bonds perform better than short-term bonds in a declining interest
rate environment.
We favored U.S. Treasury securities in 1995 over GNMA mortgage-backed
securities, as Treasury securities tend to outperform mortgage-backed securities
in a declining interest rate environment. Mortgage-backed securities' average
maturities shorten as interest rates decline due to the refinancing of
mortgages. In addition, your portfolio's position in investment-grade corporate
-- P-5 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Annual Performance Overview (continued)
- - --------------------------------------------------------------------------------
bonds, which represented 32.3% of the portfolio at December 31, contributed to
its strong performance.
Sluggish income growth and high consumer debt will more than likely slow
economic growth in the first half of 1996. This moderating growth trend, coupled
with a potential balanced-budget accord, could prompt the FRB to ease monetary
policy further and lead to continued interest rate declines. If this scenario
comes to fruition, we expect that we will continue to hold and purchase
long-maturity Treasury Bonds.
Seligman Frontier Portfolio
The chart and total returns do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
- - ----------------------------------------------
Average Annual Total Returns+
One Since
Year Inception
---- ---------
Seligman Frontier Portfolio 33.28% 32.48%
Lipper Small Company Fund 31.45 24.28*
NASDAQ 39.93 29.08*
*From September 30, 1994.
- - ----------------------------------------------
The following table is represented as a line chart in the printed material
Lipper
Small
Seligman Company
Frontier Fund
Date Portfolio Index NASDAQ
---- --------- ----- ------
10/11/94 ....... $10,000 $10,000 $10,000
12/31/94 ....... $10,580 $9,987 $9,839
3/31/95 ........ $11,300 $10,548 $10,692
6/30/95 ........ $12,260 $11,525 $12,213
9/30/95 ........ $13,780 $12,967 $13,654
12/31/95 ....... $14,101 $13,128 $13,766
The economic growth and con sumer demand in 1995, although slightly slower than
1994's pace, remained strong for the companies in your portfolio, leading to its
strong returns.
During the last quarter of 1995, retail sales slowed, which prompted retailers
to adjust inventories. These adjustments, in turn, had a negative impact on the
trucking industry as the need for new shipments and deliveries abated.
Consequently, both the retail and trucking industries had a difficult year, and
while we took action as quickly as possible, your portfolio experienced some
losses. On the upside, the continued demand for personal computers, pagers,
computer networking, and electronics in automobiles, created strong growth in
earnings and share prices for the companies in the technology segment of your
portfolio. Finally, the financial sector also performed well as it benefited
from the benign interest rate environment and strong demand for new loans.
The outlook for the year ahead is similar to what we have been experiencing.
Moderate inflation and low interest rates make for a favorable investment
environment. Valuations in the small-cap universe are reasonable. This is
especially true of the stocks in your portfolio. Corporate earnings continue to
look good, and the managements of the corporations in your portfolio continue to
express positive outlooks for the coming year.
Seligman Henderson Global Portfolio
The chart and total returns do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
- - ----------------------------------------------
Average Annual Total Returns+
One Since
Year Inception
---- ---------
Seligman Henderson Global
Portfolio 11.34% 10.05%
EAFE Index 11.54 10.53
MSCI World Index 21.31 13.04
- - ----------------------------------------------
The following table is represented as a line chart in the printed material
Seligman
Henderson MSCI
Global EAFE World
Date Portfolio Index Index
---- --------- ----- -----
5/3/93 ......... $10,000 $10,000 $10,000
6/30/93 ........ $10,010 $10,057 $10,148
9/30/93 ........ $10,480 $10,731 $10,637
12/31/93 ....... $11,439 $10,830 $10,821
3/31/94 ........ $10,987 $11,216 $10,900
6/30/94 ........ $11,399 $11,797 $11,241
9/30/94 ........ $11,751 $11,816 $11,495
12/31/94 ....... $11,591 $11,704 $11,425
3/31/95 ........ $11,428 $11,931 $11,975
6/30/95 ........ $11,765 $12,027 $12,502
9/30/95 ........ $12,603 $12,538 $13,216
12/31/95 ....... $12,905 $13,055 $13,860
Overall, economic factors have played a relatively modest role in the direction
of international stock markets. Economies have gener ally been growing steadily
in the more mature countries of the world, although there are some signs of
overheating in the Pacific. The consistent decline in inflation almost
everywhere has been a very positive feature with rates of inflation invariably
coming in lower than consensus estimates. This factor has helped bond markets,
and long-bond yields have declined virtually everywhere, providing a positive
backdrop for international equity investing.
The key economic question going forward is whether the slowdown in global growth
is just temporary or whether it presages a move towards recession. We support
the former view as we see modest growth in consumer spending next year helping
to keep economies moving along -- although not at a particularly rapid pace.
-- P-6 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
This scenario should also be reasonably favorable for inflation, and there still
appears to be very few significant inflationary pressures on a global basis.
With this background in mind, we continue to favor financial assets. Provided
there is some economic growth this year, corporate earnings should continue to
improve leading to a positive stock market background.
Seligman Henderson Global Smaller Companies Portfolio
The chart and total returns do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
- - ----------------------------------------------
Average Annual Total Returns+
One Since
Year Inception
---- ---------
Seligman Henderson Global
Smaller Companies Portfolio 17.38% 17.30%
Lipper Global Small
Companies Average 15.62 8.54*
MSCI World Index 21.31 16.11*
*From September 30, 1994.
- - ----------------------------------------------
The following table is represented as a line chart in the printed material
Seligman
Henderson Lipper
Global Global
Smaller Small MSCI
Companies Companies World
Date Portfolio Average Index
---- --------- ------- -----
10/11/94 ....... $10,000 $10,000 $10,000
12/31/94 ....... $10,353 $ 9,584 $ 9,939
3/31/95 ........ $10,594 $ 9,470 $10,417
6/30/95 ........ $10,886 $10,182 $10,876
9/30/95 ........ $11,860 $11,047 $11,497
12/31/95 ....... $12,152 $11,081 $12,057
Generally, the economic back ground has had a rather mixed effect on smaller
companies worldwide. In Japan, smaller companies performed poorly as the economy
continued to suffer from the effects of the strong Yen. European smaller
companies performed reasonably well in the early part of the year. However, with
more recent evidence of slowing economies and fears over what 1996 will bring,
smaller companies have begun to underperform larger companies. By contrast, in
the US, economic factors have had little impact on smaller companies, which have
been boosted by the strength of the technology sector.
Outside the US, smaller companies have generally suffered in recent months as
economic growth around the world has slowed. Our economic forecasts suggest that
economic growth should improve during 1996, and this would provide a reasonably
benign backdrop for smaller companies. We see particularly attractive value in
Continental Europe; however, the area with the most potential to improve is
Japan -- provided its economy does improve next year. We believe this will be
the case and, therefore, we are likely to increase our Japanese weighting
steadily over the next few months. Overall, smaller companies continue to
provide an abundance of exciting investment opportunities, and we believe the
background for investing should be very positive.
Seligman High-Yield Bond Portfolio
The chart and total returns do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
- - ----------------------------------------------
Average Annual Total Return+
Since
Inception
---------
Seligman High Yield Bond Portfolio 7.37%
Lipper High-Yield Bond Fund Index 8.79
Merrill Lynch Master Index 10.50
- - ----------------------------------------------
The following table is represented as a line chart in the printed material
Lipper
Seligman High-Yield Merrill
High-Yield Bond Lynch
Bond Fund Master
Date Portfolio Index Index
---- --------- ----- -----
5/1/95 ......... $10,000 $10,000 $10,000
5/31/95 ........ $10,000 $10,225 $10,312
6/30/95 ........ $10,030 $10,261 $10,390
7/31/95 ........ $10,160 $10,469 $10,509
8/31/95 ........ $10,150 $10,489 $10,573
9/30/95 ........ $10,300 $10,600 $10,693
10/31/95 ....... $10,440 $10,671 $10,769
11/30/95 ....... $10,540 $10,723 $10,875
12/31/95 ....... $10,737 $10,879 $11,050
The decline in interest rates during 1995 had a positive impact on the
performance and growth of your portfolio throughout the year. Increased demand
for high current income was evident as investors infused $10.2 billion into
high-yield mutual funds.
Your portfolio continued its strategy of investing in credits with improving
cash flows, strong industry fundamentals, and seasoned management teams. The
hotel and gaming sectors performed well, in particular those located in Atlantic
City, as fears of increased competition subsided. Additionally, strong demand
within the communications area helped advance many of your portfolio's holdings
in this sector. Finally, the health care and utility sectors continue to show
positive trends.
We continue to find the high-yield marketplace an attractive investment for
those seeking a high level of current income. We expect credit quality to show
steady improvements within the media sectors, with tele commu ni cations reform
as the driving force.
-- P-7 --
<PAGE>
- - --------------------------------------------------------------------------------
Annual Performance Overview (continued) December 31, 1995
- - --------------------------------------------------------------------------------
Seligman Income Portfolio
The chart and total returns do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
- - ----------------------------------------------
Average Annual Total Returns+
One Five Since
Year Yrs. Inception
---- ---- ---------
Seligman Income 17.98% 13.56% 10.03%
Portfolio
Lipper Income 22.10 12.69 10.69*
S&P 500 37.58 16.59 14.95*
*From June 30, 1988.
- - ----------------------------------------------
The following table is represented as a line chart in the printed material
Seligman
Income Lipper
Date Portfolio S&P 500 Income
---- --------- ------- ------
6/21/88 ........ $10,000 $10,000 $10,000
6/30/88 ........ $10,000 $10,000 $10,000
9/30/88 ........ $10,090 $10,034 $10,160
12/31/88 ....... $10,110 $10,344 $10,272
3/31/89 ........ $10,452 $11,077 $10,615
6/30/89 ........ $11,097 $12,055 $11,183
9/30/89 ........ $11,379 $13,346 $11,622
12/31/89 ....... $11,587 $13,621 $11,776
3/31/90 ........ $11,566 $13,211 $11,593
6/30/90 ........ $11,673 $14,042 $11,918
9/30/90 ........ $10,512 $12,113 $11,311
12/31/90 ....... $10,880 $13,199 $11,790
3/31/91 ........ $12,105 $15,116 $12,793
6/30/91 ........ $12,609 $15,081 $13,032
9/30/91 ........ $13,639 $15,888 $13,910
12/31/91 ....... $14,241 $17,220 $14,680
3/31/92 ........ $14,823 $16,785 $14,826
6/30/92 ........ $15,190 $17,104 $15,288
9/30/92 ........ $15,747 $17,643 $15,838
12/31/92 ....... $16,479 $18,531 $16,122
3/31/93 ........ $17,376 $19,341 $16,955
6/30/93 ........ $17,853 $19,435 $17,337
9/30/93 ........ $18,389 $19,938 $17,903
12/31/93 ....... $18,518 $20,340 $18,075
3/31/94 ........ $17,736 $19,626 $17,539
6/30/94 ........ $17,199 $19,708 $17,453
9/30/94 ........ $17,785 $20,672 $17,789
12/31/94 ....... $17,413 $20,669 $17,546
3/31/95 ........ $18,042 $22,681 $18,512
6/30/95 ........ $19,265 $24,847 $19,601
9/30/95 ........ $20,400 $26,821 $20,501
12/31/95 ....... $20,544 $28,436 $21,421
The dramatic decline in interest rates in 1995 had a very positive impact on
your portfolio. Investors' expectations for stable economic growth coupled with
modest inflation greatly benefited income-sensitive investments such as bonds,
convertible securities, and higher yielding equities - traditional investments
for your portfolio.
The financial, technology, and utility industries - three of the larger sectors
in the convertible and equity portions of your portfolio - did particularly
well. Additionally, the bonds held in your portfolio contributed not only high
current income, but also solid capital appreciation. Issue selection will be
extremely important for your portfolio's performance in 1996. We will pay
particular attention to identifying value, both in the stock and bond markets.
- - ----------
+ Performance data quoted represent past performance and assume that all
dividends and distributions are invested in additional shares. The investment
return and principal value of an investment will fluctuate so that shares, if
redeemed, may be worth more or less than their original cost. Past performance
is not indicative of future investment results.
-- P-8 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN CAPITAL PORTFOLIO
Shares Value
------ -----
COMMON STOCKS -- 95.2%
AUTOMOTIVE AND RELATED -- 3.1%
Cooper Tire & Rubber ........................ 5,000 $ 123,125
Harley-Davidson ............................. 5,800 166,750
-----------
289,875
-----------
BASIC MATERIALS -- 3.1%
Nucor ....................................... 2,100 119,962
Olin ........................................ 2,300 170,775
-----------
290,737
-----------
BUSINESS SERVICES AND SUPPLIES -- 1.7%
Interpublic Group of Companies .............. 3,600 156,150
-----------
COMPUTER GOODS AND SERVICES -- 5.5%
Altera* ..................................... 2,200 109,312
FIserv* ..................................... 6,000 179,625
Intel ....................................... 2,400 136,350
Sequent Computer Systems .................... 6,000 86,250
-----------
511,537
-----------
CONSUMER GOODS AND SERVICES -- 8.6%
Estee Lauder* ............................... 2,500 87,187
Masco ....................................... 4,600 144,325
Newell ...................................... 5,800 150,075
Oakley* ..................................... 5,400 183,600
Tambrands ................................... 1,600 76,400
Tommy Hilfiger* ............................. 3,700 156,787
-----------
798,374
-----------
DRUGS AND HEALTH CARE -- 11.5%
Amgen* ...................................... 3,600 213,525
Arrow International ......................... 3,000 121,875
Columbia/HCA Healthcare ..................... 2,900 147,175
Humana* ..................................... 5,300 145,087
Mid Atlantic Medical Services ............... 7,400 179,450
Oxford Health Plans ......................... 2,500 184,375
Sunrise Medical * ........................... 4,000 74,000
-----------
1,065,487
-----------
FINANCIAL SERVICES -- 11.5%
Amerin* ..................................... 7,200 192,150
Donaldson, Lufkin & Jenrette ................ 6,000 187,500
MBNA ........................................ 4,800 177,000
Progressive (Ohio) .......................... 3,700 180,838
Transatlantic Holdings ...................... 1,700 124,738
Travelers ................................... 3,300 207,488
-----------
1,069,714
-----------
- - ----------
* Non-income producing security.
See notes to financial statements.
-- P-9 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- - --------------------------------------------------------------------------------
SELIGMAN CAPITAL PORTFOLIO (continued)
Shares Value
------ -----
FOOD AND FOOD SERVICES -- 4.4%
Brinker International* ...................... 5,200 $ 78,650
Hart Brewing ................................ 10,650 159,750
PepsiCo ..................................... 3,000 167,625
-----------
406,025
-----------
LEISURE AND RELATED -- 10.4%
Chris-Craft Industries* ..................... 3,600 155,700
Circus Circus Enterprises* .................. 3,700 103,137
HFS Group* .................................. 2,400 196,200
Infinity Broadcasting* ...................... 3,700 137,825
Mattel ...................................... 6,250 192,187
Mirage Resorts* ............................. 5,200 179,400
-----------
964,449
-----------
MEDICAL EQUIPMENT -- 3.5%
Guidant ..................................... 5,000 211,250
Physio-Control International* ............... 6,200 112,375
-----------
323,625
-----------
RETAIL TRADE -- 5.5%
Home Depot .................................. 3,500 167,562
Illinois Tool Works ......................... 2,700 159,300
Nordstrom ................................... 2,400 96,900
OfficeMax* .................................. 4,100 91,738
-----------
515,500
-----------
SOFTWARE -- 14.9%
3DO* ........................................ 6,500 65,812
7th Level* .................................. 3,800 54,388
Activision* ................................. 17,500 193,594
Arbor Software .............................. 2,000 94,000
BMC Software* ............................... 1,500 63,938
Comshare .................................... 7,000 185,500
Microsoft* .................................. 1,900 166,844
Objective Systems Integrators* .............. 1,900 103,787
Spectrum Holobyte* .......................... 7,000 45,063
Sterling Software* .......................... 3,300 205,838
Sybase* ..................................... 4,020 144,218
Symantec* ................................... 2,700 62,606
-----------
1,385,588
-----------
SPECIALTY CHEMICALS -- 1.1%
Schulman, A ................................. 4,687 104,872
-----------
- - ----------
* Non-income producing security.
See notes to financial statements.
-- P-10 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN CAPITAL PORTFOLIO (continued)
Shares
or
Principal
Amount Value
------ -----
TECHNOLOGIES -- 3.6%
Litton Industries* .......................... 3,400 shs. $ 151,300
Minerals Technologies ....................... 5,000 182,500
-----------
333,800
-----------
TELECOMMUNICATIONS -- 6.8%
British Sky Broadcasting (ADRs) ............. 4,900 184,362
Century Telephone Enterprises ............... 4,100 130,175
Viacom (Class B) ............................ 3,000 142,125
WorldCom* ................................... 5,100 180,413
-----------
637,075
-----------
Total Common Stocks (Cost $7,412,353) ....... 8,852,808
REPURCHASE AGREEMENTS -- 10.8% (Cost $1,000,000)
HSBC Securities, Inc. 5%, maturing 1/3/1996
collateralized by: $985,000 U.S.
Treasury Notes 6 7/8%, 3/31/1997,
with a fair market value
of $1,020,059 ............................ $ 1,000,000 1,000,000
-----------
Total Investments -- 106.0% (Cost $8,412,353) 9,852,808
Other Assets Less Liabilities -- (6.0)% ..... (559,292)
-----------
Net Assets -- 100.0% ........................ $ 9,293,516
===========
- - ----------
* Non-income producing security.
See notes to financial statements.
-- P-11 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- - --------------------------------------------------------------------------------
SELIGMAN CASH MANAGEMENT PORTFOLIO
Annualized
Yield on
Purchase Principal
Date Amount Value
--------- --------- ---------
U.S. GOVERNMENT SECURITIES -- 45.5%
U.S. Treasury Bills, 3/7/1996 ............... 5.50% $1,600,000 $1,584,365
U.S. Treasury Bills, 4/25/1996 .............. 5.37 2,000,000 1,966,906
----------
Total U.S. Government Securities (Cost $3,551,271) 3,551,271
----------
BANKERS' ACCEPTANCES -- 2.5% (Cost $198,047)
Chase Manhattan Bank, New York, 3/4/1996 .... 5.76 200,000 198,047
----------
CERTIFICATES OF DEPOSIT -- 6.4%
Harris Trust & Savings, Chicago, 3/1/1996 ... 5.79 300,000 300,010
Wachovia Bank of Georgia, 1/25/1996 ......... 5.86 200,000 200,003
----------
Total Certificates of Deposit (Cost $500,013) 500,013
----------
COMMERCIAL PAPER -- 37.6%
American Express Credit Corp., 1/17/1996 .... 5.75 250,000 249,371
American General Finance Corp., 2/21/1996 ... 5.74 300,000 297,603
AT&T Capital Corp., 3/15/1996 ............... 5.60 300,000 296,596
Associates Corp. of North America, 4/16/1996 5.55 350,000 344,383
Beneficial Corp., 2/21/1996 ................. 5.57 300,000 297,658
CoreStates Financial Corp., 3/27/1996 ....... 5.61 300,000 296,044
Ford Motor Credit Corp., 2/12/1996 .......... 5.73 300,000 298,023
General Electric Capital Corp., 2/21/1996 ... 5.75 300,000 297,603
John Deere Capital Corp., 1/31/1996 ......... 5.77 250,000 248,821
Pitney Bowes Credit Corp., 2/2/1996 ......... 5.71 300,000 298,493
----------
Total Commercial Paper (Cost $2,924,595) .... 2,924,595
----------
REPURCHASE AGREEMENTS -- 7.7% (cost $600,000)
HSBC Securities, Inc. 5%, maturing 1/3/1996
collateralized by:
$590,000 U.S. Treasury Notes 6 7/8%, 3/31/1997,
with a fair market value of $611,000 ..... 600,000 600,000
----------
Total Investments -- 99.7% (Cost $7,773,926). 7,773,926
Other Assets Less Liabilities -- 0.3% ....... 25,585
----------
Net Assets -- 100.0% ........................ $7,799,511
==========
SELIGMAN COMMON STOCK PORTFOLIO
Shares Value
------ -----
COMMON STOCKS -- 84.2%
ADVERTISING -- 1.1%
Omnicom Group ............................... 8,400 $ 312,900
-----------
AEROSPACE/DEFENSE -- 1.7%
General Motors (Class H) .................... 5,600 275,100
United Technologies ......................... 2,300 218,212
-----------
493,312
-----------
- - ----------
See notes to financial statements.
-- P-12 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO (continued)
Shares Value
------ -----
APPAREL AND TEXTILES -- 1.2%
Liz Claiborne ............................... 5,800 $ 160,950
Unifi ....................................... 8,400 186,375
-----------
347,325
-----------
AUTOMOTIVE AND RELATED -- 1.8%
Echlin ...................................... 3,300 120,450
Genuine Parts ............................... 3,000 123,000
Harley-Davidson ............................. 5,200 149,500
The Pep Boys ................................ 5,400 138,375
-----------
531,325
-----------
BUILDING AND CONSTRUCTION -- 0.8%
Cemex S.A. (ADSs) ........................... 16,875 60,557
Sherwin-Williams ............................ 4,000 163,000
-----------
223,557
-----------
CHEMICALS -- 2.4%
Air Products and Chemicals .................. 6,200 327,050
Crompton & Knowles .......................... 7,600 100,700
Dow Chemical ................................ 3,900 274,463
-----------
702,213
-----------
CONSUMER GOODS AND SERVICES -- 11.3%
Coca-Cola ................................... 4,800 356,400
Colgate-Palmolive ........................... 4,200 295,050
Eastman Kodak ............................... 3,200 214,400
Gillette .................................... 8,200 427,425
International Flavor & Fragrance ............ 5,900 283,200
Lowe's ...................................... 4,300 144,050
Morton International ........................ 4,200 150,675
RJR Nabisco Holdings ........................ 4,400 135,850
PepsiCo ..................................... 12,100 676,088
Procter & Gamble ............................ 4,500 373,500
Rubbermaid .................................. 7,500 191,250
-----------
3,247,888
-----------
DRUGS AND HEALTH CARE -- 6.2%
Abbott Laboratories ......................... 6,200 258,850
American Home Products ...................... 2,000 194,000
Bard (C.R.) ................................. 5,000 161,250
Bausch & Lomb ............................... 2,500 99,062
Bristol-Myers Squibb ........................ 2,900 249,037
Guidant ..................................... 3,800 160,550
Mallinckrodt Group .......................... 3,700 134,588
Schering-Plough ............................. 9,600 525,600
-----------
1,782,937
-----------
- - ----------
See notes to financial statements.
-- P-13 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- - --------------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO (continued)
Shares Value
------ -----
ELECTRIC AND GAS UTILITIES -- 1.0%
FPL Group ................................... 6,000 $ 278,250
-----------
ELECTRONICS -- 0.8%
Motorola .................................... 4,200 239,400
-----------
ENERGY -- 11.5%
Anadarko Petroleum .......................... 2,900 156,962
Atlantic Richfield .......................... 2,100 232,575
Baker Hughes ................................ 7,000 170,625
Enron ....................................... 6,300 240,187
Mobil ....................................... 2,400 268,800
Panhandle Eastern ........................... 9,300 259,238
Royal Dutch Petroleum ....................... 3,700 522,163
Schlumberger ................................ 5,400 373,950
Sonat ....................................... 9,200 327,750
Texaco ...................................... 4,800 376,800
Union Pacific Resources ..................... 13,800 350,175
-----------
3,279,225
-----------
FINANCE AND INSURANCE -- 11.1%
Aetna Life & Casualty ....................... 3,200 221,600
American International Group ................ 4,000 370,000
Bank of New York ............................ 4,800 234,000
BankAmerica ................................. 2,200 142,450
Federal National Mortgage Association ....... 2,600 322,725
General Re .................................. 3,100 480,500
Household International ..................... 1,600 94,600
Morgan (J.P.) ............................... 1,900 152,475
NationsBank ................................. 5,814 404,800
PNC Bank .................................... 5,900 190,275
St. Paul Companies .......................... 2,500 139,062
State Street Boston ......................... 6,300 283,500
Travelers ................................... 2,500 157,187
-----------
3,193,174
-----------
FOOD -- 4.4%
Campbell Soup ............................... 4,700 282,000
ConAgra ..................................... 4,050 167,062
CPC International ........................... 4,200 288,225
General Mills ............................... 4,100 236,775
Sara Lee .................................... 9,500 302,813
-----------
1,276,875
-----------
INDUSTRIAL EQUIPMENT -- 2.6%
Emerson Electric ............................ 2,200 179,850
General Electric ............................ 7,900 568,800
-----------
748,650
-----------
- - ----------
See notes to financial statements.
-- P-14 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO (continued)
Shares Value
------ -----
LEISURE AND ENTERTAINMENT -- 1.5%
Disney, Walt ................................ 2,400 $ 141,600
Hasbro ...................................... 9,400 291,400
-----------
433,000
-----------
OFFICE EQUIPMENT -- 1.0%
Pitney Bowes ................................ 6,400 300,800
-----------
PAPER PRODUCTS -- 1.3%
International Paper ......................... 3,500 132,563
Kimberly-Clark .............................. 3,000 248,250
-----------
380,813
-----------
PRINTING AND PUBLISHING -- 2.5%
Donnelley (R.R.) ............................ 3,000 118,125
Knight-Ridder Newspapers .................... 5,600 350,000
Reader's Digest (Class A) ................... 2,700 138,375
Tribune ..................................... 2,000 122,250
-----------
728,750
-----------
RESTAURANTS -- 0.5%
Wendy's International ....................... 7,100 150,875
-----------
RETAIL TRADE -- 5.5%
American Stores ............................. 6,700 179,225
Dillard Department Stores ................... 4,200 119,700
Kmart ....................................... 5,800 42,050
Limited ..................................... 5,900 102,512
May Department Stores ....................... 6,800 287,300
Nordstrom ................................... 6,700 270,513
Penney (J. C.) .............................. 4,000 190,500
Sears, Roebuck .............................. 4,000 156,000
Wal-Mart .................................... 6,600 147,675
Woolworth ................................... 7,200 93,600
-----------
1,589,075
-----------
STEEL -- 0.4%
Nucor ....................................... 2,200 125,675
-----------
TECHNOLOGY -- 2.9%
Applied Materials ........................... 3,400 133,663
Cray Research ............................... 11,000 272,250
Hewlett-Packard ............................. 1,700 142,375
Intel ....................................... 2,400 136,350
Teradyne .................................... 5,700 142,500
-----------
827,138
-----------
TELECOMMUNICATIONS -- 1.9%
ALLTEL ...................................... 9,100 268,450
American Telephone & Telegraph .............. 4,200 271,950
-----------
540,400
-----------
- - ----------
See notes to financial statements.
-- P-15 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- - --------------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO (continued)
Shares
or
Principal
Amount Value
------ -----
TELEPHONE UTILITIES -- 1.0%
NYNEX ....................................... 5,300 shs. $ 286,200
-----------
TOBACCO -- 2.3%
Philip Morris ............................... 4,200 380,100
Schweitzer-Mauduit International ............ 300 6,938
UST Inc. .................................... 8,400 280,350
-----------
667,388
-----------
TRANSPORTATION -- 1.8%
Caliber System .............................. 4,850 236,437
Conrail ..................................... 2,900 203,000
NFC ......................................... 40,000 88,145
-----------
527,582
-----------
MISCELLANEOUS/DIVERSIFIED -- 3.7%
Corning (Delaware) .......................... 12,200 390,400
Dover ....................................... 4,400 162,250
Minnesota Mining & Manufacturing ............ 4,200 278,250
Tenneco ..................................... 5,000 248,125
-----------
1,079,025
-----------
Total Common Stocks (Cost $17,603,035) ...... 24,293,752
-----------
SUBORDINATED CONVERTIBLE BONDS -- 1.1%
EMC 4 1/4%, 1/1/2001 ........................ $ 125,000 124,375
MascoTech 4 1/2%, 12/15/2003 ................ 250,000 195,625
-----------
Total Subordinated Convertible Bonds
(Cost $321,514)............................ 320,000
-----------
REPURCHASE AGREEMENTS -- 13.9% (Cost $4,000,000)
HSBC Securities, Inc. 5%, maturing 1/3/1996
collateralized by:
$3,950,000 U.S. Treasury Notes 6 7/8%, 3/31/1997,
with a fair market value of $4,090,591 .... 4,000,000 4,000,000
-----------
Total Investments -- 99.2% (Cost $21,924,549) 28,613,752
Other Assets Less Liabilities -- 0.8% ....... 222,293
-----------
Net Assets -- 100.0% ........................ $28,836,045
===========
- - ----------
See notes to financial statements.
-- P-16 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO
Shares Value
------ -----
COMMON STOCKS -- 97.6%
COMMUNICATIONS INFRASTRUCTURE -- 11.1%
3Com* ....................................... 18,000 $ 840,375
CIDCO* ...................................... 31,000 786,625
Cisco Systems* .............................. 8,000 597,500
ECI Telecommunications ...................... 30,000 686,250
General Scanning* ........................... 20,000 195,000
Madge Networks* ............................. 10,000 445,625
StrataCom* .................................. 2,500 183,125
Tekelec* .................................... 50,000 528,125
-----------
4,262,625
-----------
COMPUTER HARDWARE/PERIPHERALS -- 14.6%
Adaptec* .................................... 16,000 656,000
Compaq Computers* ........................... 17,000 816,000
Electronics for Imaging* .................... 10,000 433,750
EMC* ........................................ 35,000 538,125
Komag* ...................................... 12,500 573,438
Mylex* ...................................... 20,000 386,250
Read-Rite* .................................. 20,000 463,750
Seagate Technology* ......................... 13,000 617,500
Tektronix ................................... 15,000 736,875
Vicor* ...................................... 20,000 397,500
-----------
5,619,188
-----------
COMPUTER SOFTWARE -- 21.4%
FTP Software* ............................... 23,000 668,437
Glenayre Technologies* ...................... 12,000 747,000
Informix* ................................... 27,000 811,687
Mentor Graphics ............................. 30,000 543,750
Microsoft ................................... 10,000 878,125
Netmanage* .................................. 15,000 346,875
Network General ............................. 18,000 596,250
Oracle Systems* ............................. 18,000 762,750
Parametric Technology* ...................... 12,000 796,500
Simware* .................................... 100,000 606,250
Smith Micro Software* ....................... 50,000 350,000
Symantec* ................................... 30,000 695,625
Synopsys* ................................... 11,000 419,375
-----------
8,222,624
-----------
CONTRACT MANUFACTURING -- 3.5%
Altron* ..................................... 25,000 746,875
Merix* ...................................... 20,000 593,750
-----------
1,340,625
-----------
SEMICONDUCTORS -- 23.3%
Altera* ..................................... 17,000 844,687
Cypress Semiconductor* ...................... 52,000 663,000
Integrated Device Technology* ............... 40,000 517,500
- - ----------
* Non-income producing security.
See notes to financial statements.
-- P-17 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- - --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO (continued)
Shares Value
------ -----
SEMICONDUCTORS (continued)
Intel ....................................... 13,000 $ 738,563
Lattice Semiconductor ....................... 24,000 784,500
Linear Technology ........................... 10,000 393,750
LSI Logic* .................................. 22,000 720,500
Maxim Integrated Products* .................. 20,000 770,000
Microchip Technology* ....................... 21,000 769,125
National Semiconductor* ..................... 30,000 667,500
Tower Semiconductor* ........................ 26,500 574,719
VLSI Technology* ............................ 40,000 722,500
Xilinx* ..................................... 20,000 607,500
Zycon ....................................... 15,000 170,625
-----------
8,944,469
-----------
SEMICONDUCTOR CAPITAL EQUIPMENT -- 23.7%
Amtel ....................................... 30,000 667,500
Applied Materials ........................... 17,000 668,312
Asyst Technologies .......................... 20,000 707,500
Credence Systems* ........................... 25,000 568,750
Electro Scientific* ......................... 25,000 721,875
Electroglas* ................................ 30,000 757,500
Fusion Systems* ............................. 2,000 55,500
Information Storage Devices* ................ 35,000 385,000
KLA Instruments* ............................ 25,000 653,125
Lam Research* ............................... 16,000 730,000
Novellus Systems* ........................... 13,000 703,625
Silicon Valley Group* ....................... 25,000 632,813
Tencor Instruments* ......................... 27,000 658,125
Teradyne* ................................... 30,000 750,000
Varian Associates ........................... 10,000 477,500
-----------
9,137,125
-----------
Total Common Stocks (Cost $41,365,744) ...... 37,526,656
Short-Term Holdings -- 2.6% (Cost $1,000,000) 1,000,000
-----------
Total Investments -- 100.2% (Cost $42,365,744) 38,526,656
Other Assets Less Liabilities -- (0.2)% ..... (84,563)
-----------
Net Assets -- 100.0% ........................ $38,442,093
===========
- - ----------
* Non-income producing security.
See notes to financial statements.
-- P-18 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN FIXED INCOME SECURITIES PORTFOLIO
Principal
Amount Value
------ -----
U.S. GOVERNMENT SECURITIES AND AGENCIES -- 49.7%
U.S. GOVERNMENT SECURITIES -- 36.0%
(Cost $1,411,772)
U.S. Treasury Bonds 8 7/8%, 2/15/2019 ....... $ 1,200,000 $ 1,619,250
-----------
U.S. GOVERNMENT AGENCIES -- 13.7%
Government National Mortgage Association:
10%, 12/15/2020+ ......................... 288,116 316,748
7 1/2%, 6/15/2023+ ....................... 291,440 300,001
-----------
Total U.S. Government Agencies (Cost $583,506) 616,749
-----------
Total U.S. Government Securities and Agencies
(Cost $1,995,278) ......................... 2,235,999
-----------
CORPORATE BONDS -- 32.3%
AEGON N.V. 8%, 8/15/2006 .................... 150,000 169,296
American Home 7.90%, 2/15/2005 .............. 150,000 169,029
Capital One Bank 8 1/8%, 3/1/2000 ........... 150,000 161,535
First Union 6.55%, 10/15/2035 ............... 200,000 206,979
First USA Bank 5 3/4%, 1/15/1999 ............ 100,000 99,565
General Motors Acceptance 5 5/8%, 2/1/1999 .. 150,000 149,692
Golden West Financial 6.70%, 7/1/2002 ....... 150,000 154,454
News America Holdings 8 1/4%, 8/10/2018 ..... 150,000 164,067
United Telecommunications 9 1/2%, 4/1/2003 .. 150,000 178,041
-----------
Total Corporate Bonds (Cost $1,338,167) ..... 1,452,658
-----------
REPURCHASE AGREEMENTS -- 11.1% (Cost $500,000)
HSBC Securities, Inc. 5%, maturing 1/2/1996
collateralized by:
$495,000 U.S. Treasury Notes 6 1/8%, 7/31/1996,
with a fair market value of $509,761 ...... 500,000 500,000
-----------
Total Investments -- 93.1% (Cost $3,833,445). 4,188,657
Other Assets Less Liabilities -- 6.9% ....... 307,891
-----------
Net Assets -- 100.0% ........................ $ 4,496,548
===========
- - ----------
+ Investments in mortgage-backed securities are subject to principal paydowns.
As a result of prepayments from refinancing or satisfaction of the underlying
mortgage instruments, the average life may be less than the stated maturity.
This in turn may impact the ultimate yield realized from these investments.
See notes to financial statements.
-- P-19 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- - --------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO
Shares Value
------ -----
COMMON STOCKS -- 94.8%
ADVERTISING -- 1.9%
DIMAC* ...................................... 2,790 $ 76,028
Heritage Media (Class A)* ................... 4,045 103,653
Katz Media Group* ........................... 3,530 62,216
-----------
241,897
-----------
AEROSPACE/DEFENSE -- 1.2%
BDM International* .......................... 5,110 148,190
-----------
APPAREL -- 0.9%
St. John Knits .............................. 2,060 109,438
-----------
BROADCASTING -- 2.5%
Argyle Television* .......................... 3,100 53,475
Evergreen Media (Class A)* .................. 4,800 153,600
Jacor Communications* ....................... 4,350 73,950
United Video Satellite Group (Class A)* ..... 962 26,215
-----------
307,240
-----------
BUSINESS GOODS AND SERVICES -- 16.1%
Barefoot .................................... 6,730 69,403
Bell & Howell Holdings* ..................... 4,890 136,920
BISYS Group* ................................ 4,875 148,687
Ceridian* ................................... 4,300 177,375
Corporate Express* .......................... 6,000 180,000
DST Systems* ................................ 4,400 125,400
HFS Group* .................................. 1,500 122,625
Interim Services* ........................... 2,140 74,098
Inter-Tel* .................................. 7,800 120,900
National Data ............................... 5,550 138,056
Nu-Kote Holdings (Class A)* ................. 7,200 123,300
SITEL* ...................................... 7,200 219,600
SPS Transaction Services .................... 2,570 76,136
US Office Products* ......................... 7,700 173,731
United Transnet* ............................ 8,100 124,538
-----------
2,010,769
-----------
CAPITAL GOODS -- 4.6%
The Carbide/Graphite Group* ................. 9,300 133,687
DT Industries ............................... 2,900 38,425
Fusion Systems* ............................. 1,245 34,549
Greenfield Industries ....................... 2,390 74,389
Oak Industries* ............................. 3,330 62,437
UCAR International .......................... 4,600 155,250
Wolverine Tube* ............................. 1,955 72,946
-----------
571,683
-----------
- - ----------
* Non-income producing security.
See notes to financial statements.
-- P-20 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO (continued)
Shares Value
------ -----
COMMUNICATIONS -- 6.9%
ADFlex Solutions* ........................... 4,000 $ 106,000
Arch Communications Group* .................. 5,165 124,283
Aspect Telecommunications* .................. 4,880 162,870
Cellular Communications International* ...... 180 9,022
CIDCO* ...................................... 4,880 123,830
Madge Networks* ............................. 3,939 175,532
MobileMedia (Class A)* ...................... 3,720 82,305
ProNet* ..................................... 2,470 73,019
-----------
856,861
-----------
COMPUTER HARDWARE PERIPHERALS -- 2.3%
Electronics for Imaging* .................... 2,720 117,980
Planar Systems* ............................. 9,010 172,316
-----------
290,296
-----------
COMPUTER SOFTWARE AND SERVICES -- 7.6%
Amisys Managed Care Systems* ................ 20,000 382,500
Mentor Graphics* ............................ 6,780 122,888
Netmanage* .................................. 6,110 141,294
Oak Technology* ............................. 500 21,312
SunGard Data Systems* ....................... 3,600 101,250
Synopsys* ................................... 4,840 184,525
-----------
953,769
-----------
CONSUMER GOODS AND SERVICES -- 4.7%
Buckeye Cellulose* .......................... 7,100 156,200
Central Parking ............................. 4,000 115,000
Oakley* ..................................... 5,700 193,800
ThermoLase* ................................. 4,500 116,437
-----------
581,437
-----------
DRUGS AND HEALTH CARE -- 9.8%
AmeriSource Health* ......................... 3,630 119,790
Clintrials Research* ........................ 3,730 75,532
Community Psychiatric Centers ............... 8,885 108,841
National Surgery Centers* ................... 2,200 50,050
Omnicare .................................... 4,200 187,950
Parexel International* ...................... 9,000 306,000
Protein Design Labs* ........................ 3,050 70,150
Total Renal Care Holdings* .................. 6,400 188,800
Vivra* ...................................... 4,800 120,600
-----------
1,227,713
-----------
- - ----------
* Non-income producing security.
See notes to financial statements.
-- P-21 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- - --------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO (continued)
Shares Value
------ -----
ELECTRONICS -- 16.2%
Cognex* ..................................... 9,060 $ 317,100
Credence Systems* ........................... 5,640 128,310
Cypress Semiconductor* ...................... 10,900 138,975
Electro Scientific Industries* .............. 4,330 125,029
Electroglas* ................................ 5,620 141,905
Information Storage Devices* ................ 8,400 92,400
Lam Research* ............................... 3,960 180,675
Lattice Semiconductor* ...................... 3,170 103,619
Microchip Technology* ....................... 3,000 109,875
Sanmina* .................................... 3,270 170,040
Semitool* ................................... 1,400 18,113
Silicon Valley Group* ....................... 1,000 25,313
Tencor Instruments* ......................... 4,600 112,125
Ultratech Stepper* .......................... 3,100 79,825
Vicor * ..................................... 8,760 174,105
Xilinx* ..................................... 2,200 66,825
Zilog* ...................................... 1,000 36,625
-----------
2,020,859
-----------
FARM EQUIPMENT -- 0.7%
AGCO ........................................ 1,710 87,210
-----------
FINANCIAL SERVICES -- 5.9%
Commerce Bancorp ............................ 2,500 55,156
First Investors Financial Services Group* ... 3,900 32,175
First Savings Bank of Washington* ........... 3,700 48,562
Flushing Financial* ......................... 3,300 50,325
GCR Holdings* ............................... 2,600 58,175
Jayhawk Acceptance* ......................... 8,300 77,813
Klamath First Bancorp* ...................... 3,500 47,469
Leasing Solutions* .......................... 3,900 58,988
T. Rowe Price ............................... 2,425 118,825
Roosevelt Financial Group ................... 7,300 140,525
Statewide Financial* ........................ 3,800 49,400
-----------
737,413
-----------
FOOD AND BEVERAGES -- 0.6%
Canandaigua Wine (Class A)* ................. 2,175 71,231
-----------
GAMING -- 0.9%
GTECH Holdings* ............................. 4,200 109,200
-----------
INSURANCE -- 1.4%
Capmac Holdings* ............................ 500 12,562
First Commonwealth * ........................ 6,200 159,650
-----------
172,212
-----------
MEDICAL PRODUCTS AND TECHNOLOGY -- 2.1%
Dentsply International ...................... 4,485 179,120
Sybron International* ....................... 3,280 77,900
-----------
257,020
-----------
- - ----------
* Non-income producing security.
See notes to financial statements.
-- P-22 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO (continued)
Shares
or
Principal
Amount Value
------ -----
OIL AND GAS -- 1.9%
Falcon Drilling* ............................ 7,200 shs. $ 106,650
Pogo Producing .............................. 4,510 127,408
-----------
234,058
-----------
RESTAURANTS -- 1.3%
Consolidated Products* ...................... 2,411 36,014
Longhorn Steaks* ............................ 7,000 126,875
-----------
162,889
-----------
RETAIL TRADE -- 0.9%
Casey's General Store ....................... 5,295 115,497
-----------
SPECIALTY CHEMICALS -- 1.7%
Minerals Technologies ....................... 3,700 135,050
Sealed Air* ................................. 2,780 78,188
-----------
213,238
-----------
TRANSPORTATION -- 0.8%
Eagle USA Airfreight* ....................... 4,000 104,500
-----------
UTILITIES -- 1.9%
California Energy* .......................... 12,060 235,170
-----------
Total Common Stocks (Cost $11,329,213) ...... 11,819,790
REPURCHASE AGREEMENTS -- 12.0% (Cost $1,500,000)
HSBC Securities, Inc. 5%, maturing 1/3/1996
collateralized by:
$1,480,000 U.S. Treasury Notes 6 7/8%,
3/31/1997 with a fair market value
of $1,532,677 ............................. $ 1,500,000 1,500,000
-----------
Total Investments -- 106.8%
(Cost $12,829,213) ........................ 13,319,790
Other Assets Less Liabilities -- (6.8)% ..... (843,679)
-----------
Net Assets -- 100.0% ........................ $12,476,111
===========
SELIGMAN HENDERSON GLOBAL PORTFOLIO
Shares Value
------ -----
COMMON STOCKS -- 93.5%
BANKING -- 9.8%
Banco de Santander (Spain) .................. 1,279 $ 64,000
Deutsche Bank (Germany) ..................... 962 45,605
Malayan Banking (Malaysia) .................. 3,500 29,500
Royal Bank of Scotland (UK) ................. 5,500 50,016
Siam Commercial Bank (Thailand) ............. 3,100 40,857
Societe Generale (France) ................... 556 68,558
Sumitomo Trust Banking (Japan) .............. 4,000 56,425
United Overseas Bank (Singapore) ............ 5,684 54,662
-----------
409,623
-----------
- - ----------
* Non-income producing security.
See notes to financial statements.
-- P-23 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- - --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL PORTFOLIO (continued)
Shares Value
------ -----
BUILDING MATERIALS -- 2.7%
LaFarge Coppee (France) ..................... 855 $ 54,946
Siam Cement (Thailand) ...................... 700 38,793
Uralita (Spain) ............................. 2,134 19,288
-----------
113,027
-----------
CHEMICALS -- 2.8%
Bayer (Germany) ............................. 206 54,608
Norsk Hydro (Norway) ........................ 1,006 42,208
Toyo Ink Manufacturing (Japan) .............. 4,000 19,710
-----------
116,526
-----------
CONSUMER PRODUCTS -- 5.2%
CSK (Japan) ................................. 2,000 62,415
KAO (Japan) ................................. 3,000 37,101
Nestle (Switzerland) ........................ 54 59,709
Unilever (UK) ............................... 2,900 59,540
-----------
218,765
-----------
DRUGS AND HEALTH CARE -- 1.3%
Roche Holdings (Switzerland) ................ 7 55,351
-----------
ELECTRONICS -- 8.6%
Farnell Electronics (UK) .................... 4,300 47,979
Olivetti (Italy) ............................ 43,461 34,840
Pioneer Electronics (Japan) ................. 6,000 109,565
Samsung Electronics+ (South Korea) .......... 1,000 58,250
Toshiba (Japan) ............................. 14,000 109,430
-----------
360,064
-----------
ENGINEERING -- 0.6%
Siebe (UK) .................................. 2,000 24,643
-----------
FINANCE AND INSURANCE -- 8.3%
Assicurazione Generali (Italy) .............. 2,513 60,847
AXA (France) ................................ 936 62,953
Internationale Nederlanden Group (Netherlands) 966 64,400
Mitsui Marine & Fire (Japan) ................ 8,000 56,889
Nomura Securities (Japan) ................... 2,000 43,478
Zurich Versicherung (Switzerland) ........... 193 57,699
-----------
346,266
-----------
INDUSTRIAL GOODS & SERVICES -- 3.1%
BBC Brown Boveri (Switzerland) .............. 55 63,865
Cie Generale des Eaux (France) .............. 652 64,967
-----------
128,832
-----------
LEISURE AND HOTELS -- 1.4%
Granada Group (UK) .......................... 6,000 60,057
-----------
- - ----------
+ Rule 144A security.
See notes to financial statements.
-- P-24 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL PORTFOLIO (continued)
Shares Value
------ -----
MANUFACTURING -- 5.7%
Adidas (Germany) ............................ 589 $ 31,080
Caradon (UK) ................................ 10,000 30,339
FKI Babcock (UK) ............................ 16,125 41,289
Gadjah Tunggal (Indonesia) .................. 76,000 42,795
Tokyo Steel Manufacturing (Japan) ........... 1,000 18,357
Yamaha (Japan) .............................. 4,000 71,884
-----------
235,744
-----------
MEDIA -- 5.5%
News Corp. (Australia) ...................... 7,204 38,419
Nippon Television Network (Japan) ........... 110 29,333
Reed Elsevier (Netherlands) ................. 4,660 62,017
Reuters Holdings (UK) ....................... 5,000 45,780
WPP Group (UK) .............................. 22,000 55,991
-----------
231,540
-----------
METALS -- 3.7%
Hindalco Industries (GDRs) (India) .......... 500 17,000
Mitsubishi Materials (Japan) ................ 11,000 56,860
Sumitomo Metal Industries (Japan) ........... 21,000 63,507
Sumitomo Sitix (Japan) ...................... 1,000 18,164
-----------
155,531
-----------
PAPER AND PACKAGING -- 1.1%
Stora Kopparbergs (Sweden) .................. 3,854 46,152
-----------
RESOURCES -- 5.4%
British Petroleum (UK) ...................... 5,700 47,678
Broken Hill Proprietary (Australia) ......... 4,861 68,600
ELF Aquitaine (France) ...................... 784 57,652
MIM Holdings (Australia) .................... 16,384 22,635
YPF Sociedad Anomima (ADRs) (Argentina) ..... 1,400 30,275
-----------
226,840
-----------
RESTAURANTS -- 0.8%
Denny's (Japan) ............................. 1,000 33,333
-----------
RETAILING -- 5.5%
Aoyama Trading (Japan) ...................... 600 19,130
Carrefour Supermarche (France) .............. 85 51,469
Joshin Denki (Japan) ........................ 2,000 26,087
Karstadt (Germany) .......................... 101 41,342
Tesco (UK) .................................. 14,300 65,909
Tsutsumi Jewelry (Japan) .................... 500 24,976
-----------
228,913
-----------
- - ----------
See notes to financial statements.
-- P-25 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- - --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL PORTFOLIO (continued)
Shares or
Principal
Amount Value
------ -----
SHIPBUILDING -- 2.2%
Jurong Shipyard (Singapore) ................. 9,000 shs. $ 69,363
Kvaerner Industries (Norway) ................ 713 23,842
-----------
93,205
-----------
SUPPORT SERVICES -- 0.7%
Rentokil (UK) ............................... 5,900 30,672
-----------
TELECOMMUNICATIONS -- 7.1%
Grupo Carso (ADRs)*+ (Mexico) ............... 1,000 10,669
Hong Kong Telecommunications (Hong Kong) .... 29,400 52,470
L.M. Ericsson (Series B) (Sweden) ........... 3,040 59,529
Nippon Telegraph & Telephone (Japan) ........ 15 121,015
Tele Danmark (Series B) (Denmark) ........... 1,004 54,695
-----------
298,378
-----------
TOBACCO -- 1.6%
B.A.T. Industries (UK) ...................... 7,500 66,050
-----------
TRANSPORTATION -- 8.0%
East Japan Railway (Japan) .................. 25 121,256
Lufthansa (Germany) ......................... 365 50,437
Mitsui O.S.K. Lines (Japan) ................. 20,000 63,961
Perusahaan Otomobil Nasional (Malaysia) ..... 10,000 35,250
Swire Pacific (Hong Kong) ................... 8,000 62,076
-----------
332,980
-----------
UTILITIES -- 0.8%
Iberdrola (Spain) ........................... 3,486 31,794
-----------
MISCELLANEOUS -- 1.6%
Roussel (France) ............................ 383 64,790
-----------
Total Common Stocks (Cost $3,661,623) ....... 3,909,076
-----------
CONVERTIBLE BONDS -- 1.0%
ELECTRONICS -- 0.4%
Teco Electronics & Machinery (Taiwan) 2 3/4%,
4/15/2004 ................................... $ 20,000 15,675
-----------
MANUFACTURING -- 0.6%
Gujurat Ambuja Cement (India) 3 1/2%, 6/30/1999 20,000 26,900
-----------
Total Convertible Bonds (Cost $43,724) ...... 42,575
-----------
Total Investments -- 94.5% (Cost $3,705,347). 3,951,651
Other Assets Less Liabilities -- 5.5% ....... 231,578
-----------
Net Assets -- 100.0% ........................ $ 4,183,229
===========
- - ----------
* Non-income producing security.
+ Rule 144A security.
See notes to financial statements.
-- P-26 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO
Shares Value
------ -----
COMMON STOCKS -- 91.5%
ADVERTISING -- 1.4%
DIMAC* (US) ................................. 965 $ 26,296
Heritage Media (Class A)* (US) .............. 1,140 29,213
Katz Media Group* (US) ...................... 800 14,100
-----------
69,609
-----------
AUTOMOTIVE PARTS MANUFACTURING -- 5.1%
Forsheda (Sweden) ........................... 3,458 54,692
Industria Macchine Auto (Italy) ............. 300 2,021
Kiekert* (Germany) .......................... 700 41,664
Montupet (France) ........................... 439 48,316
Nokian Tyres* (Finland) ..................... 5,000 50,487
Sylea (France) .............................. 655 47,257
-----------
244,437
-----------
BUILDING MATERIALS -- 1.3%
Mulia Industrindo (Indonesia) ............... 8,000 22,567
Polypipe (UK) ............................... 15,000 40,736
-----------
63,303
-----------
BUSINESS SERVICES -- 3.1%
BISYS Group* (US) ........................... 1,000 30,500
Fujitsu Business Systems (Japan) ............ 1,000 26,280
International Business Communications
Holdings (UK) ............................. 7,000 31,068
Nu-Kote Holdings (Class A)*(US) ............. 1,690 28,941
SunGard Data Systems*(US) ................... 1,160 32,625
-----------
149,414
-----------
CAPITAL GOODS -- 1.5%
Fusion Systems* (US) ........................ 800 22,200
Stayer Group* (Italy) ....................... 13,320 21,809
Tsubakimoto Precision (Japan) ............... 2,000 27,633
-----------
71,642
-----------
CHEMICALS -- 1.0%
Chemical Company of Malaysia (Malaysia) ..... 3,000 5,967
Dalloz* (France) ............................ 53 11,018
Toshiba Chemical (Japan) .................... 1,000 8,271
Toyo Ink Manufacturing (Japan) .............. 5,000 24,638
-----------
49,894
-----------
COMMERCIAL SERVICES -- 0.4%
Skilled Engineering (Australia) ............. 7,000 17,781
-----------
COMPUTER SOFTWARE -- 1.0%
Dendrite International* (US) ................ 900 16,425
Synopsys* (US) .............................. 870 33,169
-----------
49,594
-----------
- - ----------
* Non-income producing security.
See notes to financial statements.
-- P-27 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- - --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
Shares Value
------ -----
CONSTRUCTION AND PROPERTY -- 6.8%
Asas Dunia Berhad (Malaysia) ................ 2,000 $ 5,672
Ashstead Group (UK) ......................... 15,000 40,271
Bau Holdings (Austria) ...................... 1,380 51,746
Bukit Sembawang Estates (Singapore) ......... 1,000 21,919
Danske Traelastkompagni (Denmark) ........... 993 66,950
Higashi Nihon House (Japan) ................. 2,000 32,850
Mitsui Home (Japan) ......................... 2,000 31,884
New Asia Realty ( Hong Kong) ................ 9,000 17,226
Ruberoid (UK) ............................... 13,000 28,848
Tilbury Douglas (UK) ........................ 4,500 31,075
-----------
328,441
-----------
CONSUMER GOODS AND SERVICES -- 5.6%
Apcoa Parking* (Germany) .................... 675 44,217
Canandaigua Wine (Class A)* (US) ............ 1,215 39,791
Central Parking* (US) ....................... 1,000 28,750
Oakley* (US) ................................ 2,000 68,000
Rentsch, Walter Holdings (Switzerland) ...... 67 10,915
St. John Knits (US) ......................... 450 23,906
SITEL* (US) ................................. 1,500 45,750
Sorini (Indonesia) .......................... 2,000 10,103
-----------
271,432
-----------
DRUGS AND HEALTH CARE -- 2.4%
Darya-Varia Lab (Indonesia) ................. 5,000 9,102
Horizon Mental Health Management (US) ....... 1,800 29,925
Parexel International* (US) ................. 1,000 34,000
Protein Design Lab* (US) .................... 1,840 42,320
-----------
115,347
-----------
ELECTRICAL DISTRIBUTION -- 0.7%
Trifast (UK) ................................ 5,600 32,762
-----------
ELECTRONICS -- 5.7%
Credence Systems* (US) ...................... 1,325 30,144
Electro Scientific Industries* (US) ......... 1,890 54,574
Enplas (Japan) .............................. 1,000 18,647
Horiba Instruments (Japan) .................. 2,000 25,894
ISA International (UK) ...................... 16,500 39,176
Lem Holdings (Switzerland) .................. 67 23,630
Otra N.V. (Netherlands) ..................... 3,640 64,515
Sanmina* (US) ............................... 340 17,680
-----------
274,260
-----------
FINANCIAL SERVICES -- 4.6%
Finnveden (Series B)* (Sweden) .............. 3,250 33,289
Fokus Bank (Norway) ......................... 6,500 35,064
Ichiyoshi Securities (Japan) ................ 4,000 27,053
Manhattan Card (Hong Kong) .................. 60,500 25,820
- - ----------
* Non-income producing security.
See notes to financial statements.
-- P-28 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
Shares Value
------ -----
FINANCIAL SERVICES (continued)
Jayhawk Acceptance* (US) .................... 3,200 $ 30,000
T. Rowe Price (US) .......................... 340 16,660
Roosevelt Financial Group (US) .............. 2,400 46,200
World Acceptance* (US) ...................... 900 9,844
-----------
223,930
-----------
GAMING -- 0.7%
Grand Casinos (US) .......................... 600 13,988
GTECH Holdings* (US) ........................ 700 18,200
-----------
32,188
-----------
INDUSTRIAL GOODS & SERVICES -- 1.1%
Angpanneforeningen (Class B) (Sweden) ....... 3,550 54,009
-----------
MANUFACTURING -- 13.9%
AGCO (US) ................................... 400 20,400
Asahi Diamond Industries (Japan) ............ 2,000 28,019
Danto (Japan) ............................... 2,200 27,208
David Brown Group (UK) ...................... 9,357 28,606
Dominick Hunter (UK) ........................ 9,300 47,049
Equipments et Composants pour l'Industrie
Automobile (France) ....................... 380 40,118
Futuris (Australia) ......................... 20,000 19,609
Glory Kogyo (Japan) ......................... 1,000 36,715
Hokushin (Japan) ............................ 2,000 23,768
Iro* (Sweden) ............................... 4,700 53,097
Kalmar Industries (Sweden) .................. 3,563 59,037
Namura Shipbuilding (Japan) ................. 5,000 27,536
Nichicon (Japan) ............................ 2,000 29,372
Opta Food Ingredients (US) .................. 3,700 46,712
Plettac (Germany) ........................... 240 59,311
Sodick (Japan) .............................. 3,000 28,116
Stoves* (UK) ................................ 5,000 20,174
Tsudakoma (Japan) ........................... 4,000 25,121
Wellington Holdings (UK) .................... 9,000 34,637
Yue Yuen Industrial Holdings (Hong Kong) .... 64,000 16,967
-----------
671,572
-----------
MEDIA -- 1.7%
Capital Radio (UK) .......................... 4,500 37,221
Hodder Headline (UK) ........................ 2,700 10,559
Nippon Television Network (Japan) ........... 1,000 11,981
Sistem Televisyen of Malaysia (Malaysia) .... 3,000 10,811
United Video Satellite Group (Class A)* (US) 445 12,126
-----------
82,698
-----------
- - ----------
* Non-income producing security.
See notes to financial statements.
-- P-29 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- - --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
Shares Value
------ -----
MEDICAL PRODUCTS AND TECHNOLOGY -- 2.6%
Hitachi Medical (Japan) ..................... 2,000 $ 28,599
IDX Systems (US) ............................ 800 27,700
Norland Medical Systems (US) ................ 2,000 45,750
Summit Medical Systems* (US) ................ 1,000 21,250
-----------
123,299
-----------
METALS -- 1.4%
Nakayama Steel Works (Japan) ................ 4,000 21,952
Sanyo Special Steel (Japan) ................. 6,000 25,971
Sumitomo Sitix (Japan) ...................... 1,000 18,164
-----------
66,087
-----------
PAPER AND PACKAGING -- 2.6%
Applied Extrusion Technology (US) ........... 3,500 44,188
Bobst AG (Switzerland) ...................... 6 9,359
Rengo (Japan) ............................... 5,000 33,333
Wace Group (UK) ............................. 10,000 38,020
-----------
124,900
-----------
RESOURCES -- 1.6%
California Energy (US) ...................... 2,500 48,750
Nittetsu Mining (Japan) ..................... 3,000 29,855
-----------
78,605
-----------
RESTAURANTS -- 2.7%
Aiya (Japan) ................................ 2,000 25,121
Kentucky Fried Chicken (Japan) .............. 2,000 32,850
Pizza Express (UK) .......................... 11,500 38,726
Sagami Chain (Japan) ........................ 2,000 33,043
-----------
129,740
-----------
RETAILING -- 8.2%
Courts (Singapore) .......................... 11,000 16,800
Fotolabo Club (Switzerland) ................. 175 69,757
Frost Group (UK) ............................ 9,000 27,235
Hamleys (UK) ................................ 6,500 35,204
Hornbach Baumarkt (Germany) ................. 1,530 65,716
Jardine International Motor Holdings (Hong Kong) 16,000 18,209
Jean Pascale (Germany) ...................... 1,612 48,927
Pet City (UK) ............................... 5,100 30,233
Tsutsumi Jewelry (Japan) .................... 1,000 49,952
Xebio (Japan) ............................... 1,000 35,266
-----------
397,299
-----------
SUPPORT SERVICES -- 1.9%
COREstaff* (US) ............................. 2,500 92,188
-----------
- - ----------
* Non-income producing security.
See notes to financial statements.
-- P-30 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
Shares or
Principal
Amount Value
------ -----
TECHNOLOGY -- 5.1%
Amisys Managed Care Systems* (US) ........... 5,000 shs. $ 95,625
Asyst Technologies* (US) .................... 800 28,300
Electronics for Imaging* (US) ............... 940 40,773
Learning Tree International (US) ............ 2,500 39,375
Opal (US) ................................... 2,500 32,500
Photon Dynamics* (US) ....................... 1,500 11,813
-----------
248,386
-----------
TELECOMMUNICATIONS -- 1.0%
Arch Communications Group* (US) ............. 1,100 26,469
Loxley (Thailand) ........................... 1,000 20,326
-----------
46,795
-----------
TRANSPORTATION -- 2.4%
Comfort Group (Singapore) ................... 20,000 16,970
Eagle USA Airfreight* (US) .................. 3,000 78,375
Iino Kaiun* (Japan) ......................... 4,000 22,725
-----------
118,070
-----------
MISCELLANEOUS -- 4.0%
BT Industries (Sweden) ...................... 5,000 54,227
BUT (France) ................................ 210 11,342
Technip* (France) ........................... 923 63,395
Thorkild Kristensen (Denmark) ............... 1,252 66,779
-----------
195,743
-----------
Total Common Stocks (Cost $4,264,531)........ 4,423,425
-----------
CONVERTIBLE BONDS -- 0.1% (Cost $6,313)
MANUFACTURING -- 0.1%
Gujurat Ambuja Cement (India)
3 1/2%, 6/30/1999 ......................... $ 5,000 6,725
-----------
Total Investments -- 91.6% (Cost $4,270,844). 4,430,150
Other Assets Less Liabilities -- 8.4% ....... 406,466
-----------
Net Assets -- 100.0% ........................ $ 4,836,616
===========
- - ----------
* Non-income producing security.
See notes to financial statements.
-- P-31 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- - --------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND PORTFOLIO
Principal
Amount Value
------ -----
CORPORATE BONDS -- 91.2%
BROADCASTING -- 0.2%
Allbritton Communications 1 1/2%, 8/15/2004 . $ 7,000 $ 7,394
-----------
CABLE SYSTEMS -- 14.9%
Comcast 10 5/8%, 7/15/2012 .................. 100,000 113,375
Le Groupe Videotron Ltee 10 5/8%, 2/15/2005.. 100,000 107,125
People's Choice Television
0% (13 1/8%**), 6/1/2004 .................. 100,000 57,750
Rogers Cable Systems 11%, 12/1/2015 ......... 100,000 108,000
United International 0% (14%#), 11/15/1999 .. 100,000 62,500
-----------
448,750
-----------
CELLULAR -- 3.5%
Centennial Cellular 10 1/8%, 5/15/2005 ...... 100,000 105,250
-----------
CHEMICALS -- 3.6%
Arcadian Partners 10 3/4%, 5/1/2005 ........ 50,000 55,250
NL Industries 11 3/4%, 10/15/2003 ........... 50,000 53,625
-----------
108,875
-----------
CONSUMER PRODUCTS -- 3.5%
Williamhouse-Regency 13%, 11/15/2005+ ....... 100,000 105,500
-----------
ENERGY--7.0%
TransTexas Gas 11 1/2%, 6/15/2002 ........... 100,000 103,750
United Meridian 10 3/8%, 10/15/2005 ......... 100,000 106,250
-----------
210,000
-----------
FINANCIAL SERVICES -- 2.7%
Olympic Financial 13%, 5/1/2000 ............. 75,000 82,125
-----------
GAMING/HOTEL -- 14.1%
Aztar 11%, 10/1/2002 ........................ 50,000 50,125
Casino Magic Finance 11 1/2%, 10/15/2001 .... 75,000 64,875
Grand Casinos 10 1/8%, 12/1/2003 ............ 50,000 52,375
Stratosphere 14 1/4%, 5/15/2002 ............. 50,000 56,750
Trump Hotels & Casino Resorts Funding
15 1/2%, 6/15/2005 ........................ 50,000 53,750
Trump Plaza Funding 10 7/8%, 6/15/2001 ...... 50,000 52,000
Trump Taj Mahal 11.35%, 11/15/1999 .......... 100,000 95,113
-----------
424,988
-----------
HEALTH CARE -- 4.1%
Dade International 13%, 2/1/2005 ............ 20,000 22,400
Regency Health Services 9 7/8%, 10/15/2002 .. 100,000 99,750
-----------
122,150
-----------
- - ----------
+ 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.
-- P-32 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND PORTFOLIO (continued)
Principal
Amount Value
------ -----
LEISURE -- 3.4%
Premier Parks 12%, 8/15/2003 ................ $ 100,000 $ 103,000
-----------
MANUFACTURING -- 3.4%
Howmet 10%, 12/1/2003+ ...................... 50,000 52,750
RBX 11 1/4%, 10/15/2005+ .................... 50,000 49,250
-----------
102,000
-----------
PAGING -- 6.3%
Metrocall 10 3/8%, 10/1/2007 ................ 100,000 106,500
ProNet 11 7/8%, 6/15/2005 ................... 75,000 82,875
-----------
189,375
-----------
RETAILING -- 2.1%
Thrifty Payless 11 3/4%, 4/15/2003 .......... 10,000 10,875
Thrifty Payless 12 1/4%, 4/15/2004 .......... 50,000 53,750
-----------
64,625
-----------
SUPERMARKETS -- 5.1%
Pathmark Stores 11 5/8%, 6/15/2002 .......... 100,000 101,000
Ralph's Grocery 10.45%, 6/15/2004 ........... 50,000 50,875
-----------
151,875
-----------
TELECOMMUNICATIONS -- 10.8%
Fonorola 12 1/2%, 8/15/2002 ................. 100,000 105,500
IXC Communications 13%, 10/1/2005+ .......... 100,000 106,500
Mobile Telecommunication Technologies
13 1/2%, 12/15/2002 ....................... 100,000 111,500
-----------
323,500
-----------
THEATRES -- 3.0%
Plitt Theatres 10 7/8%, 6/15/2004 ........... 100,000 90,500
-----------
UTILITIES -- 3.5%
Midland Cogeneration Venture 11 3/4%, 7/23/2005 100,000 105,257
-----------
Total Corporate Bonds -- (Cost $2,681,011) .. 2,745,164
-----------
CONVERTIBLE BONDS -- 3.0%
COMPUTERS AND RELATED SERVICES -- 1.6%
EMC 4 1/4%, 1/1/2001 ........................ 50,000 49,750
-----------
SEMICONDUCTORS -- 1.4%
Integrated Device Technologies 5 1/2%, 6/1/2002 50,000 41,125
-----------
Total Convertible Bonds (Cost $97,640) ...... 90,875
-----------
Total Investments -- 94.2% (Cost $2,778,651). 2,836,039
Other Assets Less Liabilitie s -- 5.8% ...... 173,383
-----------
Net Assets -- 100.0% ......................... $ 3,009,422
===========
- - ----------
+ Rule 144A security.
See notes to financial statements.
-- P-33 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- - --------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO
Principal
Amount Value
------ -----
CONVERTIBLE SECURITIES -- 41.0%
SUBORDINATED CONVERTIBLE BONDS -- 23.9%
CONSUMER GOODS AND SERVICES -- 2.4%
Unifi 6%, 3/15/2002 ......................... $ 300,000 $ 302,250
-----------
DRUGS AND HEALTH CARE -- 1.7%
Pharmaceutical Marketing Services
6 1/4%, 2/1/2003+ ........................... 235,000 211,500
-----------
ELECTRONICS -- 1.4%
Micropolis 6%, 3/15/2012 .................... 350,000 173,250
-----------
ENERGY -- 3.8%
Kelley Oil & Gas 8 1/2%, 4/1/2000 ........... 285,000 159,244
Sante Fe Pipelines 11.162%, 8/15/2010 ....... 250,000 316,875
-----------
476,119
-----------
ENTERTAINMENT/PUBLISHING -- 0.6%
Time Warner 8 1/4%, 1/10/2015 ............... 76,750 79,436
-----------
INSURANCE -- 1.9%
Trenwick Group 6%, 12/15/1999 ............... 200,000 236,000
-----------
MACHINERY -- 1.6%
Cooper Industries 7.05%, 1/1/2015 ........... 200,000 207,000
-----------
RETAILING -- 1.4%
CML Group 5 1/2%, 1/15/2003 ................. 250,000 181,250
-----------
TECHNOLOGY -- 1.6%
EMC 4 1/4%, 1/1/2001 ........................ 200,000 199,000
-----------
TELECOMMUNICATIONS -- 3.3%
LDDS Communications 5%, 8/15/2003 ........... 250,000 263,750
Network Equipment 7 1/4%, 5/15/2014 ......... 147,000 153,431
-----------
417,181
-----------
TRANSPORTATION -- 0.8%
Airborne Freight 6 3/4%, 8/15/2001 .......... 100,000 100,500
-----------
MISCELLANEOUS/DIVERSIFIED -- 3.4%
MascoTech 4 1/2%,12/15/2003 ................. 300,000 234,750
TriMas 5%, 8/1/2003 ......................... 200,000 196,000
-----------
430,750
-----------
Total Subordinated Convertible Bonds
(Cost $3,129,412) ........................... 3,014,236
-----------
- - ----------
+ Rule 144A security.
See notes to financial statements.
-- P-34 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO (continued)
Shares or
Principal
Amount Value
------ -----
CONVERTIBLE PREFERRED STOCKS -- 17.1%
BANKING AND FINANCE -- 2.1%
National City $4.00 ......................... 3,300 shs. $ 259,875
-----------
ENERGY -- 2.5%
Snyder Oil (Class A) 6% ..................... 5,000 98,750
Unocal $3.50+ ............................... 4,000 214,500
-----------
313,250
-----------
INSURANCE -- 4.4%
Alexander & Alexander (Series A) $3.625+ .... 1,500 74,812
American General (Series A) $3.00 ........... 4,500 235,688
St. Paul Capital 6% ......................... 4,500 253,125
-----------
563,625
-----------
PAPER -- 1.1%
International Paper Capital 5 1/4%+ ......... 3,000 136,125
-----------
RETAILING -- 0.7%
TJX $3.125 .................................. 2,000 89,500
-----------
TELECOMMUNICATIONS -- 1.6%
Mobile Telecommunication Technologies $2.25+ 6,500 208,000
-----------
TRANSPORTATION -- 4.0%
GATX $3.875 ................................. 5,000 287,500
Sea Containers $4.00 ........................ 5,000 218,750
-----------
506,250
-----------
MISCELLANEOUS -- 0.7%
Corning (Delaware) 6% ....................... 1,700 85,638
-----------
Total Convertible Preferred Stocks
(Cost $2,143,676) ........................... 2,162,263
-----------
Total Convertible Securities (Cost $5,273,088) 5,176,499
-----------
CORPORATE BONDS -- 20.4%
AUTOMOTIVE -- 5.7%
Chrysler Financial 6 1/2%, 6/15/1998 ........ $ 200,000 203,392
Ford Motor Credit 6 3/4%, 8/15/2008 ......... 250,000 258,437
General Motors Acceptance 5 1/4%, 2/1/1999... 250,000 249,486
-----------
711,315
-----------
BANKING AND FINANCE -- 6.9%
Capital One Bank 8 1/8%, 3/1/2000 ........... 250,000 269,225
First USA Bank 5 3/4%, 1/15/1999 ............ 100,000 99,565
MBNA 6.15%, 10/1/2003 ....................... 500,000 498,158
-----------
866,948
-----------
INSURANCE -- 2.2%
AEGON N.V. 8%, 8/15/2006 .................... 250,000 282,160
-----------
TELECOMMUNICATIONS -- 3.3%
United Telecommunications 9 1/2%, 4/1/2003... 350,000 415,430
-----------
- - ----------
+ Rule 144A security.
See notes to financial statements.
-- P-35 --
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Portfolios of Investments (continued) December 31, 1995
- - --------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO (continued)
Principal
Amount
or Shares Value
--------- -----
MISCELLANEOUS -- 2.3%
Tenneco Credit 9 5/8%, 8/15/2001 ............ $ 250,000 $ 290,565
-----------
Total Corporate Bonds (Cost $2,438,843) ..... 2,566,418
-----------
COMMON STOCKS -- 16.1%
ELECTRIC AND GAS UTILITIES -- 5.0%
Atlanta Gas and Light ....................... 6,000 shs. 118,500
CINergy ..................................... 9,718 297,614
Entergy ..................................... 2,600 76,050
FPL Group ................................... 3,000 139,125
-----------
631,289
-----------
FOOD -- 2.7%
ConAgra ..................................... 8,141 335,807
-----------
INSURANCE -- 0.5%
GCR Holdings ................................ 3,000 67,125
-----------
RETAILING -- 0.2%
Kmart ....................................... 3,200 23,200
-----------
STEEL -- 1.1%
Inland Steel Industries ..................... 5,406 135,826
-----------
TRANSPORTATION -- 2.4%
Consolidated Freightways .................... 10,000 265,000
NFC ......................................... 20,000 44,072
-----------
309,072
-----------
UTILITIES/TELECOMMUNICATIONS -- 4.2%
Bell Atlantic ............................... 4,000 267,500
GTE ......................................... 3,000 132,000
Network Equipment Technologies .............. 4,857 132,964
-----------
532,464
-----------
Total Common Stocks (Cost $1,596,384) ....... 2,034,783
-----------
U.S. GOVERNMENT SECURITIES -- 8.5%
U.S. Treasury Notes 7 3/4%, 12/31/1999 ...... $ 500,000 542,968
U.S. Treasury Notes 6 1/2%, 5/15/2005 ....... 500,000 532,969
-----------
Total U.S. Government Securities
(Cost $1,052,426) ........................... 1,075,937
-----------
REPURCHASE AGREEMENTS -- 7.9% (Cost $1,000,000)
HSBC Securities, Inc. 5%, maturing 1/3/1996
collateralized by:
$985,000 U.S. Treasury Notes
6 7/8%, 3/31/1997, with a fair
market value of $1,020,059 ................. 1,000,000 1,000,000
-----------
Total Investments -- 93.9% (Cost $11,360,741) 11,853,637
Other Assets Less Liabilities -- 6.1% ........ 765,843
-----------
Net Assets -- 100.0% ......................... $12,619,480
===========
- - ----------
See notes to financial statements.
-- P-36 --
<PAGE>
This page intentionally left blank.
-- P-37 --
<PAGE>
Seligman Portfolios, Inc.
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------
Statements of Assets and Liabilities
- - -----------------------------------------------------------------------------------------------------------------------------
Seligman Seligman Seligman Seligman
Seligman Cash Common Communications Fixed Income
Capital Management Stock and Information Securities
Portfolio Portfolio Portfolio Portfolio Portfolio
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (see
portfolios of investments):
Common Stocks ............................... $ 8,852,808 $ -- $ 24,293,752 $ 37,526,656 $ --
Convertible Securities ...................... -- -- 320,000 -- --
U.S. Government Securities
and Agencies ............................ -- 3,551,271 -- -- 2,235,999
Corporate Bonds ............................. -- -- -- -- 1,452,658
Bankers' Acceptances ........................ -- 198,047 -- -- --
Certificates of Deposit ..................... -- 500,013 -- -- --
Commercial Paper ............................ -- 2,924,595 -- -- --
Fixed Time Deposits ......................... -- -- -- 1,000,000 --
Repurchase Agreements ....................... 1,000,000 600,000 4,000,000 -- 500,000
------------ ------------ ------------ ------------ ------------
Total Investments ........................... 9,852,808 7,773,926 28,613,752 38,526,656 4,188,657
Cash ........................................ 570,808 72,616 1,905,436 649,128 118,589
Receivable for securities sold .............. 157,325 -- 494,985 933,765 123,164
Receivable for Capital Stock sold ........... 49,426 -- 126,453 297,973 --
Interest and dividends receivable ........... 3,283 3,017 54,449 1,158 80,257
Receivable from associated companies ........ -- 433 -- -- 747
------------ ------------ ------------ ------------ ------------
Total Assets ................................ 10,633,650 7,849,992 31,195,075 40,408,680 4,511,414
------------ ------------ ------------ ------------ ------------
LIABILITIES:
Payable for securities purchased ............ 1,321,967 -- 2,302,454 1,920,699 --
Payable for Capital Stock repurchased ....... 584 37,549 30,347 -- 320
Accrued expenses, taxes, and other .......... 17,583 12,932 26,229 45,888 14,546
------------ ------------ ------------ ------------ ------------
Total Liabilities ........................... 1,340,134 50,481 2,359,030 1,966,587 14,866
------------ ------------ ------------ ------------ ------------
NET ASSETS .................................. $ 9,293,516 $ 7,799,511 $ 28,836,045 $ 38,442,093 $ 4,496,548
============ ============ ============ ============ ============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ....................... $ 623 $ 7,800 $ 1,868 $ 2,848 $ 431
Additional paid-in capital .................. 7,851,238 7,792,109 21,923,363 42,278,896 4,241,656
Undistributed (dividends in excess of)
net investment income ................... (3,378) -- 2,933 (563) (3,378)
Accumulated net realized gain (loss) ....... 4,578 (398) 218,698 -- (97,373)
Net unrealized appreciation
(depreciation) of investments ........... 1,440,455 -- 6,744,425 (3,839,088) 355,212
Net unrealized appreciation (depreciation)
on translation of assets and liabilities
denominated in foreign currencies ...... -- -- (55,242) -- --
------------ ------------ ------------ ------------ ------------
NET ASSETS .................................. $ 9,293,516 $ 7,799,511 $ 28,836,045 $ 38,442,093 $ 4,496,548
============ ============ ============ ============ ============
Shares of Capital Stock
($.001 par value) outstanding ............ 623,294 7,799,909 1,868,083 2,848,022 430,753
============ ============ ============ ============ ============
Net Asset Value per share ................... $ 14.91 $ 1.00 $ 15.44 $ 13.50 $ 10.44
============ ============ ============ ============ ============
</TABLE>
- - ----------
See notes to financial statements.
-- P-38 --
<PAGE>
Seligman Portfolios, Inc.
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------
December 31, 1995
- - -----------------------------------------------------------------------------------------------------------------------------
Seligman Seligman Henderson Seligman
Seligman Henderson Global Smaller High-Yield Seligman
Frontier Global Companies Bond Income
Portfolio Portfolio Portfolio Portfolio Portfolio
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (see
portfolios of investments):
Common Stocks ............................... $ 11,819,790 $ 3,909,076 $ 4,423,425 $ -- $ 2,034,783
Convertible Securities ...................... -- 42,575 6,725 90,875 5,176,499
U.S. Government Securities
and Agencies ............................ -- -- -- -- 1,075,937
Corporate Bonds ............................. -- -- -- 2,745,164 2,566,418
Bankers' Acceptances ........................ -- -- -- -- --
Certificates of Deposit ..................... -- -- -- -- --
Commercial Paper ............................ -- -- -- -- --
Fixed Time Deposits ......................... -- -- -- -- --
Repurchase Agreements ....................... 1,500,000 -- -- -- 1,000,000
------------ ------------ ------------ ------------ ------------
Total Investments ........................... 13,319,790 3,951,651 4,430,150 2,836,039 11,853,637
Cash ........................................ 761,034 178,499 577,847 118,140 569,704
Receivable for securities sold .............. 207,174 16,857 18,418 -- --
Receivable for Capital Stock sold ........... 79,769 86,790 22,629 11,213 68,781
Interest and dividends receivable ........... 2,341 5,467 3,756 51,126 153,218
Receivable from associated companies ........ -- 1,390 3,910 3,069 --
------------ ------------ ------------ ------------ ------------
Total Assets ................................ 14,370,108 4,240,654 5,056,710 3,019,587 12,645,340
------------ ------------ ------------ ------------ ------------
LIABILITIES:
Payable for securities purchased ............ 1,874,745 39,829 204,052 -- --
Payable for Capital Stock repurchased ....... -- -- -- -- 4,975
Accrued expenses, taxes, and other .......... 19,252 17,596 16,042 10,165 20,885
------------ ------------ ------------ ------------ ------------
Total Liabilities ........................... 1,893,997 57,425 220,094 10,165 25,860
------------ ------------ ------------ ------------ ------------
NET ASSETS .................................. $ 12,476,111 $ 4,183,229 $ 4,836,616 $ 3,009,422 $ 12,619,480
============ ============ ============ ============ ============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ....................... $ 920 $ 338 $ 414 $ 287 $ 1,194
Additional paid-in capital .................. 11,979,541 3,930,575 4,672,140 2,952,157 12,128,778
Undistributed (dividends in excess of)
net investment income ................... (563) (1,917) (563) (410) (3,378)
Accumulated net realized gain (loss) ....... 6,161 -- -- -- --
Net unrealized appreciation
(depreciation) of investments ........... 490,052 274,637 200,393 57,388 489,410
Net unrealized appreciation (depreciation)
on translation of assets and liabilities
denominated in foreign currencies ...... (20,404) (35,768) -- 3,476
------------ ------------ ------------ ------------ ------------
NET ASSETS .................................. $ 12,476,111 $ 4,183,229 $ 4,836,616 $ 3,009,422 $ 12,619,480
============ ============ ============ ============ ============
Shares of Capital Stock
($.001 par value) outstanding ............ 919,934 337,685 414,437 286,688 1,194,484
============ ============ ============ ============ ============
Net Asset Value per share ................... $ 13.56 $ 12.39 $ 11.67 $ 10.50 $ 10.56
============ ============ ============ ============ ============
</TABLE>
- - ----------
See notes to financial statements.
-- P-39 --
<PAGE>
Seligman Portfolios, Inc.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------
Statements of Operations For the year ended December 31, 1995
- - -------------------------------------------------------------------------------------------------------------------
Seligman Seligman Seligman Seligman
Seligman Cash Common Communications Fixed Income
Capital Management Stock and Information Securities
Portfolio Portfolio Portfolio Portfolio Portfolio
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Investment income:
Dividends* ............................ $ 50,339 $ -- $ 566,641 $ 6,609 $ --
Interest .............................. 15,565 251,624 132,407 3,041 260,351
----------- ----------- ----------- ----------- -----------
Total investment income ............... 65,904 251,624 699,048 9,650 260,351
----------- ----------- ----------- ----------- -----------
Expenses:
Management fee ........................ 28,551 18,365 94,380 123,216 15,262
Auditing fee .......................... 10,267 10,267 10,267 12,517 10,267
Legal fee ............................. 3,408 3,408 3,408 3,408 3,408
Shareholder reports and
communications ..................... 2,445 2,445 2,445 2,203 2,445
Directors' fees and expenses .......... 2,323 2,323 2,323 2,285 2,323
Registration .......................... 2,103 1,943 4,618 8,118 1,618
Custody and related services .......... -- -- 7,967 -- --
Miscellaneous ......................... 1,448 1,163 2,983 4,178 2,338
----------- ----------- ----------- ----------- -----------
Total expenses before
reimbursement ...................... 50,545 39,914 128,391 155,925 37,661
Reimbursement of expenses ............. (7,713) (39,914) -- -- (14,766)
----------- ----------- ----------- ----------- -----------
Total expenses after
reimbursement ...................... 42,832 -- 128,391 155,925 22,895
----------- ----------- ----------- ----------- -----------
Net investment income (loss) .......... 23,072 251,624 570,657 (146,275) 237,456
----------- ----------- ----------- ----------- -----------
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions:
Net realized gain (loss) on investments 673,773 (4) 3,074,117 2,629,030 (16,342)
Net realized gain (loss) from foreign
currency transactions .............. -- -- (85) -- --
Net change in unrealized appreciation/
depreciation of investments ........ 996,837 -- 2,044,468 (3,857,599) 449,551
Net change in unrealized appreciation/
depreciation on translation of
assets and liabilities denominated
in foreign currencies ............... -- -- (55,202) -- --
----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments
and foreign currency
transactions ....................... 1,670,610 (4) 5,063,298 (1,228,569) 433,209
----------- ----------- ----------- ----------- -----------
Increase (decrease) in net
assets from operations ............. $ 1,693,682 $ 251,620 $ 5,633,955 $(1,374,844) $ 670,665
=========== =========== =========== =========== ===========
- - ----------
* Net of foreign tax withheld as follows: $ 69 $ -- $ 4,659 $ -- $ --
**For the period May 1, 1995 (commencement of operations) to December 31, 1995.
See notes to financial statements.
</TABLE>
-- P-40 --
<PAGE>
Seligman Portfolios, Inc.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------
For the year ended December 31, 1995
- - ------------------------------------------------------------------------------------------------------------------
Seligman Seligman Henderson Seligman
Seligman Henderson Global Smaller High-Yield Seligman
Frontier Global Companies Bond Income
Portfolio Portfolio Portfolio Portfolio Portfolio
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Investment income:
Dividends* ............................ $ 5,811 $ 41,548 $ 15,129 $ -- $ 186,426
Interest .............................. 9,720 18,345 19,766 64,165 517,963
----------- ----------- ----------- ----------- -----------
Total investment income ............... 15,531 59,893 34,895 64,165 704,389
----------- ----------- ----------- ----------- -----------
Expenses:
Management fee ........................ 29,219 25,312 17,210 3,941 45,797
Auditing fee .......................... 12,517 10,267 12,517 11,350 10,267
Legal fee ............................. 3,408 3,528 3,694 12,507 3,408
Shareholder reports and
communications ..................... 2,203 2,203 2,203 2,203 2,445
Directors' fees and expenses .......... 2,285 2,285 2,285 1,629 2,323
Registration .......................... 3,118 2,153 2,118 1,538 2,618
Custody and related services .......... -- 31,847 21,303 25 --
Miscellaneous ......................... 819 8,511 4,685 1,237 3,762
----------- ----------- ----------- ----------- -----------
Total expenses before
reimbursement ...................... 53,569 86,106 66,015 34,430 70,620
Reimbursement of expenses ............. (16,555) (51,823) (42,122) (28,926) (1,910)
----------- ----------- ----------- ----------- -----------
Total expenses after
reimbursement ...................... 37,014 34,283 23,893 5,504 68,710
----------- ----------- ----------- ----------- -----------
Net investment income (loss) .......... (21,483) 25,610 11,002 58,661 635,679
----------- ----------- ----------- ----------- -----------
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions:
Net realized gain (loss) on investments 489,661 (39,978) 147,181 4,799 639,249
Net realized gain (loss) from foreign
currency transactions .............. -- 82,120 4,162 -- (43)
Net change in unrealized appreciation/
depreciation of investments ........ 481,517 277,417 197,114 57,388 591,277
Net change in unrealized appreciation/
depreciation on translation of
assets and liabilities denominated
in foreign currencies ............... -- (48,118) (36,341) -- 3,496
----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments
and foreign currency
transactions ....................... 971,178 271,441 312,116 62,187 1,233,979
----------- ----------- ----------- ----------- -----------
Increase (decrease) in net
assets from operations ............. $ 949,695 $ 297,051 $ 323,118 $ 120,848 $ 1,869,658
=========== =========== =========== =========== ===========
- - ----------
* Net of foreign tax withheld as follows $ -- $ 4,863 $ 2,124 $ -- $ 425
**For the period May 1, 1995 (commencement of operations) to December 31, 1995.
See notes to financial statements.
</TABLE>
-- P-41 --
<PAGE>
<TABLE>
<CAPTION>
Seligman Portfolios, Inc.
- - ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
- - ------------------------------------------------------------------------------------------------------------------------------------
Seligman Seligman Seligman
Capital Portfolio Cash Management Portfolio Common Stock Portfolio
---------------------------- ---------------------------- ----------------------------
Year Ended December 31 Year Ended December 31 Year Ended December 31
---------------------------- ---------------------------- ----------------------------
1995 1994 1995 1994 1995 1994
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income ............. $ 23,072 $ 5,975 $ 251,624 $ 127,857 $ 570,657 $ 515,701
Net realized gain (loss) on
investments ................... 673,773 642,271 (4) (240) 3,074,117 1,108,365
Net realized gain (loss) from
foreign currency transactions . -- -- -- -- (85) 20
Net change in unrealized
appreciation/depreciation
of investments ................ 996,837 (912,365) -- -- 2,044,468 (1,604,789)
Net change in unrealized
appreciation/depreciation on
translation of assets and
liabilities denominated in
foreign currencies ............ -- -- -- -- (55,202) (40)
------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets
from operations ............... 1,693,682 (264,119) 251,620 127,617 5,633,955 19,257
------------ ------------ ------------ ------------ ------------ ------------
Distributions to shareholders:
Net investment income ............. (26,627) (7,465) (251,624) (127,857) (564,862) (517,958)
Realized gain on investments ...... (666,241) (641,977) -- -- (2,855,419) (1,108,564)
------------ ------------ ------------ ------------ ------------ ------------
Decrease in net assets from
distributions ................. (692,868) (649,442) (251,624) (127,857) (3,420,281) (1,626,522)
------------ ------------ ------------ ------------ ------------ ------------
Capital share transactions:
Net proceeds from sale of shares .. 3,644,132 3,619,176 8,777,333 2,322,638 12,083,995 9,040,524
Investment of dividends ........... 26,627 7,465 251,624 127,857 564,862 517,958
Shares issued in payment of gain
distributions ................. 666,241 641,977 -- -- 2,855,419 1,108,564
------------ ------------ ------------ ------------ ------------ ------------
Total ............................. 4,337,000 4,268,618 9,028,957 2,450,495 15,504,276 10,667,046
------------ ------------ ------------ ------------ ------------ ------------
Cost of shares repurchased ........ (1,986,672) (3,298,449) (4,459,283) (2,322,134) (9,049,478) (10,753,287)
------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets
from capital share transactions 2,350,328 970,169 4,569,674 128,361 6,454,798 (86,241)
------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets . 3,351,142 56,608 4,569,670 128,121 8,668,472 (1,693,506)
Net Assets:
Beginning of period ............... 5,942,374 5,885,766 3,229,841 3,101,720 20,167,573 21,861,079
------------ ------------ ------------ ------------ ------------ ------------
End of period ..................... $ 9,293,516 $ 5,942,374 $ 7,799,511 $ 3,229,841 $ 28,836,045 $ 20,167,573
============ ============ ============ ============ ============ ============
</TABLE>
- - ----------------
** Commencement of investment operations.
See notes to financial statements.
P-42
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Seligman Seligman
Communications and Fixed Income
Information Portfolio Securities Portfolio
Year 10/11/94** Year Ended December 31
Ended to ----------------------------
12/31/95 12/31/94 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Operations:
Net investment income ............. $ (146,275) $ (442) $ 237,456 $ 179,900
Net realized gain (loss) on
investments ................... 2,629,030 -- (16,342) (81,031)
Net realized gain (loss) from
foreign currency transactions . -- -- -- --
Net change in unrealized
appreciation/depreciation (3,857,599) 18,511 449,551 (225,410)
of investments ................
Net change in unrealized
appreciation/depreciation on
translation of assets and
liabilities denominated in
foreign currencies ............ -- -- -- --
------------ ------------ ------------ ------------
Increase (decrease) in net assets
from operations ............... (1,374,844) 18,069 670,665 (126,541)
------------ ------------ ------------ ------------
Distributions to shareholders:
Net investment income ............. -- -- (239,920) (181,555)
Realized gain on investments ...... (2,505,145) -- -- --
------------ ------------ ------------ ------------
Decrease in net assets from
distributions ................. (2,505,145) -- (239,920) (181,555)
------------ ------------ ------------ ------------
Capital share transactions:
Net proceeds from sale of shares .. 40,177,251 476,552 1,663,791 2,264,201
Investment of dividends ........... -- -- 239,920 181,555
Shares issued in payment of gain
distributions ................. 2,505,145 -- -- --
------------ ------------ ------------ ------------
Total ............................. 42,682,396 476,552 1,903,711 2,445,756
------------ ------------ ------------ ------------
Cost of shares repurchased ........ (854,935) -- (1,444,282) (2,306,325)
------------ ------------ ------------ ------------
Increase (decrease) in net assets
from capital share transactions 41,827,461 476,552 459,429 139,431
------------ ------------ ------------ ------------
Increase (decrease) in net assets . 37,947,472 494,621 890,174 (168,665)
Net Assets:
Beginning of period ............... 494,621 -- 3,606,374 3,775,039
------------ ------------ ------------ ------------
End of period ..................... $ 38,442,093 $ 494,621 $ 4,496,548 $ 3,606,374
============ ============ ============ ============
<CAPTION>
Seligman
Henderson
Seligman Global Portfolio
Frontier Portfolio -----------------------------
----------------------------
Year 10/11/94** Year Ended December 31
Ended to -----------------------------
12/31/95 12/31/94 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Operations:
Net investment income ............. $ (21,483) $ (106) $ 25,610 $ 13,397
Net realized gain (loss) on
investments ................... 489,661 -- (39,978) 9,138
Net realized gain (loss) from
foreign currency transactions . -- -- 82,120 3,259
Net change in unrealized
appreciation/depreciation 481,517 9,060 277,417 (44,914)
of investments ................
Net change in unrealized
appreciation/depreciation on
translation of assets and
liabilities denominated in
foreign currencies ............ -- -- (48,118) 29,924
------------ ------------ ------------ ------------
Increase (decrease) in net assets
from operations ............... 949,695 8,954 297,051 10,804
------------ ------------ ------------ ------------
Distributions to shareholders:
Net investment income ............. -- -- (48,883) (9,661)
Realized gain on investments ...... (463,105) -- (27,517) (17,511)
------------ ------------ ------------ ------------
Decrease in net assets from
distributions ................. (463,105) -- (76,400) (27,172)
------------ ------------ ------------ ------------
Capital share transactions:
Net proceeds from sale of shares .. 11,465,250 159,997 2,562,936 1,317,845
Investment of dividends ........... -- -- 48,883 9,661
Shares issued in payment of gain
distributions ................. 463,105 -- 27,517 17,511
------------ ------------ ------------ ------------
Total ............................. 11,928,355 159,997 2,639,336 1,345,017
------------ ------------ ------------ ------------
Cost of shares repurchased ........ (107,785) -- (453,063) (200,626)
------------ ------------ ------------ ------------
Increase (decrease) in net assets
from capital share transactions 11,820,570 159,997 2,186,273 1,144,391
------------ ------------ ------------ ------------
Increase (decrease) in net assets . 12,307,160 168,951 2,406,924 1,128,023
Net Assets:
Beginning of period ............... 168,951 -- 1,776,305 648,282
------------ ------------ ------------ ------------
End of period ..................... $ 12,476,111 $ 168,951 $ 4,183,229 $ 1,776,305
============ ============ ============ ============
</TABLE>
P-43
<PAGE>
<TABLE>
<CAPTION>
Seligman Porfolios , Inc.
- - ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- - ------------------------------------------------------------------------------------------------------------------------------------
Seligman
Henderson Seligman Seligman
Global Smaller High-Yield Income Portfolio
Companies Portfolio Bond Portfolio ----------------
------------------- --------------
Year 10/11/94** 5/1/95* Year Ended December 31
Ended to to ----------------------
12/31/95 12/31/94 12/31/95 1995 1994
-------- -------- -------- ---- ----
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income .................... $ 11,002 $ 517 $ 58,661 $ 635,679 $ 678,957
Net realized gain (loss) on
investments .......................... 147,181 -- 4,799 639,249 (19,113)
Net realized gain (loss) from
foreign currency transactions ........ 4,162 (58) -- (43) 10
Net change in unrealized
appreciation/depreciation
of investments ....................... 197,114 3,279 57,388 591,277 (1,298,035)
Net change in unrealized
appreciation/depreciation on
translation of assets and
liabilities denominated in
foreign currencies ................... (36,341) 573 -- 3,496 (20)
------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets
from operations ...................... 323,118 4,311 120,848 1,869,658 (638,201)
------------ ------------ ------------ ------------ ------------
Distributions to shareholders:
Net investment income .................... (20,531) (537) (60,233) (644,348) (685,315)
Realized gain on investments ............. (148,062) -- (4,951) (636,880) --
------------ ------------ ------------ ------------ ------------
Decrease in net assets from
distributions ........................ (168,593) (537) (65,184) (1,281,228) (685,315)
------------ ------------ ------------ ------------ ------------
Capital share transactions:
Net proceeds from sale of shares ......... 4,665,264 127,199 3,188,047 5,410,208 4,595,781
Investment of dividends .................. 20,531 537 60,233 644,348 685,315
Shares issued in payment of gain
distributions ........................ 148,062 -- 4,951 636,880 --
------------ ------------ ------------ ------------ ------------
Total .................................... 4,833,857 127,736 3,253,231 6,691,436 5,281,096
------------ ------------ ------------ ------------ ------------
Cost of shares repurchased ............... (283,276) -- (299,473) (4,710,663) (5,127,246)
------------ ------------ ------------ ------------ ------------
Increase in net assets from
capital share transactions ........... 4,550,581 127,736 2,953,758 1,980,773 153,850
------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets ........ 4,705,106 131,510 3,009,422 2,569,203 (1,169,666)
Net Assets:
Beginning of period ...................... 131,510 -- -- 10,050,277 11,219,943
------------ ------------ ------------ ------------ ------------
End of period ............................ $ 4,836,616 $ 131,510 $ 3,009,422 $ 12,619,480 $ 10,050,277
============ ============ ============ ============ ============
</TABLE>
- - ----------------
* Commencement of operations.
** Commencement of investment operations.
See notes to financial statements
P-44
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Notes to Financial Statements
- - --------------------------------------------------------------------------------
1. Seligman Portfolios, Inc. (the "Fund") is an open-end diversified management
investment company consisting of ten separate portfolios (the "Portfolios"),
"Seligman Capital Portfolio" ("Capital Portfolio"), "Seligman Cash Management
Portfolio" ("Cash Management Portfolio"), "Seligman Common Stock Portfolio"
("Common Stock Portfolio"), "Seligman Communications and Information Portfolio"
("Communications and Information Portfolio"), "Seligman Fixed Income Securities
Portfolio" ("Fixed Income Securities Portfolio"), "Seligman Frontier Portfolio"
("Frontier Portfolio"), "Seligman Henderson Global Portfolio" ("Global
Portfolio"), "Seligman Henderson Global Smaller Companies Portfolio" ("Global
Smaller Companies Portfolio"), "Seligman High-Yield Bond Portfolio" ("High-Yield
Bond Portfolio") and "Seligman Income Portfolio" ("Income Portfolio"), each
designed to meet different investment goals. 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, as amended. Shares of the Fund
are also provided as the investment medium for other variable annuity accounts
established by Canada Life or its affiliates ("Canada Life Separate Accounts").
Shares of the Fund (except Communications and Information Portfolio, Frontier
Portfolio, Global Portfolio, Global Smaller Companies Portfolio, and High-Yield
Bond Portfolio) are also provided as the investment medium for Seligman Mutual
Benefit Plan (the "Mutual Benefit Plan") a separate account of MBLLife Assurance
Corporation ("MBL Life"). 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 most current market values or, in
their absence, at fair market value 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. Investments held by Cash Management Portfolio are valued
using the amortized cost method which approximates fair value.
b. The Portfolios may invest up to 10% of their total assets in foreign
securities (except Global Portfolio and Global Smaller Companies Portfolio
which may invest up to 100% of their total assets in foreign securities).
Investments in foreign securities will usually be denominated in foreign
currencies, and the Portfolios may temporarily hold funds in foreign
currencies. The Portfolios may also invest in U.S. dollar-denominated
American Depository Receipts ("ADRs"), American Depository Shares ("ADSs"),
European Depository Receipts ("EDRs"), and Global Depository Receipts
("GDRs"). ADRs and ADSs are issued by domestic banks or trust companies and
evidence ownership of securities issued by foreign corporations. ADRs and
ADSs are traded on United States exchanges or over-the-counter and are not
included in the 10% limitation. EDRs and GDRs are receipts similar to ADRs
and ADSs and are typically issued by foreign banks or trust companies and
traded in Europe. The books and records of the Portfolios are maintained in
U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(i) market value of investment securities, other assets and
liabilities, at the closing daily rate of exchange as reported by a
pricing service;
(ii) purchases and sales of investment securities, income and
expenses, at the rate of exchange prevailing on the respective dates
of such transactions.
The net asset values per share of Portfolios which invest in securities
denominated in foreign currencies 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
sales of securities and net investment income and gains, if any, to be
distributed to shareholders of 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.
Net realized foreign exchange gains (losses) arise from sales of portfolio
securities, sales and maturities of short-term securities, sales of foreign
currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on
the Portfolios' books, and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of portfolio securities and other foreign
currency denominated assets and liabilities at period end, resulting from
changes in exchange rates.
The Portfolios separate that portion of the results of operations resulting
from changes in the foreign exchange rates from the fluctuations arising
from changes in the market prices of securities held in the Portfolios.
Similarly, the Portfolios separate the effect of changes in foreign
exchange rates from the fluctuations arising from changes in the market
prices of portfolio securities sold during the period.
P-45
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- - --------------------------------------------------------------------------------
c. The Global Portfolio and Global Smaller Companies Portfolio may enter
into forward currency contracts in order to hedge their exposure to changes
in foreign currency exchange rates on their foreign portfolio holdings, or
other amounts receivable or payable in foreign currency. A forward contract
is a commitment to purchase or sell a foreign currency at a future date at
a negotiated forward rate. Certain risks may arise upon entering into these
contracts from the potential inability of counterparties to meet the terms
of their contracts. The contracts are valued daily at current exchange
rates and any unrealized gain or loss is included in net unrealized
appreciation or depreciation on translation of assets and liabilities
denominated in foreign currencies and forward currency contracts. The gain
or loss, if any, arising from the difference between the settlement value
of the forward contract and the closing of such contract, is included in
net realized gain or loss from foreign currency transactions. For federal
income tax purposes, certain open forward currency contracts are treated as
sold on the last day of the fiscal year and any gains or losses are
recognized immediately. As a result, the amount of income distributable to
shareholders may vary from the amount recognized for financial statement
purposes.
d. The Portfolios' 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.
e. Investment transactions are recorded on trade dates. Interest income is
recorded on the accrual basis. The Portfolios amortize market discounts and
premiums on purchases of portfolio securities. Dividends receivable and
payable are recorded on ex-dividend dates. The Portfolios may enter into
repurchase agreements with commercial banks and with broker/dealers deemed
to be creditworthy by the Manager. Securities purchased subject to
repurchase agreements are deposited with the Portfolios' custodians and,
pursuant to the terms of the 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. The
repurchase agreements held at December 31, 1995, by various portfolios,
were purchased on December 27, 1995 and matured on or before January 3,
1996.
f. Expenses directly attributable to each Portfolio are charged to such
Portfolio, and expenses that are applicable to more than one Portfolio are
allocated among them.
g. 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 and
the recharacterization of foreign exchange gains or losses to either
ordinary income or realized capital gain for federal income tax purposes.
Where such differences are permanent in nature, they are reclassified in
the components of net assets based on their ultimate characterization for
federal income tax purposes. Any such reclassification will have no effect
on net assets, results of operations, or net asset values per share of the
Portfolios.
2. Until April 15, 1993, the Fund functioned exclusively as the investment
vehicle for the separate account options of the Mutual Benefit Plan issued by
Mutual Benefit Life Insurance Company in Rehabilitation ("Mutual Benefit Life").
On July 16, 1991, the Superior Court of New Jersey (the "Court") entered an
Order appointing the New Jersey Insurance Commissioner as Rehabilitator of
Mutual Benefit Life. The Commissioner was granted immediate exclusive possession
and control of, and title to, the business and assets of Mutual Benefit Life,
including the assets and liabilities of the Mutual Benefit Plan.
On November 10, 1993, the Court issued an Order of Confirmation which provided
for implementation of the Third Amended Plan of Rehabilitation of Mutual Benefit
Life (the "Plan of Rehabilitation"). On April 29, 1994, the Plan of
Rehabilitation was implemented. Substantially all of the assets and liabilities
of Mutual Benefit Life were transferred to MBL Life. In addition, the assets and
liabilities of the Mutual Benefit Plan were transferred to a separate account of
MBL Life. As a separate account, the assets and liabilities of the Mutual
Benefit Plan are maintained separate and apart from MBL Life's other assets and
liabilities. Also, as of April 29, 1994, the ownership of the stock of MBLLife
was transferred to a Trust. The Commissioner is the sole Trustee of the Trust.
MBL Life has decided that it will not accept applications for new contracts nor
will it accept additional purchase payments under existing contracts. In
addition, requests for transfers of amounts to the Fixed Accumulation Account
from the Plan will not be accepted.
P-46
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
3. Purchases and sales of portfolio securities, excluding short-term
investments, for the year ended December31, 1995, were as follows:
Portfolio Purchases Sales
--------- --------- -----
Capital $ 9,827,294 $ 8,320,193
Common Stock 12,084,887 12,040,847
Communications
and Information 53,884,929 15,466,766
Fixed Income Securities 4,126,842 3,924,761
Frontier 14,387,330 3,698,729
Global 3,182,368 942,185
Global Smaller Companies 4,806,988 818,870
High-Yield Bond 3,628,139 858,011
Income 6,011,862 5,187,899
Identified cost of investments sold is used for both financial statement and
federal income tax purposes.
At December 31, 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, including the effects of foreign currency transactions, were as
follows:
Unrealized Unrealized
Portfolio Appreciation Depreciation
--------- ------------ ------------
Capital $ 1,812,197 $ 371,742
Common Stock 7,041,926 352,723
Communications
and Information 1,453,741 5,292,829
Fixed Income Securities 355,387 175
Frontier 1,150,964 660,912
Global 332,449 86,145
Global Smaller Companies 412,876 253,570
High-Yield Bond 74,070 16,682
Income 1,009,354 516,458
At December 31, 1995, the Cash Management Portfolioandthe Fixed Income
Securities Portfolio had net capital loss carryforwards of $398 and $97,373,
respectively, which are available for offset against future taxable net gains.
These net capital loss carryforwards will expire in varying amounts through
2003.
4. J. & W. Seligman & Co. Incorporated (the "Manager") manages the affairs of
the Fund and provides the necessary personnel and facilities, exclusive of and
in addition to those retained by the Fund. Compensation of all officers of the
Fund, all directors of the Fund who are employees or consultants of the Manager,
and all personnel of the Fund and the Manager is paid by the Manager. The
Manager's fee is calculated daily and payable monthly, equal to 0.40%, on an
annual basis, of Capital, Cash Management, Common Stock, Fixed Income
Securities, and Income Portfolios' daily net assets; equal to 0.75%, on an
annual basis, of Communications and Information and Frontier Portfolios' daily
net assets and equal to 0.50%, on an annual basis, of High-Yield Bond
Portfolio's daily net assets. The Manager's fee from the Global and the Global
Smaller Companies Portfolios is calculated daily and payable monthly, equal to
an annual rate of 1.00% of the daily net assets of each Portfolio, of which
0.90% is paid to Seligman Henderson Co. (the "Subadviser"), a 50% owned
affiliate of the Manager. The Manager has agreed to reimburse expenses, other
than the management fee, which exceed 0.20% per annum of the average daily net
assets of each of the Portfolios (except Cash Management Portfolio, Global and
Global Smaller Companies Portfolios). The Manager, at its discretion, has
elected to waive all of its fee for, and reimburse all of the expenses of, the
Cash Management Portfolio until such time as the Manager determines. Effective
May 1, 1995 the Manager and Subadviser have agreed to reimburse expenses, other
than management fee, which exceed 0.40% (previously 0.20%) per annum of the
average daily net assets of Global and Global Smaller Companies Portfolios. For
the year ended December31, 1995, the Manager reimbursed expenses and/or waived
fees of $7,713, $39,914, $14,766, $16,555, and $1,910, for the Capital, Cash
Management, Fixed Income Securities, Frontier, and Income Portfolios,
respectively. For the same period, the Manager and Subadviser waived all of
their fees and the Subadviser reimbursed expenses totalling $51,823 and $42,122
for the Global Portfolio and Global Smaller Companies Portfolio, respectively.
For the period from May 1, 1995 (commencement of operations) to December31,
1995, the Manager reimbursed expenses and waived fees totalling $28,926 for the
High-Yield Bond Portfolio.
P-47
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- - --------------------------------------------------------------------------------
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the CLVA-2 contracts and an affiliate of the Manager, received
concessions of $370,407 from Canada Life after commissions paid to dealers.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, and/or the Subadviser.
Fees of $36,000 were incurred by the Fund for the legal services of Sullivan &
Cromwell, a member of which firm is a director of the Fund.
The Fund 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 annual cost of such fees and interest is included in directors'
fees and expenses, and the accumulated balance thereof at December31, 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.
5. At December31, 1995, there were 20,000,000 shares of Capital Stock authorized
for each of the Capital, Common Stock, Communications and Information, Fixed
Income Securities, Frontier, Global, Global Smaller Companies, High-Yield Bond,
and Income Portfolios, and 100,000,000 shares for the Cash Management Portfolio,
all at a par value of $.001 per share.
Transactions in shares of Capital Stock were as follows:
<TABLE>
<CAPTION>
Capital Portfolio Cash Management Portfolio Common Stock Portfolio
----------------------- --------------------------- ------------------------
Year Ended December 31 Year Ended December 31 Year Ended December 31
----------------------- --------------------------- ------------------------
1995 1994 1995 1994 1995 1994
-------- -------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares ....................... 249,315 250,641 8,777,333 2,322,638 774,737 602,357
Shares issued in payment of
dividends ......................... 1,811 587 251,624 127,857 36,751 37,506
Shares issued in payment
of gain distributions ............. 45,323 50,470 -- -- 185,779 80,272
-------- -------- ---------- ---------- -------- --------
Total ................................ 296,449 301,698 9,028,957 2,450,495 997,267 720,135
-------- -------- ---------- ---------- -------- --------
Shares repurchased ................... (141,073) (227,501) (4,459,283) (2,322,134) (592,244) (716,170)
-------- -------- ---------- ---------- -------- --------
Increase in shares ................... 155,376 74,197 4,569,674 128,361 405,023 3,965
======== ======== ========== ========== ======== ========
<CAPTION>
Fixed Income
Communications and Securities Portfolio
Information Portfolio --------------------------- Frontier Portfolio
----------------------- ------------------------
Year 10/11/94** Year Ended December 31 Year 10/11/94**
Ended to --------------------------- Ended to
12/31/95 12/31/94 1995 1994 12/31/95 12/31/94
-------- -------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares ....................... 2,671,618 47,368 163,349 229,957 877,490 15,970
Shares issued in payment
of dividends ...................... -- -- 23,069 19,564 -- --
Shares issued in payment
of gain distributions ............. 187,370 -- -- -- 34,820 --
--------- -------- ---------- ---------- -------- --------
Total ................................ 2,858,988 47,368 186,418 249,521 912,310 15,970
-------- -------- ---------- ---------- -------- --------
Shares repurchased ................... (58,334) -- (144,731) (233,817) (8,346) --
--------- -------- ---------- ---------- -------- --------
Increase in shares ................... 2,800,654 47,368 41,687 15,704 903,964 15,970
========= ======== ========== ========== ======== =========
<CAPTION>
High-Yield
Global Portfolio Global Smaller Bond Income Portfolio
---------------------- Companies Portfolio Portfolio ----------------------
------------------- ----------
Year Ended December 31 Year 10/11/94** 5/1/95* Year Ended December 31
---------------------- Ended to to ----------------------
1995 1994 12/31/95 12/31/94 12/31/95 1995 1994
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Sale of shares ...................... 214,972 114,731 411,729 12,701 309,043 504,495 423,636
Shares issued in payment
of dividends ..................... 3,942 855 1,778 53 5,742 61,075 68,876
Shares issued in payment
of gain distributions ............ 2,219 1,550 12,819 -- 472 60,368 --
-------- -------- -------- ------ -------- -------- --------
Total ............................... 221,133 117,136 426,326 12,754 315,257 625,938 492,512
-------- -------- -------- ------ -------- -------- --------
Shares repurchased .................. (40,136) (17,445) (24,643) -- (28,569) (439,030) (470,827)
-------- -------- -------- ------ -------- -------- --------
Increase in shares .................. 180,997 99,691 401,683 12,754 286,688 186,908 21,685
======== ======== ======== ====== ======== ======== ========
</TABLE>
P-48
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Financial Highlights
- - --------------------------------------------------------------------------------
The Fund'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 amount.
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 exclude the effect of all
administration fees and asset based sales charges associated with variable
annuity contracts. The total returns for periods of less than one year are not
annualized.
<TABLE>
<CAPTION>
Capital Portfolio
-----------------------------------------------------------------------
Year Ended December 31
-----------------------------------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year ................... $12.700 $14.950 $16.980 $17.740 $11.230
------- ------- ------- ------- -------
Net investment income (loss) ......................... 0.048 0.015 0.021 (0.022) 0.079
Net realized and unrealized gain (loss) on investments 3.385 (0.699) 1.928 1.202 6.547
------- ------- ------- ------- -------
Increase (decrease) from investment operations ....... 3.433 (0.684) 1.949 1.180 6.626
Dividends paid ....................................... (0.047) (0.018) (0.021) -- (0.088)
Distributions from net realized gain ................. (1.176) (1.548) (3.958) (1.940) (0.028)
------- ------- ------- ------- -------
Net increase (decrease) in net asset value ........... 2.210 (2.250) (2.030) (0.760) 6.510
------- ------- ------- ------- -------
Net asset value, end of year ......................... $14.910 $12.700 $14.950 $16.980 $17.740
======= ======= ======= ======= =======
Total return based on net asset value ................ 27.17% (4.59)% 11.65% 6.80% 59.05%
Ratios/Supplemental Data:
Expenses to average net assets ....................... 0.60% 0.60% 0.71% 0.91% 0.60%
Net investment income (loss) to average net assets ... 0.32% 0.10% 0.09% (0.14)% 0.56%
Portfolio turnover ................................... 122.20% 67.39% 65.30% 54.95% 31.44%
Net assets, end of year (000's omitted) .............. $9,294 $5,942 $5,886 $5,497 $5,812
Without management fee waiver and
expense reimbursement:++
Net investment income (loss) per share ............... $0.035 $(0.036) $(0.003) $(0.035)
Ratios:
Expenses to average net assets .................... 0.71% 0.96% 0.83% 1.37%
Net investment income (loss) to average net assets 0.21% (0.26)% (0.03)% (0.21)%
<CAPTION>
Cash Management Portfolio
-----------------------------------------------------------------------
Year Ended December 31
-----------------------------------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year ................... $1.000 $1.000 $1.000 $1.000 $1.000
Net investment income ................................ 0.055 0.040 0.030 0.035 0.056
Dividends paid ....................................... (0.055) (0.040) (0.030) (0.035) (0.056)
------- ------- ------- ------- -------
Net asset value, end of year ......................... $1.000 $1.000 $1.000 $1.000 $1.000
======= ======= ======= ======= =======
Total return based on net asset value ................ 5.60% 4.03% 3.00% 3.53% 5.70%
Ratios/Supplemental Data:
Expenses to average net assets ....................... -- -- -- -- --
Net investment income to average net assets .......... 5.48% 3.98% 2.96% 3.50% 5.49%
Net assets, end of year (000's omitted) .............. $7,800 $3,230 $3,102 $4,230 $5,849
Without management fee waiver and
expense reimbursement:++
Net investment income per share ...................... $0.046 $0.025 $0.019 $0.025 $0.048
Ratios:
Expenses to average net assets .................... 0.87% 1.48% 1.07% 0.97% 0.83%
Net investment income to average net assets ....... 4.61% 2.50% 1.89% 2.53% 4.66%
</TABLE>
- - ----------
++ The Manager, at its discretion, reimbursed expenses and/or waived management
fees for certain periods presented.
P-49
<PAGE>
- - --------------------------------------------------------------------------------
Financial Highlights (continued)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock Portfolio
----------------------
Year Ended December 31
---------------------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period ..... $13.780 $14.980 $15.600 $14.740 $11.580
----------- ----------- ----------- ----------- -----------
Net investment income (loss) ............. 0.349 0.365 0.392 0.346 0.362
Net realized and unrealized gain (loss)
on investments ......................... 3.400 (0.356) 1.479 1.445 3.459
----------- ----------- ----------- ----------- -----------
Increase from investment operations ...... 3.749 0.009 1.871 1.791 3.821
Dividends paid ........................... (0.345) (0.385) (0.394) (0.369) (0.355)
Distributions from net realized gain ..... (1.744) (0.824) (2.097) (0.562) (0.306)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net asset value 1.660 (1.200) (0.620) 0.860 3.160
----------- ----------- ----------- ----------- -----------
Net asset value, end of period ........... $15.440 $13.780 $14.980 $15.600 $14.740
=========== =========== =========== =========== ===========
Total return based on net asset value .... 27.28% 0.04% 11.94% 12.14% 33.16%
Ratios/Supplemental Data:
Expenses to average net assets ........... 0.54% 0.60% 0.55% 0.56% 0.60%
Net investment income (loss) to
average net assets ..................... 2.42% 2.45% 2.10% 2.21% 2.63%
Portfolio turnover ....................... 55.48% 15.29% 10.70% 12.57% 27.67%
Net assets, end of period (000's omitted) $28,836 $20,168 $21,861 $24,987 $26,103
Without management fee waiver and
expense reimbursement:++
Net investment income (loss) per share ... $0.361 $0.350
Ratios:
Expense to average net assets .......... 0.62% 0.71%
Net investment income (loss) to
average net assets ................... 2.43% 2.52%
</TABLE>
<TABLE>
<CAPTION>
Communications and
Information Portfolio
---------------------
10/11/94**
Year Ended to
12/31/95 12/31/94
-------- --------
<S> <C> <C>
Net asset value, beginning of period ..... $10.440 $10.000
----------- --------
Net investment income (loss) ............. 0.000 (0.016)
Net realized and unrealized gain (loss)
on investments ......................... 4.015 0.456
----------- --------
Increase from investment operations ...... 4.015 0.440
Dividends paid ........................... -- --
Distributions from net realized gain ..... (0.955) --
----------- --------
Net increase (decrease) in net asset value 3.060 0.440
----------- --------
Net asset value, end of period ........... $13.500 $10.440
=========== ========
Total return based on net asset value .... 38.55% 4.40
Ratios/Supplemental Data:
Expenses to average net assets ........... 0.95% 0.95%+
Net investment income (loss) to
average net assets ..................... (0.89)% (0.95)%+
Portfolio turnover ....................... 96.62% --
Net assets, end of period (000's omitted) $38,442 $495
Without management fee waiver and
expense reimbursement:++
Net investment income (loss) per share ... (0.436)
Ratios:
Expense to average net assets .......... 13.96%+
Net investment income (loss) to
average net assets ................... (13.96)%+
</TABLE>
<TABLE>
<CAPTION>
Fixed Income Securities Portfolio
---------------------------------
Year Ended December 31
------------------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period ...... $9.270 $10.110 $10.660 $10.990 $10.310
---------- ---------- ---------- ---------- ----------
Net investment income (loss) .............. 0.605 0.499 0.713 0.706 0.798
Net realized and unrealized gain (loss)
on investments .......................... 1.171 (0.841) 0.142 (0.092) 0.699
---------- ---------- ---------- ---------- ----------
Increase (decrease) from investment
operations .............................. 1.776 (0.342) 0.855 0.614 1.497
Dividends paid ............................ (0.606) (0.498) (0.711) (0.772) (0.817)
Distributions from net realized gain ...... -- -- (0.694) (0.172)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value 1.170 (0.840) (0.550) (0.330) 0.680
---------- ---------- ---------- ---------- ----------
Net asset value, end of period ............ $10.440 $9.270 $10.110 $10.660 $10.990
========== ========== ========== ========== ==========
Total return based on net asset value ..... 19.18% (3.39)% 7.98% 5.60% 14.58%
Ratios/Supplemental Data:
Expenses to average net assets ............ 0.60% 0.60% 0.74% 1.00% 0.60%
Net investment income (loss) to
average net assets ...................... 6.22% 5.12% 5.41% 6.22% 7.30%
Portfolio turnover ........................ 114.42% 237.23% 33.21% 23.40% 6.34%
Net assets, end of period (000's omitted) . $4,497 $3,606 $3,775 $4,750 $5,369
Without management fee waiver and
expense reimbursement:++
Net investment income (loss) per share .... $0.571 $0.430 $0.675 $0.712
Ratios:
Expense to average net assets ........... 0.99% 1.31% 1.07% 1.42%
Net investment income (loss) to
average net assets .................... 5.83% 4.41% 5.08% 6.48%
</TABLE>
<TABLE>
Frontier Portfolio
------------------
10/11/94**
Year Ended to
12/31/95 12/31/94
-------- --------
<S> <C> <C>
Net asset value, beginning of period ...... $10.580 10.000
----------- --------
Net investment income (loss) .............. (0.001) (0.012)
Net realized and unrealized gain (loss)
on investments .......................... 3.512 0.592
----------- --------
Increase (decrease) from investment
operations .............................. 3.511 0.580
Dividends paid ............................ -- --
Distributions from net realized gain ...... -- (0.531)
----------- --------
Net increase (decrease) in net asset value 2.980 0.580
----------- --------
Net asset value, end of period ............ $13.560 $10.580
=========== ========
Total return based on net asset value ..... 33.28% 5.80%
Ratios/Supplemental Data:
Expenses to average net assets ............ 0.95% 0.95%+
Net investment income (loss) to
average net assets ...................... (0.55)% (0.70)%+
Portfolio turnover ........................ 106.48% --
Net assets, end of period (000's omitted) . $12,476 $169
Without management fee waiver and
expense reimbursement:++
Net investment income (loss) per share .... $(0.019) $(1.319)
Ratios:
Expense to average net assets ........... 1.37% 40.47%+
Net investment income (loss) to
average net assets .................... (0.97)% (40.22)%+
- - ----------
** Commencement of investment operations.
+Annualized.
++The Manager, at its discretion, reimbursed expenses and/or waived management
fees for certain periods presented.
P-50
</TABLE>
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Portfolio
-----------------------------------
Year Ended December 31 5/3/93*
--------------------- to
1995 1994 12/31/93
---- ---- --------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period ........ $11.340 $11.370 $10.000
---------- ---------- --------
Net investment income ....................... 0.154 0.131 0.021
Net realized and unrealized gain (loss) on
investments ............................... 0.896 (0.306) 1.518
Net realized and unrealized gain (loss) from
foreign currency transactions ............. 0.236 0.325 (0.099)
---------- ---------- --------
Increase from investment operations ......... 1.286 0.150 1.440
Dividends paid .............................. (0.151) (0.064) (0.053)
Distributions from net realized gain ........ (0.085) (0.116) (0.017)
---------- ---------- --------
Net increase (decrease) in net asset value .. 1.050 (0.030) 1.370
---------- ---------- --------
Net asset value, end of period .............. $12.390 $11.340 $11.370
========== ========== ========
Total return based on net asset value ........ 11.34% 1.32% 14.40%
Ratios/Supplemental Data:
Expenses to average net assets ............... 1.35% 1.20% 1.20%+
Net investment income to average net assets .. 1.01% 1.17% 1.30%+
Portfolio turnover ........................... 41.40% 47.34% 2.82%
Net assets, end of period (000's omitted) ... $4,183 $1,776 $648
Without management fee waiver and
expense reimbursement:++
Net investment income (loss) per share ....... $0.001 $(0.419) $(1.004)
Ratios:
Expenses to average net assets ............ 3.40% 6.12% 17.94%+
</TABLE>
<TABLE>
<CAPTION>
Global Smaller
Companies Portfolio
-------------------------------
10/11/94**
Year Ended to
12/31/95 12/31/94
-------- --------
<S> <C> <C>
Net asset value, beginning of period ........ $10.310 $10.000
---------------- --------------
Net investment income ....................... 0.051 0.058
Net realized and unrealized gain (loss) on
investments ............................... 2.037 0.266
Net realized and unrealized gain (loss) from
foreign currency transactions ............. (0.301) 0.029
---------------- --------------
Increase from investment operations ......... 1.787 0.353
Dividends paid .............................. (0.052) (0.043)
Distributions from net realized gain ........ (0.375) .--
---------------- --------------
Net increase (decrease) in net asset value .. 1.360 0.310
---------------- --------------
Net asset value, end of period .............. $11.670 $10.310
================ ==============
Total return based on net asset value ........ 17.38% 3.53%
Ratios/Supplemental Data:
Expenses to average net assets ............... 1.39% 1.20%+
Net investment income to average net assets .. 0.64% 3.14
Portfolio turnover ........................... 55.65% --
Net assets, end of period (000's omitted) ... $4,837 $132
Without management fee waiver and
expense reimbursement:++
Net investment income (loss) per share ....... $(0.051) $(1.225)
Ratios:
Expenses to average net assets ............ 3.84% 37.25%+
Net investment loss to average net assets . (1.81)% (32.91)%+
</TABLE>
<TABLE>
<CAPTION>
High-Yield Bond
Portfolio
---------
5/1/95*
to
12/31/95
--------
<S> <C>
Per Share Operating Performance:
Net asset value, beginning of period ........ $10.000
----------
Net investment income ....................... 0.218
Net realized and unrealized gain (loss)
on investments ............................ 0.519
----------
Increase (decrease) from
investment operations ..................... 0.737
Dividends paid .............................. (0.219)
Distributions from net realized gain ........ (0.018)
----------
Net increase (decrease) in net asset value .. 0.500
----------
Net asset value, end of period .............. $10.500
==========
Total return based on net asset value ....... 7.37%
Ratios/Supplemental Data:
Expenses to average net assets .............. 0.70%+
Net investment income to average net assets . 7.46%+
Portfolio turnover .......................... 67.55%
Net assets, end of year (000's omitted) ..... $3,009
Without management fee waiver and
expense reimbursement:++
Net investment income per share ............. $0.117
Ratios:
Expenses to average net assets ............ 4.38%+
Net investment income to average net assets 3.78%+
</TABLE>
<TABLE>
<CAPTION>
Income Portfolio
--------------------------------------------------------------------
Year Ended December 31
--------------------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $9.970 $11.380 $11.390 $11.250 $9.500
----------- ----------- ----------- ----------- -----------
Net investment income ....................... 0.604 0.689 0.828 0.862 0.896
Net realized and unrealized gain (loss)
on investments ............................ 1.187 (1.369) 0.576 0.896 2.024
----------- ----------- ----------- ----------- -----------
Increase (decrease) from
investment operations ..................... 1.791 (0.680) 1.404 1.758 2.920
Dividends paid .............................. (0.604) (0.730) (0.828) (0.987) (0.904)
Distributions from net realized gain ........ (0.597) .-- (0.586) (0.631) (0.266)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net asset value .. 0.590 (1.410) (0.010) 0.140 1.750
----------- ----------- ----------- ----------- -----------
Net asset value, end of period .............. $10.560 $9.970 $11.380 $11.390 $11.250
=========== =========== =========== =========== ===========
Total return based on net asset value ....... 17.98% (5.96)% 12.37% 15.72% 30.89%
Ratios/Supplemental Data:
Expenses to average net assets .............. 0.60% 0.60% 0.64% 0.68% 0.60%
Net investment income to average net assets . 5.55% 6.34% 6.40% 7.53% 8.05%
Portfolio turnover .......................... 51.22% 29.76% 38.38% 39.46% 43.67%
Net assets, end of year (000's omitted) ..... $12,619 $10,050 $11,220 $11,363 $11,509
Without management fee waiver and
expense reimbursement:++
Net investment income per share ............. $0.602 $0.670 $0.826 $0.867
Ratios:
Expenses to average net assets ............ 0.62% 0.77% 0.65% 0.93%
Net investment income to average net assets 5.53% 6.17% 6.39% 7.72%
</TABLE>
- - ----------
* Commencement of operations.
** Commencement of investment operations.
+Annualized.
++The Manager, at its discretion, reimbursed expenses and/or waived management
fees for certain periods presented.
P-51
<PAGE>
Seligman Portfolios, Inc.
- - --------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
- - --------------------------------------------------------------------------------
The Director and Shareholders,
Seligman Portfolios, Inc.
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Seligman Portfolios, Inc. (comprising,
respectively, the 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, collectively referred to as the "Fund") as of
December 31, 1995, and the related statements of operations for the year then
ended, the statements of changes in nets assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
indicated therein. These financial statements are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures include confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting the Seligman Portfolios, Inc. at
December 31, 1995, the results of their operations for the year then ended, the
changes in their net assets, for each of the two years in the period then ended,
and the financial highlights for each of the indicated periods, in conformity
with generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
February 2, 1996
P-52
<PAGE>
Seligman Portfolios, Inc.
- - -------------------------------------------------------------------------------
Board of Directors
- - -------------------------------------------------------------------------------
Fred E. Brown
Director and Consultant,
J. & W. Seligman & Co. Incorporated
John R. Galvin (2)
Dean, Fletcher School of Law and Diplomacy
at Tufts University
Director, USLIFE Corporation
Alice S. Ilchman (3)
President, Sarah Lawrence College
Trustee, Committee for Economic Development
Director, NYNEX
Chairman, The Rockefeller Foundation
Frank A. McPherson (2)
Chairman and CEO, Kerr-McGee Corporation
Director, Kimberly-Clark Corporation
Director, Baptist Medical Center
John E. Merow
Partner, Sullivan & Cromwell, Law Firm
Director, Commonwealth Aluminum Corporation
Betsy S. Michel (2)
Director or Trustee,
Various Organizations
William C. Morris (1)
Chairman
Chairman of the Board and President,
J. & W. Seligman & Co. Incorporated
Chairman, Carbo Ceramics Inc.
Director, Kerr-McGee Corporation
James C. Pitney (3)
Partner, Pitney, Hardin, Kipp & Szuch, Law Firm
Director, Public Service Enterprise Group
James Q. Riordan (3)
Director, The Brooklyn Union Gas Company
Trustee, Committee for Economic Development
Director, Dow Jones & Co., Inc.
Director, Public Broadcasting Service
Ronald T. Schroeder(1)
Managing Director,
J. & W. Seligman & Co. Incorporated
Robert L. Shafer (3)
Vice President, Pfizer Inc.
Director, USLIFE Corporation
James N. Whitson (2)
Executive Vice President and Director,
Sammons Enterprises, Inc.
Director, C-SPAN
Director, Red Man Pipe and Supply Company
Brian T. Zino (1)
President
Managing Director,
J. & W. Seligman & Co. Incorporated
- - ----------
Member:
(1) Executive Committee
(2) Audit Committee
(3) Director Nominating Committee
- - -------------------------------------------------------------------------------
Executive Officers
- - -------------------------------------------------------------------------------
William C. Morris
Chairman
Brian T.Zino
President
Daniel J. Charleston
Vice President
Leonard J. Lovito
Vice President
Arsen Mrakovcic
Vice President
Loris D. Muzzatti
Vice President
Charles C. Smith, Jr.
Vice President
Lawrence P. Vogel
Vice President
Paul H. Wick
Vice President
Thomas G. Rose
Treasurer
Frank J. Nasta
Secretary
- - -------------------------------------------------------------------------------
Manager
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, New York 10017
Subadviser
Seligman Henderson Co.
100 Park Avenue
New York, New York 10017
General Distributor
Seligman Financial Services, Inc.
100 Park Avenue
New York, New York 10017
Custodians
Investors Fiduciary Trust Company
Morgan Stanley Trust Company
General Counsel
Sullivan & Cromwell
Independent Auditors
Ernst & Young LLP
P-53
<PAGE>
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Part A - Financial Highlights from June 21, 1988 (commencement of
operations) to December 31, 1995 for Seligman Capital
Portfolio, Seligman Cash Management Portfolio, Seligman
Common Stock Portfolio, Seligman Fixed Income Securities
Portfolio and Seligman Income Portfolio; from May 3, 1993
(commencement of operations) to December 31, 1995 for the
Seligman Henderson Global Portfolio; from October 11, 1994
(commencement of operations) to December 31, 1995 for
Seligman Communications and Information Portfolio, Seligman
Frontier Portfolio and Seligman Henderson Global Smaller
Companies Portfolio; and from May 1, 1995 (commencement of
operations) to December 31, 1995 for Seligman High-Yield
Bond Portfolio.
Part B - Required Financial Statements are included in the Fund's
audited 1995 Annual Report which is incorporated by
reference in the Fund's Statement of Additional Information.
These Financial Statements are: Portfolios of Investments as
of December 31, 1995; Statements of Assets and Liabilities
as of December 31, 1995; Statements of Operations for the
year ended December 31, 1995 for all Portfolios except
Seligman High-Yield Bond Portfolio and for the period May 1,
1995 (commencement of operations) to December 31, 1995 for
the Seligman High-Yield Bond Portfolio; Statements of
Changes in Net Assets for the years ended December 31, 1995
and 1994 for Seligman Capital Portfolio, Seligman Cash
Management Portfolio, Seligman Common Stock Portfolio,
Seligman Fixed Income Securities Portfolio, Seligman
Henderson Global Portfolio and Seligman Income Portfolio;
for the year ended December 31, 1995 and for the period
October 11, 1994 (commencement of operations) to December
31, 1994 for Seligman Communications and Information
Portfolio, Seligman Frontier Portfolio and Seligman
Henderson Global Smaller Companies Portfolio; and for the
period May 1, 1995 (commencement of operations) to December
31, 1995 for Seligman High-Yield Bond Portfolio. Notes to
Financial Statements; Financial Highlights for the five
years ended December 31, 1995 for Seligman Capital
Portfolio, Seligman Cash Management Portfolio, Seligman
Common Stock Portfolio, Seligman Fixed Income Securities
Portfolio, and Seligman Income Portfolio; from October 11,
1994 (commencement of operations) to December 31, 1995 for
Seligman Communications and Information Portfolio, Seligman
Frontier Portfolio and Seligman Henderson Global Smaller
Companies Portfolio; and for the period May 1, 1995
(commencement of operations) to December 31, 1995 for
Seligman High-Yield Bond Portfolio. Report of Independent
Auditors. Also included in the Fund's Statement of
Additional Information are Condensed Statements of Net
Assets as of April 26, 1996 for each of the Seligman
Henderson Global Growth Opportunities Portfolio and the
Seligman Henderson Global Technology Portfolio.
(b) Exhibits: All Exhibits have been filed previously except where
otherwise noted and Exhibits marked with an asterisk (*) are filed
herewith and exhibits marked with a double asterisk (**) will be filed
by amendment.
(1) Articles of Amendment to the Restated Articles of Incorporation.*
(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.
<PAGE>
PART C OTHER INFORMATION
(5) (a) Form of Management Agreement in respect of Seligman Henderson Global
Growth Opportunities Portfolio and Seligman Henderson Global
Technology Portfolio.(Incorporated by reference to Post-Effective No.
17 filed on February 15, 1996.)
(b) Form of Subadvisory Agreement in respect of Seligman Henderson Global
Growth Opportunities Portfolio and Seligman Henderson Global
Technology Portfolio. (Incorporated by reference to Post-Effective No.
17 filed on February 15, 1996.)
(c) 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.)
(d) 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.)
(e) 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.)
(f) 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.)
(g) Management Agreement in respect of Seligman Henderson Global
Portfolio. (Incorporated by reference to Post-Effective Amendment No.
15 filed on March 31, 1995.)
(h) Subadvisory Agreement in respect of Seligman Henderson Global
Portfolio. (Incorporated by reference to Post-Effective Amendment No.
15 filed on March 31, 1995.)
(i) 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) First 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) Second Amendment to Custodian Agreement in respect of Seligman
High-Yield Bond Portfolio.*
<PAGE>
PART C OTHER INFORMATION
(8) (h) Third Amendment to Custodian Agreement in respect of Seligman
Henderson Global Growth Opportunities Portfolio and Seligman Henderson
Global Technology Portfolio.**
(i) Second Amendment to Recordkeeping Agreement in respect of Seligman
Henderson Global Growth Opportunities Portfolio and Seligman Henderson
Global Technology Portfolio.*
(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.)
(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.*
(h) Fourth 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 Growth Opportunities
Portfolio and Seligman Henderson Global Technology Portfolio.*
(10) Opinion and Consent of Counsel.*
(11) Consent of independent auditors.*
(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.)
<PAGE>
PART C OTHER INFORMATION
(13) (d) Representation Re: Initial Capital (Purchase Agreement for Seligman
Henderson Global Growth Opportunities Portfolio and Seligman Henderson
Global Technology Portfolio).*
(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.
(16) N/A.
(17) Financial Data Schedule meeting the requirements of Rule 483 under the
Securities Act of 1933.*
(18) N/A.
Item 25. Persons Controlled by or Under Common Control with Registrant
None.
Item 26. Number of Holders of Securities
As of February 1, 1996, 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 other associated 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 eight other associated
investment companies. They are Seligman Capital 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 Income Fund, 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 December 5, 1995.
Item 29. N/A
<PAGE>
PART C OTHER INFORMATION
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 Portfolio,
Seligman Cash Management Portfolio, Seligman Common Stock Portfolio,
Seligman Communications and Information Portfolio, Seligman Fixed
Income Securities Portfolio, Seligman Frontier Portfolio, Seligman
High-Yield Bond Portfolio, and Seligman Income Portfolio: Investors
Fiduciary Trust Company, 127 West 10th Street, Kansas City, Missouri
64105.
Custodian for Seligman Henderson Global Growth Opportunities
Portfolio, Seligman Henderson Global Portfolio, Seligman Henderson
Global Smaller Companies Portfolio and Seligman Henderson Global
Technology Portfolio: Morgan Stanley Trust Company, One Pierrepont
Plaza, Brooklyn, New York 11201.
Recordkeeping Agent for Seligman Henderson Global Growth Opportunities
Portfolio, Seligman Henderson Global Portfolio, Seligman Henderson
Global Smaller Companies Portfolio and Seligman Henderson Global
Technology Portfolio: 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.
(2) The Registrant undertakes to call a meeting of shareholders for the
purpose of voting upon the removal of a director or directors and to
assist in communications with other shareholders as required by
Section 16(c) of the Investment Company Act of 1940.
<PAGE>
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 No. 18 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 May, 1996.
SELIGMAN PORTFOLIOS, INC.
By: /s/ WILLIAM C. MORRIS
-------------------------
William C. Morris, Chairman
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Post-Effective Amendment No. 18 to the Registration
Statement has been signed below by the following persons, in the capacities
indicated on May 1, 1996.
Signature Title
/s/ WILLIAM C. MORRIS Chairman of the Board (Principal
- - -------------------------- executive officer) and Director
William C. Morris
/s/ BRIAN T. ZINO Director and President
- - --------------------------
Brian T. Zino
/s/ THOMAS G. ROSE Treasurer
- - --------------------------
Thomas G. Rose
Fred E. Brown, Director )
Alice S. Ilchman, Director )
John E. Merow, Director )
Betsy S. Michel, Director ) /s/ BRIAN T. ZINO
-----------------
James C. Pitney, Director ) *Brian T. Zino, Attorney-In-Fact
James Q. Riordan, Director )
Ronald T. Schroeder, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
<PAGE>
INDEX TO EXHIBITS
Exhibits: All Exhibits have been filed previously except where otherwise noted
and Exhibits marked with an asterisk (*) are filed herewith and exhibits marked
with a double asterisk (**) will be filed by amendment.
Exhibit Number Sequential
Page Number
(1) Articles of Amendment to the Restated Articles of Incorporation.*
(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 Henderson Global
Growth Opportunities Portfolio and Seligman Henderson Global
Technology Portfolio.(Incorporated by reference to Post-Effective No.
17 filed on February 15, 1996.)
(b) Form of Subadvisory Agreement in respect of Seligman Henderson Global
Growth Opportunities Portfolio and Seligman Henderson Global
Technology Portfolio. (Incorporated by reference to Post-Effective No.
17 filed on February 15, 1996.)
(c) 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.)
(d) 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.)
(e) 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.)
(f) 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.)
(g) Management Agreement in respect of Seligman Henderson Global
Portfolio. (Incorporated by reference to Post-Effective Amendment No.
15 filed on March 31, 1995.)
(h) Subadvisory Agreement in respect of Seligman Henderson Global
Portfolio. (Incorporated by reference to Post-Effective Amendment No.
15 filed on March 31, 1995.)
(i) 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) First 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) Second Amendment to Custodian Agreement in respect of Seligman
High-Yield Bond Portfolio.*
(h) Third Amendment to Custodian Agreement in respect of Seligman
Henderson Global Growth Opportunities Portfolio and Seligman Henderson
Global Technology Portfolio.**
(i) Second Amendment to Recordkeeping Agreement in respect of Seligman
Henderson Global Growth Opportunities Portfolio and Seligman Henderson
Global Technology Portfolio.*
(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.)
(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.*
(h) Fourth 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 Growth Opportunities
Portfolio and Seligman Henderson Global Technology Portfolio.*
(10) Opinion and Consent of Counsel.*
(11) Consent of independent auditors.*
(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.)
(d) Representation Re: Initial Capital (Purchase Agreement for Seligman
Henderson Global Growth Opportunities Portfolio and Seligman Henderson
Global Technology Portfolio).*
(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.
(16) N/A.
(17) Financial Data Schedule meeting the requirements of Rule 483 under the
Securities Act of 1933.*
(18) N/A.
SELIGMAN PORTFOLIOS, INC.
ARTICLES SUPPLEMENTARY
Seligman Portfolios, Inc., a Maryland Corporation having its principal
office in Baltimore City, Maryland and registered as an open-end investment
company under the Investment Company Act of 1940 (hereinafter called the
"Corporation") hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The total number of shares of capital stock of all classes which
the Corporation has authority to issue is hereby increased to 900,000,000 shares
of capital stock (par value $0.001 per share), amounting to an aggregate par
value of $90,000.00, of which 100,000,000 shares are classified as the "Capital
Portfolio Class," 100,000,000 shares are classified as the "Common Stock
Portfolio Class," 100,000,000 shares are classified as the "Communications and
Information Portfolio Class," 100,000,000 shares are classified as the "Fixed
Income Portfolio Class," 100,000,000 shares are classified as the "Frontier
Portfolio Class," 100,000,000 shares are classified as the "Global Portfolio
Class," 100,000,000 shares are classified as the "Global Smaller Companies
Portfolio Class," 100,000,000 shares are classified as the "High-Yield Bond
Portfolio Class" and 100,000,000 shares are classified as the "Income Portfolio
Class."
SECOND: The shares of each of the Capital Portfolio Class, the Common
Stock Portfolio Class, The Communications and Information Portfolio Class, the
Fixed Income Portfolio Class, the Frontier Portfolio Class, the Global Portfolio
Class, the Global Smaller Companies Portfolio Class, the High-Yield Portfolio
Class and the Income Portfolio Class aforesaid shall have all the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications or terms or conditions of redemption as those
respectively set forth for such Classes of Shares in the Corporation's Charter
as it may be supplemented or amended from time to time.
<PAGE>
THIRD: The Board of Directors of the Corporation on September 21, 1995
duly adopted and approved a resolution in accordance with Section 2-105(c) of
the General Corporation Law of the State of Maryland in which was set forth the
foregoing increase in capital stock of the Corporation.
FOURTH: The shares of the Capital Portfolio Class, the Common Stock
Portfolio Class, the Communications and Information Portfolio Class, the Fixed
Income Portfolio Class, the Frontier Portfolio Class, the Global Portfolio
Class, the Global Smaller Companies Portfolio Class, the High-Yield Portfolio
Class and the Income Portfolio Class aforesaid have been duly classified or
reclassified by the Board of Directors pursuant to authority and power contained
in the Articles of Incorporation of the Corporation.
FIFTH (a) The total number of shares of capital stock of all classes
which the Corporation was heretofore authorized to issue was 180,000,000 shares
of capital stock (par value $0.001), amounting to an aggregate par value of
$18,000.00, of which 20,000,000 shares were classified as the "Capital Portfolio
Class," 20,000,000 shares were classified as the "Common Stock Portfolio Class,"
20,000,000 shares were classified as the "Communications and Information
Portfolio Class," 20,000,000 shares were classified as the "Fixed Income
Portfolio Class," 20,000,000 shares were classified as the "Frontier Portfolio
Class," 20,000,000 shares were classified as the "Global Portfolio Class,"
20,000,000 shares were classified as the "Global Smaller Companies Portfolio
Class," 20,000,000 shares were classified as the "High-Yield Bond Portfolio
Class" and 20,000,000 shares were classified as the "Income Portfolio Class."
(b) The total number of shares of Common Stock is increased by these
Articles Supplementary to 900,000,000 shares of the par value of $0.001 each and
of the aggregate par value of $90,000.00, of which 100,000,000 shares are
classified as the "Capital Portfolio Class," 100,000,000 shares are classified
as the "Common Stock Portfolio Class," 100,000,000 shares are classified as the
"Communications and Information Portfolio Class," 100,000,000 shares are
classified as the "Fixed Income Portfolio Class," 100,000,000 shares are
classified as the "Frontier Portfolio Class," 100,000,000 shares are classified
as the "Global Portfolio Class," 100,000,000 shares are classified as the
"Global Smaller Companies Portfolio Class," 100,000,000 shares are classified as
the "High-Yield Bond Portfolio Class" and 100,000,000 shares are classified as
the "Income Portfolio Class."
(c) The Corporation currently has only nine classes of Common Stock
outstanding.
IN WITNESS WHEREOF, SELIGMAN PORTFOLIOS, INC. has caused these Articles
Supplementary to be signed in its name and on hits behalf by its President and
witnessed by its Secretary, and each of said officers of the Corporation has
also acknowledged these Articles Supplementary to be the corporate act of the
Corporation and has stated under penalties of perjury that to the best of his
knowledge, information and belief that the matters and facts set forth with
respect to approval are true in all material respects, all on January 17, 1996.
SELIGMAN PORTFOLIOS, INC.
By: /s/ Brian T. Zino
------------------------
Brian T. Zino, President
Witness:
/s/ Frank J. Nasta
- - ------------------
Frank J. Nasta
Secretary
<PAGE>
ARTICLES SUPPLEMENTARY
to
ARTICLES OF AMENDMENT AND RESTATEMENT
of
SELIGMAN PORTFOLIOS, INC.
THIS IS TO CERTIFY that SELIGMAN PORTFOLIOS, INC., a Maryland
corporation having its principal office in Baltimore City, Maryland (hereinafter
called the "Corporation"), hereby certifies to the State Department of
Assessments and Taxation of Maryland that:
FIRST: The Board of Directors of the Corporation, at a meeting duly
convened and held on March 21, 1996, adopted a resolution (a) classifying
20,000,000 authorized and unissued shares of the par value of $.001 each of the
common stock ("Shares") of the Seligman Fixed Income Securities Portfolio class
of the Corporation as a separate class of Shares (the "Seligman Henderson Global
Growth Opportunities Portfolio") designated the "Seligman Henderson Global
Growth Opportunities Portfolio" and classifying 20,000,000 authorized and
unissued Shares of the Seligman Capital Portfolio class of the Corporation as a
separate class of Shares (the "Seligman Henderson Global Technology Portfolio")
designated the "Seligman Henderson Global Technology Portfolio" and (b) setting
and establishing the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications or terms or conditions
of redemption of each class of Seligman Henderson Global Growth Opportunities
Portfolio and Seligman Henderson Global Technology Portfolio as those set forth
for a class of Shares of the Corporation in the Corporation's Charter as
supplemented or amended from time to time, including the Articles of Amendment
and Restatement as filed on April 14, 1988 and approved on the same day.
SECOND: The Shares of each of the Seligman Henderson Global Growth
Opportunities Portfolio and the Seligman Henderson Global Technology Portfolio
aforesaid have been duly classified by the Board of Directors pursuant to
authority and power contained in the Articles of Amendment and Restatement of
the Corporation.
IN WITNESS WHEREOF, SELIGMAN PORTFOLIOS, INC. has caused these Articles
Supplementary to be signed in its name and on its behalf by its President and
witnessed by its Secretary, and each of said officers of the Corporation has
also acknowledged these Articles Supplementary to be the corporate act of the
Corporation and has stated under penalties of perjury that to the best of his
knowledge, information and belief that the matters and facts set forth with
respect to approval are true in all material respects, all on April 24, 1996.
SELIGMAN PORTFOLIOS, INC.
By: /s/ Brian T. Zino
------------------------
Brian T. Zino, President
Witness:
/s/ Frank J. Nasta
--------------
Frank J. Nasta
Secretary
<PAGE>
THE UNDERSIGNED, President of SELIGMAN PORTFOLIOS, INC., who executed
on behalf of said corporation the foregoing Articles Supplementary of which this
Certificate is made a part, hereby acknowledges, in the name and on behalf of
said corporation, the foregoing Articles Supplementary to be the corporate act
of said corporation and further certifies under penalties of perjury that, to
the best of his knowledge, information and belief, the matters and facts set
forth therein with respect to the approval thereof are true in all material
respects.
/s/ Brian T. Zino
------------------------
Brian T. Zino
SECOND AMENDMENT OF CUSTODY AGREEMENT
THIS SECOND AMENDMENT OF CUSTODY AGREEMENT ("Agreement") is made and
entered into to be effective as of May 1, 1995, by and between SELIGMAN
PORTFOLIOS, INC., a Maryland corporation ("Fund"), and INVESTORS FIDUCIARY TRUST
COMPANY, a Missouri trust company ("IFTC").
RECITALS
A. Fund and IFTC are parties to that certain Custody Agreement dated June
1, 1988, as amended May 1, 1993 and October 4, 1994 ("Custody
Agreement"), pursuant to which Fund appointed IFTC as custodian and
recordkeeping agent of the Seligman Capital Portfolio, Seligman Cash
Management Portfolio, Seligman Common Stock Portfolio, Seligman
Communications and Information Portfolio, Seligman Fixed Income
Securities Portfolio, Seligman Frontier Portfolio and Seligman Income
Portfolio.
B. Fund desires to appoint IFTC as custodian and recordkeeping agent of
its new portfolio, known as the Seligman High-Yield Bond Portfolio,
upon and subject to the terms, conditions and agreements set forth in
the Custody Agreement, and IFTC is willing to accept such appointment.
AGREEMENT
1. Fund hereby appoints IFTC as custodian and recordkeeping agent of the
Seligman High-Yield Bond Portfolio, and IFTC hereby accepts such
appointment and agrees that it will act as the custodian and
recordkeeping agent of the Seligman High-Yield Bond Portfolio.
2. Such appointment and agreement is made upon and subject to all the
terms, conditions and agreements set forth in the Custody Agreement,
which is hereby incorporated herein by reference. Fund and IFTC hereby
ratify and confirm the Custody Agreement and agree that it remains in
full force and effect and is binding upon the parties in accordance
with its terms, except as amended hereby. Each party hereby confirms
that except as amended herein all of its representations and warranties
set forth in the Custody Agreement remain true and correct as of the
date of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers to be effective as of the date and
year first above written.
INVESTORS FIDUCIARY TRUST COMPANY
By:______________________________
Title:___________________________
SELIGMAN PORTFOLIOS, INC.
By:______________________________
Title:___________________________
SECOND AMENDMENT OF RECORDKEEPING AGREEMENT
THIS SECOND AMENDMENT OF RECORDKEEPING AGREEMENT ("Agreement") is made
and entered into to be effective as of May 1, 1996 by and between SELIGMAN
PORTFOLIOS, INC. a Maryland corporation ("Fund") and INVESTORS FIDUCIARY TRUST
COMPANY, a Missouri trust company ("IFTC").
RECITALS
A. Fund and IFTC are parties to that certain Recordkeeping Agreement dated
April 27, 1993, as amended October 4, 1994 ("Recordkeeping Agreement"),
pursuant to which the Fund appointed IFTC as recordkeeping agent of the
Fund's Seligman Henderson Global Portfolio and Seligman Henderson
Global Smaller Companies Portfolio.
B. Fund desires to appoint IFTC as recordkeeping agent of two of its new
portfolios, known as the Seligman Henderson Global Growth Opportunities
Portfolio and Seligman Henderson Global Technology Portfolio, upon and
subject to the terms, conditions and agreements set forth in the
Recordkeeping Agreement, and IFTC is willing to accept such
appointment.
AGREEMENT
1. Fund hereby appoints IFTC as recordkeeping agent of the Seligman
Henderson Global Growth Opportunities Portfolio and Seligman Henderson
Global Technology Portfolio and IFTC hereby accepts such appointment
and agrees that it will act as the recordkeeping agent of the Seligman
Henderson Global Growth Opportunities Portfolio and Seligman Henderson
Global Technology Portfolio.
2. Such appointment and agreement is made upon and subject to all the
terms, conditions and agreements set forth in the Recordkeeping
Agreement, which is hereby incorporated herein by reference. Fund and
IFTC hereby ratify and confirm the Recordkeeping Agreement and agree
that it remains in full force and effect and is binding upon the
parties in accordance with its terms, except as amended hereby. Each
party hereby confirms that except as amended herein all of its
representations and warranties set forth in the Recordkeeping Agreement
remain true and correct as of the date of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers to be effective as of the date and
year first above written.
INVESTORS FIDUCIARY TRUST COMPANY
By:
-----------------------------
Title:
---------------------------
SELIGMAN PORTFOLIOS, INC.
By:
-----------------------------
Title:
---------------------------
10
THIRD AMENDMENT OF AGENCY AGREEMENT
THIS THIRD AMENDMENT OF AGENCY AGREEMENT ("Agreement") is made and
entered into to be effective as of May 1, 1995 by and between SELIGMAN
PORTFOLIOS, INC., a Maryland corporation ("Fund"), and INVESTORS FIDUCIARY TRUST
COMPANY, a Missouri trust company ("IFTC").
RECITALS
AMENDMENT OF AGENCY AGREEMENT
A. Fund and IFTC are parties to that certain Agency Agreement dated June
1, 1988, as amended by that certain First Amendment of Agency Agreement
dated as of May 3, 1993 and by that certain Second Amendment of Agency
Agreement dated as of October 4, 1994 (collectively, "Agency
Agreement"), pursuant to which Fund appointed IFTC as transfer agent
and dividend disbursing agent of each of the Fund's existing
portfolios.
B. Fund is instituting one new portfolio, to be known as the Seligman
High-Yield Bond Portfolio, (the "New Portfolio"), and desires to
appoint IFTC as transfer agent and dividend disbursing agent thereof
upon and subject to the terms, conditions and agreements set forth in
the Agency Agreement and IFTC is willing to accept such appointment.
AGREEMENT
1. Fund hereby appoints IFTC as transfer agent and dividend disbursing
agent of the New Portfolio, and IFTC hereby accepts such appointment
and agrees that it will act as the transfer agent and dividend
disbursing agent of the New Portfolio.
2. Such appointment and agreement is made upon and subject to all the
terms, conditions and agreements set forth in the Agency Agreement,
which is hereby incorporated herein by reference. Fund and IFTC hereby
ratify and confirm the Agency Agreement and agree that it remains in
full force and effect and is binding upon the parties in accordance
with its terms, except as amended hereby. Each party hereby confirms
that except as amended herein all of its representations and warranties
set forth in the Agency Agreement remain true and correct as of the
date of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers to be effective as of the date and
year first above written.
INVESTORS FIDUCIARY TRUST COMPANY
By:
-----------------------------
Title:
--------------------------
SELIGMAN PORTFOLIOS, INC.
By:
-----------------------------
Title:
---------------------------
11
FOURTH AMENDMENT OF AGENCY AGREEMENT
THIS FOURTH AMENDMENT OF AGENCY AGREEMENT ("Agreement") is made and
entered into to be effective as of May 1, 1996 by and between SELIGMAN
PORTFOLIOS, INC., a Maryland corporation ("Fund"), and INVESTORS FIDUCIARY TRUST
COMPANY, a Missouri trust company ("IFTC").
RECITALS
A. Fund and IFTC are parties to that certain Agency Agreement dated June
1, 1988, as amended by that certain First Amendment of Agency Agreement
dated as of May 3, 1993, by that certain Second Amendment of Agency
Agreement dated as of October 4, 1994 and by that certain Third
Amendment of Agency Ageement dated as of May 1, 1995 (collectively,
"Agency Agreement"), pursuant to which Fund appointed IFTC as transfer
agent and dividend disbursing agent of each of the Fund's existing
portfolios.
B. Fund is instituting two new portfolios, to be known as the Seligman
Henderson Global Growth Opportunities Portfolio and Seligman Henderson
Global Technology Portfolio (collectively, the "New Portfolios"), and
desires to appoint IFTC as transfer agent and dividend disbursing agent
thereof upon and subject to the terms, conditions and agreements set
forth in the Agency Agreement and IFTC is willing to accept such
appointment.
AGREEMENT
1. Fund hereby appoints IFTC as transfer agent and dividend disbursing
agent of the New Portfolios, and IFTC hereby accepts such appointment
and agrees that it will act as the transfer agent and dividend
disbursing agent of the New Portfolios.
2. Such appointment and agreement is made upon and subject to all the
terms, conditions and agreements set forth in the Agency Agreement,
which is hereby incorporated herein by reference. Fund and IFTC hereby
ratify and confirm the Agency Agreement and agree that it remains in
full force and effect and is binding upon the parties in accordance
with its terms, except as amended hereby. Each party hereby confirms
that except as amended herein all of its representations and warranties
set forth in the Agency Agreement remain true and correct as of the
date of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers to be effective as of the date and
year first above written.
INVESTORS FIDUCIARY TRUST COMPANY
By:
------------------------------
Title:
---------------------------
SELIGMAN PORTFOLIOS, INC.
By:
-----------------------------
Title:
---------------------------
[Sullivan & Cromwell Letterhead]
April 30, 1996
Seligman Portfolios, Inc.,
100 Park Avenue,
New York, New York 10017.
Dear Sirs:
In connection with Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A (File No. 33-15253) of Seligman Portfolios,
Inc., a Maryland corporation (the "Fund"), which you expect to file under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to an
indefinite number of shares of Capital Stock, par value $.001 per share, of the
classes designated as Seligman Henderson Global Growth Opportunities Portfolio
and Seligman Henderson Global Technology Portfolio (the "Portfolios", and the
Shares of the Portfolios being referred to herein as the "Shares"), we, as your
counsel, have examined such corporate records, certificates and other documents,
and such questions of law, as we have considered necessary or appropriate for
the purposes of this opinion.
Upon the basis of such examination, we advise you that, in our
opinion, the Shares have been duly authorized to the extent of 20,000,000 Shares
of each Portfolio, and when the Post-Effective Amendment referred to above has
become effective under the Securities Act and the Shares of each Portfolio have
been issued (a) for at least the par value thereof in accordance with the
Registration Statement referred to above, (b) so as not to exceed the then
authorized number of Shares of the relevant Portfolio and (c) in accordance with
the authorization of the Board of Directors, the Shares will be duly and validly
issued, fully paid and non-assessable.
We have relied as to certain matters on information obtained
from public officials, officers of the Fund and other sources believed by us to
be responsible.
The foregoing opinion is limited to the federal laws of the
United States and the General Corporation Law of the State of Maryland, and we
are expressing no opinion as to the effect of the laws of any other
jurisdiction.
We hereby consent to the filing of this opinion as an exhibit
to the Post-Effective Amendment referred to above. In giving such consent, we do
not thereby admit that we are in the category of person whose consent is
required under Section 7 of the Securities Act.
Very truly yours,
SULLIVAN & CROMWELL
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights" in the Prospectus and "Custodians and Independent Auditors" and
"Financial Statements" in the Statement of Additional Information and to the
incorporation by reference of our report dated February 2, 1996, and to the use
of our report dated April 29, 1996, in this Registration Statement (Form N-1A
No. 33-15253) of Seligman Portfolios, Inc.
/s/ Ernst & Young LLP
---------------------
ERNST & YOUNG LLP
New York, New York
April 29, 1996
INVESTMENT LETTER
SELIGMAN PORTFOLIOS, INC.
Seligman Portfolios, Inc. (the "Fund"), an open-end, diversified management
investment company, and the undersigned ("Purchaser"), intending to be legally
bound, hereby agree as follows:
1. In order to provide the Seligman Henderson Global Growth Opportunities
Portfolio and Seligman Henderson Global Technology Portfolio of the
Fund (the "Portfolios") with its initial capital, the Fund hereby sells
to Purchaser and Purchaser purchases 1 share (the "Share") of Capital
Stock (par value $.001) of each Portfolio at a price of $10.00 per
share. The Fund hereby acknowledges receipt from Purchaser of funds in
the amount of $10.00 in full payment for each Share.
2. Purchaser represents and warrants to the Fund that each Share is being
acquired for investment and not with a view to distribution thereof,
and that Purchaser has no present intention to redeem or dispose of
each Share.
IN WITNESS WHEREOF, the parties have executed this agreement as of the 26th day
of April, 1996 ("Purchase Date").
SELIGMAN PORTFOLIOS, INC.
By: /s/ Lawrence P. Vogel
---------------------
Name: Lawrence P. Vogel
Title: Vice President
SELIGMAN FINANCIAL SERVICES, INC.
By: /s/ Stephen J. Hodgdon
-----------------------
Name: Stephen J. Hodgdon
Title: President
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> SELIGMAN CAPITAL PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 8413
<INVESTMENTS-AT-VALUE> 9853
<RECEIVABLES> 210
<ASSETS-OTHER> 571
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 10634
<PAYABLE-FOR-SECURITIES> 1322
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 18
<TOTAL-LIABILITIES> 1340
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7852
<SHARES-COMMON-STOCK> 623
<SHARES-COMMON-PRIOR> 468
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (3)
<ACCUMULATED-NET-GAINS> 5
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1440
<NET-ASSETS> 9294
<DIVIDEND-INCOME> 50
<INTEREST-INCOME> 16
<OTHER-INCOME> 0
<EXPENSES-NET> (43)
<NET-INVESTMENT-INCOME> 23
<REALIZED-GAINS-CURRENT> 674
<APPREC-INCREASE-CURRENT> 997
<NET-CHANGE-FROM-OPS> 1694
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (27)
<DISTRIBUTIONS-OF-GAINS> (666)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 249
<NUMBER-OF-SHARES-REDEEMED> (141)
<SHARES-REINVESTED> 47
<NET-CHANGE-IN-ASSETS> 3351
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (3)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 29
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 51
<AVERAGE-NET-ASSETS> 7189
<PER-SHARE-NAV-BEGIN> 12.70
<PER-SHARE-NII> .048
<PER-SHARE-GAIN-APPREC> 3.385
<PER-SHARE-DIVIDEND> (.047)
<PER-SHARE-DISTRIBUTIONS> (1.176)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.91
<EXPENSE-RATIO> .60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> SELIGMAN CASH MANAGEMENT PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 7774
<INVESTMENTS-AT-VALUE> 7774
<RECEIVABLES> 4
<ASSETS-OTHER> 72
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7850
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 50
<TOTAL-LIABILITIES> 50
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7800
<SHARES-COMMON-STOCK> 7800
<SHARES-COMMON-PRIOR> 3230
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 7800
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 252
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 252
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 252
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (252)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8777
<NUMBER-OF-SHARES-REDEEMED> (4459)
<SHARES-REINVESTED> 252
<NET-CHANGE-IN-ASSETS> 4570
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 18
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 40
<AVERAGE-NET-ASSETS> 4594
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .055
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.055)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> SELIGMAN COMMON STOCK PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 21925
<INVESTMENTS-AT-VALUE> 28614
<RECEIVABLES> 676
<ASSETS-OTHER> 1905
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 31195
<PAYABLE-FOR-SECURITIES> 2302
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 57
<TOTAL-LIABILITIES> 2359
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 21925
<SHARES-COMMON-STOCK> 1868
<SHARES-COMMON-PRIOR> 1463
<ACCUMULATED-NII-CURRENT> 3
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 219
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6689
<NET-ASSETS> 28836
<DIVIDEND-INCOME> 567
<INTEREST-INCOME> 132
<OTHER-INCOME> 0
<EXPENSES-NET> (128)
<NET-INVESTMENT-INCOME> 571
<REALIZED-GAINS-CURRENT> 3074
<APPREC-INCREASE-CURRENT> 1989
<NET-CHANGE-FROM-OPS> 5634
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (565)
<DISTRIBUTIONS-OF-GAINS> (2855)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 774
<NUMBER-OF-SHARES-REDEEMED> (592)
<SHARES-REINVESTED> 223
<NET-CHANGE-IN-ASSETS> 8668
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (3)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 94
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 128
<AVERAGE-NET-ASSETS> 23646
<PER-SHARE-NAV-BEGIN> 13.78
<PER-SHARE-NII> .349
<PER-SHARE-GAIN-APPREC> 3.400
<PER-SHARE-DIVIDEND> (.345)
<PER-SHARE-DISTRIBUTIONS> (1.744)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.44
<EXPENSE-RATIO> .54
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> SELIGMAN FIXED INCOME SECURITIES PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 3834
<INVESTMENTS-AT-VALUE> 4189
<RECEIVABLES> 204
<ASSETS-OTHER> 119
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4512
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15
<TOTAL-LIABILITIES> 15
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4242
<SHARES-COMMON-STOCK> 431
<SHARES-COMMON-PRIOR> 389
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (3)
<ACCUMULATED-NET-GAINS> (97)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 355
<NET-ASSETS> 4497
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 260
<OTHER-INCOME> 0
<EXPENSES-NET> (23)
<NET-INVESTMENT-INCOME> 237
<REALIZED-GAINS-CURRENT> (16)
<APPREC-INCREASE-CURRENT> 450
<NET-CHANGE-FROM-OPS> 671
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (240)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 163
<NUMBER-OF-SHARES-REDEEMED> (144)
<SHARES-REINVESTED> 23
<NET-CHANGE-IN-ASSETS> 890
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (3)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 15
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 38
<AVERAGE-NET-ASSETS> 3829
<PER-SHARE-NAV-BEGIN> 9.27
<PER-SHARE-NII> .605
<PER-SHARE-GAIN-APPREC> 1.171
<PER-SHARE-DIVIDEND> (.606)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.44
<EXPENSE-RATIO> .60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> SELIGMAN INCOME PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 11361
<INVESTMENTS-AT-VALUE> 11854
<RECEIVABLES> 221
<ASSETS-OTHER> 570
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12645
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 26
<TOTAL-LIABILITIES> 26
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12129
<SHARES-COMMON-STOCK> 1194
<SHARES-COMMON-PRIOR> 1008
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (3)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 493
<NET-ASSETS> 12619
<DIVIDEND-INCOME> 186
<INTEREST-INCOME> 518
<OTHER-INCOME> 0
<EXPENSES-NET> (68)
<NET-INVESTMENT-INCOME> 636
<REALIZED-GAINS-CURRENT> 639
<APPREC-INCREASE-CURRENT> 595
<NET-CHANGE-FROM-OPS> 1870
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (644)
<DISTRIBUTIONS-OF-GAINS> (637)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 504
<NUMBER-OF-SHARES-REDEEMED> (439)
<SHARES-REINVESTED> 121
<NET-CHANGE-IN-ASSETS> 2569
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (3)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 46
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 70
<AVERAGE-NET-ASSETS> 11444
<PER-SHARE-NAV-BEGIN> 9.97
<PER-SHARE-NII> .604
<PER-SHARE-GAIN-APPREC> 1.187
<PER-SHARE-DIVIDEND> (.604)
<PER-SHARE-DISTRIBUTIONS> (.597)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.56
<EXPENSE-RATIO> .60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> SELIGMAN HENDERSON GLOBAL PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 3705
<INVESTMENTS-AT-VALUE> 3952
<RECEIVABLES> 111
<ASSETS-OTHER> 178
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4241
<PAYABLE-FOR-SECURITIES> 40
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 18
<TOTAL-LIABILITIES> 58
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3931
<SHARES-COMMON-STOCK> 338
<SHARES-COMMON-PRIOR> 157
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (2)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 254
<NET-ASSETS> 4183
<DIVIDEND-INCOME> 42
<INTEREST-INCOME> 18
<OTHER-INCOME> 22
<EXPENSES-NET> (34)
<NET-INVESTMENT-INCOME> 48
<REALIZED-GAINS-CURRENT> 20
<APPREC-INCREASE-CURRENT> 229
<NET-CHANGE-FROM-OPS> 297
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (49)
<DISTRIBUTIONS-OF-GAINS> (28)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 215
<NUMBER-OF-SHARES-REDEEMED> (40)
<SHARES-REINVESTED> 6
<NET-CHANGE-IN-ASSETS> 2407
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (1)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 25
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 86
<AVERAGE-NET-ASSETS> 2570
<PER-SHARE-NAV-BEGIN> 11.34
<PER-SHARE-NII> .154
<PER-SHARE-GAIN-APPREC> 1.132
<PER-SHARE-DIVIDEND> (.151)
<PER-SHARE-DISTRIBUTIONS> (.085)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.39
<EXPENSE-RATIO> 1.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 42366
<INVESTMENTS-AT-VALUE> 38527
<RECEIVABLES> 1233
<ASSETS-OTHER> 649
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 40409
<PAYABLE-FOR-SECURITIES> 1921
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 46
<TOTAL-LIABILITIES> 1967
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 42282
<SHARES-COMMON-STOCK> 2848
<SHARES-COMMON-PRIOR> 47
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (1)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (3839)
<NET-ASSETS> 38442
<DIVIDEND-INCOME> 7
<INTEREST-INCOME> 3
<OTHER-INCOME> 0
<EXPENSES-NET> (156)
<NET-INVESTMENT-INCOME> (146)
<REALIZED-GAINS-CURRENT> 2629
<APPREC-INCREASE-CURRENT> (3858)
<NET-CHANGE-FROM-OPS> (1375)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (2505)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2672
<NUMBER-OF-SHARES-REDEEMED> (58)
<SHARES-REINVESTED> 187
<NET-CHANGE-IN-ASSETS> 37947
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 123
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 156
<AVERAGE-NET-ASSETS> 16933
<PER-SHARE-NAV-BEGIN> 10.44
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 4.015
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.955)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.50
<EXPENSE-RATIO> .95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> SELIGMAN FRONTIER PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 12830
<INVESTMENTS-AT-VALUE> 13320
<RECEIVABLES> 289
<ASSETS-OTHER> 761
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 14370
<PAYABLE-FOR-SECURITIES> 1875
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 19
<TOTAL-LIABILITIES> 1894
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11980
<SHARES-COMMON-STOCK> 920
<SHARES-COMMON-PRIOR> 16
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 490
<NET-ASSETS> 12476
<DIVIDEND-INCOME> 6
<INTEREST-INCOME> 10
<OTHER-INCOME> 0
<EXPENSES-NET> (37)
<NET-INVESTMENT-INCOME> (21)
<REALIZED-GAINS-CURRENT> 490
<APPREC-INCREASE-CURRENT> 481
<NET-CHANGE-FROM-OPS> 950
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (463)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 877
<NUMBER-OF-SHARES-REDEEMED> (8)
<SHARES-REINVESTED> 35
<NET-CHANGE-IN-ASSETS> 12307
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 29
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 54
<AVERAGE-NET-ASSETS> 4158
<PER-SHARE-NAV-BEGIN> 10.58
<PER-SHARE-NII> (.001)
<PER-SHARE-GAIN-APPREC> 3.512
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.531)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.56
<EXPENSE-RATIO> .95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 4271
<INVESTMENTS-AT-VALUE> 4430
<RECEIVABLES> 49
<ASSETS-OTHER> 578
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5057
<PAYABLE-FOR-SECURITIES> 204
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 16
<TOTAL-LIABILITIES> 220
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4673
<SHARES-COMMON-STOCK> 414
<SHARES-COMMON-PRIOR> 13
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (1)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 165
<NET-ASSETS> 4837
<DIVIDEND-INCOME> 15
<INTEREST-INCOME> 20
<OTHER-INCOME> 8
<EXPENSES-NET> (24)
<NET-INVESTMENT-INCOME> 19
<REALIZED-GAINS-CURRENT> 143
<APPREC-INCREASE-CURRENT> 161
<NET-CHANGE-FROM-OPS> 323
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (21)
<DISTRIBUTIONS-OF-GAINS> (148)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 412
<NUMBER-OF-SHARES-REDEEMED> (25)
<SHARES-REINVESTED> 14
<NET-CHANGE-IN-ASSETS> 4705
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 17
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 66
<AVERAGE-NET-ASSETS> 1795
<PER-SHARE-NAV-BEGIN> 10.31
<PER-SHARE-NII> .051
<PER-SHARE-GAIN-APPREC> 1.736
<PER-SHARE-DIVIDEND> (.052)
<PER-SHARE-DISTRIBUTIONS> (.375)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.67
<EXPENSE-RATIO> 1.39
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 10
<NAME> SELIGMAN HIGH-YIELD BOND PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 8-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> MAY-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 2779
<INVESTMENTS-AT-VALUE> 2836
<RECEIVABLES> 65
<ASSETS-OTHER> 118
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3019
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 10
<TOTAL-LIABILITIES> 10
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2952
<SHARES-COMMON-STOCK> 287
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 57
<NET-ASSETS> 3009
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 64
<OTHER-INCOME> 0
<EXPENSES-NET> (5)
<NET-INVESTMENT-INCOME> 59
<REALIZED-GAINS-CURRENT> 5
<APPREC-INCREASE-CURRENT> 57
<NET-CHANGE-FROM-OPS> 121
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (60)
<DISTRIBUTIONS-OF-GAINS> (5)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 309
<NUMBER-OF-SHARES-REDEEMED> (28)
<SHARES-REINVESTED> 6
<NET-CHANGE-IN-ASSETS> 3009
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 34
<AVERAGE-NET-ASSETS> 1363
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .218
<PER-SHARE-GAIN-APPREC> .519
<PER-SHARE-DIVIDEND> (.219)
<PER-SHARE-DISTRIBUTIONS> (.018)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.50
<EXPENSE-RATIO> .70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
