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 |X|
Pre-Effective Amendment No. | |
Post-Effective Amendment No. 20 |X|
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 22 |X|
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SELIGMAN PORTFOLIOS, INC.
(Exact name of registrant as specified in charter)
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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
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THOMAS G. ROSE, Treasurer, 100 Park Avenue, New York, New York 10017
(Name and address of agent for service)
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It is proposed that this filing will become effective (check appropriate box):
|_| immediately upon filing pursuant to paragraph (b)
|X| on May 1, 1997 pursuant to paragraph (b)
|_| 60 days after filing pursuant to paragraph (a)(1)
|_| on (date) pursuant to paragraph (a)(1)
|_| 75 days after filing pursuant to paragraph (a)(2)
|_| on (date) pursuant to paragraph (a)(2) of rule 485.
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 December
21, 1996.
<PAGE>
POST-EFFECTIVE AMENDMENT NO. 20
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
<TABLE>
<CAPTION>
ITEM NO. IN PART A OF FORM N-1A LOCATION IN PROSPECTUS
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<S> <C> <C>
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 Performance Management Services
6. Capital Stock and Other Securities Organization and Capitalization; Other Investment
Policies; Dividends, Distributions and Taxes
7. Purchase of Securities Being Offered Cover Page; Purchases and Redemptions
8. Redemption or Repurchase Purchases and Redemptions
9. Pending Legal Proceedings Not applicable
ITEM NO. IN PART B OF FORM N-1A LOCATION IN STATEMENT OF ADDITIONAL INFORMATION
- ------------------------------- -----------------------------------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Appendix A
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 and
Securities Being Offered 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
</TABLE>
<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, 1997
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
non-U.S. investments of the Seligman Henderson Global
(continued on page 2)
The Fund's twelve Portfolios are:
* SELIGMAN BOND PORTFOLIO: seeks favorable current income by investing
in a diversified portfolio of debt securities, primarily of investment
grade, including convertible issues and preferred stocks, with capital
appreciation as a secondary consideration.
* SELIGMAN CAPITAL PORTFOLIO: seeks to produce capital appreciation, not
current income, by investing in common stocks (primarily those with
strong near or intermediate-term prospects) and securities convertible
into or exchangeable for common stocks, in common stock purchase
warrants and rights, in debt securities and in preferred stocks
believed to provide capital appreciation opportunities.
* SELIGMAN CASH MANAGEMENT PORTFOLIO: seeks to preserve capital and to
maximize liquidity and current income by investing in a diversified
portfolio of high-quality money market instruments. INVESTMENTS IN
THIS PORTFOLIO ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE IS NO ASSURANCE THAT THIS PORTFOLIO WILL BE ABLE
TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
* SELIGMAN COMMON STOCK PORTFOLIO: seeks favorable, but not the highest,
current income and long-term growth of both income and capital value
without exposing capital to undue risk, primarily through equity
investments broadly diversified over a number of industries.
* SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO: seeks capital gain,
not income, by investing primarily in securities of companies in the
communications, information and related industries.
* SELIGMAN FRONTIER PORTFOLIO: seeks growth in capital value; income may
be considered but will be only incidental to the Portfolio's
investment objective. In general, securities owned are likely to be
those issued by small to medium-sized companies selected for their
growth prospects.
* SELIGMAN HENDERSON GLOBAL 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.
* 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.
* 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.
* SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO: seeks long-term capital
appreciation primarily through international investments in securities
of medium- to large-sized companies.
* SELIGMAN HIGH-YIELD BOND PORTFOLIO: seeks to produce maximum current
income by investing primarily in high-yielding, high risk corporate
bonds and corporate notes, which, generally, are non-rated or carry
ratings lower than those assigned to investment grade bonds. THE
PORTFOLIO WILL INVEST UP TO 100% OF ITS ASSETS IN LOWER RATED BONDS,
COMMONLY KNOWN AS "JUNK BONDS," WHICH ARE SUBJECT TO A GREATER RISK OF
LOSS OF PRINCIPAL AND INTEREST THAN HIGHER RATED INVESTMENT GRADE
BONDS. PURCHASERS SHOULD CAREFULLY ASSESS THE RISKS ASSOCIATED WITH AN
INVESTMENT IN THIS PORTFOLIO. SEE "INVESTMENT OBJECTIVES AND
POLICIES--SELIGMAN HIGH-YIELD BOND PORTFOLIO."
* SELIGMAN INCOME PORTFOLIO: seeks primarily to produce high current
income consistent with what is believed to be prudent risk of capital
and secondarily to provide the possibility of improvement in income
and capital value over the longer term, by investing primarily in
income-producing securities.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
(continued from page 1)
Growth Opportunities Portfolio, Seligman Henderson Global Smaller Companies
Portfolio, Seligman Henderson Global Technology Portfolio and Seligman Henderson
International Portfolio (collectively, the "Seligman Henderson Portfolios").
Shares of the Fund are currently provided as the investment medium for Canada
Life of America Variable Annuity Account 1 ("CLAVA-1"), Canada Life of America
Variable Annuity Account 2 ("CLAVA-2"), Canada Life of America Annuity Account 2
("CLAA-2"), Canada Life of America Annuity Account 3 ("CLAA-3"), Canada Life of
New York Variable Annuity Account 1 ("CLNYVA-1") and Canada Life of New York
Variable Annuity Account 2 ("CLNYVA-2") (collectively, "Canada Life Accounts"),
each of which is a separate account of either Canada Life Insurance Company of
America or Canada Life Insurance Company of New York, (collectively, "Canada
Life"). Shares of certain Portfolios of the Fund may not be offered to all
Canada Life Accounts. Shares of the Seligman Bond Portfolio, Seligman Capital
Portfolio, Seligman Cash Management Portfolio, Seligman Common Stock Portfolio
and Seligman Income Portfolio are also provided as the investment medium for
Mutual Benefit Variable Contract Account-9 ("VCA-9") established by MBL Life
Assurance Corporation (formerly, The Mutual Benefit Life Insurance Company)
("MBL Life").
CLAVA-1, CLAVA-2, CLNYVA-1 and CLNYVA-2 are each registered as a unit
investment trust under the Investment Company Act of 1940 (the "1940 Act") and
fund variable annuity contracts ("VA Contracts") issued by Canada Life and
distributed by Seligman Financial Services, Inc. CLAA-2 and CLAA-3 are not
registered or regulated under the 1940 Act in reliance on the exemption provided
in Section 3(c)(11) of the 1940 Act. CLAA-2 and CLAA-3 fund annuity contracts
("CLAA Contracts") issued by Canada Life and distributed by Seligman Financial
Services, Inc. which 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. VCA-9 is registered as a unit
investment trust under the 1940 Act and funds variable annuity contracts ("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 Bond Portfolio............................. P-8
Seligman Capital Portfolio.......................... P-9
Seligman Cash Management Portfolio.................. P-9
Seligman Common Stock Portfolio..................... P-10
Seligman Communications and
Information Portfolio............................. P-11
Seligman Frontier Portfolio......................... P-11
Seligman Henderson Global Growth
Opportunities Portfolio........................... P-12
Seligman Henderson Global Smaller
Companies Portfolio............................... P-12
Seligman Henderson Global Technology
Portfolio......................................... P-12
Seligman Henderson International 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-25
Purchases and Redemptions........................... P-25
Custodians and Transfer Agent....................... P-25
Organization and Capitalization..................... P-25
Appendix............................................ P-26
P-2
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THIS PAGE INTENTIONALLY LEFT BLANK
P-3
<PAGE>
FINANCIAL HIGHLIGHTS
The following sets forth selected data for the periods indicated for a
single share outstanding of each of the Fund's Portfolios. The results shown
below for all periods through the year ended December 31, 1996 have been audited
in conjunction with the annual audits of the financial statements of Seligman
Portfolios, Inc. by Ernst & Young LLP, independent auditors, whose reports
thereon are unqualified. The 1996 financial statements and independent auditors'
report thereon are incorporated by reference in the Fund's Statement of
Additional Information. Copies of the Statement of Additional Information may be
obtained free of charge from the Fund at the telephone numbers or address
provided on the cover page of this Prospectus.
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
<TABLE>
<CAPTION>
NET
NET REALIZED &
ASSET UNREALIZED INCREASE DISTRIBUTIONS NET
VALUE NET GAIN (DECREASE) FROM INCREASE
AT INVESTMENT (LOSS) FROM NET (DECREASE) NET ASSET
PER SHARE OPERATING BEGINNING INCOME ON INVESTMENT DIVIDENDS GAIN IN NET ASSET VALUE AT
PERFORMANCE: OF PERIOD (LOSS) INVESTMENTS OPERATIONS PAID REALIZED VALUE END OF PERIOD
------------ --------- ------ ----------- ------------ ---------- ----------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BOND PORTFOLIO
Year ended 12/31/96...... $10.440 $0.565 $(0.552) $ 0.013 $(0.563) $-- $(0.550) $ 9.890
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
CAPITAL PORTFOLIO
Year ended 12/31/96...... 14.910 0.043 2.121 2.164 (0.042) (1.022) 1.100 16.010
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 12/31/96...... 1.000 0.053 -- 0.053 (0.053) -- -- 1.000
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 12/31/96...... 15.440 0.334 2.789 3.123 (0.336) (2.307) 0.480 15.920
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 12/31/96...... 13.500 -- 1.190 1.190 -- -- 1.190 14.690
Year ended 12/31/95 ..... 10.440 -- 4.015 4.015 -- (0.955) 3.060 13.500
10/11/94*-12/31/94....... 10.000 (0.016) 0.456 0.440 -- -- 0.440 10.440
FRONTIER PORTFOLIO
Year ended 12/31/96...... 13.560 0.001 3.220 3.221 -- (1.801) 1.420 14.980
Year ended 12/31/95 ..... 10.580 (0.001) 3.512 3.511 -- (0.531) 2.980 13.560
10/11/94*-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>
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.
Average commission rate paid represents the average commissions paid by a
Portfolio to purchase or sell securities. It is determined by dividing the total
commission dollars paid by the number of shares purchased and sold during the
period for which commissions were paid.
<TABLE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------
NET
INVESTMENT
TOTAL INCOME NET
RETURN EXPENSES (LOSS) ASSETS AT
BASED ON TO TO AVERAGE END OF
NET AVERAGE AVERAGE COMMISSION PERIOD
ASSET NET NET PORTFOLIO RATE (000S
VALUE ASSETS ASSETS TURNOVER PAID OMITTED)
----- ------ ------ -------- ---- --------
<S> <C> <C> <C> <C> <C> <C>
BOND PORTFOLIO
Year ended 12/31/96...... 0.09% 0.60% 5.97% 199.74% $ 5,015
Year ended 12/31/95 ..... 19.18 0.60 6.22 114.42 4,497
Year ended 12/31/94...... (3.39) 0.60 5.12 237.23 3,606
Year ended 12/31/93...... 7.98 0.74 5.41 33.21 3,775
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
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
6/21/88*-12/31/88........ 1.01 2.99+ 5.25+ 144.21 2,223
CAPITAL PORTFOLIO
Year ended 12/31/96...... 14.51 0.59 0.29 88.78 $0.0557 14,313
Year ended 12/31/95 ..... 27.17 0.60 0.32 122.20 9,294
Year ended 12/31/94...... (4.59) 0.60 0.10 67.39 5,942
Year ended 12/31/93...... 11.65 0.71 0.09 65.30 5,886
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
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
6/21/88*-12/31/88........ 0.60 6.99+ (0.11)+ -- 890
CASH MANAGEMENT PORTFOLIO
Year ended 12/31/96...... 5.43 -- 5.30 -- 9,755
Year ended 12/31/95 ..... 5.60 -- 5.48 -- 7,800
Year ended 12/31/94...... 4.03 -- 3.98 -- 3,230
Year ended 12/31/93...... 3.00 -- 2.96 -- 3,102
Year ended 12/31/92...... 3.53 -- 3.50 -- 4,230
Year ended 12/31/91...... 5.70 -- 5.49 -- 5,849
Year ended 12/31/90...... 7.79 -- 7.53 -- 3,994
Year ended 12/31/89...... 7.81 -- 7.72 -- 908
6/21/88*-12/31/88........ 2.35 0.95+ 5.83+ -- 283
COMMON STOCK PORTFOLIO
Year ended 12/31/96...... 20.08 0.53 1.99 50.33 0.0561 37,168
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
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
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
6/21/88*-12/31/88........ 1.80 3.62+ 1.65+ 14.40 2,476
COMMUNICATIONS AND
INFORMATION PORTFOLIO
Year ended 12/31/96...... 8.81 0.87 (0.32) 167.20 0.0530 60,645
Year ended 12/31/95 ..... 38.55 0.95 (0.89) 96.62 38,442
10/11/94*-12/31/94....... 4.40 0.95+ (0.95)+ -- 495
FRONTIER PORTFOLIO
Year ended 12/31/96...... 23.93 0.92 (0.37) 119.74 0.0532 31,672
Year ended 12/31/95 ..... 33.28 0.95 (0.55) 106.48 12,476
10/11/94*-12/31/94....... 5.80 0.95+ (0.70)+ -- 169
</TABLE>
WITHOUT MANAGEMENT FEE WAIVER AND/OR
EXPENSE REIMBURSEMENT**
----------------------------------------------
RATIO OF
RATIO OF NET INVESTMENT
NET EXPENSES INCOME (LOSS)
INVESTMENT TO AVERAGE TO AVERAGE
INCOME (LOSS) NET NET
PER SHARE ASSETS ASSETS
--------- ------ ------
BOND PORTFOLIO
Year ended 12/31/96...... $0.545 0.79% 5.78%
Year ended 12/31/95 ..... 0.571 0.99 5.83
Year ended 12/31/94...... 0.430 1.31 4.41
Year ended 12/31/93...... 0.675 1.07 5.08
Year ended 12/31/92......
Year ended 12/31/91...... 0.712 1.42 6.48
Year ended 12/31/90......
Year ended 12/31/89...... 0.643 2.27 6.37
6/21/88*-12/31/88........
CAPITAL PORTFOLIO
Year ended 12/31/96......
Year ended 12/31/95 ..... 0.035 0.71 0.21
Year ended 12/31/94...... (0.036) 0.96 (0.26)
Year ended 12/31/93...... (0.003) 0.83 (0.03)
Year ended 12/31/92......
Year ended 12/31/91...... (0.035) 1.37 (0.21)
Year ended 12/31/90......
Year ended 12/31/89...... (0.092) 3.80 (1.12)
6/21/88*-12/31/88........
CASH MANAGEMENT PORTFOLIO
Year ended 12/31/96...... 0.047 0.63 4.67
Year ended 12/31/95 ..... 0.046 0.87 4.61
Year ended 12/31/94...... 0.025 1.48 2.50
Year ended 12/31/93...... 0.019 1.07 1.89
Year ended 12/31/92...... 0.025 0.97 2.53
Year ended 12/31/91...... 0.048 0.83 4.66
Year ended 12/31/90...... 0.045 2.97 4.56
Year ended 12/31/89...... (0.019) 9.57 (1.85)
6/21/88*-12/31/88........ (0.050) 20.02+ (13.24)+
COMMON STOCK PORTFOLIO
Year ended 12/31/96......
Year ended 12/31/95 .....
Year ended 12/31/94...... 0.361 0.62 2.43
Year ended 12/31/93......
Year ended 12/31/92......
Year ended 12/31/91...... 0.350 0.71 2.52
Year ended 12/31/90......
Year ended 12/31/89...... 0.236 1.67 2.23
6/21/88*-12/31/88........
COMMUNICATIONS AND
INFORMATION PORTFOLIO
Year ended 12/31/96......
Year ended 12/31/95 .....
10/11/94*-12/31/94....... (0.436) 13.96+ (13.96)+
FRONTIER PORTFOLIO
Year ended 12/31/96......
Year ended 12/31/95 ..... (0.019) 1.37 (0.97)
10/11/94*-12/31/94....... (1.319) 40.47+ (40.22)+
- ----------
* Commencement of Operations.
** The Manager and/or Subadviser, at their discretion, waived management fees
and/or reimbursed expenses for certain periods presented.
+ Annualized.
P-5
<PAGE>
<TABLE>
<CAPTION>
NET
NET REALIZED
NET REALIZED & & UNREALIZED
ASSET UNREALIZED GAIN INCREASE
VALUE GAIN (LOSS) (DECREASE)
AT NET (LOSS) FROM FOREIGN FROM DISTRIBUTIONS NET INCREASE
PER SHARE OPERATING BEGINNING INVESTMENT ON CURRENCY INVESTMENT DIVIDENDS FROM NET (DECREASE) IN
PERFORMANCE: OF PERIOD INCOME INVESTMENTS TRANSACTIONS OPERATIONS PAID GAIN REALIZED NET ASSET VALUE
------------ --------- ------ ----------- ------------ ---------- ---- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GLOBAL GROWTH
OPPORTUNITIES PORTFOLIO
5/1/96*-12/31/96......... $10.000 $ 0.008 $ 0.018 $(0.104) $(0.078) $(0.012) $-- $(0.090)
GLOBAL SMALLER COMPANIES
PORTFOLIO
Year ended 12/31/96...... 11.670 0.022 2.305 (0.158) 2.169 (0.018) (0.951) 1.200
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
GLOBAL TECHNOLOGY
PORTFOLIO
5/1/96*-12/31/96......... 10.000 (0.004) 0.305 0.099 0.400 -- (0.080) 0.320
INTERNATIONAL PORTFOLIO
Year ended 12/31/96...... 12.390 0.074 1.124 (0.323) 0.875 (0.068) (0.237) 0.570
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
HIGH-YIELD BOND PORTFOLIO
Year ended 12/31/96...... 10.500 0.768 0.766 -- 1.534 (0.766) (0.078) 0.690
5/1/95*-12/31/95......... 10.000 0.218 0.519 -- 0.737 (0.219) (0.018) 0.500
INCOME PORTFOLIO
Year ended 12/31/96...... 10.560 0.579 0.126 -- 0.705 (0.579) (0.166) (0.040)
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 and/or Subadviser, at their discretion, waived management fees
and/or reimbursed expenses for certain periods presented.
+ Annualized.
P-6
<PAGE>
<TABLE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
-----------------------------------------------------------
NET
INVESTMENT NET
TOTAL INCOME ASSETS
RETURN EXPENSES (LOSS) AT
NET ASSET BASED ON TO TO AVERAGE END OF
VALUE AT NET AVERAGE AVERAGE PORT- COMMISSION PERIOD
END OF ASSET NET NET FOLIO RATE (000S
PERIOD VALUE ASSETS ASSETS TURNOVER PAID OMITTED)
------ ----- ------ ------ -------- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C>
GLOBAL GROWTH
OPPORTUNITIES PORTFOLIO
5/1/96*-12/31/96......... $ 9.910 (0.78)% 1.40%+ 0.37%+ 12.99% $0.0522 $1,590
GLOBAL SMALLER COMPANIES
PORTFOLIO
Year ended 12/31/96...... 12.870 18.66 1.40 0.23 62.31 0.0219 16,876
Year ended 12/31/95...... 11.670 17.38 1.39 0.64 55.65 4,837
10/11/94*-12/31/94....... 10.310 3.53 1.20+ 3.14+ -- 132
GLOBAL TECHNOLOGY
PORTFOLIO
5/1/96*-12/31/96......... 10.320 4.01 1.40+ 0.60+ 45.04 0.0160 1,364
INTERNATIONAL PORTFOLIO
Year ended 12/31/96...... 12.960 7.08 1.40 0.70 48.53 0.0191 7,242
Year ended 12/31/95...... 12.390 11.34 1.35 1.01 41.40 4,183
Year ended 12/31/94...... 11.340 1.32 1.20 1.17 47.34 1,776
5/3/93*-12/31/93......... 11.370 14.40 1.20+ 1.30+ 2.82 648
HIGH-YIELD BOND PORTFOLIO
Year ended 12/31/96...... 11.190 14.62 0.70 9.77 117.01 11,176
5/1/95*-12/31/95......... 10.500 7.37 0.70+ 7.46+ 67.55 3,009
INCOME PORTFOLIO
Year ended 12/31/96...... 10.520 6.66 0.59 5.37 19.59 0.0600 13,717
Year ended 12/31/95...... 10.560 17.98 0.60 5.55 51.22 12,619
Year ended 12/31/94...... 9.970 (5.96) 0.60 6.34 29.76 10,050
Year ended 12/31/93...... 11.380 12.37 0.64 6.40 38.38 11,220
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
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
6/21/88*-12/31/88........ 10.040 1.10 5.02+ 2.46+ -- 1,265
</TABLE>
WITHOUT MANAGEMENT FEE WAIVER
AND/OR EXPENSE REIMBURSEMENT**
---------------------------------------------------
RATIOS OF
NET RATIOS OF NET INVESTMENT
INVESTMENT EXPENSES TO INCOME (LOSS)
INCOME (LOSS) AVERAGE NET TO AVERAGE
PER SHARE ASSETS NET ASSETS
------------ ----------- --------------
GLOBAL GROWTH
OPPORTUNITIES PORTFOLIO
5/1/96*-12/31/96......... $(0.255) 6.04%+ (4.27)%+
GLOBAL SMALLER COMPANIES
PORTFOLIO
Year ended 12/31/96...... (0.044) 1.90 (0.27)
Year ended 12/31/95...... (0.051) 3.84 (1.81)
10/11/94*-12/31/94....... (1.225) 37.25+ (32.91)+
GLOBAL TECHNOLOGY
PORTFOLIO
5/1/96*-12/31/96......... (0.202) 4.71+ (2.71)+
INTERNATIONAL PORTFOLIO
Year ended 12/31/96...... (0.042) 2.30 (0.20)
Year ended 12/31/95...... 0.001 3.40 (1.04)
Year ended 12/31/94...... (0.419) 6.12 (3.75)
5/3/93*-12/31/93......... (1.004) 17.94+ (15.44)+
HIGH-YIELD BOND PORTFOLIO
Year ended 12/31/96...... 0.747 0.88 9.59
5/1/95*-12/31/95......... 0.117 4.38+ 3.78+
INCOME PORTFOLIO
Year ended 12/31/96......
Year ended 12/31/95...... 0.602 0.62 5.53
Year ended 12/31/94...... 0.670 0.77 6.17
Year ended 12/31/93...... 0.826 0.65 6.39
Year ended 12/31/92......
Year ended 12/31/91...... 0.867 0.93 7.72
Year ended 12/31/90......
Year ended 12/31/89...... 0.610 2.88 5.77
6/21/88*-12/31/88........ 0.089 5.42+ 2.07+
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 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 Rating Service
("S&P") and Moody's Investors Service, Inc. ("Moody's"), and referred to in the
following descriptions, is included in the Appendix to this Prospectus.
SELIGMAN BOND PORTFOLIO
The investment objective of this Portfolio is to achieve favorable current
income by investing in debt securities, including convertible issues and
preferred stock, diversified over a number of industries. Capital appreciation
will be a secondary consideration in selecting portfolio securities. As a matter
of fundamental policy, the Portfolio will invest at least 80% of its assets in
securities that are rated investment grade.
The Portfolio's assets may be invested in (l) corporate debt securities,
including bonds and debentures convertible into common stock or with warrants
and rights; (2) debt securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities; or (3) mortgage-backed debt securities, including
securities issued by the Government National Mortgage Association ("GNMA") and
debt obligations secured by commercial or residential real estate, rated within
one of the three highest rating categories by S&P or, if unrated, of comparable
quality in the opinion of the Manager; (4) preferred stock; and (5) commercial
paper rated within one of the three highest rating categories by S&P or Moody's.
The Portfolio may also hold or sell any securities obtained through the exercise
of conversion rights or warrants, or as a result of reorganization,
recapitalization, or liquidation proceedings of any issuer of securities owned
by the Portfolio. Long-term debt securities normally will be held when it is
believed that the trend of interest rates is down and prices of such securities
will increase; conversely, when it is believed that long-term interest rates
will rise, the Portfolio may attempt to shift into short-term debt securities
that are generally not as volatile as longer-term securities in periods of
rising interest rates. The Portfolio may, pending investment and for temporary
defensive purposes, invest without limitation in high-grade short-term money
market instruments, including repurchase agreements, of the types listed under
"Seligman Cash Management Portfolio."
Corporate debt securities purchased by the Portfolio will, in order to meet
the Portfolio's fundamental policy, be investment grade bonds that are rated
within one of the four highest rating categories by S&P or Moody's. To the
extent that the Portfolio may invest in lower-rated bonds, an investor should be
aware that while providing higher yields, such lower-rated bonds generally are
subject to greater market fluctuations and risks of loss of income and principal
than higher-rated (and lower-yielding) bonds. A description of the credit
ratings and the risks associated with such investments is contained in the
Appendix to this Prospectus. U.S. Government and agency obligations in which the
Portfolio invests may include direct obligations of the U.S. Treasury, such as
bills, notes and bonds, and marketable obligations issued by a U.S. Government
agency or instrumentality. Agency securities include those issued by the Small
Business Administration, General Services Administration and Farmers Home
Administration, which are guaranteed by the U.S. Treasury. Other such securities
are supported by the right of the issuer to borrow from the Treasury, such as
securities issued by the Federal Home Loan Mortgage Corporation ("FHLMC"), while
certain other securities are supported only by the credit of the agency or
instrumentality itself, such as securities issued by the Federal National
Mortgage Association ("FNMA"). Commercial paper includes unsecured promissory
notes of corporate issuers, which securities generally have remaining maturities
not exceeding nine months.
The mortgage-backed securities in which the Portfolio invests will include
securities that represent interests in pools of mortgage loans made by lenders
such as savings and loan institutions, mortgage bankers, and commercial banks.
Such securities provide a "pass-through" of monthly payments of interest and
principal made by the borrowers on their residential mortgage loans (net of any
fees paid to the issuer or guarantor of such securities). Although the
residential mortgages underlying a pool may have maturities of up to 30 years, a
pool's effective maturity may be reduced by prepayments of principal on the
underlying mortgage obligations. Factors affecting mortgage prepayments include,
among other things, the level of interest rates, general economic and social
conditions and the location and age of the mortgages. High interest rate
mortgages are more likely to be prepaid than lower-rate mortgages; consequently,
the effective maturities of mortgage-related obligations that pass-through
payments of higher-rate mortgages are likely to be shorter than those of
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.
P-8
<PAGE>
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 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 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.
P-9
<PAGE>
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.
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 100 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 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 Portfolio seeks to achieve
its objective primarily through equity investments, and in general, investments
will be broadly diversified over a number of industries. 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."
P-10
<PAGE>
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
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 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 100 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 SMALLER COMPANIES PORTFOLIO
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO
SELIGMAN HENDERSON INTERNATIONAL 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"), Seligman
Henderson Global Smaller Companies Portfolio ("Global Smaller Companies
Portfolio"), Seligman Henderson Global Technology Portfolio ("Global Technology
Portfolio") and Seligman Henderson International Portfolio ("International
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 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.
The investment objective of the International Portfolio is long-term
capital appreciation primarily through international investments in securities
of medium- to large-sized companies. Under normal market conditions, the
International Portfolio will invest 65% of its assets in securities of issuers
located in at least three different countries, not including the U.S.
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 (except the International
Portfolio, which normally will not invest in the U.S.), 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,
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.
P-12
<PAGE>
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, depositary
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.
DEPOSITARY RECEIPTS. The Portfolios may invest in securities represented by
American Depositary Receipts ("ADRs"), American Depositary Shares ("ADSs"),
European Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs") or
Global Depositary 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
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.
P-13
<PAGE>
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).
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.
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
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.
P-14
<PAGE>
DERIVATIVES. Each of the 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 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.
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.
P-15
<PAGE>
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, 1996. 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....................................... 1.7%
B/B......................................... 87.9%
CCC/Caa..................................... 5.6%
CC/Ca....................................... --
Non-rated................................... 2.6%
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, 1996. 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..................................... 8.1%
AA/Aa....................................... 2.6%
A/A......................................... 12.1%
BBB/Baa..................................... 14.2%
BB/Ba....................................... 5.2%
B/B......................................... 5.2%
CCC/Caa..................................... 1.3%
CC/Ca....................................... --
Non-rated................................... 4.1%
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 Seligman
Henderson Portfolios, 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 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, GDRs
or GDSs. 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
International 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,
GDRs or GDSs, 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 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. 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.
P-19
<PAGE>
Except as noted below, a Portfolio may not borrow money except from banks
for temporary purposes (but not for the purpose of purchasing portfolio
securities) in an amount not to exceed 10% of the value of the total assets of
that Portfolio. In addition, the Seligman Frontier Portfolio and the Seligman
High-Yield Bond Portfolio will not purchase additional portfolio securities if
that Portfolio has outstanding borrowings in excess of 5% of the value of its
total assets.
The Seligman Capital Portfolio, the Seligman Common Stock Portfolio and the
Seligman Communications and Information Portfolio may from time to time borrow
money in order to purchase securities. Borrowings may be made only from banks
and each of these Portfolios may not borrow in excess of one-third of the market
value of its assets, less liabilities other than such borrowing, or pledge more
than 10% of its total assets, taken at cost, to secure the borrowing. Current
asset value coverage of three times any amount borrowed by the respective
Portfolio is required at all times. Borrowed money creates an opportunity for
greater capital appreciation, but at the same time increases exposure to capital
risk. The net cost of any money borrowed would be an expense that otherwise
would not be incurred, and this expense will reduce the Portfolio's net
investment income in any given period. Any gain in the value of securities
purchased with money borrowed to an amount in excess of amounts borrowed plus
interest would cause the net asset value of the Portfolio's shares to increase
more than otherwise would be the case. Conversely, any decline in the value of
securities purchased to an amount below the amount borrowed plus interest would
cause the net asset value to decrease more than would otherwise be the case.
Each of the Seligman Henderson 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 Bond 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 their business and other affairs. The address of the Manager is
100 Park Avenue, New York, New York 10017.
Mr. William C. Morris is Chairman 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 Bond Portfolio, Seligman Capital
Portfolio, Seligman Cash Management Portfolio, Seligman Common Stock Portfolio
and 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 Seligman Frontier Portfolio.
Each of the Seligman Henderson Portfolios pays 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 or international 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 expenses (other than the management fee) that
exceed .20% per annum of the average daily net assets for each of the Seligman
Bond, Seligman Capital, Seligman Common Stock, Seligman Communications and
Information, Seligman Frontier, Seligman High-Yield Bond and Seligman Income
Portfolios. There is no assurance that the Manager will continue this policy in
the future.
The Manager and Subadviser voluntarily agreed to reimburse certain expenses
(other than the management fee) that exceed .40% per annum of the average daily
net assets for each of the Seligman Henderson Portfolios. There is no assurance
that the Manager and Subadviser will continue this policy in the future.
The management fee and total expenses paid by each Portfolio, expressed as
an annualized percentage of average daily net assets of such Portfolio, are
presented in the following table for the fiscal year/period ended December 31,
1996.
<TABLE>
<CAPTION>
MANAGEMENT FEE RATE EXPENSE RATIOS FOR
FOR THE YEAR/PERIOD ENDED THE YEAR/PERIOD ENDED
PORTFOLIO 12/31/96 12/31/96*
--------- ---------------------- -----------------------
<S> <C> <C>
Seligman Bond Portfolio.............................. .40% .60%
Seligman Capital Portfolio........................... .40 .59
Seligman Cash Management Portfolio................... -* -
Seligman Common Stock Portfolio...................... .40 .53
Seligman Communications and Information
Portfolio.......................................... .75 .87
Seligman Frontier Portfolio.......................... .75 .92
Seligman Henderson Global
Growth Opportunities Portfolio ................... 1.00 1.40
Seligman Henderson Global Smaller
Companies Portfolio .............................. 1.00 1.40
Seligman Henderson Global
Technology Portfolio ............................. 1.00 1.40
Seligman Henderson International Portfolio........... 1.00 1.40
Seligman High-Yield Bond Portfolio .................. .50 .70
Seligman Income Portfolio............................ .40 .59
</TABLE>
- ----------
* During the year ended December 31, 1996, the Manager, at its discretion,
waived all of its fees for the Seligman Cash Management Portfolio, and the
Manager and/or Subadviser elected to reimburse all or a portion of the
expenses for the Seligman Bond Portfolio, Global Growth Opportunities
Portfolio, Global Smaller Companies Portfolio, Global Technology
Portfolio, International Portfolio and Seligman High-Yield Bond Portfolio.
P-21
<PAGE>
The Manager also serves as manager of seventeen other investment companies,
which, together with the Fund, make up the "Seligman Group." The aggregate
assets of the Seligman Group were approximately $14.2 billion at March 31, 1997.
The Manager also provides investment management or advice to institutional
accounts having an aggregate value of approximately $4.2 billion at March 31,
1997.
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 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 Seligman
Henderson 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. Leonard J. Lovito, a Vice President of the Manager,
serves as a Vice President of the Fund and has been Portfolio Manager of the
Seligman Bond Portfolio since January 1, 1994 and of the Seligman Cash
Management Portfolio since January 1, 1995. Mr. Lovito, who joined the Manager
in 1984, also serves as Vice President and Portfolio Manager of Seligman Cash
Management Fund, Inc. and Vice President of Seligman High Income Fund Series and
Portfolio Manager of its Seligman U.S. Government Securities Series. The
Portfolio Manager's discussion of the Seligman Bond Portfolio's performance, as
well as a line graph illustrating comparative performance information between
the Seligman Bond Portfolio, the Lehman Brothers Government Bond Index, the
Lipper Fixed Income Funds Average, and the Lipper Corporate Debt BBB-Rated Funds
Average, is included in the Fund's 1996 Annual Report to Shareholders.
Loris D. Muzzatti, a Managing Director of the Manager, has served as a 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,
Inc. and Seligman Growth Fund, Inc. and a Co-Manager of the Global Growth
Opportunities Portfolio and the Seligman Henderson Global Growth Opportunities
Fund, a series of Seligman Henderson Global Fund Series, Inc. The Portfolio
Manager's discussion of the Seligman Capital Portfolio's performance, as well as
a line graph illustrating comparative performance information between the
Seligman Capital Portfolio, the Standard & Poor's 500 Composite Stock Price
Index and the Lipper Capital Appreciation Funds Average, is included in the
Fund's 1996 Annual Report to Shareholders.
Charles C. Smith, Jr., a Managing Director of the Manager since January 1,
1994, serves as a 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 serves as Vice President and Portfolio Manager of Seligman Common
Stock Fund, Inc., Seligman Income Fund, Inc. and Tri-Continental Corporation.
Odette Galli, Vice President, Investment Officer of the Manager since 1993,
serves as Co-Portfolio Manager of the Seligman Common Stock Portfolio. Ms. Galli
is also Co-Portfolio Manager of Seligman Common Stock Fund, Inc. and
Tri-Continental Corporation. Prior to 1993, Ms. Galli was an equity research
analyst at Morgan Stanley & Co. Rodney Collins, Vice President, Investment
Officer of the Manager, serves as Co-Portfolio Manager of the Seligman Income
Portfolio. Mr. Collins, who joined the Manager in 1992 as an investment
associate, is also Co-Portfolio Manager of Seligman Income Fund, Inc. The
Portfolio Managers' 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 Funds Average,
is included in the Fund's 1996 Annual Report to Shareholders. The Portfolio
Managers' 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 Funds Average, is included in the Fund's 1996
Annual Report to Shareholders.
P-22
<PAGE>
Paul H. Wick, a Managing Director of the Manager, serves as a Vice
President of the Fund and is the Portfolio Manager of the Seligman
Communications and Information Portfolio and a Co-Portfolio Manager of the
Global Technology Portfolio. Mr. Wick, who joined the Manager in 1987, also
serves as Vice President and Portfolio Manager of Seligman Communications and
Information Fund, Inc., and Vice President of Seligman Henderson Global Fund
Series, Inc. and Co-Portfolio Manager of its Seligman Henderson Global
Technology Fund. 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 Funds Average, is included in the Fund's 1996
Annual Report to Shareholders.
Arsen Mrakovcic, a Managing Director of the Manager, is a Vice President of
the Fund and Portfolio Manager of the Seligman Frontier Portfolio since October
1, 1995 and Co-Portfolio Manager of the Global Smaller Companies Portfolio. 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 serves as Vice President and Portfolio
Manager of Seligman Frontier Fund, Inc. and Vice President of Seligman Henderson
Global Fund Series, Inc. and Co-Portfolio Manager of its Seligman Henderson
Global Smaller Companies Fund. 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 Composite Index, the
Lipper Small Company Growth Fund Index and the Russell 2000 Growth Index, is
included in the Fund's 1996 Annual Report to Shareholders.
Daniel J. Charleston, a Managing Director of the Manager, is a Vice
President of the Fund and has been the Portfolio Manager of the Seligman
High-Yield Bond Portfolio since its inception on May 1, 1995. Mr. Charleston,
who joined the Manager in 1987, also serves as Vice President of Seligman High
Income Fund Series and Portfolio Manager of its Seligman High-Yield Bond Series.
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 Funds
Index and the Merrill Lynch High-Yield Master Index, is included in the Fund's
1996 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 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 a Vice President of the Fund and is responsible
for the day-to-day investment activity of the International Portfolio and the
international investments of the Global Smaller Companies Portfolio. Mr. Clark,
who joined the Subadviser in 1992, has been a Director and Senior Portfolio
Manager of Henderson plc and Director of Henderson International, Ltd. since
1985 and Secretary, Treasurer and Vice President of Henderson International,
Inc. since 1991. Mr. Clark's discussion of the International Portfolio's
performance, as well as a line graph illustrating comparative performance
information between the International Portfolio, the Lipper International Funds
Average, the Morgan Stanley Capital International ("MSCI") World Index and the
MSCI Europe-Asia-Far East Index, is included in the Fund's 1996 Annual Report to
Shareholders. The Portfolio Managers' 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 Funds Average, is included in the
Fund's 1996 Annual Report to Shareholders.
Brian Ashford-Russell, a Portfolio Manager with Henderson plc since
February 1993, is a Vice President of the Fund and Co-Portfolio 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. The Portfolio Managers'
discussion of the Global Technology Portfolio's performance, as well as a line
graph illustrating comparative performance between the Global Technology
Portfolio, the Lipper Global Funds Average and the MSCI World Index, is included
in the Fund's 1996 Annual Report to Shareholders.
P-23
<PAGE>
Nitin Mehta, a Portfolio Manager with Henderson plc since September 1994,
is a Vice President of the Fund and Co-Portfolio 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 an Investment
Officer with International Finance Corporation. From July 1986 to March 1992, he
was Director of Equities at Shearson Lehman Global Asset Management. The
Portfolio Managers' discussion of the Global Growth Opportunities Portfolio's
performance, as well as a line graph illustrating comparative performance
information between the Global Growth Opportunities Portfolio, the Lipper Global
Funds Average and the MSCI World Index, is included in the Fund's 1996 Annual
Report to Shareholders.
Copies of the Fund's 1996 Annual Report to Shareholders may be obtained,
without charge, by calling or writing the Fund at the telephone numbers or
address listed on the front page of this Prospectus.
PORTFOLIO TRANSACTIONS, PORTFOLIO TURNOVER AND VALUATION
PORTFOLIO TRANSACTIONS. In directing transactions involving exchange-listed
securities, the Manager (or in the case of the Seligman Henderson 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 Bond
Portfolio, Seligman Cash Management 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 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 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 (normally, 4:00 p.m. Eastern 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 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.
P-24
<PAGE>
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 has qualified and intends to continue to qualify
as a "regulated investment company" under certain provisions of the Internal
Revenue Code of 1986, as amended (the "Code"). Under such provisions, the Fund's
Portfolios will be subject to federal income tax only with respect to
undistributed net investment income and net realized capital gain. Each of the
Fund's Portfolios will be treated as a separate entity. Dividends on the
Seligman Cash Management Portfolio will be declared daily and reinvested monthly
in additional full and fractional shares of the Seligman Cash Management
Portfolio; it is not expected that this Portfolio will realize capital gains.
Dividends and capital gain distributions from each of the other Portfolios will
be declared and paid annually and will be reinvested at the net asset value of
such shares of the Portfolio that declared such dividend or gain distribution.
Dividend and gain distributions are generally not currently taxable to owners of
the VA, CLAA 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 are sold subject to certain fees and charges. These fees and charges
for the Canada Life Accounts and VCA-9 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. Eastern 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 Fund's shares.
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 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
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
Bond Portfolio, Seligman Capital Portfolio, Seligman Cash Management Portfolio,
Seligman Common Stock Portfolio, Seligman Communications and Information
Portfolio, Seligman Frontier Portfolio, Seligman Henderson Global Growth
Opportunities Portfolio, Seligman Henderson Global Smaller Companies Portfolio,
Seligman Henderson Global Technology Portfolio, Seligman Henderson International
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 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, INC. (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.
P-26
<PAGE>
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.
STANDARD & POOR'S RATING SERVICE ("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, 1997
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, 1997. 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................................ 15
FINANCIAL STATEMENTS............................................... 15
APPENDIX A......................................................... 16
<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 , the Seligman Henderson Global Growth Opportunities Portfolio, the
Seligman Henderson Global Smaller Companies Portfolio, the Seligman Henderson
Global Technology Portfolio and the Seligman Henderson International Portfolio
(collectively, the "Seligman Henderson 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 Portfolios
will generally enter into forward foreign currency exchange contracts to fix the
U.S. 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 U.S. dollar value of securities it
owns.
A Portfolio 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 U.S. dollar. In this case the contract would approximate the value of some
or all of the Portfolio's securities denominated in such foreign currency. Under
normal circumstances, the portfolio manager will limit forward currency
contracts to not greater than 75% of a Portfolio's 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 Portfolio. Under
extraordinary circumstances, the Subadviser may enter into forward currency
contracts in excess of 75% of a Portfolio's 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
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
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
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 Portfolio is obligated to deliver and if a decision is made to sell
the security and make delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency received upon
the sale of the portfolio security if its market value exceeds the amount of
foreign currency a Portfolio is obligated to deliver. However, a Portfolio may
use liquid, high-grade debt securities, denominated in any currency, to cover
the amount by which the value of a forward contract exceeds the value of the
securities to which it relates.
If a Portfolio retains the portfolio security and engages in offsetting
transactions, the Portfolio will incur a gain or a loss (as described below) to
the extent that there has been movement in forward contract prices. If the
Portfolio engages in an offsetting transaction, it may subsequently enter into a
new forward contract to sell the foreign currency. Should forward prices decline
during the period between the Portfolio's entering into a forward contract for
the sale of a foreign currency and the date it enters into an offsetting
contract for the purchase of the foreign currency, the Portfolio will realize a
gain to the extent the price of the currency it has agreed to sell exceeds the
price of the currency it has agreed to purchase. Should forward prices increase,
the Portfolio will suffer a loss to the extent the price of the currency it has
agreed to purchase exceeds the price of the currency it has agreed to sell.
3
<PAGE>
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 rates for each Portfolio are 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/periods ended December 31, 1996 and 1995
for each Portfolio (except the Seligman Cash Management Portfolio) were as
follows:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Seligman Bond Portfolio 199.74% 114.42%
Seligman Capital Portfolio 88.78 122.20
Seligman Common Stock Portfolio 50.33 55.48
Seligman Communications and Information Portfolio 167.20 96.62
Seligman Frontier Portfolio 119.74 106.48
Seligman Henderson Global Growth Opportunities Portfolio 12.99 N/A
Seligman Henderson Global Smaller Companies Portfolio 62.31 55.65
Seligman Henderson Global Technology Portfolio 45.04 N/A
Seligman Henderson International Portfolio 48.53 41.40
Seligman High-Yield Bond Portfolio 117.01 67.55
Seligman Income Portfolio 19.59 51.22
</TABLE>
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 a
Portfolio'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 Portfolios may borrow money from banks to purchase securities
in amounts not in excess of 5% of its total assets.
4
<PAGE>
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
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 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 Bond
Portfolio and each of the Seligman Henderson Portfolios may engage in
transactions involving securities secured by real estate or interests
therein, and each of the Seligman Henderson 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 1933 Act 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.
5
<PAGE>
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").
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 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 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
(59) Executive Officer and Chairman of the
Executive Committee
Chairman, J. & W. Seligman & Co.
Incorporated, investment managers and
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, Seligman Data Corp.,
shareholder service agent; Kerr-McGee
Corporation, diversified energy company;
Trustee, Sarah Lawrence College; and a
Member of the Board of Governors of the
Investment Company Institute; formerly,
Director, Daniel Industries, Inc.,
manufacturer of oil and gas metering
equipment.
6
<PAGE>
BRIAN T. ZINO* Director, President and Member of the
(44) Executive Committee
President, J. & W. Seligman & Co.
Incorporated, investment managers and
advisers; President (with the exception of
Seligman Quality Municipal Fund, Inc. and
Seligman Select Municipal Fund, Inc.) and
Director or Trustee, the Seligman Group of
Investment Companies; Chairman and
President, Seligman Data Corp., shareholder
service agent; and Director, Seligman
Financial Services, Inc., broker/dealer;
Seligman Services, Inc., broker/dealer; and
Seligman Henderson Co., advisers.
JOHN R. GALVIN Director
(67)
Dean, Fletcher School of Law and Diplomacy
at Tufts University; Director or Trustee,
the Seligman Group of Investment Companies;
Chairman, American Council on Germany; a
Governor of the Center for Creative
Leadership; Director, USLIFE Corporation,
insurance; and Raytheon Co., electronics;
the National Defense University; and the
Institute for Defense Analysis; formerly,
Ambassador, U.S. State Department for
negotiations in Bosnia 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
(62)
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
(64)
Director, various corporations; Director or
Trustee, the Seligman Group of Investment
Companies; Director, Kimberly-Clark
Corporation, consumer products, Bank of
Oklahoma Holding Company, Oklahoma City
Chamber of Commerce, Baptist Medical Center,
Oklahoma Chapter of the Nature Conservancy,
Oklahoma Medical Research Foundation, and
National Boys and Girls Clubs of America;
Chairman, Oklahoma City Public Schools
Foundation; and a Member of the Business
Roundtable ; formerly, Chairman of the Board
and Chief Executive Officer, Kerr-McGee
Corporation, energy and chemicals.
123 Robert S. Kerr Avenue, Oklahoma City, OK
73102
JOHN E. MEROW* Director
(67)
Retired Chairman and Senior Partner,
Sullivan & Cromwell, law firm; Director or
Trustee, the Seligman Group of Investment
Companies; Commonwealth Aluminum
Corporation; Municipal Art Society of New
York; U.S. Council for International
Business; and U.S.-New Zealand Council;
Chairman, American Australian Association; a
Member of the American Law Institute and
Council on Foreign Relations; and a Member
of the Board of Governors of the Foreign
Policy Association and the New York
Hospital.
125 Broad Street, New York, NY 10004
7
<PAGE>
BETSY S. MICHEL Director
(54) Attorney; Director or Trustee, the Seligman
Group of Investment Companies; Trustee,
Geraldine R. Dodge Foundation, charitable
foundation; and 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
(70)
Retired Partner, Pitney, Hardin, Kipp &
Szuch, law firm; Director or Trustee, the
Seligman Group of Investment Companies and
Director, Public Service Enterprise Group,
public utility.
Park Avenue at Morris County, P.O. Box 1945,
Morristown, NJ 07962-1945
JAMES Q. RIORDAN Director
(69)
Director, various corporations; Director or
Trustee, the Seligman Group of Investment
Companies, Director, The Houston Exploration
Company, The Brooklyn Union Gas Company, Dow
Jones & Co., Inc. and Public Broadcasting
Service; and Trustee, The Brooklyn Museum,
and The Committee for Economic Development,;
formerly, Co-Chairman of the Policy Council
of the Tax Foundation; 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
(49) Committee
Director, Managing Director and Chief
Investment Officer, Institutional, J. & W.
Seligman & Co. Incorporated, investment
managers and advisers, Director or Trustee,
the Seligman Group of investment companies;
Director, Seligman Financial Services, Inc.,
broker/dealer; 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, trust company; Seligman Data Corp.,
shareholder service agent; and Seligman
Securities, Inc., broker/dealer.
ROBERT L. SHAFER Director
(64)
Director, various corporations; Director or
Trustee, the Seligman Group of Investment
Companies; and Director, USLIFE Corporation,
life insurance; formerly, vice president,
Pfizer Inc., pharmaceuticals. 235 East 42nd
Street, New York, NY 10017
JAMES N. WHITSON Director
(62)
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
BRIAN ASHFORD- RUSSELL Vice President and Portfolio Manager
(37) Portfolio Manager, Seligman Henderson Co.,
advisers; and Henderson plc, investment
managers; and Vice President and Portfolio
Manager, one other open-end investment
company in the Seligman Group of investment
companies; formerly, Portfolio Manager,
Touche Remnant & Co., investment anagers.
8
<PAGE>
DANIEL J. CHARLESTON Vice President and Portfolio Manager
(37)
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.
IAIN C. CLARK Vice President and Portfolio Manager
(46) Managing Director and Chief Investment
Officer, Seligman Henderson Co., advisers;
Vice President and Portfolio Manager, one
other open-end investment company in the
Seligman Group of investment companies;
Director and Senior Portfolio Manager,
Henderson plc, investment managers;
Director, Henderson International, Ltd.,
investment managers; and Secretary,
Treasurer and Vice President, Henderson
International, Inc., investment adviser.
LEONARD J. LOVITO Vice President and Portfolio Manager
(37)
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.
NITIN MEHTA Vice President and Portfolio Manager
(36) Portfolio Manager, Seligman Henderson Co.,
advisers; and Henderson plc, investment
managers; and Vice President and Portfolio
Manager, one other open-end investment
company in the Seligman Group of investment
companies; formerly, Head of Currency
Management and Derivatives, Quorum Capital
Management; Investment Officer,
International Finance Corp.; and Director of
Equities, Shearson Lehman Global Asset
Management.
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, two other open-end investment
companies in the Seligman Group of
Investment Companies
LORIS D. MUZZATTI Vice President and Portfolio Manager
(39)
Managing Director, 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
(40)
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; and Vice President and Portfolio
Manager, two other open-end investment
companies in the Seligman Group of
Investment Companies.
9
<PAGE>
LAWRENCE P. VOGEL Vice President
(40)
Senior Vice President, Finance, J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; Seligman Advisors,
Inc., advisers and Seligman Data Corp.,
shareholder service agent; Vice President,
the Seligman Group of Investment Companies;
Seligman Financial Services, Inc.,
broker/dealer; and Seligman Services, Inc.,
broker/dealer; and Treasurer, Seligman
Holdings, Inc., holding company; and
Seligman Henderson Co., advisers.
FRANK J. NASTA Secretary
(32)
Senior Vice President, Law and Regulation,
and Corporate Secretary, J. & W. Seligman &
Co. Incorporated, investment managers and
advisers; Corporate Secretary, the Seligman
Group of Investment Companies; Seligman
Advisors, Inc., advisers; 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
(39)
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 Fund
Name and Compensation From Accrued as part of and Fund Complex
Position with Fund Fund (1) Fund Expenses Paid to Directors (2)
------------------ -------- ------------- ---------------------
<S> <C> <C> <C>
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
John R. Galvin, Director $2,357.99 N/A $65,000.00
Alice S. Ilchman, Director 2,393.70 N/A 66,000.00
Frank A. McPherson, Director 2,357.99 N/A 65,000.00
John E. Merow, Director 2,393.70(d) N/A 66,000.00(d)
Betsy S. Michel, Director 2,393.70 N/A 66,000.00
James C. Pitney, Director 2,357.99(d) N/A 65,000.00
James Q. Riordan, Director 2,393.70 N/A 66,000.00
Robert L. Shafer, Director 2,393.70 N/A 66,000.00
James N. Whitson, Director 2,393.70 N/A 66,000.00(d)
</TABLE>
(1) Based on remuneration received by the Directors of the Fund for the
year ended December 31, 1996.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of eighteen investment companies.
* Retired March 20, 1997.
(d) Deferred.
10
<PAGE>
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 directors' fees and expenses and the accumulated balance thereof
is included in "Liabilities" in the Fund's financial statements. The total
amounts of deferred compensation (including interest) payable in respect of the
Fund to Messrs. Merow and Whitson as of December 31, 1996 were $13,894 and
$9,258, respectively. As of January 1, 1997, Mr. Merow no longer defers current
compensation. Mr. Pitney no longer defers current compensation; however, he has
accrued deferred compensation (including interest) in the amount of $3,719 as of
December 31, 1996. The Fund has applied for, and expects to receive, exemptive
relief that would permit a director who has elected deferral of his or her fees
to choose a rate of return equal to either (i) the interest rate on short-term
Treasury bills, or (ii) the rate of return on the shares of any of the
investment companies advised by the Manager, as designated by the director. The
Fund may, but is not obligated to, purchase shares of such investment companies
to hedge its obligations in connection with this deferral arrangement.
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 March 31, 1997, no Directors or officers of the Fund owned directly or
indirectly shares of any of the Portfolios.
MANAGEMENT AND EXPENSES
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
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 Portfolios) provide that the Manager (and the
Subadviser, in the case of each of the Seligman Henderson 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.
The Seligman Bond Portfolio, Seligman Capital Portfolio, Seligman Cash
Management Portfolio, Seligman Common Stock 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 such Portfolio. The 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 such Portfolio. The 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 such
Portfolio. Each of the Seligman Henderson 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 such Portfolio, of which .90% is
paid to the Subadviser for the services described below.
11
<PAGE>
The following table indicates the management fees paid (or waived, in
the case of Seligman Cash Management Portfolio) for the years 1996, 1995, and
1994:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Seligman Bond Portfolio $ 18,034 $ 15,262 $ 14,043
Seligman Capital Portfolio 48,339 28,551 23,120
Seligman Cash Management Portfolio* 36,532 18,365 12,837
Seligman Common Stock Portfolio 134,264 94,380 84,124
Seligman Communications and Information Portfolio 373,337 123,216 349**
Seligman Frontier Portfolio 165,050 29,219 99**
Seligman Henderson Global Growth Opportunities Portfolio 4,098** -- --
Seligman Henderson Global Smaller Companies Portfolio 110,169 17,210 159**
Seligman Henderson Global Technology Portfolio 4,920** -- --
Seligman Henderson International Portfolio 57,323 25,312 11,417
Seligman High-Yield Bond Portfolio 35,858 3,941** --
Seligman Income Portfolio 49,574 45,797 42,854
</TABLE>
- ------------------------
* The Manager, at its discretion, waived all of its fees.
** Fees paid from commencement of operations.
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. 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. See Appendix A for further information about the Manager.
The Management Agreement with respect to the Seligman Bond Portfolio,
Seligman Capital Portfolio, Seligman Cash Management Portfolio, Seligman Common
Stock 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 International 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 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 Portfolios 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) 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 Portfolios, including making purchases and
sales of portfolio securities consistent with each of the Seligman Henderson
Portfolio's investment objectives and policies. For these services the
Subadviser is paid a fee equal to an annual rate of .90% of each of the Seligman
Henderson Portfolio's average daily net assets. The Subadvisory Agreement with
respect to Seligman Henderson International 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 of each year, with respect
to each Portfolio (except for the Seligman Henderson Global Growth Opportunities
Portfolio and the Seligman Henderson Global Technology Portfolio for which the
Subadvisory Agreement is in effect until December 31, 1997 and then December 31
of each year thereafter), and from year to 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
12
<PAGE>
Directors or of the outstanding voting securities of the Portfolios and by a
vote of a majority of the Directors who are not parties to the Subadvisory
Agreements or interested persons of any such party) and (2) 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 plc.
Henderson plc, headquartered in London, is one of the largest independent money
managers in Europe. The firm managed approximately $18.1 billion in assets as of
December 31, 1996, 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 "Ethics Code"). The Ethics Code proscribes certain practices with
regard to personal securities transactions and personal dealings, provides a
framework for the reporting and monitoring of personal securities transactions
by the Manager's Director of Compliance, and sets forth a procedure of
identifying, for disciplinary action, those individuals who violate the Ethics
Code. The Ethics 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 Ethics 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 Ethics 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 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.
13
<PAGE>
Brokerage commissions of each Portfolio (except the Seligman Bond
Portfolio, Seligman Cash Management Portfolio and Seligman High-Yield Bond
Portfolio) for the years 1996, and if applicable, 1995 and 1994, are set forth
in the following table:
<TABLE>
<CAPTION>
Total Brokerage
Commissions Paid for
Execution and Statistical Services (1)
--------------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Seligman Capital Portfolio $ 19,283 $ 20,041 $ 8,412
Seligman Common Stock Portfolio 37,709 34,600 12,559
Seligman Communications and Information Portfolio 82,832 32,247 134
Seligman Frontier Portfolio 43,065 12,086 111
Seligman Henderson Global Growth Opportunities Portfolio 4,056 N/A N/A
Seligman Henderson Global Smaller Companies Portfolio 39,649 12,794 180
Seligman Henderson Global Technology Portfolio 2,037 N/A N/A
Seligman Henderson International Portfolio 20,495 12,389 5,503
Seligman Income Portfolio 1,483 6,746 2,839
</TABLE>
- --------------
(1) Not including any spreads on principal transactions on a net basis.
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 salable.
Valuation. The net asset value per share of each Portfolio is
determined as of the close of trading on the New York Stock Exchange(normally,
4:00 p.m. Eastern 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.
The foregoing method of valuation is permitted by Rule 2a-7 adopted by
the Securities and Exchange Commission (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 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
14
<PAGE>
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.
CUSTODIANS AND INDEPENDENT AUDITORS
CUSTODIANS. With the exception of each of the Seligman Henderson
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 Portfolios, and in
such capacity holds in a separate account assets received by it from or for the
account of each of these Portfolios of the Fund.
INDEPENDENT AUDITORS. Ernst & Young LLP, independent auditors, serve 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, 1996 for the Fund's
Portfolios are incorporated herein by reference to the Fund's 1996 Annual
Report. The Annual Report will be furnished, without charge, to investors who
request copies of the Fund's Statement of Additional Information.
15
<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.
16
<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 to the public Seligman Frontier Fund, Inc., a small
capitalization mutual fund.
o Launches Seligman Henderson Global Fund Series, Inc., which today
offers five separate series: Seligman Henderson International Fund,
Seligman Henderson Global Smaller Companies Fund, Seligman Henderson
Global Technology Fund, Seligman Henderson Global Growth Opportunities
Fund and Seligman Henderson Emerging Markets Growth Fund.
o Launches Seligman Value Fund Series, Inc., which currently offers two
separate series: Seligman Large-Cap Value Fund and Seligman Small-Cap
Value Fund.
17
<PAGE>
- ------------------------------------------------------------------------------
ANNUAL REPORT
- ------------------------------------------------------------------------------
SELIGMAN
- -------------------
PORTFOLIOS,
- -------------------
INC.
- -------------------
J&WS
December 31, 1996
<PAGE>
SELIGMAN
PORTFOLIOS,
INC.
February 4, 1997
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 year ended December 31, 1996.
A constructive economic environment supported strong corporate earnings in
most industries during 1996. In spite of continued corporate downsizing and
restructuring, the unemployment rate fell as low as 5.2% in August and ended the
year at 5.3%, as compared to 5.6% in December 1995. Simply put, the increased
competitiveness of US industry and the low inflation environment provided strong
fundamental support to higher equity prices and improved results in the
fixed-income markets, particularly in the last half of the year.
Driven by the outstanding performance of a small number of the largest
stocks, the US large-capitalized equity markets continued to advance in 1996,
setting new highs and rebounding from sharp short-term setbacks. The S&P 500's
total return for the year was 22.96%, and the Dow Jones Industrial Average
(DJIA) posted an exceptional total return of 28.91%. The US small-company market
advanced more slowly, led by technology and value stocks. Overall, performance
results for the standard small-company indices were more muted.
The fixed-income markets, in contrast, had a less positive year. In the first
two quarters of the year, the markets were hindered by persistent concerns that
the economy's unexpected vigor would produce higher levels of inflation and, in
turn, increases in interest rates. However, performance improved in the last two
quarters of the year, as low levels of inflation prevailed despite continued
economic growth. The yield on the benchmark 30-year Treasury bond reflected the
changing perceptions of inflationary pressure, rising from 5.95% on December 31,
1995, to end the year at 6.64%. Additionally, the yield on the benchmark
three-month Treasury bill ended the year at 5.17%, modestly higher than the
5.05% yield at year-end 1995.
Looking ahead, the economic environment supporting the US financial markets
remains generally positive, given continued modest economic growth, low
inflation, and bipartisan efforts to balance the federal budget without raising
taxes. While we always recognize that there could be further short-term
volatility, we remain positive about the long-term outlook for the US economy
and the financial markets.
Internationally, the fundamental economic background was supportive in most
of the world's major financial markets. In particular, inflation remained stable
and, in many countries, short-term interest rates were flat, or declined.
However, despite a relatively strong fourth quarter, 1996 was a mixed year for
the international equity markets. European markets performed well, but Asian
markets, with the exception of Hong Kong, were patchy, while Japan was
particularly weak. Looking forward, we believe the economic and interest rate
fundamentals will remain positive in 1997. Further, we believe corporate profits
growth will remain strong for most European markets. While Japan has the
potential for significant recovery, it may yet take a little time for this to
happen, and in the meantime its market may remain volatile.
We thank you for your continued confidence in Seligman Portfolios, Inc., and
look forward to serving your investment needs in 1997 and the years ahead.
Respectfully,
[GRAPHIC OMITTED]
William C. Morris
Chairman
J. & W. Seligman & Co. Incorporated
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Largest Portfolio Changes (unaudited)
- --------------------------------------------------------------------------------
During the Six Months Ended December 31, 1996
<TABLE>
Principal Amount
or Shares
----------------------
Holdings
Additions Increase 12/31/96
- --------------------- -------- --------
SELIGMAN BOND PORTFOLIO
US Government Securities
<S> <C> <C>
US Treasury Bonds 7 7/8%,
2/15/2021............... $400,000 $400,000
US Treasury Notes 6 1/4%,
10/31/2001.............. 200,000 200,000
US Treasury Notes 7%,
7/15/2006............... 800,000 800,000
US Government Agencies
Federal National Mortgage
Association 7 1/2%, 10/1/2026 492,553 492,553
Corporate Bonds
Kohls 7 3/8%, 10/15/2011.. 200,000 200,000
NewPort News 8 5/8%, 12/1/2006 200,000 200,000
Oryx Energy 10%, 4/1/2001. 200,000 200,000
Woolworth 7%, 6/1/2000.... 200,000 200,000
Principal Amount
or Shares
----------------------
Holdings
Reductions Decrease 12/31/96
- --------------------- -------- --------
US Government Securities
US Treasury Notes 7 1/4%,
8/15/2004............... $500,000 --
US Treasury Bonds 8 3/4%,
5/15/2020............... 200,000 $400,000
US Government Agencies
Federal National Mortgage
Association 7%, 5/1/2026 507,867 --
Government National Mortgage
Association 10%, 12/15/2020 224,491 --
Corporate Bonds
Continental Cablevision 8.30%,
5/15/2006............... 200,000 --
Asset-Backed Securities
Advanta 7.44%, 8/25/2018 200,000 --
- --------------------------------------------------------------------------
SELIGMAN CAPITAL PORTFOLIO
Common Stocks
C-Cube Microsystems............ 5,000 shs. 5,000 shs.
Ceridian....................... 5,000 5,000
Maxim Integrated Products...... 5,000 5,000
McLeod (Class A)............... 6,000 6,000
MGM Grand...................... 4,700 4,700
Saks Holdings.................. 5,200 5,200
Seagate Technology............. 2,500 5,000 (1)
Snyder Communications.......... 7,100 7,100
Symantec....................... 20,100 20,100
Washington Mutual.............. 4,800 4,800
Common Stocks
Berg Electronics............... 7,000 shs. --
Comshare....................... 7,000 --
Cooper Tire & Rubber........... 5,000 --
Garden Botanika................ 7,500 --
Masco.......................... 4,600 --
Oxford Health Plans............ 5,000 --
PepsiCo........................ 6,000 --
St. Jude Medical............... 3,800 --
Sterling Software.............. 3,300 --
Western Wireless (Class A)..... 8,450 --
- --------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO
Common Stocks
AMP............................ 8,000 shs. 12,800 shs.
Automatic Data Processing...... 4,200 4,200
Borg-Warner Automotive......... 4,400 4,400
Electronic Data Systems........ 5,000 5,000
Federal-Mogul.................. 7,000 7,000
Kemet.......................... 10,000 10,000
Olin........................... 2,200 8,800 (2)
Sun Microsystems............... 3,300 6,600 (3)
WorldCom....................... 9,000 9,000
Worthington Industries......... 12,500 12,500
Common Stocks
American Stores................ 8,200 shs. --
Coca-Cola...................... 5,600 --
Dell Computer.................. 5,500 --
Fleet Financial Group.......... 6,000 --
Gillette....................... 3,000 --
Mobil.......................... 2,800 --
Nordstrom...................... 6,700 --
Philip Morris.................. 4,800 --
Unifi.......................... 9,700 --
UST Inc........................ 9,900 --
- ----------------
See footnotes on page P-4.
-- P-1 --
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Largest Portfolio Changes (unaudited) (continued)
- --------------------------------------------------------------------------------
During the Six Months Ended December 31, 1996
Shares
----------------------
Holdings
Additions Increase 12/31/96
- --------------------- -------- --------
SELIGMAN COMMUNICATIONS AND
INFORMATION PORTFOLIO
Common Stocks
Applix....................... 40,000 40,000
Gateway 2000................. 20,000 20,000
Glenayre Technologies........ 30,000 50,000
IA........................... 195,000 195,000
Millicom International Cellular 30,000 35,000
Pure Atria................... 35,000 35,000
Simulation Sciences.......... 160,000 160,000
Tellabs...................... 20,000 40,000 (4)
U.S. Robotics................ 20,000 25,000
VeriFone..................... 30,000 30,000
Shares
----------------------
Holdings
Reductions Decrease 12/31/96
- --------------------- -------- --------
Common Stocks
Aspect Development........... 25,000 --
Dell Computer................ 17,000 --
Hadco........................ 17,000 10,000
Hummingbird Communications... 20,000 --
K-III Communications......... 70,000 --
Lattice Semiconductor........ 24,000 --
Novellus Systems............. 15,000 --
Oracle Systems............... 22,500 --
Xerox........................ 21,000 --
Xilinx....................... 20,000 10,000
- --------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO
Common Stocks
American Pad & Paper......... 20,300 20,300
CalEnergy.................... 11,700 23,760
Drilex International......... 20,000 20,000
First Commonwealth........... 20,000 26,200
Health Management Association
(Class A).................. 17,000 17,000
Memtec (ADRs)................ 13,600 13,600
National Surgery Centers..... 16,400 20,750
Omnipoint.................... 12,300 16,100
ONTRACK Data International... 30,000 30,000
Watson Pharmaceuticals....... 9,500 20,100
Common Stocks
Applied Graphics Technologies 15,000 --
Corporate Express............ 11,500 --
ESC Medical Systems.......... 16,500 --
HFS.......................... 2,600 3,400
Minerals Technologies........ 6,400 --
Oakley....................... 10,700 --
Parexel International........ 9,000 --
Pomeroy Computer Resources... 16,500 (5) --
Sealed Air................... 5,480 --
Vincam Group................. 13,000 --
- --------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH
OPPORTUNITIES PORTFOLIO
Common Stocks
CRT Group.................... 6,500 6,500
Grupo Carso (ADRs)........... 1,900 1,900
Joshin Denki................. 2,000 2,000
Kalmar Industries............ 1,300 1,300
Pacific BBA.................. 7,900 7,900
Richter Gedeon............... 480 480
SGS-Thomson Microelectronics. 400 400
Shimachu..................... 1,000 1,000
Societe Industrielle de Transports
Automobiles................ 105 105
Tomra Systems................ 1,550 1,550
Common Stocks
Informix..................... 200 --
PepsiCo...................... 100 --
R.J. Reynolds................ 4,000 --
WMC.......................... 1,600 --
- ----------------
See footnotes on page P-4.
-- P-2 --
<PAGE>
Seligman Portfolios, Inc.
During the Six Months Ended December 31, 1996
Shares
----------------------
Holdings
Additions Increase 12/31/96
- --------------------- -------- --------
SELIGMAN HENDERSON GLOBAL SMALLER
COMPANIES PORTFOLIO
Common Stocks
Bau Holdings (Non-Voting
Preference Shares)............. 2,600 2,600
Berg Electronics................. 6,300 7,500
BMC Industries................... 4,300 4,900
La Doria......................... 40,000 40,000
L'Europeenne d'Extincteurs....... 3,000 3,000
Hucke............................ 6,892 6,892
Rauma Group...................... 7,900 7,900
Teva Pharmaceutical.............. 4,000 4,000
Universal Outdoor Holdings....... 8,000 8,000
Watson Pharmaceuticals........... 7,400 7,400
Shares
----------------------
Holdings
Reductions Decrease 12/31/96
- --------------------- -------- --------
Common Stocks
Apcoa Parking.................... 675 --
Electronics for Imaging.......... 940 --
Hoganas (Series B)............... 2,200 --
Lassila & Tikanoja............... 1,800 --
Oakley........................... 2,000 --
Opal............................. 3,400 --
Outdoor Systems.................. 1,300 --
Pomeroy Computer Resources....... 3,000 (6) --
Roosevelt Financial Group........ 3,000 5,000
Southern Pacific Funding......... 11,500 --
- --------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL
TECHNOLOGY PORTFOLIO
Common Stocks
Amtek Engineering................ 16,000 16,000
ASM Lithography.................. 800 800
CRT Group........................ 8,700 8,700
Dialogic......................... 1,400 1,650
IA............................... 5,000 5,000
Informatics Holdings............. 70,000 70,000
Nokia............................ 710 710
U.S. Robotics.................... 400 600
VeriFone......................... 1,500 1,500
Xionics Document Technologies.... 2,000 2,000
Common Stocks
Bell Cablemedia (ADRs)........... 450 --
Electronic Data Systems.......... 75 --
First Data....................... 50 --
Gartner Group (Class A).......... 300 --
Hadco............................ 250 --
Hewlett-Packard.................. 100 (7) --
Informix......................... 300 --
Lernout & Hauspie
Speech Products............... 480 --
Natural Microsystems............. 300 --
Telecom Italia Mobile............ 3,840 --
- --------------------------------------------------------------------------
SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO
Common Stocks
Koninklijke Ahold................ 1,216 1,216
Mannesman........................ 219 219
Michelin (Class B)............... 1,365 1,365
Pharmacia & Upjohn............... 1,983 1,983
Roche Holdings................... 9 9
Samsung Electronics.............. 1,120 1,120
STET Societa' Finanziaria
Telefonica.................... 24,563 24,563
Usinor Sacilor................... 5,097 5,097
VEBA............................. 1,485 1,485
Volkswagen....................... 209 209
Common Stocks
Assicurazione Generali........... 3,665 --
Deutsche Bank.................... 1,608 --
Guangdong Investments............ 95,000 --
Nestle........................... 73 --
Norsk Hydro...................... 1,434 --
Reuters Holdings................. 4,000 --
Roussel-Uclaf.................... 338 --
Siemens.......................... 1,540 --
Stora Kopparbergs................ 2,442 3,153
WMC.............................. 7,000 --
- ----------------
See footnotes on page P-4.
-- P-3 --
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Largest Portfolio Changes (unaudited) (continued)
- --------------------------------------------------------------------------------
During the Six Months Ended December 31, 1996
Principal Amount
or Shares
----------------------
Holdings
Additions Increase 12/31/96
- --------------------- -------- --------
SELIGMAN HIGH-YIELD BOND PORTFOLIO
Corporate Bonds
Grand Union 12%, 9/1/2004....... $150,000 $150,000
Intermedia Capital Partners
11 1/4%, 8/1/2006............. 200,000 200,000
International Home Foods
10 3/8%, 11/1/2006............ 150,000 150,000
Omnipoint 11 5/8%, 8/15/2006.... 150,000 150,000
Petersen Publishing
11 1/8%, 11/15/2006........... 150,000 150,000
Royal Oak Mines 11%, 8/15/2006.. 150,000 150,000
Sprint Spectrum 11%, 8/15/2006.. 150,000 150,000
Unisys 11 3/4%, 10/15/2004...... 150,000 150,000
U.S. Can 10 1/8%, 10/15/2006.... 150,000 150,000
Wireless One 13%, 10/15/2003.... 150,000 150,000
Principal Amount
or Shares
----------------------
Holdings
Reductions Decrease 12/31/96
- --------------------- -------- --------
Corporate Bonds
Aztar 11%, 10/1/2002............ $100,000 --
Benton Oil & Gas 11 5/8%,
5/1/2003...................... 100,000 --
Le Group Videotron Ltee
10 5/8%, 2/15/2005............ 100,000 --
Hayes Wheels International
11%, 7/15/2006................ 100,000 --
Herff Jones 11%, 8/15/2005...... 100,000 --
Paracelsus Healthcare
9 7/8%, 10/15/2003............ 100,000 --
Smiths Food & Drug 11 1/4%,
5/15/2007..................... 100,000 --
United Meridian 10 3/8%,
10/15/2005................... 100,000 --
Wyndham Hotel 10 1/2%, 5/15/2006 100,000 --
Convertible Bonds
EMC 4 1/4%, 1/1/2001............ 100,000 --
- --------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO
Subordinated Convertible Bonds
BroadBand Technology 5%,
5/15/2001..................... $250,000 $250,000
Cirrus Logic 6%, 12/15/2003..... 45,000 45,000
Park Electrochemical 5 1/2%,
3/1/2006...................... 100,000 100,000
Platinum Technology 6 3/4%,
11/15/2001.................... 200,000 200,000
Convertible Preferred Stocks
Ikon Office Solutions $5.04..... 2,500 shs. 2,500 shs.
Common Stocks
Ford Motor...................... 1,500 1,500
Frontier........................ 4,400 4,400
StreamLogic..................... 65,000 65,000
Corporate Bonds
StreamLogic 14%, 10/7/1998...... $33,999 $33,999
Subordinated Convertible Bonds
EMC 4 1/4%, 1/1/2001............ $200,000 --
StreamLogic 6%, 3/15/2012....... 350,000 --
Common Stocks
National City................... 7,866 shs. --
Corporate Bonds
Tenneco Credit 9 5/8%, 8/15/2001 $250,000 --
</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
2,500 shares received as a result of a 2-for-1 stock split. (2) Includes 4,400
shares received as a result of a 2-for-1 stock split. (3) Includes 3,300 shares
received as a result of a 2-for-1 stock split. (4) Includes 20,000 shares
received as a result of a 2-for-1 stock split. (5) Includes 5,500 shares
received as a result of a 3-for-2 stock split. (6) Includes 1,000 shares
received as a result of a 3-for-2 stock split. (7) Includes 50 shares received
as a result of a 2-for-1 stock split.
-- P-4 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
Annual Performance Overview December 31, 1996
- -------------------------------------------------------------------------------
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, 1996, 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
investment strategy and sector performance that affected the Portfolio during
the past year.
SELIGMAN BOND PORTFOLIO (formerly 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.
through December 31, 1996, 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
investment strategy and sector performance that affected the Portfolio during
the past year.
SELIGMAN BOND PORTFOLIO (formerly 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.
er Corporate Debt BBB-Rated
Funds Average 3.18 7.91 8.86*
*From June 30, 1988.
Lipper Lehman
Corp Bros
Seligman Debt Lipper Gov't
Bond BBB Fixed Bond
Date Portfolio Average Income Index
6/30/88 $10,000.00 $10,000.00 $10,000.00 $10,000.00
9/30/88 $10,100.00 $10,210.20 $10,166.80 $10,169.00
12/31/88 $10,100.69 $10,336.14 $10,281.88 $10,264.59
3/31/89 $10,121.03 $10,461.95 $10,421.50 $10,373.39
6/30/89 $10,670.31 $11,117.15 $11,037.49 $11,207.41
9/30/89 $10,690.66 $11,179.00 $11,125.69 $11,300.44
12/31/89 $10,979.28 $11,382.12 $11,319.09 $11,725.33
3/31/90 $10,796.65 $11,182.80 $11,165.89 $11,579.94
6/30/90 $11,118.94 $11,539.17 $11,535.00 $11,985.24
9/30/90 $11,161.91 $11,435.94 $11,403.29 $12,084.71
12/31/90 $11,652.91 $11,883.20 $11,785.09 $12,748.16
3/31/91 $11,924.17 $12,363.52 $12,326.88 $13,024.80
6/30/91 $12,093.71 $12,616.72 $12,605.75 $13,200.63
9/30/91 $12,726.65 $13,361.10 $13,301.31 $13,953.07
12/31/91 $13,351.66 $14,064.04 $13,944.47 $14,700.95
3/31/92 $13,120.83 $14,019.72 $13,957.83 $14,443.69
6/30/92 $13,485.30 $14,572.74 $14,431.73 $15,015.66
9/30/92 $14,080.60 $15,298.48 $14,994.04 $15,757.43
12/31/92 $14,098.68 $15,319.51 $15,044.05 $15,763.73
3/31/93 $14,548.36 $16,163.63 $15,662.53 $16,476.26
6/30/93 $14,879.00 $16,732.35 $16,064.53 $16,952.42
9/30/93 $15,249.32 $17,355.48 $16,455.78 $17,503.37
12/31/93 $15,223.99 $17,431.70 $16,555.51 $17,443.86
3/31/94 $14,787.30 $16,836.80 $16,183.74 $16,918.80
6/30/94 $14,621.66 $16,510.13 $15,972.32 $16,725.93
9/30/94 $14,742.12 $16,595.05 $16,045.71 $16,796.18
12/31/94 $14,708.19 $16,604.62 $16,000.51 $16,854.96
3/31/95 $15,215.92 $17,399.58 $16,656.59 $17,648.83
6/30/95 $16,263.10 $18,644.67 $17,502.43 $18,743.06
9/30/95 $16,596.30 $19,050.30 $17,850.94 $19,074.81
12/31/95 $17,529.77 $19,953.83 $18,481.18 $19,946.53
3/31/96 $16,942.09 $19,446.98 $18,342.84 $19,495.74
6/30/96 $16,874.92 $19,507.31 $18,469.12 $19,589.32
9/30/96 $17,042.83 $19,895.55 $18,862.14 $19,918.42
12/31/96 $17,545.90 $20,588.45 $19,394.43 $20,500.04
** Seligman Bond Portfolio will no longer be compared to the Lipper Fixed Income
Funds Average after December 31, 1996, because it is a broad-based fixed
income average that includes the performance of types of securities that your
Portfolio does not invest in.
It was a year of mixed economic signals for the bond market. The expectations
for slow growth, which predominated in January of 1996, changed abruptly in
early March, resulting in a market decline. After acting in February to maintain
slow growth by reducing the fed funds rate, the Federal Reserve Board refrained
from further action despite market fears of inflation. As a result, yields in
the bond market increased and prices fell through the first half of 1996, and
then fluctuated through the remainder of the year.
As interest rates increased during the second and third quarters of 1996, two
significant steps were taken to protect the Portfolio. First, the average
maturity was reduced by increasing the Portfolio's exposure to more
intermediate-term issues, as these are less sensitive to changes in interest
rates and have better performance when interest rates rise. Second, additional
mortgage-backed securities were purchased, as they have higher yields and have
historically outperformed Treasury securities in a rising interest rate
environment. During the fourth quarter, the economy showed signs of slowing
which helped bond prices recover through October and November. The Portfolio's
maturity was increased to take advantage of the rising bond prices, and the
prices of the Portfolio's holdings appreciated. In December, however, news of
renewed strength in the economy once again drove bond yields higher, negatively
affecting the value of the Portfolio.
As we enter 1997, most market analysts expect moderate economic growth and
continued low levels of inflation. If there are signs of slower economic growth,
the Portfolio's average maturity will be lengthened. If there are signs of
stronger- than-expected economic growth, the Portfolio's interest rate risk
could be quickly reduced by investing in securities with shorter maturities.
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+
Since
One Yr. Five Yrs. Inception
------- --------- ---------
Seligman Capital Portfolio 14.51% 10.62% 13.69%
Lipper Capital Appreciation Funds Avg. 16.11 13.73 13.94*
S&P 500 22.96 15.22 15.85*
*From June 30, 1988.
Lipper
Seligman Capital S&P
Capital Appreciation 500
Date Portfolio Funds Index
6/30/88 $10000.00 $10000.00 $10000.00
9/30/88 $10090.00 $9879.60 $10034.00
12/31/88 $10060.00 $9959.38 $10344.05
3/31/89 $10240.00 $10731.33 $11077.44
6/30/89 $10840.00 $11602.43 $12055.58
9/30/89 $12040.00 $12814.86 $13346.73
12/31/89 $11716.83 $12600.59 $13621.68
3/31/90 $11343.75 $12263.54 $13211.67
6/30/90 $12715.08 $12981.68 $14042.68
9/30/90 $9720.33 $10750.69 $12113.21
12/31/90 $11343.95 $11464.78 $13198.56
3/31/91 $13596.58 $13606.96 $15116.31
6/30/91 $13778.41 $13411.71 $15081.54
9/30/91 $15455.25 $14569.19 $15888.40
12/31/91 $18042.36 $15942.91 $17219.85
3/31/92 $16842.25 $15962.16 $16784.19
6/30/92 $15601.45 $15368.28 $17103.09
9/30/92 $16791.40 $15737.44 $17641.84
12/31/92 $19268.38 $17373.59 $18529.22
3/31/93 $19903.85 $18068.45 $19338.95
6/30/93 $19552.07 $18601.48 $19433.71
9/30/93 $20845.71 $19956.67 $19935.10
12/31/93 $21513.51 $20497.70 $20397.59
3/31/94 $20837.17 $19837.80 $19624.52
6/30/94 $19009.60 $18984.15 $19706.95
9/30/94 $20736.44 $20312.38 $20670.62
12/31/94 $20525.66 $19990.05 $20666.48
3/31/95 $21802.46 $21293.95 $22679.40
6/30/95 $23111.57 $23249.53 $24845.28
9/30/95 $25196.46 $25528.14 $26820.48
12/31/95 $26102.30 $26150.58 $28435.07
3/31/96 $27852.95 $27697.20 $29962.04
6/30/96 $29761.17 $29102.23 $31304.34
9/30/96 $30478.94 $29714.77 $32271.64
12/31/96 $29890.72 $30362.77 $34963.10
While the general US equity markets finished 1996 on a positive note, June,
July, and October corrections in the mid-sized company market slowed the
otherwise strong perfor mance of the Portfolio.
Throughout the year, the Portfolio's investment strategy focused on
purchasing high-quality stocks. An emphasis was placed on companies with
capitalizations ranging from $500 million to $5 billion. We favored companies
whose corporate executives had insider ownership, as this ensured that manage
ment goals were aligned with
- --------------------------
The investment return and principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.
-- P-5 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
ANNUAL PERFORMANCE OVERVIEW (continued)
- -------------------------------------------------------------------------------
shareholder interests, and companies with positive cash flows, which indicated
that companies had the means to fund their growth internally.
The Portfolio's overweighting in technology broadly contributed to
performance. Finance was another strong sector, as companies benefited from the
decline in interest rates in the second half of the year. The Portfolio also
benefited from the strong performance of the new issue market, and a great part
of the capital gain came from the sale of these stocks. On the other hand,
health care was a difficult sector this year. As HMO companies suffered in the
first half of the year, the Portfolio's weighting was realigned into medical
product and biotechnology companies that were experiencing strong unit volume
growth.
Looking ahead, we believe that the Portfolio is well positioned, as its
holdings have much higher projected earnings growth for 1997 than the S&P 500.
We anticipate that investors will seek above-average earnings growth potential
in 1997 if the economy sustains its moderate growth levels without re-igniting
inflation.
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+
Since
One Yr. Five Yrs. Inception
------- --------- ---------
Seligman Common Stock Portfolio 20.08% 13.93% 14.29%
Lipper Growth and Income Funds Average 20.73 13.89 13.78*
S&P 500 22.96 15.22 15.85*
*From June 30, 1988.
Common Lipper S&P
Stock Growth 500
Date Portfolio & Income Index
6/30/88 $10000.00 $10000.00 $10000.00
9/30/88 $10190.00 $10033.65 $10034.00
12/31/88 $10180.24 $10244.58 $10344.05
3/31/89 $10581.43 $10904.23 $11077.44
6/30/89 $11223.34 $11685.25 $12055.58
9/30/89 $12316.58 $12685.79 $13346.73
12/31/89 $12634.92 $12683.25 $13621.68
3/31/90 $12521.56 $12374.87 $13211.67
6/30/90 $13315.11 $13017.82 $14042.68
9/30/90 $10965.38 $11294.82 $12113.21
12/31/90 $12237.13 $12138.15 $13198.56
3/31/91 $14424.60 $13881.81 $15116.31
5/30/91 $14287.22 $13835.95 $15081.54
9/30/91 $15280.56 $14607.10 $15888.40
12/31/91 $16294.95 $15652.57 $17219.85
3/31/92 $16604.49 $15654.15 $16784.19
6/30/92 $16471.83 $15689.44 $17103.09
9/30/92 $17146.18 $16094.67 $17641.84
12/31/92 $18272.25 $17052.31 $18529.22
3/31/93 $18928.18 $17847.32 $19338.95
6/30/93 $19127.30 $18015.19 $19433.71
9/30/93 $19607.53 $18652.15 $19935.10
12/31/93 $20454.05 $19083.77 $20397.59
3/31/94 $19621.14 $18520.75 $19624.52
6/30/94 $19730.38 $18479.08 $19706.95
9/30/94 $20727.14 $19273.29 $20670.62
12/31/94 $20462.76 $18972.63 $20666.48
3/31/95 $21932.87 $20504.64 $22679.40
6/30/95 $23313.89 $22149.58 $24845.28
9/30/95 $24769.15 $23750.29 $26820.48
12/31/95 $26044.01 $24857.32 $28435.07
3/31/96 $27832.00 $26261.14 $29962.04
6/30/96 $29097.09 $27146.55 $31304.34
9/30/96 $29653.73 $27940.50 $32271.64
12/31/96 $31272.98 $30009.39 $34963.10
The economic environment in 1996 produced stronger-than-expected corporate
profits in many industries, which broadly benefited the Portfolio's equity
holdings. Further, the decline in interest rates in the second half of the year
improved the performance of the interest-rate-sensitive issues in the Portfolio.
Over the last 12 months, several restructuring companies whose managements
were working to improve the corporate balance sheet, increase efficiency, and
therefore enhance profitability, were pur chased.
The Portfolio's consumer cyclical stocks, which are economically sensitive,
benefited from the year's positive economic environment and performed well.
Consequently, the Portfolio's overweight position in the sector improved its
performance. The Portfolio also benefited from its significant position in
consumer staples. On the other hand, the basic materials sector, which includes
the Portfolio's mineral, steel, and paper issues, suffered throughout the year
due to ongoing restructuring problems and reduced earnings. Utilities were also
generally weak in 1996, due to continued problems associated with the
deregulation of the industry.
Looking ahead, we believe the Portfolio is well positioned for the coming
year as it is reasonably valued, with a lower average price-to-earnings ratio
than the S&P 500. We believe stock selection will be extremely important in
1997, as market participants should focus increasingly on fundamentals. We
remain committed to maintaining a broadly diversified Portfolio, holding
companies with reasonable current income and solid long-term prospects for
earnings and dividend growth.
- ----------------
The investment return and principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.
-- P-6 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
December 31, 1996
- -------------------------------------------------------------------------------
Seligman Communications and Information Portfolio
The chart and total return do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Average Annual Total Returns+
Since
One Yr. Inception
------- ---------
Seligman Communications
and Information Portfolio 8.81% 22.61%
Lipper Science and Technology Funds Average 19.72 29.14*
S&P 500 22.96 26.25*
*From September 30, 1994.
Seligman Lipper
Communications Science & S&P
& Information Technology 500
Date Portfolio Fund Index
10/31/94 $10000.00 $10611.00 $10224.66
11/30/94 $10000.00 $10349.97 $9852.25
12/31/94 $10440.00 $10586.98 $9998.43
1/31/95 $10180.00 $10261.96 $10257.73
2/28/95 $10430.00 $10810.98 $10657.48
3/30/95 $11030.00 $11313.69 $10971.96
4/30/95 $12260.00 $11881.64 $11295.05
5/31/95 $13100.00 $12267.79 $11746.48
6/30/95 $14690.00 $13592.71 $12019.32
7/31/95 $16340.00 $14964.21 $12417.92
8/31/95 $16220.00 $15236.56 $12449.14
9/30/95 $16950.00 $15754.61 $12974.52
10/31/95 $16620.00 $15500.96 $12928.14
11/30/95 $15920.00 $15573.81 $13495.67
12/31/95 $14464.29 $14868.32 $13755.62
1/31/96 $14142.86 $14786.54 $14223.81
2/29/96 $14560.72 $15528.83 $14355.69
3/31/96 $13617.86 $14960.47 $14493.87
4/30/96 $15257.15 $16579.20 $14707.56
5/31/96 $15375.01 $17167.76 $15086.86
6/30/96 $13992.86 $15996.92 $15144.40
7/31/96 $12867.86 $14541.20 $14475.30
8/31/96 $13714.29 $15332.24 $14780.63
9/30/96 $15139.29 $16992.72 $15612.54
10/31/96 $15107.15 $16690.25 $16043.13
11/30/96 $16114.29 $18164.00 $17255.76
12/31/96 $15739.29 $17800.72 $16913.85
In the technology market, as in the overall equity markets, the largest
companies were the strongest performers in 1996. The first two quarters of the
year, however, were generally disappointing for the technology market as the
semi conductor and semiconductor capital equipment industries suffered from
inadequate demand conditions after a rapid inventory buildup. This particularly
affected the Portfolio due to its weighting in these areas. In the second half
of the year, however, the growing strength of the global personal computer (PC)
market helped improve market psychology, and quelled fears of reduced future
earnings in the technology sector. Further, the memory chip inventory buildup,
which had lingered for most of the year, ended in the fourth quarter.
Looking ahead, several developments in the technology market have provided us
with strong reasons for an optimistic outlook. The long-awaited 64-bit video
game systems are just starting to ship in quantity to the US, invigorating the
depressed video game hardware and software markets. Digital Video Disk (DVD)
players are expected to finally hit US markets early in 1997 after unexpected
delays. Personal Communications Services (PCS) wireless networks are being built
all over America, with activity accelerating in 1997. The Direct Broadcast
Satellite (DBS) industry continues to grow at explosive rates in the US and
around the world. And finally, Intel's early 1997 launch of its Multimedia
Extension (MMX) technology will greatly improve the on-screen graphics of PC
games, helping augment PC sales to consumers.
Seligman Frontier Portfolio
The chart and total return do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Average Annual Total Returns+
Since
One Yr. Inception
------- ---------
Seligman Frontier Portfolio 23.93% 28.52%
Lipper Small Company Growth Fund Index 14.49 19.88*
Russell 2000 Growth Index 11.26 17.80*
NASDAQ** 22.71 26.18*
*From September 30, 1994.
Lipper
Small Russell
Company 2000
Frontier Growth Growth
Date Portfolio Fund Index NASDAQ
10/31/94 $10000.00 $10168.00 $10106.00 $10172.71
11/30/94 $10000.00 $9766.36 $9696.71 $9817.22
12/31/94 $10580.00 $9987.08 $9925.55 $9838.68
1/31/95 $10120.00 $9868.24 $9723.07 $9881.07
2/28/95 $10530.00 $10273.82 $10172.27 $10385.20
3/30/95 $11300.00 $10548.13 $10469.30 $10692.41
4/30/95 $11790.00 $10694.75 $10626.34 $11042.67
5/31/95 $11820.00 $10861.59 $10765.55 $11312.20
6/30/95 $12260.00 $11525.23 $11507.30 $12213.30
7/31/95 $13240.00 $12393.08 $12403.71 $13099.87
8/31/95 $13380.00 $12611.20 $12556.28 $13347.16
9/30/95 $13780.00 $12966.84 $12814.94 $13653.72
10/31/95 $13630.00 $12566.16 $12184.44 $13555.85
11/30/95 $13720.00 $12999.70 $12721.78 $13858.61
12/31/95 $14101.38 $13146.59 $13004.20 $13766.11
1/31/96 $14080.58 $13084.80 $12896.27 $13866.33
2/29/96 $14974.92 $13610.81 $13484.34 $14393.10
3/31/96 $15442.89 $13887.11 $13751.33 $14410.76
4/30/96 $17054.77 $14995.30 $14807.43 $15576.81
5/31/96 $17845.11 $15626.60 $15567.05 $16269.09
6/30/96 $17065.17 $14996.85 $14555.19 $15504.85
7/31/96 $15286.90 $13540.66 $12778.00 $14138.47
8/31/96 $16316.42 $14361.22 $13723.57 $14935.44
9/30/96 $17730.72 $15185.56 $14430.34 $16053.07
10/31/96 $16721.99 $14717.84 $13808.39 $15982.44
11/30/96 $16971.58 $14988.65 $14192.26 $16912.61
12/31/96 $17476.33 $15051.60 $14469.01 $16892.32
** Seligman Frontier Portfolio will no longer be compared to the NASDAQ
Composite Index after December 31, 1996, as the Index measures the performance
of 4,500 over-the-counter stocks but is heavily influenced by the performance of
100 of the largest NASDAQ stocks, and the Portfolio invests pr
The Frontier Portfolio remained wide ly diversified in 1996. It continued to be
heavily invested in business goods and services, electronics, and media and
broadcasting. Further, the Portfolio was overweighted in some of the rapidly
growing areas of the US economy, such as health care and consumer goods and
services.
The health care sector provided the greatest support to the Portfolio's
performance, and here the Portfolio's strength depended on purchasing only those
companies with strong cash flows. Other sectors in the Portfolio had mixed
results. The business goods and services sector, in which the Portfolio has
substantial holdings, depreciated in the fourth quarter of 1996. We expect that
the performance of the business goods and services stocks held in the Portfolio
will improve as the companies have strong financials and good long-term growth
prospects.
Looking ahead, we believe the Portfolio is well positioned in relation to the
small-company market for 1997, as the stocks in the Portfolio have both higher
projected earnings growth and a lower average price-to-earnings ratio than the
overall Russell 2000 Index, which measures the performance of small-company
stocks. We believe that share price appreciation in the equity markets is linked
to earnings growth, and that our disciplined investment approach should support
the Portfolio's long-term performance.
- ----------------------
The investment return and principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.
-- P-7 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
ANNUAL PERFORMANCE OVERVIEW (continued)
- -------------------------------------------------------------------------------
Seligman Henderson Global Growth Opportunities Portfolio
The chart and total return do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Total Returns+
Since
Inception
---------
Seligman Henderson Global Growth (0.78)%
Opportunities Portfolio
Lipper Global Funds Average 6.39
MSCI World Index 6.87
Global MSCI
Growth Lipper World
Date Portfolio Global Index
5/1/96 $10000.00 $10000.00 $10000.00
5/31/96 $10000.00 $10127.00 $10010.00
6/30/96 $10010.00 $10089.53 $10062.05
7/31/96 $9480.00 $9623.39 $9707.87
8/31/96 $9790.00 $9887.07 $9821.45
9/30/96 $9810.00 $10179.73 $10207.43
10/31/96 $9650.00 $10165.48 $10280.93
11/30/96 $9980.00 $10644.27 $10858.71
12/31/96 $9922.10 $10638.95 $10687.15
Growth investing around the world experienced mixed results in the last 12
months. In the UK and Continental Europe, growth stocks significantly
outperformed value stocks, while lower economic growth brought weaker
performance from the markets in the Pacific. Our portfolio strategy continued to
focus on four major global themes: "Consumer is King," "Global Trade,"
"Productivity," and "Quality of Life."
Both the US and European mar kets improved the Portfolio's performance. In
the US, the financial markets were volatile due to rapidly changing perceptions
about the pace of economic growth. Nonetheless, the markets soared to new highs
after a short setback in July. In Europe, growth stocks performed extremely
well, as the outlook for European economies improved significantly in the last
six months of the year. In the end, the economy remained healthy with no
significant signs of inflationary pressures.
The Portfolio's investment in the Pacific produced mixed results. Hong Kong
had the only consistently strong market for the year, though it weakened in the
fourth quarter. On the other hand, Japan's market significantly underperformed
as Japanese and foreign equity investors remained on the sidelines. In the rest
of the Pacific, disappointing economic growth combined with a decline in the
prices of commodity electronic products resulted in lackluster performance.
Particular attention was focused on the "Productivity" theme in the second half
of the year, and outsourcing companies that benefited from global corporate
subcontracting trends, and technology stocks, which rebounded from summer lows
on improved corporate earnings, were purchased.
We believe that a combination of higher global economic growth, subdued
inflation, and widespread corporate restructuring will continue to support the
current equity bull market and growth investing. We continue to see ample
opportunities for growth investing around the world.
Seligman Henderson Global Smaller Companies Portfolio
The chart and total return do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Average Annual Total Returns+
Since
One Yr. Inception
------- ---------
Seligman Henderson Global Smaller 18.66% 17.89%
Companies Portfolio
Lipper Global Small Company Funds Average 16.13 12.57*
MSCI World Index 13.99 15.14*
*From September 30, 1994.
Global
Smaller MSCI
Companies Lipper World
Date Portfolio Global Index
10/31/94 $10000.00 $10093.00 $10286.00
11/30/94 $10000.00 $9604.50 $9841.64
12/31/94 $10353.43 $9605.46 $9939.08
1/31/95 $10072.25 $9237.57 $9791.98
2/28/95 $10152.58 $9344.73 $9936.90
3/30/95 $10594.44 $9531.62 $10417.85
4/30/95 $10895.70 $9810.90 $10782.47
5/31/95 $10805.32 $9972.78 $10876.28
6/30/95 $10885.66 $10293.90 $10875.19
7/31/95 $11327.51 $11017.56 $11421.13
8/31/95 $11518.31 $11014.26 $11168.72
9/30/95 $11859.74 $11212.51 $11495.96
10/31/95 $11759.32 $10951.26 $11316.62
11/30/95 $11779.41 $11011.49 $11711.57
12/31/95 $12152.40 $11246.04 $12055.90
1/31/96 $12568.94 $11460.84 $12276.52
2/29/96 $12995.89 $11806.95 $12353.86
3/31/96 $13245.81 $12084.42 $12561.40
4/30/96 $14224.66 $12767.19 $12859.11
5/31/96 $14599.54 $13094.03 $12871.97
6/30/96 $14589.13 $12922.50 $12938.90
7/31/96 $13891.44 $12132.93 $12483.45
8/31/96 $14120.53 $12509.05 $12629.51
9/30/96 $14464.17 $12768.75 $13125.85
10/31/96 $14162.18 $12616.69 $13220.36
11/30/96 $14422.52 $12940.94 $13963.34
12/31/96 $14420.55 $13059.99 $13742.72
Smaller-company stocks around the world had a turbulent 12 months, as most
regions experienced a rally in the first half of 1996 but faltered in the second
half of the year. The worldwide appreciation of the equity markets was driven
primarily by larger-company stocks. Most small companies, therefore, did not
participate in the advances to the same extent as larger companies, and never
fully recovered from their mid-year correction.
Within the Portfolio, the exposure to US smaller companies was increased
because of attractive valuations. However, Continental Europe is still favored
as we expect an economic recovery in the near future. Additionally, the
Portfolio's Japanese weighting declined, mainly as a result of market movements.
However, we continue to believe the economy will recover and we will retain a
focus on economically-sensitive stocks. Finally, the Portfolio's Pacific
weighting was modestly increased on weakness in the market.
- ------------------
The investment return and principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.
-- P-8 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
December 31, 1996
- -------------------------------------------------------------------------------
It is anticipated that in 1997 the global economy will experience strong
growth, and that any resulting increases in inflation or interest rates, which
could inhibit global equity markets, are likely to be muted. Further,
small-company valuations in many regions, particularly in the US and Continental
Europe, look attractive. Overall, we believe that a solid economic environment
and the attractive valuations of small-company stocks could provide a
constructive backdrop for the performance of smaller companies around the world.
Seligman Henderson Global Technology Portfolio
The chart and total return do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Total Returns+
Since
Inception
---------
Seligman Henderson Global 4.01%
Technology Portfolio
Lipper Global Funds Average 6.39
MSCI World Index 6.87
MSCI
Global Lipper World
Date Technology Global Index
5/1/96 $10000.00 $10000.00 $10000.00
5/31/96 $10000.00 $10127.00 $10010.00
6/30/96 $9860.00 $10089.53 $10062.05
7/31/96 $8830.00 $9623.39 $9707.87
8/31/96 $9250.00 $9887.07 $9821.45
9/30/96 $9970.00 $10179.73 $10207.43
10/30/96 $9880.00 $10165.48 $10280.93
11/30/96 $10400.00 $10644.27 $10858.71
12/31/96 $10400.90 $10638.95 $10687.15
In 1996, the global technology market once again put its investors to the test.
Volatility was most pronounced in the US, where the first half of the year
brought a significant inventory correction in the personal computer (PC) and
components markets, and a dramatic correction in July. In Asia, technology
shares also suffered from the sharp falls in component prices that accompanied
the liquidation of surplus inventory. In contrast, the performance of European
shares stabilized the global technology market, and individual companies
performed well. After July, the global technology market began to recover. By
year end, the technology market regained momentum to finish on a positive note.
Within the Portfolio, the exposure to semiconductors was de-emphasized in
favor of networking/communications at the beginning of the year. After the July
correction, however, the overall US exposure was increased: A significant
weighting in the outsourcing industry and holdings in companies that should
benefit from the strength of PC demand were increased. Additionally, we
continued to look for investments that would increase the Portfolio's exposure
to the mobile communications sector.
We remain enthusiastic about the technology market's long-term outlook.
Earnings growth has been strong, and consequently price-to-earnings ratios have
come down sharply. It is expected that strong earnings growth will continue into
1997, and we believe that technology stocks will provide stronger earnings than
the equity markets in general.
Seligman Henderson International Portfolio (formerly 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+
Since
One Yr. Inception
------- ---------
Seligman Henderson International Portfolio 7.08% 9.22%
EAFE Index 6.36 9.35
MSCI World Index** 13.99 13.26
Lipper International Funds Average 11.77 10.58
Lipper
International MSCI MSCI
International Funds EAFE World
Date Portfolio Average Index Index
5/3/93 $10,000.00 $10,000.00 $10,000.00 $10,000.00
6/30/93 $10,010.00 $9,993.51 $10,057.00 $10,148.00
9/30/93 $10,480.00 $10,882.84 $10,730.82 $10,637.13
12/31/93 $11,439.57 $11,914.38 $10,830.62 $10,822.22
3/31/94 $10,986.82 $11,828.87 $11,216.19 $10,901.22
6/30/94 $11,399.33 $11,959.99 $11,797.18 $11,241.34
9/30/94 $11,751.47 $12,331.53 $11,816.06 $11,496.52
12/31/94 $11,591.12 $11,836.36 $11,703.81 $11,426.39
3/31/95 $11,427.58 $11,630.96 $11,930.86 $11,976.00
6/30/95 $11,764.89 $12,102.59 $12,027.50 $12,502.94
9/30/95 $12,603.05 $12,694.06 $12,538.67 $13,216.86
12/31/95 $12,905.41 $12,943.99 $13,056.52 $13,861.84
3/31/96 $13,228.31 $13,512.79 $13,442.99 $14,442.66
6/30/96 $13,603.28 $14,006.28 $13,666.14 $14,877.38
9/30/96 $13,519.96 $13,935.30 $13,659.31 $15,093.10
12/31/96 $13,818.54 $14,467.73 $13,887.42 $15,800.97
** Seligman Henderson International Portfolio will no longer be compared to the
MSCI World Index, which includes US stocks, after December 31, 1996, because
the Portfolio's investment objective has been changed from a "global"
portfolio to an "international" portfolio. As such, the MSCI World Index is
no longer an appropriate index.
Over the past 12 months, there were mixed results in the international stock
markets: European markets performed reasonably well, while the Pacific markets
posted mixed results and Japan underperformed.
In the UK, the economy grew strongly during the year, causing Sterling to
rise in value. In Continental Europe, lower interest rates proved positive for
the equity markets, although most European currencies weakened against the US
Dollar. In Japan, a slow economic recovery continued. However, Japanese
investors cautiously remained on the sidelines and foreign investors fled the
market in the fourth quarter, which caused the
- -------------------
The investment return and principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.
-- P-9 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
ANNUAL PERFORMANCE OVERVIEW (continued)
- -------------------------------------------------------------------------------
market to fall sharply at the end of the year. In the Pacific, Hong Kong
performed well, but experienced a downturn in the fourth quarter of 1996, and
the other Pacific markets had weak performance.
Within the Portfolio, the UK and Continental European weightings were
increased, due to a strong economy in the UK and expectations for an economic
recovery in Continental Europe. In Japan, Portfolio holdings were focused in
economically-sensitive stocks, as we believe the economy will improve, though
the overall weighting declined due to the market's weakness. Finally, the
Portfolio's exposure to the Pacific was reduced.
Looking forward, economic fundamentals seem strong, and we expect that
moderate growth and low levels of inflation should continue around the world.
While we anticipate reasonable performance in the UK and improvements in
Continental Europe and Japan, the corporate profits outlook will be important
for future performance. Nonetheless, we anticipate that the fundamental
background will continue to remain positive.
Seligman High-Yield Bond Portfolio
The chart and total return do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Average Annual Total Returns+
Since
One Yr. Inception
------- ---------
Seligman High-Yield Bond Portfolio 14.62% 13.23%
Lipper High-Yield Bond Funds Index 12.68 13.18
Merrill Lynch High-Yield Master Index 11.07 13.01
Lipper
Merrill High
Lynch Yield
High High Bond
Yield Yield Fund
Date Bond Index Index
4/30/95 $10000.00 $10000.00 $10000.00
5/31/95 $10000.00 $10312.00 $10227.00
6/30/95 $10030.00 $10390.37 $10268.93
7/31/95 $10160.00 $10508.82 $10480.47
8/31/95 $10150.00 $10572.93 $10503.53
9/30/95 $10300.00 $10693.46 $10624.32
10/31/95 $10440.00 $10769.38 $10704.00
11/30/95 $10540.00 $10874.92 $10757.52
12/31/95 $10737.23 $11048.92 $10918.88
1/31/96 $11033.78 $11223.49 $11132.89
2/29/96 $11176.94 $11240.33 $11245.34
3/31/96 $11125.81 $11209.98 $11198.11
4/30/96 $11248.52 $11215.58 $11286.57
5/31/96 $11371.23 $11296.34 $11371.22
6/30/96 $11340.56 $11364.11 $11378.04
7/31/96 $11371.23 $11441.39 $11429.24
8/31/96 $11524.62 $11559.24 $11610.97
9/30/96 $11872.30 $11807.76 $11907.05
10/31/96 $11892.76 $11937.64 $11958.25
11/30/96 $12097.28 $12178.78 $12157.95
12/31/96 $12306.65 $12272.56 $12303.85
In 1996, high-yield bonds demon strated tremendous resiliency in a generally
rising interest rate environment. One factor that sup ported performance was the
more than $15 billion net inflow into high-yield mutual funds. The near-record
levels of new issues offered in 1996 and the historically low default rates also
contributed to an overall positive market sentiment. Further, high-yield
securities continued to deliver out standing yields versus other taxable
fixed-income investments, and grew in acceptance as a viable institutional asset
class.
Investment strategy focused on investing in B-rated domestic corporate issues
and avoiding distressed, defaulted, and foreign-dollar-denominated securities.
An emphasis was placed on individual company selection and on non-cyclical
industries such as cable operators and telecommunications providers. The
Portfolio's core positions in cable systems, gaming, and telecommunications were
also expanded as Portfolio assets increased.
The outlook for the High-Yield Bond Portfolio continues to be positive.
Strong fundamental and technical factors point to another solid year in the
high-yield bond market. A stable, growing economy with relatively steady
interest rates and strong inflows into high-yield investment vehicles translate
to a positive outlook for the high-yield asset class and your Portfolio.
- --------------------
The investment return and principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.
-- P-10 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
December 31, 1996
- -------------------------------------------------------------------------------
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+
Since
One Yr. Five Yrs. Inception
-------- ---------- -----------
Seligman Income Portfolio 6.66% 9.00% 9.63%
Lipper Income Funds Average 10.76 10.32 10.90*
S&P 500 22.96 15.22 15.85*
*From June 30, 1988.
Lipper S&P
Income Income 500
Date Portfolio Funds Index
6/21/88 $10000.00 $10000.00 $10000.00
9/30/88 $10090.00 $10146.97 $10034.00
12/31/88 $10110.28 $10271.69 $10344.05
3/31/89 $10452.66 $10655.18 $11077.44
6/30/89 $11097.14 $11290.30 $12055.58
9/30/89 $11379.10 $11766.17 $13346.73
12/31/89 $11587.20 $11924.56 $13621.68
3/31/90 $11565.70 $11714.70 $13211.67
6/30/90 $11673.19 $12050.72 $14042.68
9/30/90 $10512.32 $11302.13 $12113.21
12/31/90 $10879.92 $11853.87 $13198.56
3/31/91 $12105.35 $12891.73 $15116.31
6/30/91 $12609.26 $13059.28 $15081.54
9/30/91 $13639.99 $13993.44 $15888.40
12/31/91 $14240.95 $14746.66 $17219.85
3/31/92 $14823.24 $14831.76 $16784.19
6/30/92 $15190.34 $15247.42 $17103.09
9/30/92 $15747.32 $15821.75 $17641.84
12/31/92 $16479.01 $16179.73 $18529.22
3/31/93 $17376.02 $17070.83 $19338.95
6/30/93 $17853.46 $17458.49 $19433.71
9/30/93 $18388.78 $18043.59 $19935.10
12/31/93 $18517.52 $18213.92 $20397.59
3/31/94 $17736.47 $17596.10 $19624.52
6/30/94 $17199.49 $17515.63 $19706.95
9/30/94 $17785.29 $17949.13 $20670.62
12/31/94 $17413.41 $17662.97 $20666.48
3/31/95 $18042.18 $18703.18 $22679.40
6/30/95 $19264.79 $19859.26 $24845.28
9/30/95 $20400.07 $20855.53 $26820.48
12/31/95 $20543.53 $21767.17 $28435.07
3/31/96 $20796.43 $22214.39 $29962.04
6/30/96 $21068.79 $22600.81 $31304.34
9/30/96 $21243.88 $23042.54 $32271.64
12/31/96 $21910.92 $24110.33 $34963.10
In the last 12 months, the Income Portfolio followed a bottom-up approach to
investing, focusing on iden tifying value in the markets. The in vestment
strategy focused on purchasing corporate bonds that had improving credit
fundamentals such as strong cash flow and debt re duction. The Portfolio's
holdings were also concentrated in high-quality US Government securities to
provide solid yield and stability.
At December 31, the Portfolio was overweighted, in historical terms, in
fixed-income securities, and the weighting in convertible securities had been
reduced to historically low levels. The Portfolio's exposure to convertible
securities was reduced due to the declining quality of new convertible offerings
brought to market, which had high premiums and inadequate yields.
Currently, the relative attractiveness versus risk of each asset class in the
P ortfolio is being re-examined. We will focus on maintaining the Portfolio's
yield and low level of risk while remaining fully invested to take advantage of
the strong equity markets. As we believe that we are entering a period of
moderate economic growth, the Portfolio was repositioned to take advantage of
possible declines in interest rates.
- ---------------------
The investment return and principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results. + Performance data
quoted represent past performance and assume that all dividends and
distributions are invested in additional shares.
-- P-11 --
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Portfolios of Investments
- --------------------------------------------------------------------------------
SELIGMAN BOND PORTFOLIO
<TABLE>
<CAPTION>
Principal
Amount Value
--------- -----
US GOVERNMENT SECURITIES AND AGENCIES -- 54.6%
US GOVERNMENT SECURITIES -- 39.4%
<S> <C> <C>
US Treasury Bonds 8 3/4%, 5/15/2020................................................ $400,000 $ 492,125
US Treasury Bonds 7 7/8%, 2/15/2021................................................ 400,000 452,000
US Treasury Notes 6 1/4%, 10/31/2001............................................... 200,000 200,188
US Treasury Notes 7%, 7/15/2006.................................................... 800,000 831,501
----------
TOTAL US GOVERNMENT SECURITIES (Cost $1,980,507)................................... 1,975,814
----------
US GOVERNMENT AGENCIES -- 15.2%
Federal National Mortgage Association
7 1/2%, 10/1/2026+............................................................... 492,553 493,015
Government National Mortgage Association
7 1/2%, 6/15/2023+............................................................... 266,258 266,758
----------
TOTAL US GOVERNMENT AGENCIES (Cost $732,292).................................... 759,773
----------
TOTAL US GOVERNMENT SECURITIES AND AGENCIES (Cost $2,712,799)................... 2,735,587
----------
CORPORATE BONDS -- 38.1%
AEGON 8%, 8/15/2006............................................................. 150,000 159,760
American Home 7.90%, 2/15/2005..................................................... 150,000 160,155
Capital One Bank 8 1/8%, 3/1/2000.................................................. 150,000 155,863
First Union 6.55%, 10/15/2035...................................................... 200,000 194,527
First USA Bank 5 1/4%, 1/15/1999................................................... 100,000 98,580
General Motors Acceptance 5 5/8%, 2/1/1999......................................... 150,000 148,234
Kohls 7 3/8%, 10/15/2011........................................................... 200,000 200,487
NewPort News 8 5/8%, 12/1/2006..................................................... 200,000 205,500
Oryx Energy 10%, 4/1/2001.......................................................... 200,000 219,458
United Telecommunications 9 1/2%, 4/1/2003......................................... 150,000 168,420
Woolworth 7%, 6/1/2000.......................................................... 200,000 201,515
----------
TOTAL CORPORATE BONDS (Cost $1,871,914)......................................... 1,912,499
----------
SHORT-TERM HOLDINGS -- 5.0% (Cost $250,000)
Canadian Imperial Bank of Commerce, Grand
Cayman, Fixed Time Deposit, 5 3/8%, 1/8/1997..................................... 250,000 250,000
----------
TOTAL INVESTMENTS-- 97.7% (Cost $4,834,713).................................... 4,898,086
OTHER ASSETS LESS LIABILITIES-- 2.3%............................................ 116,795
----------
NET ASSETS-- 100.0%............................................................. $5,014,881
----------
----------
- --------------------
+ 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 original maturity.
This in turn may impact the ultimate yield realized from these investments.
</TABLE>
See Notes to Financial Statements.
-- P-12 --
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
December 31, 1996
- --------------------------------------------------------------------------------
SELIGMAN CAPITAL PORTFOLIO
<TABLE>
<CAPTION>
Shares Value
--------- -----
COMMON STOCKS -- 92.7%
AEROSPACE -- 1.1%
<S> <C> <C>
Litton Industries*.............................................................. 3,400 $ 161,925
-----------
AUTOMOTIVE AND RELATED -- 2.0%
Harley-Davidson................................................................. 6,000 282,000
-----------
BASIC MATERIALS -- 4.6%
Minerals Technologies........................................................... 5,000 205,000
Nucor........................................................................... 2,100 107,100
Olin............................................................................ 6,100 229,512
Schulman, A..................................................................... 4,687 115,417
-----------
657,029
-----------
BUSINESS SERVICES AND SUPPLIES -- 3.7%
HFS................................................... 4,687 115,417
-----------
657,029
-----------
BUSINESS SERVICES AND SUPPLIES -- 3.7%
HFS -----------
534,100
-----------
COMPUTER GOODS AND SERVICES -- 14.3%
Adaptec*........................................................................ 4,400 176,275
Arrow Electronics*.............................................................. 3,000 160,500
C-Cube Microsystems*............................................................ 5,000 184,688
Ceridian*....................................................................... 5,000 202,500
Fiserv*......................................................................... 6,000 221,625
Intel......,275
Arrow Electronics*.............................................................. 3,000 160,500
C-Cube Microsystems*............................................................ 5,000 184,688
Ceridian*....................................................................... 5,000 202,500
Fiserv*......................................................................... 6,000 221,625
Intel........................................................... 5,000 197,500
Tencor Instruments* ............................................................ 5,000 132,187
3Com*........................................................................... 1,200 87,975
Xilinx*......................................................................... 3,100 114,119
-----------
2,046,231
-----------
CONSUMER GOODS AND SERVICES -- 5.7%
Estee Lauder (Class A).......................................................... 2,500 127,187
Gucci Group..................................................................... 1,500 95,813
Landry's Seafood Restaurants*................................................... 2,800 60,375
Newell.......................................................................... 7,500 236,250
Oakley*......................................................................... 10,800 117,450
Tommy Hilfiger*................................................................. 3,700 177,600
-----------
814,675
-----------
- --------------------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-13 --
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- --------------------------------------------------------------------------------
SELIGMAN CAPITAL PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
DRUGS AND HEALTH CARE -- 11.0%
<S> <C> <C>
Amgen*.......................................................................... 2,500 $ 136,094
Biogen*......................................................................... 2,000 77,250
Centocor........................................................................ 3,600 128,925
Columbia/HCA Healthcare......................................................... 4,350 177,263
Guidant......................................................................... 4,000 228,000
HCIA*........................................................................... 2,000 69,375
Humana*......................................................................... 5,300 101,362
Mid Atlantic Medical Services*.................................................. 7,400 98,975
Nitinol Medical Technologies*................................................... 5,000 61,563
Pfizer.......................................................................... 2,800 232,050
Physio-Control International*................................................... 4,500 100,125
United Healthcare............................................................... 3,700 166,500
----------
1,577,482
----------
FINANCIAL SERVICES -- 14.1%
Amerin*......................................................................... 7,200 184,950
Donaldson, Lufkin & Jenrette Securities......................................... 6,000 216,000
GreenPoint Financial............................................................ 4,200 198,450
MBNA ........................................................................... 7,200 298,800
Old Republic International...................................................... 2,900 77,575
Progressive (Ohio).............................................................. 3,700 249,287
St. Paul Bancorp................................................................ 2,500 73,281
Schwab (Charles)................................................................ 2,500 80,000
Transatlantic Holdings.......................................................... 1,700 136,850
Travelers....................................................................... 6,600 299,475
Washington Mutual............................................................... 4,800 207,900
----------
2,022,568
----------
INDUSTRIAL GOODS AND SERVICES -- 4.6%
Illinois Tool Works............................................................. 2,700 215,663
Ionics*......................................................................... 1,500 72,000
Maxim Integrated Products*...................................................... 5,000 216,563
Petroleum Geo-Services (ADRs)*.................................................. 4,000 156,000
----------
660,226
----------
LEISURE AND RELATED -- 11.3%
British Sky Broadcasting (ADRs)................................................. 4,900 257,250
Circus Circus Enterprises*...................................................... 5,200 178,750
Infinity Broadcasting (Class A)*................................................ 5,550 186,619
International Game Technology................................................... 6,200 113,150
Mattel.......................................................................... 7,812 216,783
MGM Grand*...................................................................... 4,700 163,912
Mirage Resorts*................................................................. 5,800 125,425
Sun International Hotels*....................................................... 5,700 208,050
Viacom (Class B)*............................................................... 4,600 160,425
----------
1,610,364
----------
PRINTING AND PUBLISHING -- 0.9%
World Color Press*.............................................................. 6,300 121,275
----------
- ---------------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-14 --
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
December 31, 1996
- --------------------------------------------------------------------------------
SELIGMAN CAPITAL PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
RETAIL TRADE -- 2.8%
<S> <C> <C>
Home Depot...................................................................... 3,500 shs. $ 175,438
Office Depot*................................................................... 4,800 85,200
Saks Holdings*.................................................................. 5,200 140,400
-----------
401,038
-----------
SOFTWARE -- 9.3%
Activision*..................................................................... 12,500 157,813
DST Systems*.................................................................... 5,000 156,875
Microsoft*...................................................................... 5,000 413,437
Parametric Technology*.......................................................... 1,700 87,444
Shiva*.......................................................................... 1,200 41,700
Sterling Commerce*.............................................................. 5,000 176,250
Symantec*....................................................................... 20,100 292,706
-----------
1,326,225
-----------
TELECOMMUNICATIONS -- 7.3%
Century Telephone Enterprises................................................... 4,100 126,588
Harmonic Lightwaves*............................................................ 1,500 22,969
LCC International (Class A)*.................................................... 2,300 41,544
Level One Communications*....................................................... 2,100 74,550
Madge Networks*................................................................. 3,600 35,775
McLeod (Class A)*............................................................... 6,000 153,750
MRV Communications*............................................................. 4,700 102,519
Premisys Communications*........................................................ 2,800 94,500
TCSI*........................................................................... 3,000 18,937
360(degree)Communications*............................................................ 4,800 111,000
WorldCom*....................................................................... 10,200 265,837
-----------
1,047,969
-----------
TOTAL COMMON STOCKS (Cost $11,155,759).......................................... 13,263,107
REPURCHASE AGREEMENTS -- 7.0% (Cost $1,000,000)
HSBC Securities, Inc. 4 7/8%, dated 12/31/1996, maturing 1/8/1997
collateralized by: $980,000 US Treasury Notes 7 3/4%,
12/31/1999, with a fair market value of $1,025,478........................... $1,000,000 1,000,000
-----------
TOTAL INVESTMENTS-- 99.7% (Cost $12,155,759).................................... 14,263,107
OTHER ASSETS LESS LIABILITIES-- 0.3%............................................ 49,950
-----------
NET ASSETS-- 100.0%............................................................. $14,313,057
-----------
-----------
- --------------------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-15 --
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- --------------------------------------------------------------------------------
SELIGMAN CASH MANAGEMENT PORTFOLIO
<TABLE>
<CAPTION>
Annualized
Yield on Principal
Purchase Date Amount Value
------------- --------- -----
COMMERCIAL PAPER --- 49.2%
<S> <C> <C> <C>
American Express Credit Corp., 2/12/1997....................................... 5.34% $ 450,000 $ 447,233
American General Finance Corp., 1/15/1997...................................... 5.36 475,000 474,023
Ameritech Corp., 3/4/1997...................................................... 5.34 450,000 445,916
Associates Corp. of North America, 1/27/1997................................... 5.38 450,000 448,274
BellSouth Telecommunications Corp., 2/5/1997................................... 5.34 450,000 447,694
Clorox Corp., 3/6/1997......................................................... 5.35 400,000 396,245
Ford Motor Credit Corp., 2/14/1997............................................. 5.36 450,000 447,091
General Electric Capital Corp., 3/14/1997...................................... 5.42 400,000 395,720
John Deere Capital Corp., 2/7/1997............................................. 5.36 440,000 437,608
Norwest Financial, 3/7/1997.................................................... 5.37 475,000 470,455
Pitney Bowes, 3/10/1997........................................................ 5.34 400,000 396,018
-----------
TOTAL COMMERCIAL PAPER (Cost $4,806,277)....................................... 4,806,277
-----------
US GOVERNMENT SECURITIES --- 28.0 %
US Treasury Bills, 1/30/1997................................................... 5.10 1,800,000 1,792,706
US Treasury Bills, 4/17/1997 .................................................. 5.04 950,000 936,098
-----------
TOTAL US GOVERNMENT SECURITIES (Cost $2,728,804)............................... 2,728,804
-----------
BANK NOTES --- 4.1% (Cost $400,001)
NBD Bank, Detroit, 1/6/1997.................................................... 5.45 400,000 400,001
-----------
REPURCHASE AGREEMENTS -- 19.5% (Cost $1,900,000) HSBC Securities, Inc., 4 7/8%,
dated 12/31/1996, maturing 1/8/1997 collateralized by: $1,860,000 US Treasury
Notes 7 3/4%, 12/31/1999,
with a fair market value of $1,946,316....................................... 1,900,000 1,900,000
-----------
TOTAL INVESTMENTS --- 100.8 % (Cost $9,835,082)................................ 9,835,082
OTHER ASSETS LESS LIABILITIES--- (0.8)%......................................... (80,190)
-----------
NET ASSETS--- 100.0%............................................................ $9,754,892
-----------
-----------
</TABLE>
- --------------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO
<TABLE>
<CAPTION>
Shares Value
--------- -----
COMMON STOCKS -- 77.1%
ADVERTISING -- 0.5%
<S> <C> <C>
Omnicom Group................................................................... 4,200 $ 192,150
-----------
AEROSPACE/DEFENSE -- 3.3%
Avondale Industries*............................................................ 8,000 171,500
General Dynamics................................................................ 3,000 211,500
General Motors (Class H)........................................................ 2,400 135,000
Lockheed Martin................................................................. 2,100 192,150
Raytheon........................................................................ 5,500 264,688
United Technologies............................................................. 3,600 237,600
-----------
1,212,438
-----------
- ----------------------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-16 --
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- --------------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
APPAREL AND TEXTILES -- 0.7%
<S> <C> <C>
Liz Claiborne................................................................... 7,000 $ 270,375
----------
AUTOMOTIVE AND RELATED -- 4.1%
Borg-Warner Automotive.......................................................... 4,400 169,400
Dura Automotive Systems*........................................................ 10,000 221,250
Echlin.......................................................................... 11,300 357,363
Federal-Mogul................................................................... 7,000 154,000
Ford Motor...................................................................... 3,000 95,625
Genuine Parts................................................................... 3,800 169,100
Harley-Davidson................................................................. 4,200 197,400
The Pep Boys.................................................................... 5,200 159,900
----------
1,524,038
----------
CHEMICALS -- 2.2%
Dow Chemical.................................................................... 2,400 188,100
Hercules........................................................................ 3,000 129,750
Morton International............................................................ 4,200 171,150
Olin............................................................................ 8,800 331,100
----------
820,100
----------
COMPUTER GOODS AND SERVICES -- 1.9%
Automatic Data Processing....................................................... 4,200 180,075
Compaq Computer................................................................. 4,300 319,275
Electronic Data Systems......................................................... 5,000 216,250
----------
715,600
----------
COMPUTER SOFTWARE -- 0.6%
Synopsys*....................................................................... 5,100 234,600
----------
CONSTRUCTION -- 0.7%
Sherwin-Williams................................................................ 4,800 268,800
----------
CONSUMER GOODS AND SERVICES -- 6.2%
Colgate-Palmolive............................................................... 5,200 479,700
Eastman Kodak................................................................... 4,000 321,000
First Brands.................................................................... 12,000 340,500
International Flavors & Fragrances.............................................. 6,700 301,500
RJR Nabisco Holdings............................................................ 4,400 149,600
PepsiCo......................................................................... 12,600 368,550
Procter & Gamble................................................................ 3,300 354,750
----------
2,315,600
----------
DRUGS AND HEALTH CARE -- 6.1%
Abbott Laboratories............................................................. 6,200 314,650
American Home Products.......................................................... 3,600 211,050
Baxter International............................................................ 3,600 147,600
Biomet.......................................................................... 12,000 182,250
Bristol-Myers Squibb............................................................ 2,000 217,500
Guidant......................................................................... 3,500 199,500
Medtronic....................................................................... 3,000 204,000
- -------------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-17 --
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- --------------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
DRUGS AND HEALTH CARE (continued)
<S> <C> <C>
Nellcor Puritan Bennett*........................................................ 6,400 $ 139,200
Schering-Plough................................................................. 6,600 427,350
United Healthcare............................................................... 4,500 202,500
----------
2,245,600
----------
ELECTRIC AND GAS UTILITIES -- 0.9%
FPL Group....................................................................... 7,200 331,200
----------
ELECTRONICS -- 6.1%
AMP............................................................................. 12,800 491,200
Arrow Electronics*.............................................................. 3,500 187,250
General Signal.................................................................. 7,400 316,350
Kemet*.......................................................................... 10,000 230,625
Motorola........................................................................ 6,000 368,250
Vishay Intertechnology*......................................................... 16,000 374,000
Xilinx*......................................................................... 7,800 287,137
----------
2,254,812
----------
ENERGY -- 8.1%
Atlantic Richfield.............................................................. 2,500 331,250
Baker Hughes.................................................................... 7,000 241,500
Enron........................................................................... 7,500 323,438
PanEnergy....................................................................... 4,800 216,000
Royal Dutch Petroleum........................................................... 2,200 375,650
Schlumberger.................................................................... 3,000 299,625
Sonat........................................................................... 9,200 473,800
Texaco.......................................................................... 5,300 520,062
Union Pacific Resources......................................................... 7,800 228,150
----------
3,009,475
----------
ENVIRONMENTAL SERVICES -- 0.4%
Browning-Ferris Industries...................................................... 6,000 157,500
----------
FINANCE AND INSURANCE -- 10.1%
American International Group.................................................... 4,800 519,600
BankAmerica..................................................................... 2,200 219,450
Bank of New York................................................................ 9,600 324,000
Federal National Mortgage Association........................................... 10,400 387,400
General Re...................................................................... 3,500 552,125
Great Western Financial......................................................... 5,000 145,000
Household International......................................................... 2,000 184,500
Mellon Bank..................................................................... 3,100 220,100
NationsBank..................................................................... 5,814 568,319
PNC Bank........................................................................ 5,900 221,988
St. Paul Companies.............................................................. 3,000 175,875
Travelers....................................................................... 5,000 226,875
----------
3,745,232
----------
- -----------------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-18 --
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
December 31, 1996
- --------------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
FOOD -- 4.3%
<S> <C> <C>
Campbell Soup................................................................... 2,800 $ 224,700
ConAgra......................................................................... 5,250 261,187
CPC International............................................................... 3,000 232,500
General Mills................................................................... 4,900 310,538
Sara Lee........................................................................ 11,400 424,650
Sysco........................................................................... 5,000 163,125
----------
1,616,700
----------
INDUSTRIAL EQUIPMENT -- 1.9%
Emerson Electric................................................................ 2,600 251,550
General Electric................................................................ 4,600 454,825
----------
706,375
----------
LEISURE AND ENTERTAINMENT -- 0.5%
Disney, Walt.................................................................... 2,900 201,913
----------
MACHINERY -- 1.0%
Ingersoll-Rand.................................................................. 4,500 200,250
Parker-Hannifin................................................................. 4,300 166,625
----------
366,875
----------
METALS AND MINING -- 1.1%
Reynolds Metals................................................................. 3,000 169,125
Worthington Industries.......................................................... 12,500 227,344
----------
396,469
----------
OFFICE EQUIPMENT -- 1.0%
Ikon Office Solutions........................................................... 2,900 149,712
Pitney Bowes.................................................................... 4,100 223,450
----------
373,162
----------
PAPER AND PACKAGING -- 1.9%
International Paper............................................................. 4,300 173,612
Kimberly-Clark.................................................................. 3,300 314,325
Mead............................................................................ 3,500 203,438
----------
691,375
----------
PRINTING AND PUBLISHING -- 0.5%
Tribune......................................................................... 2,400 189,300
----------
RESTAURANTS -- 0.6%
McDonald's...................................................................... 4,500 203,625
----------
RETAIL TRADE -- 1.7%
Kmart........................................................................... 5,800 60,175
May Department Stores........................................................... 4,000 187,000
Wal-Mart........................................................................ 8,100 185,287
Woolworth....................................................................... 8,500 185,937
----------
618,399
----------
</TABLE>
- -----------------------
See Notes to Financial Statements.
-- P-19 --
<PAGE>
Seligman Portfolios, Inc.
- --------------------------------------------------------------------------------
Portfolios of Investments (continued)
- --------------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
STEEL -- 0.3%
<S> <C> <C>
Nucor........................................................................... 2,200 shs. $ 112,200
-----------
TECHNOLOGY -- 2.5%
Hewlett-Packard................................................................. 5,000 251,250
Intel........................................................................... 2,800 366,625
Sun Microsystems................................................................ 6,600 169,537
Teradyne........................................................................ 6,400 156,000
-----------
943,412
-----------
TELECOMMUNICATIONS -- 2.7%
Frontier........................................................................ 10,000 226,250
GTE............................................................................. 3,900 177,450
Loral Space & Communications*................................................... 14,000 257,250
Teleport Communications......................................................... 3,500 106,750
WorldCom*....................................................................... 9,000 234,562
-----------
1,002,262
-----------
TELEPHONE UTILITIES -- 1.3%
ALLTEL.......................................................................... 11,000 345,125
SBC Communications.............................................................. 2,900 150,075
-----------
495,200
-----------
TRANSPORTATION -- 0.5%
Burlington Northern Santa Fe.................................................... 2,000 172,750
-----------
MISCELLANEOUS/DIVERSIFIED --- 3.4%
Corning (Delaware).............................................................. 9,200 425,500
Minnesota Mining & Manufacturing................................................ 4,600 381,225
Republic Industries*............................................................ 6,500 202,719
Tenneco......................................................................... 5,900 266,238
-----------
1,275,682
-----------
TOTAL COMMON STOCKS (Cost $20,936,736).......................................... 28,663,219
-----------
SUBORDINATED CONVERTIBLE BONDS -- 0.6% (Cost $200,137)
MascoTech 4 1/2%, 12/15/2003.................................................... $ 250,000 203,125
-----------
REPURCHASE AGREEMENTS -- 21.8% (Cost $8,100,000)
HSBC Securities, Inc. 4 7/8%, dated 12/31/1996, maturing 1/8/1997
collateralized by: $7,895,000 US Treasury Notes 7 3/4%, 12/31/1999,
with a fair market value of $8,261,377....................................... 8,100,000 8,100,000
-----------
TOTAL INVESTMENTS-- 99.5% (Cost $29,236,873)................................... 36,966,344
OTHER ASSETS LESS LIABILITIES-- 0.5%............................................ 202,056
-----------
NET ASSETS-- 100.0%............................................................. $37,168,400
-----------
-----------
- -------------------------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-20 --
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
December 31, 1996
- ------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO
<TABLE>
<CAPTION>
Shares Value
--------- -----
COMMON STOCKS -- 97.6%
COMMUNICATIONS INFRASTRUCTURE -- 22.9%
<S> <C> <C>
Cabletron Systems*.............................................................. 40,000 $ 1,330,000
CIDCO*.......................................................................... 40,000 695,000
Cisco Systems*.................................................................. 25,000 1,592,187
Dialogic* ...................................................................... 30,000 937,500
ECI Telecommunications.......................................................... 30,000 635,625
FORE Systems*................................................................... 25,000 823,438
Glenayre Technologies*.......................................................... 50,000 1,078,125
Network General*................................................................ 36,000 1,086,750
Pairgain Technologies*.......................................................... 18,600 566,137
Tellabs*........................................................................ 40,000 1,507,500
3Com*........................................................................... 25,000 1,832,813
U.S. Robotics*.................................................................. 25,000 1,801,563
-----------
13,886,638
-----------
COMPUTER HARDWARE/PERIPHERALS -- 21.2%
Adaptec*........................................................................ 15,700 628,981
Electronics for Imaging*........................................................ 10,000 818,750
EMC*............................................................................ 55,000 1,821,875
Gateway 2000*................................................................... 20,000 1,071,250
IKOS Systems*................................................................... 45,000 905,625
Komag*.......................................................................... 35,000 947,188
Lexmark International Group (Class A)*.......................................... 50,000 1,381,250
Mylex*.......................................................................... 50,000 625,000
Seagate Technology*............................................................. 40,000 1,580,000
Sun Microsystems*............................................................... 40,000 1,027,500
Tektronix....................................................................... 10,000 512,500
VeriFone*....................................................................... 30,000 885,000
Xionics Document Technologies*.................................................. 49,750 624,984
-----------
12,829,903
-----------
COMPUTER SOFTWARE -- 26.6%
Applix*......................................................................... 40,000 867,500
Cadence Design Systems*......................................................... 8,000 318,000
Computer Associates International............................................... 10,000 497,500
HNC Software*................................................................... 20,000 620,000
I2 Technologies*................................................................ 15,000 579,375
IA*............................................................................. 195,000 1,121,250
Infonautics (Class A)*.......................................................... 100,000 387,500
Informix*....................................................................... 25,000 510,937
Mentor Graphics*................................................................ 70,000 686,875
Metatools*...................................................................... 5,000 58,438
Microsoft*...................................................................... 20,000 1,653,750
Parametric Technology*.......................................................... 23,000 1,183,063
Pure Atria*..................................................................... 35,000 859,688
Rogue Wave Software*............................................................ 44,000 704,000
Siebel Systems*................................................................. 40,000 1,090,000
Simulation Sciences*............................................................ 160,000 2,370,000
- -------------------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-21 --
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Portfolios of Investments (continued)
- ------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
COMPUTER SOFTWARE (continued)
<S> <C> <C>
Synopsys*....................................................................... 25,000 $ 1,150,000
Technology Modeling Associates*................................................. 56,000 742,000
VIASOFT*........................................................................ 15,000 710,625
-----------
16,110,501
-----------
CONTRACT MANUFACTURING/CIRCUIT BOARDS -- 4.4%
Hadco*.......................................................................... 10,000 488,125
Sanmina*........................................................................ 20,000 1,130,000
Solectron*...................................................................... 20,000 1,067,500
-----------
2,685,625
-----------
INFORMATION SERVICES -- 3.2%
Abacus Direct*.................................................................. 55,000 1,038,125
MetroMail*...................................................................... 25,000 456,250
Sapient*........................................................................ 10,000 416,250
-----------
1,910,625
-----------
MEDIA -- 0.8%
Infinity Broadcasting (Class A)*................................................ 15,000 504,375
-----------
PUBLISHING -- 0.5%
Alliance Entertainment*......................................................... 70,000 131,250
News Corp. (ADRs-Voting Preference Shares)...................................... 10,000 176,250
-----------
307,500
-----------
SEMICONDUCTORS -- 13.8%
Analog Devices*................................................................. 6,000 203,250
C-Cube Microsystems*............................................................ 30,000 1,108,125
Intel........................................................................... 13,000 1,702,187
International Rectifier*........................................................ 50,000 762,500
Linear Technology............................................................... 13,000 570,375
Maxim Integrated Products*...................................................... 30,000 1,299,375
Microchip Technology*........................................................... 12,600 641,025
S3*............................................................................. 45,000 734,063
SGS-Thomson Microelectronics*................................................... 5,000 351,605
Texas Instruments............................................................... 10,000 641,250
Xilinx*......................................................................... 10,000 368,125
-----------
8,381,880
-----------
SEMICONDUCTOR CAPITAL EQUIPMENT -- 2.2%
Cognex*......................................................................... 35,000 645,312
Veeco Instruments............................................................... 32,000 716,000
-----------
1,361,312
-----------
TELECOMMUNICATIONS -- 2.0%
Millicom International Cellular*................................................ 35,000 1,122,187
Paging Network*................................................................. 5,000 76,563
-----------
1,198,750
-----------
- ---------------------------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-22 --
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
December 31, 1996
- ------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
--------- -----
<S> <C> <C>
TOTAL COMMON STOCKS (Cost $54,364,974).......................................... $59,177,109
REPURCHASE AGREEMENTS -- 5.0% (Cost $3,050,000)
HSBC Securities, Inc. 4 7/8%, dated 12/31/1996, maturing
1/8/1997 collateralized by: $2,975,000 US Treasury Notes
7 3/4%, 12/31/1999, with a fair market value of $3,113,059.................... $3,050,000 3,050,000
-----------
TOTAL INVESTMENTS-- 102.6% (Cost $57,414,974)................................... 62,227,109
OTHER ASSETS LESS LIABILITIES-- (2.6)%.......................................... (1,582,162)
-----------
NET ASSETS-- 100.0%............................................................. $60,644,947
-----------
-----------
- ---------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO
Shares Value
--------- -----
COMMON STOCKS -- 91.2%
ADVERTISING -- 1.2%
ADVO*........................................................................... 18,000 $ 252,000
Heritage Media (Class A)*....................................................... 11,390 128,138
-----------
380,138
-----------
AEROSPACE AND DEFENSE -- 1.4%
Avondale Industries*............................................................ 20,300 435,181
-----------
BUSINESS GOODS AND SERVICES -- 16.1%
AccuStaff*...................................................................... 21,600 456,300
American Pad & Paper*........................................................... 20,300 459,287
BDM International*.............................................................. 5,410 291,464
Bell & Howell Holdings*......................................................... 8,290 196,888
Ceridian*....................................................................... 11,900 481,950
Coinmach Laundry*............................................................... 12,500 218,750
DST Systems*.................................................................... 17,500 549,063
Education Management*........................................................... 15,300 317,475
Fiserv*......................................................................... 4,000 147,750
MetroMail*...................................................................... 15,200 277,400
National Data................................................................... 10,150 441,525
National Processing*............................................................ 6,800 108,800
Nu-Kote Holdings (Class A)*..................................................... 10,500 107,625
OMI*............................................................................ 18,000 157,500
TeleSpectrum Worldwide*......................................................... 11,900 187,425
US Office Products*............................................................. 11,400 386,888
US Xpress Enterprises*.......................................................... 6,000 96,375
Wilmar Industries*.............................................................. 8,500 234,813
-----------
5,117,278
-----------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-23 --
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Portfolios of Investments (continued)
- ------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
GOODS -- 4.4%
<S> <C> <C>
Carbide/Graphite Group*......................................................... 16,100 $ 313,950
Fusion Systems*................................................................. 3,745 80,517
Greenfield Industries........................................................... 6,790 207,519
Oak Industries*................................................................. 13,530 311,190
UCAR International*............................................................. 10,200 383,775
Wyman-Gordon*................................................................... 5,000 110,937
----------
1,407,888
----------
CHEMICALS-- 0.6%
Polymer Group*.................................................................. 13,600 188,700
----------
COMMUNICATIONS -- 3.6%
Arch Communications Group*...................................................... 13,565 125,476
CIDCO*.......................................................................... 11,480 199,465
Glenayre Technologies*.......................................................... 13,200 284,625
KVH Industries*................................................................. 20,000 147,500
Omnipoint*...................................................................... 16,100 308,919
Western Wireless (Class A)*..................................................... 4,300 59,394
----------
1,125,379
----------
COMPUTER SOFTWARE AND SERVICES -- 5.9%
Amisys Managed Care Systems*.................................................... 20,000 335,000
Control Data Systems............................................................ 11,300 247,894
Dendrite International*......................................................... 8,500 71,188
Mentor Graphics*................................................................ 17,800 174,662
ONTRACK Data International*..................................................... 30,000 451,875
Sunquest Information Systems*................................................... 21,000 291,375
Synopsys*....................................................................... 6,740 310,040
----------
1,882,034
----------
CONSUMER GOODS AND SERVICES -- 2.7%
American Homestar*.............................................................. 6,800 153,850
Barefoot........................................................................ 6,730 106,418
Carriage Services (Class A)*.................................................... 2,500 55,469
Carson*......................................................................... 5,000 69,375
Gucci Group..................................................................... 4,000 255,500
HFS*............................................................................ 3,400 203,150
----------
843,762
----------
DRUGS AND HEALTH CARE -- 16.6%
American HomePatient*........................................................... 9,900 267,300
American Medserve*.............................................................. 15,000 230,625
AmeriSource Health (Class A)*................................................... 8,130 392,273
Educational Medical*............................................................ 25,000 281,250
HCIA*........................................................................... 4,200 145,687
Health Management Associates (Class A)*......................................... 17,000 382,500
HealthCor Holdings*............................................................. 10,200 94,350
National Surgery Centers*....................................................... 20,750 783,312
- --------------------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-24 --
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
December 31, 1996
- ------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
--------- -----
<S> <C> <C>
DRUGS AND HEALTH CARE (continued)
Omnicare........................................................................ 7,500 $ 240,938
Protein Design Labs*............................................................ 6,750 244,687
R.P. Scherer*................................................................... 11,400 572,850
Total Renal Care Holdings*...................................................... 10,200 369,750
Transitional Hospitals*......................................................... 16,485 158,668
Vivra*.......................................................................... 6,400 176,800
Watson Pharmaceuticals*......................................................... 20,100 903,244
----------
5,244,234
----------
ELECTRONICS -- 7.4%
Cognex*......................................................................... 23,760 438,075
Credence Systems*............................................................... 8,500 169,469
Electro Scientific Industries*.................................................. 4,500 117,844
Electronics for Imaging*........................................................ 3,100 253,812
International Rectifier*........................................................ 10,800 164,700
Lattice Semiconductor*.......................................................... 9,870 452,786
Maxim Integrated Products*...................................................... 8,500 368,156
Sanmina*........................................................................ 3,600 203,400
Vicor*.......................................................................... 10,160 169,545
----------
2,337,787
----------
ENVIRONMENTAL MANAGEMENT-- 1.6%
Allied Waste Industries*........................................................ 17,000 156,188
American Disposal Services*..................................................... 20,000 362,500
----------
518,688
----------
FARM EQUIPMENT -- 0.6%
AGCO............................................................................ 6,320 180,910
----------
FINANCIAL SERVICES -- 5.7%
CMAC Investment................................................................. 6,800 249,900
Commerce Bancorp................................................................ 5,125 169,125
EVEREN Capital*................................................................. 2,000 44,750
First Investors Financial Services Group*....................................... 5,100 38,569
First Savings Bank of Washington................................................ 5,100 94,669
Flushing Financial*............................................................. 6,800 123,250
GCR Holdings.................................................................... 7,100 157,531
Klamath First Bancorp........................................................... 5,100 79,687
Leasing Solutions*.............................................................. 6,100 158,600
PFF Bancorp*.................................................................... 3,400 50,150
T. Rowe Price................................................................... 7,750 337,125
Roosevelt Financial Group....................................................... 10,200 212,925
Statewide Financial............................................................. 5,100 73,950
----------
1,790,231
----------
GAMING -- 1.0%
GTECH Holdings*................................................................. 10,200 326,400
----------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-25 --
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Portfolios of Investments (continued)
- ------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
INDEPENDENT POWER PRODUCERS-- 3.7%
<S> <C> <C>
AES*............................................................................ 2,000 $ 93,000
CalEnergy*...................................................................... 23,760 798,930
Calpine*........................................................................ 14,200 284,000
----------
1,175,930
----------
INDUSTRIAL GOODS AND SERVICES-- 1.4%
Memtec (ADRs)................................................................... 13,600 442,850
----------
INSURANCE -- 1.6%
First Commonwealth*............................................................. 26,200 510,900
----------
MANUFACTURING -- 0.6%
Printrak International*......................................................... 24,800 204,600
----------
MEDIA AND BROADCASTING -- 3.3%
Argyle Television (Class A)*.................................................... 13,400 324,950
Chancellor Broadcasting (Class A)*.............................................. 6,400 151,200
Evergreen Media (Class A)*...................................................... 11,400 283,575
Jacor Communications*........................................................... 4,450 122,097
Paxson Communications (Class A)*................................................ 20,300 159,863
----------
1,041,685
----------
MEDICAL PRODUCTS AND TECHNOLOGY -- 6.2%
Biacore International (ADRs)*................................................... 15,000 328,125
CompDent*....................................................................... 9,800 347,900
Dentsply International.......................................................... 9,785 465,399
Suburban Ostomy Supply*......................................................... 13,600 186,150
Sybron International*........................................................... 10,980 362,340
Waters*......................................................................... 9,300 282,487
----------
1,972,401
----------
METALS-- 0.2%
NN Ball & Roller................................................................ 3,400 52,275
----------
OIL AND GAS -- 2.7%
Drilex International*........................................................... 20,000 245,000
Pogo Producing.................................................................. 7,610 359,572
Santa Fe Energy Resources*...................................................... 17,000 235,875
----------
840,447
----------
PLASTICS-- 0.5%
Spartech........................................................................ 13,600 151,300
----------
PUBLISHING -- 0.4%
World Color Press*.............................................................. 6,800 130,900
----------
RESTAURANTS -- 0.6%
Rare Hospitality International*................................................. 10,200 193,800
----------
- ---------------------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-26 --
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
December 31, 1996
- ------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
------------------ -----
RETAIL TRADE -- 1.2%
<S> <C> <C>
Borders Group*.................................................................. 4,200 shs. $ 150,675
Saks Holdings*.................................................................. 7,300 197,100
Stage Stores*................................................................... 2,000 36,000
-----------
383,775
-----------
TOTAL COMMON STOCKS (Cost $27,695,460).......................................... 28,879,473
REPURCHASE AGREEMENTS -- 8.5% (Cost $2,700,000)
HSBC Securities, Inc. 4 7/8%, dated 12/31/1996, maturing 1/8/1997
collateralized by: $2,630,000 US Treasury Notes 7 3/4%,
12/31/1999, with a fair market value of $2,752,048........................... $2,700,000 2,700,000
-----------
TOTAL INVESTMENTS-- 99.7% (Cost $30,395,460)................................... 31,579,473
OTHER ASSETS LESS LIABILITIES-- 0.3%............................................ 92,548
-----------
NET ASSETS-- 100.0%............................................................. $31,672,021
===========
- -----------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO
Shares Value
--------- -----
COMMON STOCKS -- 86.0%
AEROSPACE AND DEFENSE-- 1.9%
Boeing (US)..................................................................... 100 $ 10,637
Rolls-Royce (UK)................................................................ 4,200 18,521
-----------
29,158
-----------
APPAREL AND TEXTILES -- 1.0%
Liz Claiborne (US).............................................................. 400 15,450
-----------
AUTOMOTIVE AND RELATED -- 3.0%
Pacific BBA (Australia)......................................................... 7,900 27,814
Valeo (France).................................................................. 330 20,347
-----------
48,161
-----------
BUSINESS GOODS AND SERVICES -- 5.2%
Interpublic Group of Companies (US)............................................. 300 14,250
Parity (UK)..................................................................... 2,500 18,945
Snyder Communications* (US)..................................................... 200 5,400
Tomra Systems (Norway).......................................................... 1,550 24,204
WPP Group (UK).................................................................. 4,500 19,574
-----------
82,373
-----------
COMPUTER AND TECHNOLOGY RELATED -- 7.1%
Cisco Systems* (US)............................................................. 200 12,738
CMG* (UK)....................................................................... 1,100 15,824
Computer Associates International (US).......................................... 200 9,950
First Data (US)................................................................. 300 10,950
- ------------------------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-27 --
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Portfolios of Investments (continued)
- ------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
COMPUTER AND TECHNOLOGY RELATED (continued)
<S> <C> <C>
Meitec (Japan).................................................................. 600 $ 11,423
Microsoft* (US)................................................................. 300 24,806
Sterling Commerce* (US)......................................................... 359 12,664
Sterling Software* (US)......................................................... 200 6,325
3Com* (US)...................................................................... 100 7,331
--------
112,011
--------
CONSTRUCTION AND PROPERTY-- 0.7%
Metacorp (Malaysia)............................................................. 4,000 10,216
--------
CONSUMER GOODS AND SERVICES -- 6.7%
Adidas (Germany)................................................................ 160 13,818
Assa Abloy (Series B) (Sweden).................................................. 1,130 20,477
Oakley* (US).................................................................... 600 6,525
Procter & Gamble (US)........................................................... 100 10,750
Puma* (Germany)................................................................. 360 12,390
SMH Neuenberg (Switzerland)..................................................... 152 21,641
Tabacalera (Series A) (Spain)................................................... 485 20,873
--------
106,474
--------
DIVERSIFIED -- 3.2%
Bodycote International (UK)..................................................... 1,000 13,614
CITIC Pacific* (Hong Kong)...................................................... 3,000 17,415
Grupo Carso (ADRs)+ (Mexico).................................................... 1,900 19,950
--------
50,979
--------
DRUGS AND HEALTH CARE -- 10.1%
Amgen* (US)..................................................................... 200 10,888
Biogen* (US).................................................................... 200 7,725
British Biotech* (UK)........................................................... 5,000 17,596
Columbia/HCA Healthcare (US).................................................... 400 16,300
Guidant (US).................................................................... 300 17,100
Hogy Medical (Japan)............................................................ 200 7,770
Pfizer (US)..................................................................... 200 16,575
Pharmacia & Upjohn (Sweden)..................................................... 275 10,897
Pharmacia & Upjohn (ADRs) (Sweden).............................................. 445 18,176
Richter Gedeon (GDRs) (Hungary)................................................. 480 27,960
United Healthcare (US).......................................................... 200 9,000
--------
159,987
--------
ELECTRIC AND GAS UTILITIES -- 1.8%
Gazprom (ADRs)*+ (Russia)....................................................... 800 13,800
Shandong Huaneng Power (ADRs) (Hong Kong)....................................... 1,500 14,625
--------
28,425
--------
+ Rule 144A security.
*Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-28 --
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
December 31, 1996
- ------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
------------------ -----
ELECTRONICS -- 7.0%
<S> <C> <C>
Adaptec* (US)................................................................... 200 $ 8,012
Daitec (Japan).................................................................. 300 16,799
Intel (US)...................................................................... 100 13,094
Keyence (Japan)................................................................. 100 12,319
Nihon Dempa Kogyo (Japan)....................................................... 500 8,098
Ryoyo Electro (Japan)........................................................... 1,000 18,091
Samsung Electronics (GDRs)+ (South Korea)....................................... 130 7,000
SGS-Thomson Microelectronics* (France).......................................... 400 28,285
--------
111,698
--------
ENTERTAINMENT AND LEISURE -- 8.6%
Accor (France).................................................................. 210 26,584
Disney, Walt (US)............................................................... 100 6,963
Granada Group (UK).............................................................. 1,250 18,441
Ladbroke Group (UK)............................................................. 4,000 15,824
MGM Grand* (US)................................................................. 400 13,950
Oriental Land (Japan)........................................................... 200 13,749
Sol Melia* (Spain).............................................................. 570 20,406
Sun International Hotels* (US).................................................. 300 10,950
Viacom (Class B) (US)........................................................... 300 10,462
--------
137,329
--------
FINANCIAL SERVICES -- 6.2%
American International Group (US)............................................... 100 10,825
Donaldson, Lufkin & Jenrette Securities (US).................................... 400 14,400
Malaysia Assurance (Malaysia)................................................... 3,000 14,611
MBNA (US)....................................................................... 500 20,750
Mediolanum* (Italy)............................................................. 1,200 11,352
Sanyo Shinpan Finance (Japan)................................................... 200 12,491
State Bank of India (GDRs)*+ (India)............................................ 800 14,100
--------
98,529
--------
INDUSTRIAL GOODS AND SERVICES -- 1.6%
ABB (Sweden).................................................................... 21 26,064
--------
MANUFACTURING AND INDUSTRIAL EQUIPMENT -- 2.8%
Asahi Diamond Industries (Japan)................................................ 1,000 9,045
Kalmar Industries (Sweden)...................................................... 1,300 21,562
Larsen & Toubro (GDRs) (India).................................................. 1,000 14,500
--------
45,107
--------
MEDIA -- 0.7%
Chubu Nippon Broadcasting (Japan)............................................... 500 11,544
--------
PUBLISHING -- 2.5%
Elsevier (Netherlands).......................................................... 1,205 20,359
Singapore Press Holdings (Singapore)............................................ 1,000 19,721
--------
40,080
--------
+ Rule 144A security.
*Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-29 --
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Portfolios of Investments (continued)
- ------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
RESTAURANTS -- 0.8%
<S> <C> <C>
KFC Holdings (Malaysia)......................................................... 3,000 $ 12,354
----------
RETAILING -- 4.0%
Guangnan Holdings (Hong Kong)................................................... 2,000 1,720
Joshin Denki (Japan)............................................................ 2,000 20,675
Saks Holdings* (US)............................................................. 400 10,800
Shimachu (Japan)................................................................ 1,000 25,586
Tsutsumi Jewelry (Japan)........................................................ 200 4,945
----------
63,726
----------
SUPPORT SERVICES -- 4.3%
CRT Group (UK).................................................................. 6,500 27,828
Rentokil (UK)................................................................... 2,500 18,795
Societe Industrielle de Transports Automobiles (France)......................... 105 22,254
----------
68,877
----------
TELECOMMUNICATIONS -- 4.5%
DDI (Japan)..................................................................... 2 13,198
L.M. Ericsson Telefon (Series B) (Sweden)....................................... 470 14,492
Telebras (ADRs) (Brazil)........................................................ 330 25,407
WorldCom* (US).................................................................. 700 18,244
----------
71,341
----------
TRANSPORTATION -- 2.3%
Kobenhavns Lufthavne (Denmark).................................................. 190 19,339
Lufthansa (Germany)............................................................. 1,320 17,811
----------
37,150
----------
TOTAL COMMON STOCKS (Cost $1,348,818).......................................... 1,367,033
PREFERRED STOCKS -- 1.1% (Cost $12,988)
AUTOMOTIVE AND RELATED -- 1.1%
Porsche (Non-Voting)* (Germany)................................................. 20 17,857
----------
TOTAL INVESTMENTS-- 87.1% (Cost $1,361,806)..................................... 1,384,890
OTHER ASSETS LESS LIABILITIES-- 12.9%........................................... 204,800
----------
NET ASSETS-- 100.0%............................................................. $1,589,690
==========
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-30 --
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1996
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO
<TABLE>
<CAPTION>
Shares Value
--------- -----
COMMON STOCKS -- 96.1%
ADVERTISING -- 0.7%
<S> <C> <C>
Asatsu (Japan).................................................................. 2,000 $ 63,405
Heritage Media (Class A)* (US).................................................. 2,680 30,150
Katz Media Group* (US).......................................................... 2,200 24,750
--------
118,305
--------
AUTOMOTIVE PARTS MANUFACTURING -- 3.1%
ECIA (France)................................................................... 910 140,620
Industria Macchine Auto (Italy)................................................. 10,200 39,980
Montupet (France)............................................................... 720 69,364
Nippon Seiki (Japan)............................................................ 3,300 29,850
Nokian Tyres* (Finland)......................................................... 5,000 108,748
Sylea (France).................................................................. 1,255 137,591
--------
526,153
--------
BUILDING MATERIALS -- 1.8%
Gujurat Ambuja Cement (GDSs) (India)............................................ 10,839 89,422
Malayan Cement (Malaysia)....................................................... 23,000 52,821
Polypipe (UK)................................................................... 32,000 127,136
Tipco Asphalt (Thailand)........................................................ 5,000 30,210
--------
299,589
--------
BUSINESS GOODS AND SERVICES -- 3.1%
Cort Business Services (US)..................................................... 3,000 61,875
FactSet Research Systems* (US).................................................. 6,000 126,000
Fujitsu Business Systems (Japan)................................................ 3,000 65,386
IBC Holdings (UK)............................................................... 19,100 98,290
National Processing* (US)....................................................... 1,000 16,000
Nu-Kote Holdings (Class A)* (US)................................................ 1,690 17,322
Select Appointments Holdings (ADRs)* (UK)....................................... 3,000 35,250
SIG Schweitz Industrie (Switzerland)............................................ 90 109,020
--------
529,143
--------
CAPITAL GOODS -- 0.1%
Fusion Systems* (US)............................................................ 800 17,200
--------
CHEMICALS -- 0.6%
Chemical Company of Malaysia (Malaysia)......................................... 10,000 28,905
Chemical Company of Malaysia (Warrants)* (Malaysia)............................. 1,250 1,163
Toyo Ink Manufacturing (Japan).................................................. 18,000 73,656
--------
103,724
--------
COMMERCIAL SERVICES-- 1.5%
AccuStaff* (US)................................................................. 4,000 84,500
AEA Technology (UK)............................................................. 5,500 37,298
Lason Holdings* (US)............................................................ 2,900 59,087
Skilled Engineering (Australia)................................................. 21,000 70,931
--------
251,816
--------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-31 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
COMPUTER SOFTWARE -- 4.9%
<S> <C> <C>
CMG (UK)........................................................................ 10,400 $ 149,604
Dendrite International* (US).................................................... 6,700 56,112
F.I. Group* (UK)................................................................ 9,220 89,762
Hitachi Information Systems (Japan)............................................. 3,000 36,182
Imnet Systems (US).............................................................. 4,800 115,200
Informatics Holdings (Singapore)................................................ 30,000 13,612
Kewill Systems (UK)............................................................. 800 7,172
Mentor Graphics* (US)........................................................... 4,400 43,175
Parity (UK)..................................................................... 21,000 159,134
Software 2000* (US) ............................................................ 4,200 34,388
Synopsys* (US).................................................................. 2,470 113,620
---------
817,961
---------
CONSTRUCTION AND PROPERTY -- 7.7%
American Homestar* (US)......................................................... 4,000 90,500
Ashtead Group (UK).............................................................. 35,800 137,022
Bau Holdings (Non-Voting Preference Shares) (Austria) .......................... 2,600 155,633
Bau Holdings (Voting Preference Shares) (Austria)............................... 1,380 68,965
Bukit Sembawang Estates (Singapore)............................................. 1,000 22,151
Danske Traelastkompagni (Denmark)............................................... 2,043 187,500
Higashi Nihon House (Japan)..................................................... 7,000 89,852
Kampa-Haus (Germany)............................................................ 2,880 93,132
Metacorp (Malaysia)............................................................. 11,300 28,860
Mitsui Home (Japan)............................................................. 4,000 49,276
New Asia Realty (Hong Kong)..................................................... 17,000 62,751
Nishio Rent All (Japan)......................................................... 3,100 53,946
Sime UEP Properties (Malaysia).................................................. 9,000 23,164
Sto (Voting Preference Shares) (Germany)........................................ 235 110,633
Tilbury Douglas (UK)............................................................ 11,200 98,777
Wing Tai Holdings (Singapore) .................................................. 9,000 25,723
---------
1,297,885
---------
CONSUMER GOODS AND SERVICES -- 6.3%
American Disposal Service* (US)................................................. 5,000 90,625
Canandaigua Wine (Class A)* (US)................................................ 2,415 68,677
Childtime Learning Centers* (US)................................................ 4,600 44,562
La Doria (Italy)................................................................ 40,000 155,468
Ekornes (Norway)................................................................ 7,500 244,829
HUB Group (Class A) (US)........................................................ 1,800 48,600
St. John Knits (US)............................................................. 900 39,150
SITEL* (US)..................................................................... 2,600 36,888
Sorini (Indonesia).............................................................. 5,000 2,381
Steinway Musical Instruments* (US).............................................. 3,800 66,025
Tarkett (Germany)............................................................... 6,000 121,558
Team Rental Group* (US)......................................................... 6,400 104,000
Want Want Holdings* (Singapore)................................................. 17,000 44,710
---------
1,067,473
---------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-32 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
December 31, 1996
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
DRUGS AND HEALTH CARE -- 9.2%
<S> <C> <C>
American Oncology Resources* (US)............................................... 3,000 $ 30,562
AmeriSource Health (Class A)* (US).............................................. 3,600 173,700
Chiroscience Group (UK)......................................................... 2,250 12,908
Darya-Varia Lab (Indonesia)..................................................... 15,720 24,625
FPA Medical Management* (US).................................................... 7,000 155,312
Horizon Mental Health Management* (US).......................................... 3,700 103,600
Intensiva Healthcare* (US)...................................................... 5,000 54,687
Medicis Pharmaceutical (Class A)* (US) ......................................... 1,200 52,500
Peptide Therapeutics Group* (UK)................................................ 2,750 10,832
Shire Pharmaceuticals* (UK)..................................................... 5,000 20,422
Tamro (Finland)................................................................. 25,000 166,928
Teva Pharmaceutical Industries (ADRs) (Israel).................................. 4,000 200,250
Total Renal Care Holdings* (UK)................................................. 1,200 43,500
Towa Pharmaceutical (Japan)..................................................... 1,000 13,784
Vanguard Medica Group* (UK)..................................................... 1,250 11,024
Waters* (US) ................................................................... 5,000 151,875
Watson Pharmaceuticals* (US).................................................... 7,400 332,537
----------
1,559,046
----------
ELECTRIC UTILITIES -- 1.9%
CalEnergy* (US)................................................................. 7,700 258,912
Johnson Electric Holdings (Hong Kong)........................................... 9,000 24,901
Okinawa Electric Power (Japan).................................................. 1,200 30,496
----------
314,309
----------
ELECTRICAL DISTRIBUTION -- 0.3%
Trifast (UK).................................................................... 7,600 57,722
----------
ELECTRONICS -- 6.3%
Abacus Polar (UK)............................................................... 14,500 44,448
Berg Electronics (US)........................................................... 7,500 220,312
BMC Industries (US)............................................................. 4,900 154,350
Credence Systems* (US).......................................................... 2,125 42,367
Electro Scientific Industries* (US)............................................. 2,790 73,063
Enplas (Japan).................................................................. 1,000 14,559
Fairey Group (UK)............................................................... 7,200 71,206
Horiba Instruments (Japan)...................................................... 8,000 82,012
ISA International (UK).......................................................... 25,900 106,449
LoJack* (US).................................................................... 9,800 96,775
Otra (Netherlands).............................................................. 3,640 62,552
Ryoyo Electro (Japan)........................................................... 5,000 90,455
----------
1,058,548
----------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-33 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
FINANCIAL SERVICES -- 5.0%
<S> <C> <C>
Dah Sing Financial Group (Hong Kong)............................................ 10,000 $ 40,597
Finnveden (Series B)* (Sweden) ................................................. 7,550 135,709
Fokus Bank (Norway)............................................................. 13,000 89,567
Hambrecht & Quist Group* (US)................................................... 2,300 49,737
Ichiyoshi Securities (Japan).................................................... 16,000 66,023
Mutual Risk Management (US)..................................................... 1,066 39,442
Nisshin Fire & Marine Insurance (Japan)......................................... 16,000 60,924
Philippine National Bank* (Philippines)......................................... 2,000 23,764
T. Rowe Price (US).............................................................. 1,400 60,900
Roosevelt Financial Group (US).................................................. 5,000 104,375
Southern Bank (Malaysia)........................................................ 15,000 40,388
Ssangyong Investment & Securities* (South Korea)................................ 2,000 19,124
UnionAmerica Holdings (ADRs) (UK)............................................... 4,500 79,875
Wing Hang Bank (Hong Kong)...................................................... 6,000 27,229
World Acceptance* (US).......................................................... 2,200 14,575
--------
852,229
--------
INDUSTRIAL GOODS AND SERVICES -- 4.7%
Angpanneforeningen (Class B) (Sweden)........................................... 5,325 85,599
Assystem (France)............................................................... 1,500 114,451
Bacou USA (US).................................................................. 3,100 50,569
Drilex International* (US)...................................................... 5,000 61,250
Druck Holdings (UK)............................................................. 6,500 34,062
Maxim Integrated Products* (US)................................................. 1,700 73,631
Memtec (ADRs) (Australia)....................................................... 2,600 84,662
Mitsubishi Cable Industries (Japan)............................................. 8,000 35,837
Rauma Group (Finland)........................................................... 7,900 166,667
Technip* (France)............................................................... 923 86,609
--------
793,337
--------
LEISURE AND HOTELS -- 2.5%
Allied Leisure (UK)............................................................. 97,500 99,346
Fine Host* (US)................................................................. 4,900 92,487
GTECH Holdings* (US)............................................................ 3,700 118,400
Mandarin Oriental* (Hong Kong).................................................. 26,000 36,660
Sun International Hotels* (US).................................................. 2,000 73,000
--------
419,893
--------
MANUFACTURING -- 13.3%
AGCO (US)....................................................................... 800 22,900
Asahi Diamond Industries (Japan)................................................ 10,000 90,455
British Polythene Industries (UK)............................................... 5,500 66,638
Cobham (UK)..................................................................... 6,950 72,899
Danto (Japan)................................................................... 8,000 77,877
David Brown Group (UK).......................................................... 21,657 81,778
Domnick Hunter Group (UK)....................................................... 20,000 121,074
L'Europeenne d'Extincteurs (France)............................................. 3,000 186,127
Futuris (Australia)............................................................. 48,512 66,314
Glory Kogyo (Japan)............................................................. 3,000 70,038
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-34 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
December 31, 1996
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
MANUFACTURING (continued)
<S> <C> <C>
Hokkai Can (Japan).............................................................. 6,000 $ 34,476
Hokushin (Japan)................................................................ 10,000 67,712
Hucke (Germany)................................................................. 6,892 120,834
Iro* (Sweden)................................................................... 11,570 140,336
Kalmar Industries (Sweden)...................................................... 4,563 75,684
Lintec (Japan).................................................................. 3,000 48,329
Namura Shipbuilding (Japan)..................................................... 5,000 16,368
Nichicon (Japan)................................................................ 7,000 80,806
Nissha Printing (Japan)......................................................... 4,000 37,905
Plettac (Germany)............................................................... 420 77,182
Samas Groep (Netherlands)....................................................... 3,593 153,840
Sodick (Japan).................................................................. 9,000 74,431
Stoves* (UK).................................................................... 7,500 35,513
Tsudakoma (Japan)............................................................... 20,000 83,563
Valmet (Finland)................................................................ 7,100 125,082
Venture Manufacturing (Singapore)............................................... 6,000 14,920
Wellington Holdings (UK)........................................................ 9,500 40,428
Zag Industries* (US)............................................................ 9,500 157,344
----------
2,240,853
----------
MEDIA -- 3.9%
Capital Radio (UK).............................................................. 10,500 98,268
Cox Radio (Class A)* (US)....................................................... 3,000 52,500
GWR Group (UK).................................................................. 24,000 77,063
South China3
----------
MEDIA -- 3.9%
Capital Radio (UK).............................................................. 10,500 98,268
Cox Radio (Class A)* (US)....................................................... 3,000 52,500
GWR Group (UK).................................................................. 24,000 77,063
South China......................................... 8,000 186,000
Visual Action Holdings (UK)..................................................... 9,000 25,816
----------
663,689
----------
MEDICAL PRODUCTS AND TECHNOLOGY -- 2.0%
Hitachi Medical (Japan)......................................................... 6,000 77,533
IDX Systems* (US)............................................................... 3,600 103,500
Instrumentation Laboratory* (US)................................................ 6,000 59,250
NCS HealthCare (Class A)* (US).................................................. 3,100 89,900
----------
330,183
----------
METALS -- 1.4%
Amtek Engineering (Singapore)................................................... 7,000 13,905
Nakayama Steel Works (Japan).................................................... 16,000 68,642
Sanyo Special Steel (Japan)..................................................... 26,000 76,826
Tsubaki Nakashima (Japan)....................................................... 9,000 75,672
----------
235,045
----------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-35 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
PAPER AND PRINTING -- 1.6%
<S> <C> <C>
Bobst (Switzerland)............................................................. 42 $ 56,668
PLM (Sweden).................................................................... 8,100 139,677
Rengo (Japan)................................................................... 14,000 79,359
--------
275,704
--------
RESOURCES -- 0.8%
Nittetsu Mining (Japan)......................................................... 10,000 75,724
QNI (Australia)................................................................. 29,000 58,311
--------
134,035
--------
RESTAURANTS -- 1.9%
Aiya (Japan).................................................................... 3,000 40,059
Kentucky Fried Chicken (Japan).................................................. 5,000 65,041
KFC Holdings (Malaysia)......................................................... 8,000 32,944
Pizza Express (UK).............................................................. 16,500 149,052
Sagami Chain (Japan)............................................................ 2,000 32,391
--------
319,487
--------
RETAILING -- 5.0%
Courts (Singapore).............................................................. 11,200 13,925
Fotolabo Club (Switzerland)..................................................... 250 96,906
Frost Group (UK)................................................................ 8,600 19,514
Guangnan Holdings (Hong Kong)................................................... 70,000 60,185
Hamley's (UK)................................................................... 4,100 28,155
Hornbach Baumarkt (Germany)..................................................... 1,530 48,483
Jardine International Motor Holdings (Hong Kong)................................ 42,000 56,203
Jean Pascale (Germany).......................................................... 1,612 21,982
Mazel Stores* (US).............................................................. 5,000 110,625
Moebel Walther (Germany)........................................................ 3,800 249,221
Tsutsumi Jewelry (Japan)........................................................ 3,000 74,173
Xebio (Japan)................................................................... 2,000 59,442
--------
838,814
--------
SUPPORT SERVICES -- 0.4%
CRT Group (UK).................................................................. 17,500 74,922
--------
TECHNOLOGY -- 0.9%
Asyst Technologies* (US)........................................................ 2,900 49,300
BTG (UK)........................................................................ 5,000 38,831
Photon Dynamics* (US)........................................................... 2,300 17,969
Printrak International* (US).................................................... 4,700 38,775
--------
144,875
--------
TELECOMMUNICATIONS -- 1.0%
Aerial Communications* (US)..................................................... 7,300 58,400
Arch Communications Group* (US)................................................. 6,600 61,050
Boston Communications* (US)..................................................... 2,100 11,812
KVH Industries* (US)............................................................ 4,200 30,975
--------
162,237
--------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-36 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
December 31, 1996
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
TEXTILES AND APPAREL -- 0.7%
<S> <C> <C>
Designer Holdings* (US)......................................................... 5,200 $ 83,850
Komatsu Seiren (Japan).......................................................... 5,000 37,216
-----------
121,066
-----------
TRANSPORTATION -- 1.4%
Comfort (Singapore)............................................................. 43,000 38,099
Dawson Group (UK)............................................................... 22,600 65,407
Iino Kaiun* (Japan)............................................................. 21,000 74,173
National Express Group (UK)..................................................... 7,000 61,136
-----------
238,815
-----------
MISCELLANEOUS -- 2.1%
BT Industries (Sweden).......................................................... 7,000 129,915
First Philippine Holdings (Philippines)......................................... 4,400 10,038
Parkway Holdings (Singapore).................................................... 10,000 39,300
Taiwan American Fund (Taiwan)................................................... 3,000 42,990
Thorkild Kristensen (Denmark)................................................... 1,652 124,711
-----------
346,954
-----------
TOTAL INVESTMENTS-- 96.1% (Cost $15,984,805).................................... 16,211,012
OTHER ASSETS LESS LIABILITIES-- 3.9%............................................ 665,235
-----------
NET ASSETS-- 100.0%............................................................. $16,876,247
-----------
-----------
- ----------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO
Shares Value
--------- -----
COMMON STOCKS -- 104.3%
COMPUTER AND BUSINESS SERVICES -- 9.8%
Azlan Group (UK)................................................................ 2,680 $26,045
Azlan Group (Rights)* (UK)...................................................... 804 7
CRT Group (UK).................................................................. 8,700 37,247
CSK (Japan)..................................................................... 1,000 26,189
Logica (UK)..................................................................... 2,810 44,199
-----------
133,687
-----------
COMPUTER HARDWARE/PERIPHERALS -- 9.8%
Gateway 2000* (US).............................................................. 300 16,069
IKOS Systems* (US).............................................................. 600 12,075
Mylex* (US)..................................................................... 1,200 15,000
Sun Microsystems* (US).......................................................... 800 20,550
VeriFone* (US).................................................................. 1,500 44,250
Xionics Document Technologies* (US)............................................. 2,000 25,125
-----------
133,069
-----------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-37 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
COMPUTER SOFTWARE -- 18.7%
<S> <C> <C>
Computer Associates International (US).......................................... 250 $ 12,438
HNC Software* (US).............................................................. 600 18,600
IA* (US)........................................................................ 5,000 28,750
Informatics Holdings (Singapore)................................................ 70,000 31,761
Metatools* (US)................................................................. 400 4,675
Microsoft* (US)................................................................. 350 28,941
Performance Technologies* (US).................................................. 1,000 9,562
Pure Atria* (US)................................................................ 500 12,281
Rogue Wave Software* (US)....................................................... 1,100 17,600
SAP (Germany)................................................................... 105 14,353
Segue Software* (US)............................................................ 1,000 18,062
Siebel Systems* (US)............................................................ 800 21,800
Synopsys* (US).................................................................. 500 23,000
Technology Modeling* (US)....................................................... 1,000 13,250
--------
255,073
--------
DISTRIBUTORS -- 1.2%
Abacus Polar (UK)............................................................... 5,500 16,859
--------
ELECTRONICS -- 7.3%
Adaptec* (US)................................................................... 200 8,013
Astec (UK)...................................................................... 12,600 33,985
Benchmark Electronics* (US)..................................................... 200 6,025
Sanmina* (US)................................................................... 300 16,950
Venture Manufacturing (Singapore)............................................... 14,000 34,812
--------
99,785
--------
ELECTRONICS CAPITAL EQUIPMENT-- 8.8%
ASM Lithography (Netherlands)................................................... 800 39,900
Canon (Japan)................................................................... 1,000 22,054
Intevac* (US)................................................................... 1,000 16,500
Siliconware Precision Industries (GDRs) (Taiwan)................................ 2,750 30,800
Veeco Instruments* (US)......................................................... 500 11,187
--------
120,441
--------
INFORMATION SERVICES -- 4.3%
Abacus Direct* (US)............................................................. 1,000 18,875
Applix* (US).................................................................... 600 13,013
BTG* (UK)....................................................................... 2,400 18,639
Sapient* (US)................................................................... 200 8,325
--------
58,852
--------
INTERNET/ON LINE -- 3.0%
America Online* (US)............................................................ 525 17,456
Verity* (US).................................................................... 1,500 22,875
--------
40,331
--------
MEDICAL PRODUCTS AND TECHNOLOGY -- 1.4%
Pharmacia & Upjohn (Sweden)..................................................... 460 18,789
--------
* Non-income producing security
</TABLE>
See Notes to Financial Statements.
-- P-38 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1996
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
METALS -- 2.3%
<S> <C> <C>
Amtek Engineering (Singapore)................................................... 16,000 $ 31,783
----------
NETWORKING/COMMUNICATIONS INFRASTRUCTURE -- 26.4%
Act Networks* (US).............................................................. 400 14,750
Cabletron Systems (US).......................................................... 600 19,950
CIDCO* (US)..................................................................... 500 8,687
Cisco Systems* (US)............................................................. 400 25,475
Dialogic* (US).................................................................. 1,650 51,563
FORE Systems* (US).............................................................. 500 16,469
Glenayre Technologies* (US)..................................................... 500 10,781
L.M. Ericsson Telefon (Series B) (Sweden)....................................... 700 21,584
Network General* (US)........................................................... 500 15,094
Nokia (Finland)................................................................. 710 41,200
Northern Telecom (US)........................................................... 400 24,750
Pairgain Technologies* (US)..................................................... 800 24,350
3Com* (US)...................................................................... 300 21,994
U.S. Robotics* (US)............................................................. 600 43,237
Verilink* (US).................................................................. 600 19,575
----------
359,459
----------
SEMICONDUCTORS -- 7.7%
C-Cube Microsystems* (US)....................................................... 400 14,775
Intel (US)...................................................................... 200 26,187
Maxim Integrated Products* (US)................................................. 400 17,325
Microchip Technology* (US)...................................................... 200 10,175
Quality Semiconductor* (US)..................................................... 1,500 13,312
S3* (US)........................................................................ 600 9,787
SGS-Thomson Microelectronics* (US) ............................................. 100 7,032
Texas Instruments (US).......................................................... 100 6,413
----------
105,006
----------
TELECOMMUNICATIONS -- 3.6%
Airtouch Communications* (US)................................................... 400 10,100
DDI (Japan)..................................................................... 2 13,198
Korea Mobile Telecom (ADRs) (South Korea)....................................... 426 5,485
Millicom International Cellular* (Luxembourg)................................... 400 12,825
Paging Network* (US)............................................................ 225 3,445
T-Netix* (US)................................................................... 350 3,675
----------
48,728
----------
TOTAL INVESTMENTS-- 104.3% (Cost $1,353,294).................................... 1,421,862
OTHER ASSETS LESS LIABILITIES-- (4.3)%.......................................... (58,147)
----------
NET ASSETS-- 100.0%............................................................. $1,363,715
----------
----------
* Non-income producing security
</TABLE>
See Notes to Financial Statements.
-- P-39 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (CONTINUED)
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO
<TABLE>
<CAPTION>
Shares Value
--------- -----
COMMON STOCKS -- 87.0%
BANKING -- 8.0%
<S> <C> <C>
Banco de Santander (Spain)...................................................... 1,393 $ 89,120
CS Holdings (Switzerland)....................................................... 715 73,286
HSBC Holdings (UK).............................................................. 2,400 51,354
Malayan Banking (Malaysia)...................................................... 4,050 44,902
Royal Bank of Scotland (UK)..................................................... 8,500 82,024
Siam Commerical Bank (Thailand)................................................. 3,100 22,476
Societe Generale (France)....................................................... 604 65,288
Sumitomo Trust and Banking (Japan).............................................. 6,000 59,959
UTD Overseas Bank (Singapore)................................................... 4,684 52,216
Westpac Banking (Australia)..................................................... 7,100 40,402
--------
581,027
--------
BUILDING MATERIALS -- 0.5%
Gujurat Ambuja Cement (GDSs) (India)............................................ 4,360 35,970
--------
BUSINESS SERVICES-- 0.7%
CSK (Japan)..................................................................... 2,000 52,378
--------
CHEMICALS -- 3.9%
Bayer (Germany)................................................................. 2,227 90,309
DSM (Netherlands)............................................................... 647 63,790
Novartis* (Switzerland)......................................................... 61 69,708
SKW Trostberg (Germany)......................................................... 1,641 44,563
Toyo Ink Manufacturing (Japan).................................................. 4,000 16,368
--------
284,738
--------
CONSTRUCTION AND PROPERTY -- 3.4%
DBS Land (Singapore)............................................................ 11,000 40,479
Empresas ICA Sociedad Controladora (ADRs)* (Mexico)............................. 2,400 35,100
Hong Kong Land Holdings (Hong Kong)............................................. 11,000 30,580
Sun Hung Kai Properties (Hong Kong)............................................. 4,000 49,001
United Engineers (Malaysia)..................................................... 6,000 54,167
United Industrial (Singapore)................................................... 13,000 10,961
Wing Tai Holdings (Singapore)................................................... 9,000 25,723
--------
246,011
--------
CONSUMER PRODUCTS -- 2.0%
Electrolux (Series B) (Sweden).................................................. 835 48,321
KAO (Japan)..................................................................... 3,000 34,890
Matthew Clark (UK).............................................................. 4,400 19,779
Sankyo (Japan).................................................................. 1,300 37,965
--------
140,955
--------
ELECTRONICS --4.8%
Alps Electric (Japan)........................................................... 3,000 32,564
Pioneer Electronic (Japan)...................................................... 6,000 114,232
Samsung Electronics (South Korea)............................................... 1,120 60,308
Samsung Electronics (GDRs)*+ (South Korea)...................................... 301 4,665
Toshiba (Japan)................................................................. 21,000 131,702
--------
343,471
--------
* Non-income producing security
+ Rule 144A security.
</TABLE>
See Notes to Financial Statements.
-- P-40 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
December 31, 1996
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
FINANCE AND INSURANCE -- 7.0%
<S> <C> <C>
AXA-UAP (France)................................................................ 1,406 $ 89,399
Credit Communal Holding/Dexia* (Belgium)........................................ 547 49,889
ING Groep (Netherlands)......................................................... 2,758 99,258
Istituto Nazionale delle Assicurazioni (Italy).................................. 50,522 65,765
Lend Lease (Australia).......................................................... 2,100 40,723
Mitsui Marine & Fire (Japan).................................................... 10,000 53,670
Nomura Securities (Japan)....................................................... 2,000 29,979
Zurich Versicherung (Switzerland)............................................... 276 76,535
---------
505,218
---------
HEALTH AND HOUSEHOLD -- 4.3%
British Biotech (UK)............................................................ 15,000 52,788
EGIS (Hungary).................................................................. 425 24,316
Novo Nordisk (Denmark).......................................................... 314 59,127
Pharmacia & Upjohn (Sweden)..................................................... 1,983 80,996
Pliva (GDRs) (Croatia).......................................................... 500 26,468
Roche Holdings (Switzerland).................................................... 9 69,873
---------
313,568
---------
INDUSTRIAL GOODS AND SERVICES -- 4.1%
ABB (Sweden).................................................................... 60 74,469
Cie Generale des Eaux (France).................................................. 681 84,371
CITIC Pacific* (Hong Kong)...................................................... 11,000 63,857
Siebe (UK)...................................................................... 3,800 70,411
---------
293,108
---------
LEISURE AND HOTELS -- 3.1%
Accor (France).................................................................. 594 75,194
Granada Group (UK).............................................................. 6,400 94,420
Sol Melia (Spain)............................................................... 1,563 55,955
---------
225,569
---------
MANUFACTURING -- 7.8%
Caradon (UK).................................................................... 14,500 59,347
FKI Babcock (UK)................................................................ 16,125 55,780
Mannesmann (Germany)............................................................ 219 94,170
Michelin (Class B) (France)..................................................... 1,365 73,668
Rolls-Royce (UK)................................................................ 14,000 61,736
SMH Neuenberg (Switzerland)..................................................... 336 47,839
Tokyo Steel Manufacturing (Japan).............................................. 1,000 14,214
Volkswagen (Germany)............................................................ 209 86,518
Yamaha (Japan).................................................................. 4,000 67,884
---------
561,156
---------
MEDIA -- 3.4%
Elsevier (Netherlands).......................................................... 4,617 78,005
News Corp. (Australia).......................................................... 9,990 52,719
Nippon Television Network (Japan)............................................... 110 33,167
WPP Group (UK).................................................................. 19,000 82,645
---------
246,536
---------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-41 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
METALS -- 3.9%
<S> <C> <C>
Companhia Vale do Rio Doce (ADRs) (Brazil)...................................... 1,800 $ 34,646
Hindalco Industries (GDRs)+ (India)............................................. 1,750 34,773
Mitsubishi Materials (Japan).................................................... 15,000 60,476
Sumitomo Metal Industries (Japan)............................................... 25,000 61,380
Tsubaki Nakashima (Japan)....................................................... 2,000 16,816
Usinor Sacilor (France)......................................................... 5,097 74,147
--------
282,238
--------
PAPER AND PACKAGING -- 0.8%
Hokkai Can (Japan).............................................................. 3,000 17,238
Stora Kopparbergs (Sweden)...................................................... 3,153 42,851
--------
60,089
--------
RESOURCES -- 3.7%
British Petroleum (UK).......................................................... 5,800 69,577
Broken Hill Proprietary (Australia)............................................. 4,450 63,377
ELF Aquitaine (France).......................................................... 977 88,909
Nippon Oil (Japan).............................................................. 3,000 15,377
Petroleo Brasileiro (ADRs) (Brazil)............................................. 2,000 31,855
--------
269,095
--------
RESTAURANTS -- 0.4%
Denny's (Japan)................................................................. 1,000 30,496
--------
RETAILING -- 5.8%
Adidas (Germany)................................................................ 543 46,895
Aoyama Trading (Japan).......................................................... 800 21,227
Carrefour Supermarche (France).................................................. 133 86,514
Centros Comerciales Pryca (Spain)............................................... 1,339 28,349
Joshin Denki (Japan)............................................................ 2,000 20,675
Koninklijke Ahold (Netherlands)................................................. 1,216 75,987
SM Prime Holdings (Philippines)................................................. 142,000 36,715
Tesco (UK)...................................................................... 14,800 89,848
Tsutsumi Jewelry (Japan)........................................................ 500 12,362
--------
418,572
--------
SUPPORT SERVICES -- 1.7%
Rentokil (UK)................................................................... 10,400 78,186
Societe Industrielle de Transports Automobiles (France)......................... 212 44,933
--------
123,119
--------
TELECOMMUNICATIONS -- 6.8%
Grupo Carso (ADRs)*+ (Mexico)................................................... 4,000 41,666
L.M. Ericsson Telefon (Series B) (Sweden)....................................... 2,544 78,443
Nippon Telegraph & Telephone (Japan)............................................ 17 128,584
SPT Telecom (Czech Republic).................................................... 200 24,892
STET Societa' Finanziaria Telefonica (Italy).................................... 24,563 82,928
Telebras (ADRs) (Brazil)........................................................ 510 39,265
* Non-income producing security
+ Rule 144A security.
</TABLE>
See Notes to Financial Statements.
-- P-42 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
December 31, 1996
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares Value
--------- -----
TELECOMMUNICATIONS (continued)
<S> <C> <C>
Telefonica del Peru (ADRs) (Peru)............................................... 2,000 $ 37,750
Telekomunikasi (Indonesia)...................................................... 500 860
Telekomunikasi (ADRs) (Indonesia)............................................... 1,650 56,925
----------
491,313
----------
TOBACCO -- 1.3%
B.A.T. Industries (UK).......................................................... 11,500 95,416
----------
TRANSPORTATION -- 4.9%
BAA (UK)........................................................................ 6,800 56,653
East Japan Railway (Japan)...................................................... 20 89,766
Lufthansa (Germany)............................................................. 5,505 74,282
Mitsui O.S.K. Lines (Japan).................................................... 22,000 52,498
Perusahaan Otomobil Nasional (Malaysia)......................................... 5,000 31,677
Swire Pacific (Hong Kong)...................................................... 5,500 52,444
----------
357,320
----------
UTILITIES -- 3.3%
Iberdrola (Spain).............................................................. 6,731 95,350
National Power (UK)............................................................. 7,000 58,619
VEBA (Germany).................................................................. 1,485 85,339
----------
239,308
----------
MISCELLANEOUS -- 1.4%
Sime Darby (Malaysia)........................................................... 8,000 31,519
Taiwan American Fund (Taiwan)................................................... 1,500 21,495
Taiwan Fund (Taiwan)............................................................ 5,000 51,250
----------
104,264
----------
TOTAL INVESTMENTS-- 87.0% (Cost $5,824,749)..................................... 6,300,935
OTHER ASSETS LESS LIABILITIES-- 13.0%........................................... 941,337
----------
NET ASSETS-- 100.0%............................................................. $7,242,272
----------
----------
</TABLE>
See Notes to Financial Statements.
-- P-43 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- -------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND PORTFOLIO
<TABLE>
<CAPTION>
Principal
Amount Value
--------- -----
CORPORATE BONDS -- 94.0%
AEROSPACE -- 1.0%
<S> <C> <C>
UNC 11%, 6/1/2006............................................................... $100,000 $ 107,500
----------
BROADCASTING -- 4.3%
Allbritton Communications 11 1/2%, 8/15/2004....................................... 100,000 106,000
Paxson Communications 11 5/8%, 10/1/2002........................................... 200,000 210,000
SFX Broadcasting 10 3/4%, 5/15/2006+ .............................................. 150,000 159,375
----------
475,375
----------
BUSINESS SERVICES -- 1.0%
Pierce Leahy 11 1/8%, 7/15/2006+ .................................................. 100,000 109,750
----------
CABLE SYSTEMS -- 14.2%
American Telecasting 0% (14 1/2%#), 8/15/2005...................................... 100,000 36,500
Cablevision Systems 10 1/2%, 5/15/2016............................................. 250,000 260,000
Charter Communications 11 1/4%, 3/15/2006+ ........................................ 150,000 157,500
Charter Communications 0% (14%#), 3/15/2007........................................ 100,000 59,500
Comcast 10 5/8%, 7/15/2012......................................................... 150,000 167,250
Comcast U.K. Cable Partners 0% (11.20%#), 11/15/2007............................... 100,000 71,750
Heartland Wireless Communications 14%, 10/15/2004+................................. 100,000 104,250
Intermedia Capital Partners IV 11 1/4%, 8/1/2006 .................................. 200,000 209,500
International CableTel 0% (11 1/2%#), 2/1/2006..................................... 100,000 68,500
People's Choice TV 0%(13 1/8%#), 6/1/2004.......................................... 100,000 43,000
Rogers Cablesystems 11%, 12/1/2015................................................. 150,000 161,625
Rogers Communications 10 7/8%, 4/15/2004........................................... 100,000 105,750
Wireless One 13%, 10/15/2003....................................................... 150,000 146,250
----------
1,591,375
----------
CELLULAR -- 4.5%
Centennial Cellular 10 1/8%, 5/15/2005............................................. 150,000 151,500
Commnet Cellular 11 1/4%, 7/1/2005................................................. 150,000 159,750
PriceCellular Wireless 0% (12 1/4%**), 10/1/2003................................... 100,000 86,000
PriceCellular Wireless 10 3/4%, 11/1/2004 ......................................... 100,000 104,250
----------
501,500
----------
CHEMICALS -- 2.4%
NL Industries 11 3/4%, 10/15/2003.................................................. 150,000 159,375
Texas Petrochemicals 11 1/8%, 7/1/2006+............................................ 100,000 108,000
----------
267,375
----------
COMPUTER AND RELATED SERVICES -- 2.9%
Unisys 12%, 4/15/2003+............................................................. 150,000 161,250
Unisys 11 3/4%, 10/15/2004......................................................... 150,000 160,688
----------
321,938
----------
CONSUMER PRODUCTS -- 3.8%
American Pad & Paper 13%, 11/15/2005+.............................................. 97,000 114,460
Ryder TRS 10%, 12/1/2006+.......................................................... 100,000 104,250
Spinnaker Industries 10 3/4%, 10/15/2006+.......................................... 100,000 104,500
William Carter 10 3/8%, 12/1/2006+................................................. 100,000 104,000
----------
427,210
----------
+ 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.
</TABLE>
See Notes to Financial Statements.
-- P-44 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
December 31, 1996
- -------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND PORTFOLIO (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
--------- -----
ENERGY -- 1.0%
<S> <C> <C>
Abraxas Petroleum 11 1/2%, 11/1/2004+.............................................. $100,000 $ 107,750
----------
ENVIRONMENTAL SERVICES-- 0.9%
Allied Waste North America 10 1/4%, 12/1/2006+..................................... 100,000 105,375
----------
FINANCIAL SERVICES -- 0.9%
Dollar Financial Group 10 7/8%, 11/15/2006+........................................ 100,000 103,500
----------
FOOD -- 3.3%
AmeriKing 10 3/4%, 12/1/2006....................................................... 100,000 104,000
Gorges/Quik-to-Fix Foods 11 1/2%, 12/1/2006+....................................... 100,000 104,125
International Home Foods 10 3/8%, 11/1/2006+....................................... 150,000 156,750
----------
364,875
----------
FUNERALS AND CEMETERY -- 1.0%
Prime Succession Acquisition 10 3/4%, 8/15/2004.................................... 100,000 108,750
----------
GAMING/HOTEL -- 11.9%
Alliance Gaming 12 7/8%, 6/30/2003................................................. 100,000 106,500
Aztar 13 3/4%, 10/1/2004........................................................... 150,000 160,500
Casino America 12 1/2%, 8/1/2003................................................... 150,000 143,063
Casino Magic of Louisiana 13%, 8/15/2003+.......................................... 100,000 99,250
Coast Hotels & Casinos 13%, 12/15/2002+............................................ 150,000 165,750
Showboat 13%, 8/1/2009............................................................. 110,000 121,550
Showboat Marina Casino Partnership 13 1/2%, 3/15/2003+............................. 150,000 165,750
Trump Atlantic City Funding 11 1/4%, 5/1/2006...................................... 200,000 199,000
Trump Hotels & Casino Resorts Funding 15 1/2%, 6/15/2005........................... 150,000 172,500
----------
1,333,863
----------
HEALTH CARE/MEDICAL PRODUCTS -- 5.1%
Dade International 11 1/8%, 5/1/2006+.............................................. 200,000 217,000
Graphic Controls 12%, 9/15/2005.................................................... 100,000 111,250
IMED 9 3/4%, 12/1/2006+............................................................ 150,000 153,750
Paracelsus Healthcare 10%, 8/15/2006............................................... 90,000 84,825
----------
566,825
----------
INDUSTRIAL -- 1.2%
IMO Industries 11 3/4%, 5/1/2006+.................................................. 150,000 139,500
----------
LEISURE-- 1.9%
Premier Parks 12%, 8/15/2003...................................................... 100,000 109,500
Stuart Entertainment 12 1/2%, 11/15/2004+.......................................... 100,000 102,250
----------
211,750
----------
MANUFACTURING -- 1.9%
Blue Bird Body 10 3/4%, 11/15/2006................................................. 100,000 105,500
International Knife & Saw 11 3/8%, 11/15/2006+..................................... 100,000 104,000
----------
209,500
----------
METALS/ MINING -- 2.3%
Renco Metals 11 1/2%, 7/1/2003..................................................... 100,000 105,250
Royal Oak Mines 11%, 8/15/2006..................................................... 150,000 153,000
----------
258,250
----------
+ Rule 144A security.
</TABLE>
See Notes to Financial Statements.
-- P-45 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- -------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND PORTFOLIO (continued)
<TABLE>
<CAPTION>
Principal
Amount
or Shares Value
--------- -----
PAGING -- 2.6%
<S> <C> <C>
Mobile Telecommunication Technologies 131 1/42%, 12/15/2002........................ $200,000 $ 201,500
ProNet 11 7/8%, 6/15/2005.......................................................... 100,000 94,500
-----------
296,000
-----------
PAPER AND PACKAGING -- 4.8%
Plastic Containers 10%, 12/15/2006+................................................ 100,000 104,000
Silgan 11 3/4%, 6/15/2002.......................................................... 100,000 107,500
U.S. Can 10 1/8%, 10/15/2006+...................................................... 150,000 158,250
S.D. Warren 12%, 12/15/2004........................................................ 150,000 162,750
-----------
532,500
-----------
PUBLISHING-- 1.4%
Petersen Publishing 11 1/8%, 11/15/2006+........................................... 150,000 157,500
-----------
RETAILING-- 1.4%
Cole National Group 9 7/8%, 12/31/2006+............................................ 150,000 155,250
-----------
SUPERMARKETS -- 4.7%
Grand Union 12%, 9/1/2004.......................................................... 150,000 159,750
Jitney-Jungle Stores of America 12%, 3/1/2006...................................... 200,000 213,000
Pathmark Stores 11 5/8%, 6/15/2002................................................. 150,000 153,750
-----------
526,500
-----------
TELECOMMUNICATIONS -- 9.9%
Brooks Fiber Properties 0% (10 7/8%**), 11/1/2006.................................. 100,000 64,250
Fonorola 12 1/2%, 8/15/2002........................................................ 200,000 220,000
Intermedia Communications of Florida 0% (12 1/2%**), 5/15/2006..................... 100,000 67,000
IXC Communications 12 1/2%, 10/1/2005+............................................. 200,000 221,000
NEXTLINK Communications 12 1/2%, 4/15/2006......................................... 200,000 215,500
Omnipoint 11 5/8%, 8/15/2006+...................................................... 150,000 156,750
Sprint Spectrum 11%, 8/15/2006..................................................... 150,000 163,125
-----------
1,107,625
-----------
THEATERS -- 1.2%
Plitt Theatres 10 7/8%, 6/15/2004.................................................. 135,000 138,037
-----------
UTILITIES -- 2.5%
Midland Cogeneration Venture 11 3/4%, 7/23/2005.................................... 250,000 281,250
-----------
TOTAL CORPORATE BONDS-- (Cost $10,242,301)........................................ 10,506,623
-----------
CONVERTIBLE PREFERRED STOCKS -- 0.4% (Cost $47,125)
BROADCASTING -- 0.4%
Paxson Communications 12 1/2%...................................................... 50 shs. 47,750
-----------
SHORT-TERM HOLDINGS-- 2.0% (Cost $220,000)......................................... 220,000
-----------
TOTAL INVESTMENTS-- 96.4% (Cost $10,509,426)....................................... 10,774,373
OTHER ASSETS LESS LIABILITIES-- 3.6%............................................... 401,987
-----------
NET ASSETS-- 100.0%................................................................ $11,176,360
-----------
-----------
+ Rule 144A security.
** Deferred-interest debentures pay no interest for a stipulated number of
years, after which they pay the indicated coupon rate.
</TABLE>
See Notes to Financial Statements.
-- P-46 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
December 31, 1996
- -------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO
<TABLE>
<CAPTION>
Principal
Amount
or Shares Value
--------- -----
CONVERTIBLE SECURITIES -- 40.7%
SUBORDINATED CONVERTIBLE BONDS -- 21.6%
DRUGS AND HEALTH CARE -- 1.4%
<S> <C>
Pharmaceutical Marketing Services 6 1/4%, 2/1/2003+................................ $235,000 $ 189,175
----------
ELECTRONICS -- 1.0%
Cirrus Logic 6%, 12/15/2003+....................................................... 45,000 41,231
Park Electrochemical 5 1/2%, 3/1/2006+............................................. 100,000 88,000
----------
129,231
----------
ENERGY -- 2.3%
Santa Fe Pipelines 11.162%, 8/15/2010.............................................. 250,000 311,250
----------
ENVIRONMENTAL SERVICES -- 1.0%
Molten Metal Technology 5 1/2%, 5/1/2006+.......................................... 200,000 139,000
----------
INSURANCE -- 1.5%
Trenwick Group 6%, 12/15/1999...................................................... 200,000 210,750
----------
MACHINERY -- 1.5%
Cooper Industries 7.05%, 1/1/2015.................................................. 200,000 211,000
----------
RETAILING -- 1.3%
CML Group 5 1/2%, 1/15/2003........................................................ 250,000 182,500
----------
MACHINERY -- 1.5%
Cooper Industries 7.05%, 1/1/2015.................................................. 200,000 211,000
----------
RETAILING -- 1.3%
CML Group 5 1/2%, 1/15/2003........................................................ 250,000 182,500
----------
682,250
----------
TELECOMMUNICATIONS -- 0.9%
Network Equipment 7 1/4%, 5/15/2014................................................ 147,000 126,972
----------
TRANSPORTATION -- 0.7%
Airborne Freight 6 3/4%, 8/15/2001................................................. 100,000 100,250
----------
MISCELLANEOUS -- 5.0%
General Signal 5 3/4%, 6/1/2002.................................................... 200,000 218,250
MascoTech 4 1/2%, 12/15/2003....................................................... 300,000 243,750
TriMas 5%, 8/1/2003................................................................ 200,000 220,000
----------
682,000
----------
TOTAL SUBORDINATED CONVERTIBLE BONDS (Cost $2,951,037)............................. 2,964,378
----------
CONVERTIBLE PREFERRED STOCKS -- 19.1%
ENERGY -- 2.7%
Snyder Oil (Class A) 6% ........................................................... 5,000 shs. 121,250
Unocal 6 1/4%...................................................................... 4,464 254,448
----------
375,698
----------
+ Rule 144A security.
</TABLE>
See Notes to Financial Statements.
-- P-47 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- -------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO (continued)
<TABLE>
<CAPTION>
Principal
Amount
or Shares Value
--------- -----
ENVIRONMENTAL SERVICES -- 1.6%
<S> <C> <C>
Browning-Ferris Industries 7 1/4%.................................................. 7,500 $ 213,750
----------
INSURANCE -- 5.9%
Alexander & Alexander (Series A) $3.625+........................................ 1,500 78,000
American General 3%............................................................. 4,500 248,625
FSA 7 5/8%...................................................................... 7,500 231,563
St. Paul Capital 6%............................................................. 4,500 249,187
----------
807,375
----------
OFFICE EQUIPMENT-- 1.7%
Ikon Office Solutions $5.04..................................................... 2,500 238,750
----------
PAPER AND FOREST PRODUCTS -- 1.0%
International Paper Capital 5 1/4%+............................................. 3,000 137,250
----------
RETAILING -- 0.7%
Kmart Financing 7 3/4%.......................................................... 2,000 97,500
----------
TELECOMMUNICATIONS -- 0.9%
Mobile Telecommunication Technologies $2.25+.................................... 6,500 118,625
----------
TRANSPORTATION -- 3.8%
GATX $3.875..................................................................... 5,000 291,875
Sea Containers $4.00............................................................ 5,000 227,500
----------
519,375
----------
MISCELLANEOUS -- 0.8%
Corning (Delaware) 6%........................................................... 1,700 108,162
----------
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $2,573,691)............................ 2,616,485
----------
TOTAL CONVERTIBLE SECURITIES (Cost $5,524,728).................................. 5,580,863
----------
COMMON STOCKS -- 16.9%
AUTOMOTIVE -- 0.3%
Ford Motor...................................................................... 1,500 47,813
----------
ELECTRIC AND GAS UTILITIES -- 5.2%
AGL Resources................................................................... 6,000 126,750
Central and South West.......................................................... 1,900 48,687
CINergy......................................................................... 9,718 324,338
Entergy......................................................................... 2,600 72,150
FPL Group....................................................................... 3,000 138,000
----------
709,925
----------
ELECTRONICS -- 0.3%
StreamLogic*#................................................................... 65,000 45,703
----------
* Non-income producing security.
+ Rule 144A security.
# Includes 300 warrants.
</TABLE>
See Notes to Financial Statements.
-- P-48 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
December 31, 1996
- -------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO (continued)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
--------- -----
FOOD -- 3.0%
<S> <C> <C>
ConAgra......................................................................... 8,141 shs. $ 405,015
----------
INSURANCE -- 0.5%
GCR Holdings ................................................................... 3,000 66,563
----------
RETAILING -- 0.2%
Kmart........................................................................... 3,200 33,200
----------
STEEL -- 0.8%
Inland Steel Industries......................................................... 5,406 108,120
----------
TELECOMMUNICATIONS -- 0.7%
Frontier........................................................................ 4,400 99,550
----------
TRANSPORTATION -- 2.4%
CNF Transportation.............................................................. 10,000 222,500
Consolidated Freightways*....................................................... 5,000 45,000
NFC ............................................................................ 20,000 63,876
----------
331,376
----------
UTILITIES/TELECOMMUNICATIONS -- 3.5%
Bell Atlantic................................................................... 4,000 259,000
GTE............................................................................. 3,000 136,500
Network Equipment Technologies*................................................. 4,857 80,140
----------
475,640
----------
TOTAL COMMON STOCKS (Cost $1,884,749)........................................... 2,322,905
----------
CORPORATE BONDS -- 16.1%
AUTOMOTIVE -- 5.0%
Chrysler Financial 6 1/2%, 6/15/1998............................................ $200,000 201,156
Ford Motor Credit 6 3/4%, 8/15/2008............................................. 250,000 241,881
General Motors Acceptance 5 5/8%, 2/1/1999...................................... 250,000 247,057
----------
690,094
----------
BANKING AND FINANCE -- 6.1%
Capital One Bank 8 1/8%, 3/1/2000............................................... 250,000 259,772
First USA Bank 5 3/4%, 1/15/1999................................................ 100,000 98,580
MBNA 6.15%, 10/1/2003........................................................... 500,000 480,504
----------
838,856
----------
ELECTRONICS -- 0.1%
StreamLogic 14%, 10/7/1998...................................................... 33,999 17,000
----------
INSURANCE -- 2.0%
AEGON 8%, 8/15/2006............................................................. 250,000 266,267
----------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
-- P-49 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
December 31, 1996
- -------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
--------- -----
TELECOMMUNICATIONS -- 2.9%
<S> <C> <C>
United Telecommunications 9 1/2%, 4/1/2003......................................... $ 350,000 $ 392,980
-----------
TOTAL CORPORATE BONDS (Cost $2,259,487)............................................ 2,205,197
-----------
US GOVERNMENT SECURITIES -- 7.5%
US Treasury Notes 7 3/4%, 12/31/1999............................................... 500,000 522,969
US Treasury Notes 6 1/2%, 5/15/2005................................................ 500,000 503,751
-----------
TOTAL US GOVERNMENT SECURITIES (Cost $1,041,916)................................... 1,026,720
-----------
REPURCHASE AGREEMENTS -- 16.8% (Cost $2,300,000)
HSBC Securities, Inc. 4 7/8%, dated 12/31/1996, maturing 1/8/1997
collateralized by: $2,345,000 US Treasury Notes 7 3/4%,
12/31/1999, with a fair market value of $2,454,826............................... 2,300,000 2,300,000
-----------
TOTAL INVESTMENTS-- 98.0% (Cost $13,010,880)....................................... 13,435,685
OTHER ASSETS LESS LIABILITIES-- 2.0%............................................... 281,105
-----------
NET ASSETS-- 100.0%................................................................ $13,716,790
-----------
-----------
</TABLE>
See Notes to Financial Statements.
-- P-50 --
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
-- P-51 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN SELIGMAN SELIGMAN
SELIGMAN SELIGMAN CASH COMMON COMMUNICATIONS
BOND CAPITAL MANAGEMENT STOCK AND INFORMATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (see
portfolios of investments):
Common Stocks ............................. $ -- $13,263,107 $ -- $28,663,219 $59,177,109
Convertible Securities .................... -- -- -- 203,125 --
Preferred Stocks -- -- -- -- --
US Government Securities and Agencies 2,735,587 -- 2,728,804 -- --
Corporate Bonds ........................... 1,912,499 -- -- -- --
Repurchase Agreements ..................... -- 1,000,000 1,900,000 8,100,000 3,050,000
Commercial Paper .......................... -- -- 4,806,277 -- --
Fixed Time Deposits ....................... 250,000 -- -- -- --
Bank Notes ................................ -- -- 400,001 -- --
---------- ----------- ---------- ----------- -----------
Total Investments ......................... 4,898,086 14,263,107 9,835,082 36,966,344 62,227,109
Cash ...................................... 27,768 68,288 31,921 60,521 57,691
Interest and dividends receivable ........ 86,025 3,492 5,697 39,464 913
Receivable for Capital Stock sold ......... 18,173 53,528 -- 134,995 154,848
Receivable for securities sold ............ -- 41,516 -- 8,800 --
Receivable from associated companies ...... 321 17,736 1,934 -- --
Unrealized appreciation on foreign
currencies and forward currency contracts -- -- -- -- --
---------- ----------- ---------- ----------- -----------
TOTAL ASSETS .............................. 5,030,373 14,447,667 9,874,634 37,210,124 62,440,561
---------- ----------- ---------- ----------- -----------
LIABILITIES:
Payable for Capital Stock repurchased .... 383 807 104,055 2,346 --
Payable for securities purchased .......... -- 111,549 -- -- 1,720,419
Payable to custodian ...................... -- -- -- -- --
Accrued expenses, taxes, and other ........ 15,109 22,254 15,687 39,378 75,195
---------- ----------- ---------- ----------- -----------
TOTAL LIABILITIES ........................ 15,492 134,610 119,742 41,724 1,795,614
---------- ----------- ---------- ----------- -----------
NET ASSETS ................................ $5,014,881 $14,313,057 $9,754,892 $37,168,400 $60,644,947
---------- ----------- ---------- ----------- -----------
---------- ----------- ---------- ----------- -----------
COMPOSITION OF NET ASSETS:
Capital Stock, at par ..................... $ 507 $ 894 $ 9,755 $ 2,335 $ 4,129
Additional paid-in capital ................ 5,008,719 12,208,743 9,745,535 29,431,923 59,376,045
Undistributed (dividends in excess of)
net investment income ................. (3,247) (3,928) -- (378) (1,077)
Undistributed/accumulated net
realized gain (loss) .................. (54,471) -- (398) 5,049 (3,546,285)
Net unrealized appreciation
of investments ........................ 63,373 2,107,348 -- 7,729,471 4,812,135
Net unrealized appreciation (depreciation)
on translation of assets and liabilities
denominated in foreign currencies and
forward currency contracts ............ -- -- -- -- --
---------- ----------- ---------- ----------- -----------
NET ASSETS ................................ $5,014,881 $14,313,057 $9,754,892 $37,168,400 $60,644,947
---------- ----------- ---------- ----------- -----------
---------- ----------- ---------- ----------- -----------
SHARES OF CAPITAL STOCK
($.001 PAR VALUE) OUTSTANDING .......... 507,312 893,906 9,755,290 2,335,077 4,129,459
---------- ----------- ---------- ----------- -----------
---------- ----------- ---------- ----------- -----------
NET ASSET VALUE PER SHARE ................. $ 9.89 $ 16.01 $ 1.00 $ 15.92 $ 14.69
---------- ----------- ---------- ----------- -----------
---------- ----------- ---------- ----------- -----------
- ---------------------
See Notes to Financial Statements.
</TABLE>
-- P-52 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
December 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN SELIGMAN SELIGMAN
HENDERSON HENDERSON HENDERSON SELIGMAN SELIGMAN
SELIGMAN GLOBAL GROWTH GLOBAL SMALLER GLOBAL HENDERSON HIGH-YIELD SELIGMAN
FRONTIER OPPORTUNITIES COMPANIES TECHNOLOGY INTERNATIONAL BOND INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (see
portfolios of investments):
Common Stocks .................. $28,879,473 $1,367,033 $16,211,012 $1,421,862 $6,300,935 $ -- $ 2,322,905
Convertible Securities.......... -- -- -- -- -- 47,750 5,580,863
Preferred Stocks ............... -- 17,857 -- -- -- -- --
US Government Securities and
Agencies ..................... -- -- -- -- -- -- 1,026,720
Corporate Bonds ................ -- -- -- -- -- 10,506,623 2,205,197
Repurchase Agreements .......... 2,700,000 -- -- -- -- -- 2,300,000
Commercial Paper ............... -- -- -- -- -- -- --
Fixed Time Deposits ............ -- -- -- -- -- 220,000 --
Bank Notes ..................... -- -- -- -- -- -- --
----------- ---------- ----------- ---------- ---------- ----------- -----------
Total Investments .............. 31,579,473 1,384,890 16,211,012 1,421,862 6,300,935 10,774,373 13,435,685
Cash ........................... 58,401 316,812 441,176 -- 943,335 2,241 72,146
Interest and dividends receivable 3,570 588 17,778 402 15,335 243,090 110,337
Receivable for Capital Stock sold 120,126 64,582 89,414 6,370 26,524 174,747 122,859
Receivable for securities sold.. -- 4,383 252,142 5,338 20,518 -- --
Receivable from associated companies -- 2,817 3,924 7,147 3,369 709 --
Unrealized appreciation on foreign
currencies and forward
currency contracts ............ -- 66 2,143 -- 2,358 -- --
----------- ---------- ----------- ---------- ---------- ----------- -----------
TOTAL ASSETS .................... 31,761,570 1,774,138 17,017,589 1,441,119 7,312,374 11,195,160 13,741,027
----------- ---------- ----------- ---------- ---------- ----------- -----------
LIABILITIES:
Payable for Capital Stock
repurchased .................. -- -- -- -- -- -- 3,127
Payable for securities purchased 45,937 173,854 101,041 61,809 46,607 -- --
Payable to custodian ........... -- -- -- 5,922 -- -- --
Accrued expenses, taxes, and other 43,612 10,594 40,301 9,673 23,495 18,800 21,110
----------- ---------- ----------- ---------- ---------- ----------- -----------
TOTAL LIABILITIES .............. 89,549 184,448 141,342 77,404 70,102 18,800 24,237
----------- ---------- ----------- ---------- ---------- ----------- -----------
NET ASSETS ..................... $31,672,021 $1,589,690 $16,876,247 $1,363,715 $7,242,272 $11,176,360 $13,716,790
----------- ---------- ----------- ---------- ---------- ----------- -----------
----------- ---------- ----------- ---------- ---------- ----------- -----------
COMPOSITION OF NET ASSETS:
Capital Stock, at par .......... $ 2,114 $ 160 $ 1,312 $ 132 $ 559 $ 999 $ 1,304
Additional paid-in capital...... 30,486,971 1,576,720 16,614,658 1,295,382 6,760,890 10,911,265 13,294,533
Undistributed (dividends in excess
of) net investment income...... (1,077) (322) 239 (322) (1,453) (924) (3,928)
Undistributed/accumulated net
realized gain (loss)........ -- (9,630) 32,079 -- 2,721 73 --
Net unrealized appreciation
of investments ............. 1,184,013 30,586 393,128 59,662 653,131 264,947 413,974
Net unrealized appreciation
(depreciation) on translation
of assets and liabilities
denominated in foreign
currencies and forward
currency contracts ......... -- (7,824) (165,169) 8,861 (173,576) -- 10,907
----------- ---------- ----------- ---------- ---------- ----------- -----------
NET ASSETS ..................... $31,672,021 $1,589,690 $16,876,247 $1,363,715 $7,242,272 $11,176,360 $13,716,790
----------- ---------- ----------- ---------- ---------- ----------- -----------
----------- ---------- ----------- ---------- ---------- ----------- -----------
SHARES OF CAPITAL STOCK
($.001 PAR VALUE) OUTSTANDING 2,114,247 160,340 1,311,514 132,117 558,648 998,797 1,303,744
----------- ---------- ----------- ---------- ---------- ----------- -----------
----------- ---------- ----------- ---------- ---------- ----------- -----------
NET ASSET VALUE PER SHARE ...... $ 14.98 $ 9.91 $ 12.87 $ 10.32 $ 12.96 $ 11.19 $ 10.52
----------- ---------- ----------- ---------- ---------- ----------- -----------
----------- ---------- ----------- ---------- ---------- ----------- -----------
</TABLE>
-- P-53 --
<PAGE>
Seligman Portfolios, Inc.
- -----------------------------------------------------------
Statement of Operations
- -----------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN SELIGMAN SELIGMAN
SELIGMAN SELIGMAN CASH COMMON COMMUNICATIONS
BOND CAPITAL MANAGEMENT STOCK AND INFORMATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest................................... $296,554 $ 51,983 $483,722 $ 248,848 $ 237,897
Dividends* ................................ -- 54,145 -- 596,312 34,917
-------- --------- -------- --------- -----------
Total investment income ................... 296,554 106,128 483,722 845,160 272,814
-------- --------- -------- --------- -----------
EXPENSES:
Management fee ............................ 18,034 48,339 36,532 134,264 373,337
Auditing fee .............................. 6,700 10,000 8,600 18,700 26,400
Legal fee ................................. 3,067 3,067 3,067 3,067 3,067
Directors' fees and expenses............... 2,034 2,034 2,034 2,034 1,998
Registration .............................. 1,585 2,838 3,003 1,554 15,557
Custody and related services .............. 1,270 577 803 9,444 1,500
Shareholder reports and
communications ......................... 1,060 1,060 1,060 1,060 837
Shareholders' meeting ..................... 996 2,483 1,814 6,136 9,300
Miscellaneous ............................. 902 1,170 1,023 2,108 710
-------- --------- -------- --------- -----------
Total expenses before reimbursement ....... 35,648 71,568 57,936 178,367 432,706
Reimbursement of expenses ................. (8,584) -- (57,936) -- --
-------- --------- -------- --------- -----------
Total expenses after reimbursement ........ 27,064 71,568 -- 178,367 432,706
-------- --------- -------- --------- -----------
NET INVESTMENT INCOME (LOSS) .............. 269,490 34,560 483,722 666,793 (159,892)
-------- --------- -------- --------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS:
Net realized gain (loss) on investments ... 42,902 793,791 -- 4,441,023 (3,546,285)
Net realized gain (loss) from foreign
currency transactions .................. -- -- -- (56,144) --
Net change in unrealized appreciation/
depreciation of investments ............ (291,839) 666,893 -- 985,046 8,651,223
Net change in unrealized appreciation/
depreciation on translation of
assets and liabilities denominated
in foreign currencies and forward
currency contracts ..................... -- -- -- 55,242 --
-------- ---------- -------- --------- -----------
NET GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS ........................... (248,937) 1,460,684 -- 5,425,167 5,104,938
-------- ---------- -------- --------- -----------
INCREASE IN NET ASSETS
FROM OPERATIONS ........................ $ 20,553 $1,495,244 $483,722 $6,091,960 $ 4,945,046
-------- ---------- -------- --------- -----------
-------- ---------- -------- --------- -----------
- -------------------------
* Net of foreign tax withheld as follows: $ -- $ 482 $ -- $ 2,213 $ 1,076
** For the period May 1, 1996, (commencement of operations) to December 31, 1996.
</TABLE>
See Notes to Financial Statements.
-- P-54 --
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
For the year ended December 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN SELIGMAN SELIGMAN
HENDERSON HENDERSON HENDERSON SELIGMAN SELIGMAN
SELIGMAN GLOBAL GROWTH GLOBAL SMALLER GLOBAL HENDERSON HIGH-YIELD SELIGMAN
FRONTIER OPPORTUNITIES COMPANIES TECHNOLOGY INTERNATIONAL BOND INCOME
PORTFOLIO PORTFOLIO** PORTFOLIO PORTFOLIO** PORTFOLIO PORTFOLIO PORTFOLIO
---------- ----------- ----------- ------------ ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ........................ $ 86,025 $ 4,809 $ 47,164 $ 3,475 $ 23,467 $750,586 $485,343
Dividends* ...................... 36,667 2,421 131,952 1,060 96,954 -- 252,881
---------- ------- ---------- -------- -------- -------- --------
Total investment income ......... 122,692 7,230 179,116 4,535 120,421 750,586 738,224
---------- ------- ---------- -------- -------- -------- --------
EXPENSES:
Management fee .................. 165,050 4,098 110,169 4,920 57,323 35,858 49,574
Auditing fee .................... 15,800 5,900 10,700 5,900 7,300 8,400 9,600
Legal fee ....................... 3,067 2,013 3,067 2,013 3,067 3,067 3,067
Directors' fees and expenses .... 1,998 1,226 1,998 1,226 1,998 1,998 2,034
Registration .................... 9,605 1,561 6,297 1,661 2,081 4,796 1,010
Custody and related services .... 796 6,553 71,957 4,020 56,933 5,674 3,006
Shareholder reports and
communications ............... 837 2,211 837 2,211 837 837 1,060
Shareholders' meeting ........... 4,727 276 2,674 325 1,254 1,602 2,318
Miscellaneous ................... 1,351 820 1,100 836 1,000 833 1,292
--------- ------- ---------- -------- -------- -------- --------
Total expenses before reimbursement 203,231 24,658 208,799 23,112 131,793 63,065 72,961
Reimbursement of expenses ....... -- (18,938) (54,562) (16,245) (51,562) (12,879) --
--------- ------- ---------- -------- -------- -------- --------
Total expenses after reimbursement 203,231 5,720 154,237 6,867 80,231 50,186 72,961
--------- ------- ---------- -------- -------- -------- --------
NET INVESTMENT INCOME (LOSS) .... (80,539) 1,510 24,879 (2,332) 40,190 700,400 665,263
--------- ------- ---------- -------- -------- -------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on
investments .................. 3,410,956 (9,589) 1,146,142 9,847 99,382 71,419 188,849
Net realized gain (loss) from
foreign currency transactions -- 297 34,461 (762) 29,228 -- (24)
Net change in unrealized
appreciation/depreciation
of investments ............... 693,961 30,586 192,735 59,662 378,494 207,559 (75,436)
Net change in unrealized
appreciation/depreciation on
translation of assets and
liabilities denominated
in foreign currencies and
forward currency contracts ... -- (7,824) (129,401) 8,861 (153,172) -- 7,431
---------- ------- ---------- -------- -------- -------- --------
NET GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS ................. 4,104,917 13,470 1,243,937 77,608 353,932 278,978 120,820
---------- ------- ---------- -------- -------- -------- --------
INCREASE IN NET ASSETS
FROM OPERATIONS .............. $4,024,378 $14,980 $1,268,816 $ 75,276 $394,122 $979,378 $786,083
---------- ------- ---------- -------- -------- -------- --------
---------- ------- ---------- -------- -------- -------- --------
- ----------------------
* Net of foreign tax withheld as
follows: $ 166 $ 224 $ 18,180 $ 168 $ 11,134 $ -- $ 871
---------- ------- ---------- -------- -------- -------- --------
** For the period May 1, 1996, (commencement of operations) to December 31, 1996.
See Notes to Financial Statements.
</TABLE>
-- P-55 --
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN SELIGMAN SELIGMAN
BOND PORTFOLIO CAPITAL PORTFOLIO CASH MANAGEMENT PORTFOLIO
----------------------- ------------------------ -------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
----------------------- ------------------------ --------------------------
1996 1995 1996 1995 1996 1995
---------- ---------- ----------- ----------- ------------ -----------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss) ..... $ 269,490 $ 237,456 $ 34,560 $ 23,072 $ 483,722 $ 251,624
Net realized gain (loss) on
investments ................... 42,902 (16,342) 793,791 673,773 -- (4)
Net realized gain (loss) from
foreign currency transactions.. -- -- -- -- -- --
Net change in unrealized
appreciation/depreciation
of investments ................ (291,839) 449,551 666,893 996,837 -- --
Net change in unrealized
appreciation/depreciation on
translation of assets and
liabilities denominated in
foreign currencies and forward
currency contracts -- -- -- -- -- --
---------- ---------- ----------- ----------- ------------ ----------
Increase (decrease) in net assets
from operations 20,553 670,665 1,495,244 1,693,682 483,722 251,620
---------- ---------- ----------- ----------- ------------ ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ............ (269,359) (239,920) (35,038) (26,627) (483,722) (251,624)
Realized gain on investments ..... -- -- (852,588) (666,241) -- --
---------- ---------- ----------- ----------- ------------ ----------
Decrease in net assets from
distributions ................. (269,359) (239,920) (887,626) (692,868) (483,722) (251,624)
---------- ---------- ----------- ----------- ------------ ----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares . 2,178,074 1,663,791 6,122,881 3,644,132 16,950,432 8,777,333
Investment of dividends .......... 269,359 239,920 35,038 26,627 483,722 251,624
Shares issued in payment of gain
distributions ................. -- -- 852,588 666,241 -- --
---------- ---------- ----------- ----------- ------------ ----------
Total ............................ 2,447,433 1,903,711 7,010,507 4,337,000 17,434,154 9,028,957
---------- ---------- ----------- ----------- ------------ ----------
Cost of shares repurchased ....... (1,680,294) (1,444,282) (2,598,584) (1,986,672) (15,478,773) (4,459,283)
---------- ---------- ----------- ----------- ------------ ----------
Increase in net assets from
capital share transactions .... 767,139 459,429 4,411,923 2,350,328 1,955,381 4,569,674
---------- ---------- ----------- ----------- ------------ ----------
Increase in net assets ........... 518,333 890,174 5,019,541 3,351,142 1,955,381 4,569,670
NET ASSETS:
Beginning of period .............. 4,496,548 3,606,374 9,293,516 5,942,374 7,799,511 3,229,841
---------- ---------- ----------- ----------- ------------ ----------
End of period .................... $5,014,881 $4,496,548 $14,313,057 $ 9,293,516 $ 9,754,892 $7,799,511
---------- ---------- ----------- ----------- ------------ ----------
---------- ---------- ----------- ----------- ------------ ----------
- -----------------
* Commencement of operations.
</TABLE>
See Notes to Financial Statements.
-- P-56 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN SELIGMAN
COMMON STOCK COMMUNICATIONS AND SELIGMAN
PORTFOLIO INFORMATION PORTFOLIO FRONTIER PORTFOLIO
-------------------- --------------------- ------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
-------------------- ------------------- ---------------------
1996 1995 1996 1995 1996 1995
------- ------- ------ ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ..... $ 666,793 $ 570,657 $ (159,892) $ (146,275) $ (80,539) $ (21,483)
Net realized gain (loss) on
investments ................... 4,441,023 3,074,117 (3,546,285) 2,629,030 3,410,956 489,661
Net realized gain (loss) from
foreign currency transactions.. (56,144) (85) -- -- -- --
Net change in unrealized
appreciation/depreciation
of investments ................ 985,046 2,044,468 8,651,223 (3,857,599) 693,961 481,517
Net change in unrealized
appreciation/depreciation on
translation of assets and
liabilities denominated in
foreign currencies and forward
currency contracts ........... 55,242 (55,202) -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets
from operations .............. 6,091,960 5,633,955 4,945,046 (1,374,844) 4,024,378 949,695
----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ............ (669,792) (564,862) -- -- -- --
Realized gain on investments ..... (4,598,840) (2,855,419) -- (2,505,145) (3,392,252) (463,105)
----------- ----------- ----------- ----------- ----------- -----------
Decrease in net assets from
distributions ................. (5,268,632) (3,420,281) -- (2,505,145) (3,392,252) (463,105)
----------- ----------- ----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares . 11,490,927 12,083,995 27,653,569 40,177,251 17,892,649 11,465,250
Investment of dividends .......... 669,792 564,862 -- -- -- --
Shares issued in payment of gain
distributions ................. 4,598,840 2,855,419 -- 2,505,145 3,392,252 463,105
----------- ----------- ----------- ----------- ----------- -----------
Total ............................ 16,759,559 15,504,276 27,653,569 42,682,396 21,284,901 11,928,355
----------- ----------- ----------- ----------- ----------- -----------
Cost of shares repurchased ....... (9,250,532) (9,049,478) (10,395,761) (854,935) (2,721,117) (107,785)
----------- ----------- ----------- ----------- ----------- -----------
Increase in net assets from
capital share transactions .... 7,509,027 6,454,798 17,257,808 41,827,461 18,563,784 11,820,570
----------- ----------- ----------- ----------- ----------- -----------
Increase in net assets ........... 8,332,355 8,668,472 22,202,854 37,947,472 19,195,910 12,307,160
NET ASSETS:
Beginning of period .............. 28,836,045 20,167,573 38,442,093 494,621 12,476,111 168,951
----------- ----------- ----------- ----------- ----------- -----------
End of period ................... $37,168,400 $28,836,045 $60,644,947 $38,442,093 $31,672,021 $12,476,111
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
SELIGMAN SELIGMAN
HENDERSON HENDERSON
GLOBAL GROWTH GLOBAL SMALLER
OPPORTUNITIES PORTFOLIO COMPANIES PORTFOLIO
----------------------- --------------------
5/1/96* YEAR ENDED
TO DECEMBER 31,
--------------------
12/31/96 1996 1995
-------- ------ ------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ..... $ 1,510 $ 24,879 $ 11,002
Net realized gain (loss) on
investments ................... (9,589) 1,146,142 147,181
Net realized gain (loss) from
foreign currency transactions.. 297 34,461 4,162
Net change in unrealized
appreciation/depreciation
of investments ................ 30,586 192,735 197,114
Net change in unrealized
appreciation/depreciation on
translation of assets and
liabilities denominated in
foreign currencies and forward
currency contracts ........... (7,824) (129,401) (36,341)
---------- ----------- ----------
Increase (decrease) in net assets
from operations .............. 14,980 1,268,816 323,118
---------- ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ............ (1,843) (21,782) (20,531)
Realized gain on investments ..... -- (1,150,819) (148,062)
---------- ----------- ----------
Decrease in net assets from
distributions ................. (1,843) (1,172,601) (168,593)
---------- ----------- ----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares . 1,707,364 11,760,606 4,665,264
Investment of dividends .......... 1,843 21,782 20,531
Shares issued in payment of gain
distributions ................. -- 1,150,819 148,062
---------- ----------- ----------
Total ............................ 1,709,207 12,933,207 4,833,857
---------- ----------- ----------
Cost of shares repurchased ....... (132,654) (989,791) (283,276)
---------- ----------- ----------
Increase in net assets from
capital share transactions .... 1,576,553 11,943,416 4,550,581
---------- ----------- ----------
Increase in net assets ........... 1,589,690 12,039,631 4,705,106
NET ASSETS:
Beginning of period .............. -- 4,836,616 131,510
---------- ----------- ----------
End of period .................... $1,589,690 $16,876,247 $4,836,616
---------- ----------- ----------
- -----------------
* Commencement of operations.
See Notes to Financial Statements.
</TABLE>
-- P-57 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN SELIGMAN
HENDERSON HENDERSON SELIGMAN
GLOBAL TECHNOLOGY INTERNATIONAL HIGH-YIELD SELIGMAN
PORTFOLIO PORTFOLIO BOND PORTFOLIO INCOME PORTFOLIO
----------------- -------------- ------------------- --------------------
5/1/96* YEAR ENDED YEAR 5/1/95* YEAR ENDED
TO DECEMBER 31, ENDED TO DECEMBER 31,
------------------ -------------------
12/31/96 1996 1995 12/31/96 12/31/95 1996 1995
----------- --------- --------- -------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income ............ $ (2,332) $ 40,190 $ 25,610 $ 700,400 $ 58,661 $ 665,263 $ 635,679
Net realized gain (loss) on
investments ................... 9,847 99,382 (39,978) 71,419 4,799 188,849 639,249
Net realized gain (loss) from
foreign currency transactions.. (762) 29,228 82,120 -- -- (24) (43)
Net change in unrealized
appreciation/depreciation
of investments ................ 59,662 378,494 277,417 207,559 57,388 (75,436) 591,277
Net change in unrealized
appreciation/depreciation on
translation of assets and
liabilities denominated in
foreign currencies and forward
currency contracts 8,861 (153,172) (48,118) -- -- 7,431 3,496
---------- ---------- ---------- ----------- ---------- ----------- -----------
Increase in net assets
from operations ............... 75,276 394,122 297,051 979,378 120,848 786,083 1,869,658
---------- ---------- ---------- ----------- ---------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ............ -- (36,924) (48,883) (700,656) (60,233) (693,657) (644,348)
Realized gain on investments ..... (10,437) (128,691) (27,517) (71,346) (4,951) (198,872) (636,880)
---------- ---------- ---------- ----------- ---------- ----------- -----------
Decrease in net assets from
distributions ................. (10,437) (165,615) (76,400) (772,002) (65,184) (892,529) (1,281,228)
---------- ---------- ---------- ----------- ---------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares.. 1,484,242 4,060,684 2,562,936 9,904,511 3,188,047 5,080,349 5,410,208
Investment of dividends .......... -- 36,924 48,883 700,656 60,233 693,657 644,348
Shares issued in payment of gain
distributions ................. 10,437 128,691 27,517 71,346 4,951 198,872 636,880
---------- ---------- ---------- ----------- ---------- ----------- -----------
Total ............................ 1,494,679 4,226,299 2,639,336 10,676,513 3,253,231 5,972,878 6,691,436
---------- ---------- ---------- ----------- ---------- ----------- -----------
Cost of shares repurchased ....... (195,803) (1,395,763) (453,063) (2,716,951) (299,473) (4,769,122) (4,710,663)
---------- ---------- ---------- ----------- ---------- ----------- -----------
Increase in net assets
from capital share transactions 1,298,876 2,830,536 2,186,273 7,959,562 2,953,758 1,203,756 1,980,773
---------- ---------- ---------- ----------- ---------- ----------- -----------
Increase in net assets ........... 1,363,715 3,059,043 2,406,924 8,166,938 3,009,422 1,097,310 2,569,203
NET ASSETS:
Beginning of period .............. -- 4,183,229 1,776,305 3,009,422 -- 12,619,480 10,050,277
---------- ---------- ---------- ----------- ---------- ----------- -----------
End of period .................... $1,363,715 $7,242,272 $4,183,229 $11,176,360 $3,009,422 $13,716,790 $12,619,480
---------- ---------- ---------- ----------- ---------- ----------- -----------
---------- ---------- ---------- ----------- ---------- ----------- -----------
- -----------------
* Commencement of operations.
</TABLE>
See Notes to Financial Statements.
-- P-58 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. Seligman Portfolios, Inc. (the "Fund") is an open-end diversified management
investment company consisting of twelve separate portfolios (the "Portfolios"),
"Seligman Bond Portfolio," formerly Seligman Fixed Income Securities Portfolio
("Bond Portfolio"), "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
Frontier Portfolio" ("Frontier Portfolio"), "Seligman Henderson Global Growth
Opportunities Portfolio" ("Global Growth Opportunities Portfolio"), "Seligman
Henderson Global Smaller Companies Portfolio" ("Global Smaller Companies
Portfolio"),"Seligman Henderson Global Technology Portfolio" ("Global Technology
Portfolio"), "Seligman Henderson International Portfolio," formerly Seligman
Henderson Global Portfolio, ("International 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"), which is offered by Canada Life
Insurance Company of America ("CLICA"), Canada Life of New York Variable Annuity
Account 2 ("CLNYVA-2") which is offered by Canada Life Insurance Company of New
York ("CLNY"), and Canada Life of America Annuity Account 3 ("CLVA-3"), which is
offered by Canada Life Insurance Company of America. CLVA-2 and CLNYVA-2 are
registered as unit investment trusts under the Investment Company Act of 1940,
as amended (the "1940 Act") and fund variable annuity contracts (the "CLVA-2
Contracts") issued by CLICA and CLNY and distributed by Seligman Financial
Services, Inc. CLVA-3 is not registered or regulated as a unit investment trust
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 CLICA 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 CLICA or its affiliates ("Canada Life Separate Accounts"). Shares
of the Bond, Capital,CashManagement,CommonStock, andIncomePortfolios 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"). However, 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 its Fixed
Accumulation Account from the Mutual Benefit Plan will not be accepted.
Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:
a. Investments in US Government securitiesandagencies, bonds, convertible
securities, and stocks are valued at the most current market values or, in
their absence, at fair market values determined in accordance with procedures
approved by the Board of Directors. Securities traded on national exchanges
are valued at the last sales prices or, in their absence and in the case of
over-the-counter securities, a mean of closing bid and asked prices.
Short-term holdings maturing in 60 days or less are valued at amortized cost.
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 Growth Opportunities Portfolio, Global Smaller
Companies Portfolio, Global Technology Portfolio, and International
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 US dollar-denominated American
Depositary Receipts ("ADRs"), American Depositary Shares ("ADSs"), European
Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs"), and Global
Depositary Shares ("GDSs"). 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,GDRs,and
GDSs 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 US dollars. Foreign currency amounts are
translated into US 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 US 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 from the difference between
the amounts of dividends, interest and foreign withholding taxes recorded on
the Portfolios' books, and the US dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange
-- P-59 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- -------------------------------------------------------------------------------
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.
c. The Global Growth Opportunities Portfolio, Global Smaller Companies
Portfolio, Global Technology Portfolio, and International 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.
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. Purchases and sales of portfolio securities, excluding US Government
obligations and short-term investments, for the year ended December 31, 1996,
were as follows:
<TABLE>
<CAPTION>
PORTFOLIO PURCHASES SALES
-------- --------- -----
<S> <C> <C>
Bond $ 1,871,532 $1,765,872
Capital 12,824,055 9,874,441
Common Stock 14,429,833 15,609,374
Communications
and Information 92,871,047 76,325,532
Frontier 37,446,743 24,491,977
Global Growth Opportunities 1,448,534 77,098
Global Smaller Companies 16,854,856 6,320,967
Global Technology 1,682,353 338,516
International 4,610,219 2,572,028
High-Yield Bond 15,472,051 8,062,787
Income 2,339,369 2,177,188
</TABLE>
-- P-60 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
For the year ended December 31, 1996, purchases and sales of US Government
obligations were $7,087,731 and $5,970,071, respectively, for the Bond
Portfolio.
Identified cost of investments sold is used for both financial statement and
federal income tax purposes.
At December 31, 1996, with the exception of the Communications and Information
Portfolio, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes. With regard
to the Communications and Information Portfolio, the cost of investments was
$57,672,636. The tax basis gross unrealized appreciation and depreciation of
portfolio securities, including the effects of foreign currency transactions,
were as follows:
<TABLE>
<CAPTION>
UNREALIZED UNREALIZED
PORTFOLIO APPRECIATION DEPRECIATION
--------- ------------ ------------
<S> <C> <C>
Bond $ 80,830 $ 17,457
Capital 2,610,567 503,219
Common Stock 8,138,741 409,270
Communications
and Information 9,725,958 5,171,485
Frontier 3,385,882 2,201,869
Global Growth Opportunities 83,514 60,430
Global Smaller Companies 1,980,556 1,754,349
Global Technology 148,379 79,811
International 791,811 315,625
High-Yield Bond 363,244 98,297
Income 1,019,945 595,140
</TABLE>
At December 31, 1996, the Bond Portfolio, the Cash Management Portfolio, the
Communications and Information Portfolio,andthe Global Growth Opportunities
Portfolio had net capital loss carryforwards of $54,471, $398, $3,288,623 and
$9,630, respectively, which are available for offset against future taxable net
gains. These net capital loss carryforwards will expire in varying amounts
through 2004.
3. J. & W. Seligman & Co. Incorporated (the "Manager") manages the affairs of
the Fund and provides orarrangesforthe necessary personnel and facilities.
SeligmanHendersonCo.(the"Subadviser"),an entity owned50% each bytheManager and
Henderson plc, supervises and directs the Fund's global investments.
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 ManagerorbyHenderson plc. The Manager's fee is calculated
daily and payable monthly, equal to 0.40%, on an annual basis, of Bond, Capital,
Cash Management, Common Stock, 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 Global
Growth Opportunities, Global Smaller Companies, Global Technology and
International 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 the Subadviser. 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 theCash Management, Global Growth
Opportunities, Global Smaller Companies, Global Technology and International
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. The Manager and Subadviser have agreed to
reimburse expenses, other than the management fee, which exceed 0.40% per annum
of the average daily net assets of theGlobal Growth Opportunities, Global
Smaller Companies, Global Technology and International Portfolios. For the year
ended December 31, 1996, the Manager reimbursed expenses and/or waived fees of
$8,584, $57,936 and $12,879 for the Bond, Cash Management and High-Yield Bond
Portfolios, respectively. For the same period, the Manager waived all its fee
and the Subadviser waived a portion of its fee for the Global Smaller Companies
Portfolio and the International Portfolio, totalling $54,562 and $51,562,
respectively. For the period from May 1, 1996 (commencement of operations) to
December 31, 1996, the Manager and Subadviser waived their fees and the
Subadviser reimbursed expenses totalling $18,938 and $16,245, respectively, for
the Global Growth Opportunities Portfolio and the Global Technology Portfolio,
respectively.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the CLVA-2 Contracts and an affiliate of the Manager, received
concessions of $384,824 from Canada Life Insurance Company of America and
$15,132 from Canada Life Insurance Company of New York, 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.
-- P-61 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- -------------------------------------------------------------------------------
Fees of $30,500 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 December 31, 1996, 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.
4. At December 31, 1996, the Fund had outstanding forward exchange currency
contracts to purchase or sell foreign currencies as follows:
<TABLE>
<CAPTION>
FOREIGN IN EXCHANGE SETTLEMENT UNREALIZED
CONTRACT CURRENCY FOR US $ DATE US $ VALUE APPRECIATION
-------- -------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
GLOBAL GROWTH OPPORTUNITIES PORTFOLIO
PURCHASES:
Swiss Francs 14,872 11,020 1/6/97 11,086 $ 66
======
GLOBAL SMALLER COMPANIES PORTFOLIO
SALES:
French Francs 765,780 150,000 2/7/97 147,857 $2,143
======
INTERNATIONAL PORTFOLIO
SALES:
French Francs 842,358 165,000 2/7/97 162,642 $2,358
======
</TABLE>
5. At December 31, 1996, there were 20,000,000 shares of Capital Stock
authorized for each of the Global Growth Opportunities and Global Technology
Portfolios; 80,000,000 shares for the Bond and Capital Portfolios; and
100,000,000 shares for each of the Cash Management, Common Stock, Communications
and Information, Frontier, Global Smaller Companies, International, High-Yield
Bond, and Income Portfolios, all at a par value of $.001 per share. Transactions
in shares of Capital Stock were as follows:
<TABLE>
<CAPTION>
BOND CAPITAL CASH MANAGEMENT
PORTFOLIO PORTFOLIO PORTFOLIO
------------------- ------------------ --------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
------------------- ------------------ --------------------
1996 1995 1996 1995 1996 1995
------- ------- ------- ------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares...................... 214,510 163,349 371,812 249,315 16,950,432 8,777,333
------- ------- ------- ------- ---------- ---------
Shares issued in payment
of dividends..................... 27,071 23,069 2,189 1,811 483,722 251,624
Shares issued in payment
of gain distributions............ -- -- 53,253 45,323 -- --
------- ------- ------- ------- ---------- ---------
Total............................... 241,581 186,418 427,254 296,449 17,434,154 9,028,957
------- ------- ------- ------- ---------- ---------
Shares repurchased.................. (165,022) (144,731) (156,642) (141,073) (15,478,773) (4,459,283)
------- ------- ------- ------- ---------- ---------
Increase in shares.................. 76,559 41,687 270,612 155,376 1,955,381 4,569,674
------- ------- ------- ------- ---------- ---------
------- ------- ------- ------- ---------- ---------
</TABLE>
<TABLE>
<CAPTION>
COMMUNICATIONS
COMMON STOCK AND INFORMATION FRONTIER
PORTFOLIO PORTFOLIO PORTFOLIO
--------------------- -------------------- -------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
--------------------- -------------------- -------------------
1996 1995 1996 1995 1996 1995
--------- ------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares...................... 676,407 774,737 2,058,865 2,671,618 1,141,808 877,490
Shares issued in payment
of dividends..................... 41,705 36,751 -- -- -- --
Shares issued in payment
of gain distributions............ 286,354 185,779 -- 187,370 229,516 34,820
--------- ------- --------- --------- --------- -------
Total............................... 1,004,466 997,267 2,058,865 2,858,988 1,371,324 912,310
--------- ------- --------- --------- --------- -------
Shares repurchased.................. (537,472) (592,244) (777,428) (58,334) (177,011) (8,346)
--------- ------- --------- --------- --------- -------
Increase in shares.................. 466,994 405,023 1,281,437 2,800,654 1,194,313 903,964
--------- ------- --------- --------- --------- -------
--------- ------- --------- --------- --------- -------
</TABLE>
-- P-62 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL GROWTH GLOBAL SMALLER GLOBAL
OPPORTUNITIES COMPANIES TECHNOLOGY
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------------ -----------
5/1/96* YEAR ENDED 5/1/96*
TO DECEMBER 31, TO
------------------
12/31/96 1996 1995 12/31/96
------------ ------- ------- -----------
<S> <C> <C> <C> <C>
Sale of shares...................... 173,750 877,250 411,729 150,969
------- ------- ------- -------
Shares issued in payment
of dividends..................... 186 1,708 1,778 --
------- ------- ------- -------
Shares issued in payment
of gain distributions............ -- 90,260 12,819 1,023
------- ------- ------- -------
Total............................... 173,936 969,218 426,326 151,992
Shares repurchased.................. (13,596) (72,141) (24,643) (19,875)
------- ------- ------- -------
Increase in shares.................. 160,340 897,077 401,683 132,117
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL HIGH-YIELD BOND INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
------------------- ------------------ -----------------
YEAR ENDED YEAR 5/1/95* YEAR ENDED
DECEMBER 31, ENDED TO DECEMBER 31,
------------------- -----------------
1996 1995 12/31/96 12/31/95 1996 1995
--------- ------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares...................... 316,262 214,972 885,932 309,043 468,320 504,495
Shares issued in payment
of dividends..................... 2,864 3,942 62,670 5,742 65,750 61,075
Shares issued in payment
of gain distributions............ 9,983 2,219 6,382 472 18,850 60,368
------- ------- --------- --------- --------- -------
Total............................... 329,109 221,133 954,984 315,257 552,920 625,938
------- ------- --------- --------- --------- -------
Shares repurchased.................. (108,146) (40,136) (242,875) (28,569) (443,660) (439,030)
------- ------- --------- --------- --------- -------
Increase in shares.................. 220,963 180,997 712,109 286,688 109,260 186,908
------- ------- --------- --------- --------- -------
------- ------- --------- --------- --------- -------
</TABLE>
- --------------------
* Commencement of operations.
-- P-63 --
<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.
Average commission rate paid
represents the average commission paid by the Portfolios to purchase or sell
portfolio securities. It is determined by dividing the total commission dollars
paid by the number of shares purchased and sold during the period for which
commissions were paid. This rate is provided for the period beginning January 1,
1996.
<TABLE>
<CAPTION>
Bond Portfolio
------------------------------------------------------------
Year Ended December 31,
------------------------------------------------------------
1996 1995 1994 1993 1992
----------- -------- -------- -------- --------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........................... $10.440 $ 9.270 $10.110 $10.660 $10.990
------- ------- ------- ------- -------
Net investment income........................................ 0.565 0.605 0.499 0.713 0.706
Net realized and unrealized gain (loss) on investments....... (0.552) 1.171 (0.841) 0.142 (0.092)
------- ------- ------- ------- -------
Increase (decrease) from investment operations............... 0.013 1.776 (0.342) 0.855 0.614
Dividends paid............................................... (0.563) (0.606) (0.498) (0.711) (0.772)
Distributions from net realized gain......................... -- -- -- (0.694) (0.172)
------- ------- ------- ------- -------
Net increase (decrease) in net asset value................... (0.550) 1.170 (0.840) (0.550) (0.330)
------- ------- ------- ------- -------
Net asset value, end of year................................. $ 9.890 $10.440 $ 9.270 $10.110 $10.660
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL RETURN BASED ON NET ASSET VALUE: 0.09% 19.18% (3.39)% 7.98% 5.60%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets............................... 0.60% 0.60% 0.60% 0.74% 1.00%
Net investment income to average net assets.................. 5.97% 6.22% 5.12% 5.41% 6.22%
Portfolio turnover........................................... 199.74% 114.42% 237.23% 33.21% 23.40%
Net assets, end of year (000s omitted)....................... $5,015 $4,497 $3,606 $3,775 $4,750
Without management fee waiver and
expense reimbursement:++
Net investment income per share.............................. $0.545 $0.571 $0.430 $0.675
Ratios:
Expenses to average net assets............................ 0.79% 0.99% 1.31% 1.07%
Net investment income to average net assets............... 5.78% 5.83% 4.41% 5.08%
- ----------------------
++ The Manager, at its discretion, reimbursed expenses and/or waived management
fees for certain periods presented.
</TABLE>
See Notes to Financial Statements.
-- P-64 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Capital Portfolio
------------------------------------------------------------
Year Ended December 31,
------------------------------------------------------------
1996 1995 1994 1993 1992
----------- -------- -------- -------- --------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........................... $14.910 $12.700 $14.950 $16.980 $17.740
------- ------- ------- ------- -------
Net investment income (loss)................................. 0.043 0.048 0.015 0.021 (0.022)
Net realized and unrealized gain (loss) on investments....... 2.121 3.385 (0.699) 1.928 1.202
------- ------- ------- ------- -------
Increase (decrease) from investment operations............... 2.164 3.433 (0.684) 1.949 1.180
Dividends paid............................................... (0.042) (0.047) (0.018) (0.021) --
Distributions from net realized gain......................... (1.022) (1.176) (1.548) (3.958) (1.940)
------- ------- ------- ------- -------
Net increase (decrease) in net asset value................... 1.100 2.210 (2.250) (2.030) (0.760)
------- ------- ------- ------- -------
Net asset value, end of year................................. $16.010 $14.910 $12.700 $14.950 $16.980
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL RETURN BASED ON NET ASSET VALUE: 14.51% 27.17% (4.59)% 11.65% 6.80%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets............................... 0.59% 0.60% 0.60% 0.71% 0.91%
Net investment income to average net assets.................. 0.29% 0.32% 0.10% 0.09% (0.14)%
Portfolio turnover........................................... 88.78% 122.20% 67.39% 65.30% 54.95%
Average commission rate paid................................. $0.0557
Net assets, end of year (000s omitted)....................... $14,313 $9,294 $5,942 $5,886 $5,497
Without management fee waiver and
expense reimbursement:++
Net investment income per share.............................. $0.035 $(0.036) $(0.003)
Ratios:
Expenses to average net assets............................ 0.71% 0.96% 0.83%
Net investment income to average net assets............... 0.21% (0.26)% (0.03)%
</TABLE>
<TABLE>
<CAPTION>
Cash Management Portfolio
------------------------------------------------------------
Year Ended December 31,
------------------------------------------------------------
1996 1995 1994 1993 1992
----------- -------- -------- -------- --------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........................... $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------ ------
Net investment income........................................ 0.053 0.055 0.040 0.030 0.035
Dividends paid............................................... (0.053) (0.055) (0.040) (0.030) (0.035)
------ ------ ------ ------ ------
Net asset value, end of year................................. $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------ ------
------ ------ ------ ------ ------
TOTAL RETURN BASED ON NET ASSET VALUE: 5.43% 5.60% 4.03% 3.00% 3.53%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets............................... -- -- -- -- --
Net investment income to average net assets.................. 5.30% 5.48% 3.98% 2.96% 3.50%
Net assets, end of year (000s omitted)....................... $9,755 $7,800 $3,230 $3,102 $4,230
Without management fee waiver and
expense reimbursement:++
Net investment income per share.............................. $0.047 $0.046 $0.025 $0.019 $0.025
Ratios:
Expenses to average net assets............................ 0.63% 0.87% 1.48% 1.07% 0.97%
Net investment income to average net assets............... 4.67% 4.61% 2.50% 1.89% 2.53%
- ----------------------
++ The Manager, at its discretion, reimbursed expenses and/or waived management
fees for certain periods presented.
</TABLE>
See Notes to Financial Statements.
-- P-65 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Communications and
Common Stock Portfolio Information Portfolio
------------------------------------------ -----------------------------
Year Ended 10/11/94**
Year Ended December 31, December 31, to
------------------------------------------ ---------------
1996 1995 1994 1993 1992 1996 1995 12/31/94
------ ------ ------ ------ ------ ------ ------ --------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $15.440 $13.780 $14.980 $15.600 $14.740 $13.500 $10.440 $10.000
------- ------- ------- ------- ------- ------- ------- -------
Net investment income (loss)......... 0.334 0.349 0.365 0.392 0.346 -- -- (0.016)
Net realized and unrealized gain (loss)
on investments..................... 2.789 3.400 (0.356) 1.479 1.445 1.190 4.015 0.456
------- ------- ------- ------- ------- ------- ------- -------
Increase from investment operations.. 3.123 3.749 0.009 1.871 1.791 1.190 4.015 0.440
Dividends paid....................... (0.336) (0.345) (0.385) (0.394) (0.369) -- -- --
Distributions from net realized gain (2.307) (1.744) (0.824) (2.097) (0.562) -- (0.955) --
------- ------- ------- ------- ------- ------- ------- -------
Net increase (decrease) in net asset value 0.480 1.660 (1.200) (0.620) 0.860 1.190 3.060 0.440
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period....... $15.920 $15.440 $13.780 $14.980 $15.600 $14.690 $13.500 $10.440
------- ------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- ------- -------
TOTAL RETURN BASED ON NET ASSET VALUE: 20.08% 27.28% 0.04% 11.94% 12.14% 8.81% 38.55% 4.40%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets....... 0.53% 0.54% 0.60% 0.55% 0.56% 0.87% 0.95% 0.95%+
Net investment income (loss) to
average net assets................. 1.99% 2.42% 2.45% 2.10% 2.21% (0.32)% (0.89)% (0.95)%+
Portfolio turnover................... 50.33% 55.48% 15.29% 10.70% 12.57% 167.20% 96.62% --
Average commission rate paid......... $0.0561 $0.0530
Net assets, end of period (000s omitted) $37,168 $28,836 $20,168 $21,861 $24,987 $60,645 $38,442 $495
Without management fee waiver and
expense reimbursement:++
Net investment income (loss) per share $0.361 $(0.436)
Ratios:
Expenses to average net assets..... 0.62% 13.96%+
Net investment income (loss) to
average net assets............... 2.43% (13.96)%+
</TABLE>
<TABLE>
<CAPTION>
Global Growth Global Smaller
Frontier Portfolio Opportunities Portfolio Companies Portfolio
---------------------------- ----------------------- ---------------------------
Year Ended 10/11/94** 5/1/96* Year Ended 10/11/94**
December 31, to to December 31, to
-------------- --------------
1996 1995 12/31/94 12/31/96 1996 1995 12/31/94
------ ------- -------- -------- ------ ------ --------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $13.560 $10.580 $10.000 $10.000 $11.670 $10.310 $10.000
------- ------- ------- ------- ------- ------- -------
Net investment income (loss)......... 0.001 (0.001) (0.012) 0.008 0.022 0.051 0.058
Net realized and unrealized gain
on investments..................... 3.220 3.512 0.592 0.018 2.305 2.037 0.266
Net realized and unrealized gain (loss)
from foreign currency transactions. -- -- -- (0.104) (0.158) (0.301) 0.029
------- ------- ------- ------- ------- ------- -------
Increase (decrease) from investment
operations........................ 3.221 3.511 0.580 (0.078) 2.169 1.787 0.353
Dividends paid....................... -- -- -- (0.012) (0.018) (0.052) (0.043)
Distributions from net realized gain (1.801) (0.531) -- -- (0.951) (0.375) --
------- ------- ------- ------- ------- ------- -------
Net increase (decrease) in net asset value 1.420 2.980 0.580 (0.090) 1.200 1.360 0.310
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period....... $14.980 $13.560 $10.580 $ 9.910 $12.870 $11.670 $10.310
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
TOTAL RETURN BASED ON NET ASSET VALUE: 23.93% 33.28% 5.80% (0.78)% 18.66% 17.38% 3.53%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets....... 0.92% 0.95% 0.95%+ 1.40%+ 1.40% 1.39% 1.20%+
Net investment income (loss) to average
net assets......................... (0.37)% (0.55)% (0.70)%+ 0.37%+ 0.23% 0.64% 3.14%+
Portfolio turnover................... 119.74% 106.48% -- 12.99% 62.31% 55.65% --
Average commission rate paid......... $0.0532 $0.0522 $0.0219
Net assets, end of period (000s omitted) $31,672 $12,476 $169 $1,590 $16,876 $4,837 $132
Without management fee waiver and
expense reimbursement:++
Net investment loss per share $(0.019) $(1.319) $(0.255) $(0.044) $(0.051) $(1.225)
Ratios:
Expenses to average net assets..... 1.37% 40.47%+ 6.04%+ 1.90% 3.84% 37.25%+
Net investment loss to average net assets (0.97)% (40.22)%+ (4.27)%+ (0.27)% (1.81)% (32.91)%+
- -----------------------
* Commencement of operations.
** Commencement of investment operations.
+ Annualized.
++ The Manager and Subadviser, at their discretion, reimbursed expenses and/or
waived management fees for certain periods presented.
</TABLE>
See Notes to Financial Statements.
-- P-66 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Technology
Portfolio International Portfolio
----------------- -----------------------------------------
5/1/96* 5/3/93*
to Year Ended December 31, to
----------------------------
12/31/96 1996 1995 1994 12/31/93
-------- ------- ------- -------- --------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $10.000 $12.390 $11.340 $11.370 $10.000
------- ------- ------- ------- -------
Net investment income (loss)......... (0.004) 0.074 0.154 0.131 0.021
Net realized and unrealized gain (loss)
on investments..................... 0.305 1.124 0.896 (0.306) 1.518
Net realized and unrealized gain (loss)
from foreign currency transactions. 0.099 (0.323) 0.236 0.325 0.099
------- ------- ------- ------- -------
Increase from investment operations.. 0.400 0.875 1.286 0.150 1.440
Dividends paid....................... -- (0.068) (0.151) (0.064) (0.053)
Distributions from net realized gain (0.080) (0.237) (0.085) (0.116) (0.017)
------- ------- ------- ------- -------
Net increase (decrease) in net asset value 0.320 0.570 1.050 (0.030) 1.370
------- ------- ------- ------- -------
Net asset value, end of period....... $10.320 $12.960 $12.390 $11.340 $11.370
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL RETURN BASED ON NET ASSET VALUE: 4.01% 7.08% 11.34% 1.32% 14.40%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets....... 1.40%+ 1.40% 1.35% 1.20% 1.20%+
Net investment income to
average net assets................. 0.60%+ 0.70% 1.01% 1.17% 1.30%+
Portfolio turnover................... 45.04% 48.53% 41.40% 47.34% 2.82%
Average commission rate paid......... $0.0160 $0.0191
Net assets, end of period (000s omitted) $1,364 $7,242 $4,183 $1,776 $648
Without management fee waiver and
expense reimbursement:++
Net investment income (loss) per share $(0.202) $(0.042) $0.001 $(0.419) $(1.004)
Ratios:
Expenses to average net assets..... 4.71%+ 2.30% 3.40% 6.12% 17.94%+
Net investment income (loss) to
average net assets............... (2.71)%+ (0.20)% (1.04)% (3.75)% (15.44)%+
</TABLE>
<TABLE>
<CAPTION>
High-Yield Bond
Portfolio Income Portfolio
------------------- -----------------------------------------
Year 5/1/95*
Ended to Year Ended December 31,
-----------------------------------------
12/31/96 12/31/95 1996 1995 1994 1993 1992
--------- --------- ------ ------ ------ ------ ------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $10.500 $10.000 $10.560 $ 9.970 $11.380 $11.390 $11.250
------- ------- ------- ------- ------- ------- -------
Net investment income (loss)......... 0.768 0.218 0.579 0.604 0.689 0.828 0.862
Net realized and unrealized gain (loss)
on investments..................... 0.766 0.519 0.126 1.187 (1.369) 0.576 0.896
------- ------- ------- ------- ------- ------- -------
Increase (decrease) from investment
operations........................ 1.534 0.737 0.705 1.791 (0.680) 1.404 1.758
Dividends paid....................... (0.766) (0.219) (0.579) (0.604) (0.730) (0.828) (0.987)
Distributions from net realized gain (0.078) (0.018) (0.166) (0.597) -- (0.586) (0.631)
------- ------- ------- ------- ------- ------- -------
Net increase (decrease) in net asset value 0.690 0.500 (0.040) 0.590 (1.410) (0.010) 0.140
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period....... $11.190 $10.500 $10.520 $10.560 $ 9.970 $11.380 $11.390
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
TOTAL RETURN BASED ON NET ASSET VALUE: 14.62% 7.37% 6.66% 17.98% (5.96)% 12.37% 15.72%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets....... 0.70% 0.70%+ 0.59% 0.60% 0.60% 0.64% 0.68%
Net investment income to
average net assets................. 9.77% 7.46%+ 5.37% 5.55% 6.34% 6.40% 7.53%
Portfolio turnover................... 117.01% 67.55% 19.59% 51.22% 29.76% 38.38% 39.46%
Average commission rate paid......... $0.0600
Net assets, end of period (000s omitted) $11,176 $3,009 $13,717 $12,619 $10,050 $11,220 $11,363
Without management fee waiver and
expense reimbursement:++
Net investment income (loss) per share $0.747 $0.117 $0.602 $0.670 $0.826
Ratios:
Expenses to average net assets..... 0.88% 4.38%+ 0.62% 0.77% 0.65%
Net investment income (loss) to
average net assets............... 9.59% 3.78%+ 5.53% 6.17% 6.39%
- -----------------------
* Commencement of operations.
** Commencement of investment operations.
+ Annualized.
++ The Manager and Subadviser, at their discretion, reimbursed expenses and/or
waived management fees for certain periods presented.
</TABLE>
See Notes to Financial Statements.
-- P-67 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
- -------------------------------------------------------------------------
The Directors 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 Bond Portfolio, Seligman Capital Portfolio, Seligman
Cash Management Portfolio, Seligman Common Stock Portfolio, Seligman
Communications and Information Portfolio, Seligman Frontier Portfolio, Seligman
Henderson Global Growth Opportunities Portfolio, Seligman Henderson Global
Smaller Companies Portfolio, Seligman Henderson Global Technology Portfolio,
Seligman Henderson International Portfolio, Seligman High-Yield Bond Portfolio,
and Seligman Income Portfolio, collectively referred to as the "Fund") as of
December 31, 1996, and the related statements of operations for the year then
ended, the statements of changes in net 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 and financial statement highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with 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 and financial statement highlights. Our procedures include
confirmation of securities owned as of December 31, 1996, 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 Seligman Portfolios, Inc. at December
31, 1996, 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.
Ernst & Young LLP
New York, New York
February 4, 1997
-- P-68 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
PROXY RESULTS
- -------------------------------------------------------------------------------
Seligman Portfolios, Inc. Shareholders voted on the following proposals at the
Special Meeting of Shareholders held on September 30, 1996, in New York, New
York. Each Director was elected, and all other proposals were approved. The
description of each proposal and number of shares voted are as follows:
<TABLE>
<CAPTION>
FOR WITHHELD
---------- ----------
ELECTION OF DIRECTORS:
<S> <C> <C>
Fred E. Brown 21,279,462 468,265
John R. Galvin 21,336,434 411,293
Alice S. Ilchman 21,332,223 415,504
Frank A. McPherson 21,327,238 420,489
John E. Merow 21,325,582 422,145
Betsy S. Michel 21,336,434 411,293
William C. Morris 21,333,631 414,096
James C. Pitney 21,319,189 428,538
James Q. Riordan 21,319,189 428,538
Ronald T. Schroeder 21,336,434 411,293
Robert L. Shafer 21,336,434 411,293
James N. Whitson 21,336,434 411,293
Brian T. Zino 21,332,774 414,953
</TABLE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
---------- ---------- --------
<S> <C> <C> <C>
RATIFICATION OF ERNST &YOUNG LLP
AS INDEPENDENT AUDITORS: 21,259,386 154,666 333,675
APPROVAL OF A CHANGE IN THE
INVESTMENT OBJECTIVE OF
SELIGMAN HENDERSON GLOBAL
(now, International) PORTFOLIO: 413,611 14,334 15,020
</TABLE>
-- P-69 --
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
BOARD OF DIRECTORS
- -------------------------------------------------------------------------------
FRED E. BROWN
Director and Consultant,
J. & W. Seligman & Co. Incorporated
JOHN R. GALVIN2
Dean, Fletcher School of Law and Diplomacy
at Tufts University
Director, USLIFE Corporation
ALICE S. ILCHMAN3
President, Sarah Lawrence College
Trustee, Committee for Economic Development
Director, NYNEX
Chairman, The Rockefeller Foundation
FRANK A. MCPHERSON2
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. MICHEL2
Director or Trustee,
Various Organizations
WILLIAM C. MORRIS1
Chairman
Chairman of the Board
J. & W. Seligman & Co. Incorporated
Chairman, Carbo Ceramics Inc.
Director, Kerr-McGee Corporation
JAMES C. PITNEY3
Partner, Pitney, Hardin, Kipp & Szuch, Law Firm
Director, Public Service Enterprise Group
JAMES Q. RIORDAN3
Director, The Brooklyn Union Gas Company
Trustee, Committee for Economic Development
Director, Dow Jones & Co., Inc.
Director, Public Broadcasting Service
RONALD T. SCHROEDER1
Managing Director,
J. & W. Seligman & Co. Incorporated
ROBERT L. SHAFER3
Director or Trustee,
Various Organizations
JAMES N. WHITSON2
Executive Vice President and Director,
Sammons Enterprises, Inc.
Director, C-SPAN
Director, Red Man Pipe and Supply Company
BRIAN T. ZINO1
President and Managing Director,
J. & W. Seligman & Co. Incorporated
Chairman and President,
Seligman Data Corp.
- ---------------------------------
Member:
1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
- -------------------------------------------------------------------------------
EXECUTIVE OFFICERS
- -------------------------------------------------------------------------------
WILLIAM C. MORRIS
Chairman
BRIANT.ZINO
President
BRIAN ASHFORD-RUSSELL
Vice President
DANIEL J. CHARLESTON
Vice President
IAIN CLARK
Vice President
LEONARD J. LOVITO
Vice President
NITIN MEHTA
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
SELIGMAN ANNUAL
PART C. OTHER INFORMATION
- ------- -----------------
Item 24. Financial Statements and Exhibits
- -------- ---------------------------------
(a) Financial Statements:
Part A - Financial Highlights from June 21, 1988 (commencement of
operations) toDecember 31, 1996 for Seligman Bond Portfolio,
Seligman Capital Portfolio, Seligman Cash Management Portfolio,
Seligman Common Stock Portfolio, and Seligman Income Portfolio; from
May 3, 1993 (commencement of operations) to December 31, 1996 for
the Seligman Henderson International Portfolio; from October 11,
1994 (commencement of operations) to December 31, 1996 for Seligman
Communications and Information Portfolio, Seligman Frontier
Portfolio and Seligman Henderson Global Smaller Companies Portfolio;
from May 1, 1995 (commencement of operations) to December 31, 1996
for Seligman High-Yield Bond Portfolio; and from May 1, 1996
(commencement of operations) toDecember 31, 1996 for Seligman
Henderson Global Growth Opportunities Portfolio and Seligman
Henderson Global Technology Portfolio.
Part B - Financial Statements are included in the Fund's audited 1996
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, 1996; Statements of
Assets and Liabilities as of December 31, 1996; Statements of
Operations for the year/period ended December 31, 1996; (for the
period May 1, 1996 (commencement of operations) toDecember 31, 1996
for the Seligman Henderson Global Growth Opportunities Portfolio and
Seligman Henderson Global Technology Portfolio); Statements of
Changes in Net Assets for the years ended December 31, 1996 and 1995
for Seligman Bond Portfolio, Seligman Capital Portfolio, Seligman
Cash Management Portfolio, Seligman Common Stock Portfolio, Seligman
Communications and Information Portfolio, Seligman Frontier
Portfolio, Seligman Henderson Global Smaller Companies Portfolio,
Seligman Henderson International Portfolio, and Seligman Income
Portfolio; for the year ended December 31, 1996 and the period May
1, 1995 (commencement of operations) to December 31, 1995 for
Seligman High-Yield Bond Portfolio; and for the period May 1, 1996
(commencement of operations) to December 31, 1996 for the Seligman
Henderson Global Growth Opportunities Portfolio and Seligman
Henderson Global Technology Portfolio; Notes to Financial
Statements; Financial Highlights for the five years ended December
31, 1996 for Seligman Bond Portfolio, Seligman Capital Portfolio,
Seligman Cash Management Portfolio, Seligman Common Stock Portfolio,
and Seligman Income Portfolio; for the period May 3, 1993
(commencement of operations) to December 31, 1996 for Seligman
Henderson International Portfolio; for the period October 11, 1994
(commencement of operations) to December 31, 1996 for Seligman
Communications and Information Portfolio, Seligman Frontier
Portfolio and Seligman Henderson Global Smaller Companies Portfolio;
for the period May 1, 1995 (commencement of operations) to December
31, 1996 for Seligman High-Yield Bond Portfolio; and for the period
May 1, 1996 (commencement of operations) toDecember 31, 1996 for
Seligman Henderson Global Growth Opportunities Portfolio and
Seligman Henderson Global Technology Portfolio; Report of
Independent Auditors.
(b) Exhibits: All Exhibits have been previously filed, except Exhibits
marked with an asterisk (*) which are filed herewith.
(1) Form of Articles of Amendment and Restatement of Articles
of Incorporation. (Incorporated by reference to Post-Effective
Amendment No. 19 filed on November 1, 1996.)
(2) By-laws of Registrant.*
(3) Not applicable.
(4) Not applicable.
PART C. OTHER INFORMATION (cont'd)
- ------- --------------------------
(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) Not applicable.
(7) Not applicable.
(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) 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.)
(c) Recordkeeping Agreement in respect of Seligman Henderson Global
Portfolio. (Incorporated by reference to Post-Effective Amendment
No. 10 filed on April 26, 1993.)
(d) 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.)
(e) Second Amendment to Custodian Agreement in respect of Seligman
High-Yield Bond Portfolio. (Incorporated by reference to
Post-Effective Amendment No. 18 filed on May 2, 1996.)
(f) Second Amendment to Recordkeeping Agreement in respect of
Seligman Henderson Global Growth Opportunities Portfolio and
Seligman Henderson Global Technology Portfolio. (Incorporated by
reference to Post-Effective Amendment No. 18, filed May 2, 1996.)
(g) Custodian Agreement between Registrant and Morgan Stanley Trust
Company in respect of the Seligman Henderson Portfolios.
(Incorporporated by reference to Post-Effective Amendment No. 19
filed on November 1, 1996.)
<PAGE>
PART C. OTHER INFORMATION (cont'd)
- ------- --------------------------
(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.
(Incorporated by reference to Post-Effective Amendment No. 18,
filed May 2, 1996.)
(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. (Incorporated by reference to Post-Effective Amendment
No. 18, filed May 2, 1996.)
(10) Opinion and Consent of Counsel.
(Incorporated by reference to Post-Effective Amendment No. 18,
filed May 2, 1996.)
(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). (Incorporated by
reference to Post-Effective Amendment No. 18, filed May 2, 1996.)
<PAGE>
PART C. OTHER INFORMATION (cont'd)
- ------- --------------------------
(14) The Seligman 401(k) Retirement Plan Marketing. (Incorporated by
reference to Post-Effective Amendment No. 3 filed on May 1, 1989.)
(15) Not applicable.
(16) Not applicable.
(17) Financial Data Schedules meeting the requirements of Rule 483 under the
Securities Act of 1933.*
(18) Not applicable.
Other Exhibits: Powers of Attorney*
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
- -------- -------------------------------------------------------------
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
- -------- -------------------------------
As of March 31, 1997, there were eight record holders of Capital
Stock of the Registrant.
ITEM 27. INDEMNIFICATION
- -------- ---------------
Reference is made to the provisions of Article Eleventh of
Registrant's Amended and Restated Articles of Incorporation filed
as Exhibit 24(b)(1) of Post-Effective Amendment No. 19 to the
Registration Statement, filed November 6, 1996 and Article IV of
Registrant's Amended and Restated By-laws filed as Exhibit 24(b)(2)
to this Post-Effective Amendment No.
20 to the Registration Statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised by the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
<PAGE>
PART C. OTHER INFORMATION (cont'd)
- ------- --------------------------
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 seventeen 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 Municipal Fund Series, Inc., Seligman Municipal Series
Trust, Seligman New Jersey Municipal Fund, Inc., Seligman
Pennsylvania Municipal Fund Series, Seligman Quality Municipal Fund,
Inc., Seligman Select Municipal Fund, Inc., Seligman Value Fund
Series, Inc., and Tri-Continental Corporation.
The Subadviser also serves as subadviser to nine 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., Seligman Value Fund Series, Inc., and Tri-Continental
Corporation.
The Manager and Subadviser each 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. 801-15798 and 801-40670, respectively), which
were filed on August 7, 1996 and October 3, 1996, respectively).
ITEM 29. NOT APPLICABLE.
- -------- ---------------
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 for Seligman Bond Portfolio, Seligman Capital Portfolio,
Seligman Cash Management Portfolio, Seligman Common Stock Portfolio,
Seligman Communications and Information Portfolio, Seligman Frontier
Portfolio, Seligman High-Yield Bond Portfolio, and Seligman Income
Portfolio and Recordkeeping agent for all Portfolios: Investors
Fiduciary Trust Company, 127 West 10th Street, Kansas City, Missouri
64105.
Custodian for Seligman Henderson Global Growth Opportunities
Portfolio, Seligman Henderson Global Smaller Companies Portfolio,
Seligman Henderson Global Technology Portfolio, and Seligman
Henderson International Portfolio: Morgan Stanley Trust Company, One
Pierrepont Plaza, Brooklyn, New York 11201.
Transfer, Redemption and Other Shareholder Account Services for all
Portfolios: Investors Fiduciary Trust Company, 127 West 10th Street,
Kansas City, Missouri 64105.
<PAGE>
PART C. OTHER INFORMATION (cont'd)
- ------- --------------------------
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. 20 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 17th day of April, 1997.
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. 20 to the Registration
Statement has been signed below by the following persons, in the capacities
indicated on April 17, 1997.
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
John R. Galvin, Director )
Alice S. Ilchman, Director )
Frank A. McPherson, Director )
John E. Merow, Director )
Betsy S. Michel, Director ) /s/ BRIAN T. ZINO
James C. Pitney, Director ) --------------------------------
James Q. Riordan, Director ) *Brian T. Zino, Attorney-In-Fact
Ronald T. Schroeder, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
<PAGE>
SELIGMAN PORTFOLIOS, INC.
Post-Effective Amendment No. 20 to the
Registration Statement on Form N-1A
EXHIBIT INDEX
Form N-1A Item No. Description
- ------------------ -----------
24(b)(2) By-Laws
24(b)(11) Consent of Independent Auditors
24(b)(17) Financial Data Schedules
Other Exhibits: Powers of Attorney
RESTATEMENT
of the
BY-LAWS
of
SELIGMAN MUTUAL BENEFIT PORTFOLIOS, INC.
<PAGE>
SELIGMAN MUTUAL BENEFIT PORTFOLIOS, INC.
BY-LAWS
ARTICLE I
SHAREHOLDERS
------------
SECTION 1. PLACE OF MEETINGS. All meetings of shareholders shall be
held at the principal office of the Corporation in the City of Baltimore or at
such other place within the United States as may from time to time be designated
by the and stated in the notice of such meeting.
SECTION 2. ANNUAL MEETINGS. The annual meeting of the shareholders of
the Corporation shall be held during the 31-day period commencing April 15 of
each year on such day and at such hour as may from time to time be designated by
the Board of Directors and stated in the notice of such meeting, for the
transaction of such business as may properly be brought before the meeting;
provided, however, that an annual meeting of shareholders shall not be required
to be held in any year in which none of the following is required to be acted on
by shareholders pursuant to the Investment Company Act of 1940: election of
directors; approval of the investment advisory agreement; ratification of the
selection of independent public accountants; or approval of a distribution
agreement.
SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders for
any purpose or purposes may be called by the Chairman of the Board, the
President, a majority of the Directors or a majority of the Executive Committee,
and shall be called by the Secretary upon receipt of the written request of the
holders of shares entitled to not less than twenty-five percent (25%) of all the
votes entitled to be cast at such meeting. Such request shall state the purpose
or purposes of the proposed meeting, and the matters proposed to be acted on
thereat. The Secretary shall inform such shareholders of the reasonably
estimated costs of preparing and mailing such notice of meeting, and upon
payment to the Corporation of such costs the Secretary shall give notice stating
the purpose or purposes of the meeting, as required in this Article and by law,
to all shareholders entitled to notice of such meeting. No special meeting need
be called upon the request of the holders of Shares entitled to cast less than a
majority of all votes entitled to be cast at such meeting, to consider any
matter which is substantially the same as a matter voted upon at any special
meeting of shareholders held during the preceding twelve months.
SECTION 4. NOTICE OF SHAREHOLDERS' MEETINGS. Not less than ten days nor
more than ninety days before the date of any shareholders' meeting, the
Secretary shall give to each shareholder entitled to vote at or to notice of
such meeting, written or printed notice stating the time and place of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called, either by mail or presenting it to him personally or by
leaving it at his residence or usual place of business. If mailed, such notice
shall be deemed to be given when deposited in the United States mail addressed
to the shareholder at his post office address as it appears on the records of
the Corporation, with postage thereon prepaid.
0
<PAGE>
No notice of the time, place or purpose of any meeting of shareholders
need be given to any shareholder who attends in person or by proxy or to any
shareholder who executes a written waiver of such notice, either before or after
the meeting is held, and which notice is filed with the records of the meeting.
SECTION 5. QUORUM; ADJOURNMENT; MAJORITY VOTE. The presence in person
or by proxy of the holders of one-third of the Shares of all Classes issued and
outstanding and entitled to vote thereat shall constitute a quorum for the
transaction of any business at all meetings of the shareholders except as
otherwise provided by law or in the Articles of Incorporation and except that
where the holders of Shares of any Class are entitled to a separate vote as a
Class (a "Separate Class") or where the holders of Shares of two or more (but
not all) Classes are required to vote as a single Class (a "Combined Class"),
the presence in person or by proxy of the holders of one-third of the Shares of
that Separate Class or Combined Class, as the case may be, issued and
outstanding and entitled to vote thereat shall constitute a quorum for such
vote. If, however, a quorum with respect to all Classes, a Separate Class or a
Combined Class, as the case may be, shall not be present or represented at any
meeting of the shareholders, the holders of a majority of the Shares of all
Classes, such Separate Class or such Combined Class, as the case may be, present
in person or by proxy and entitled to vote shall have power to adjourn the
meeting from time to time as to all Classes, such Separate Class or such
Combined Class, as the case may be, without notice other than announcement at
the meeting, until the requisite number of Shares entitled to vote at such
meeting shall be present. At such adjourned meeting at which the requisite
number of Shares entitled to vote thereat shall be represented any business day
may be transacted which might have been transacted at the meeting as originally
notified. The absence from any meeting of shareholders of the number of Shares
in excess of one-third of the Shares of all Classes or of the affected Class or
Classes, as the case may be, which may be required by the laws of the State of
Maryland, the Investment Company Act of 1940 or any other applicable law or the
Articles of Incorporation for action upon any given matter, shall not prevent
action of such meeting upon any other matter of matters which may properly come
before the meeting, if there shall be present thereat, in person or by proxy,
holders of the number of Shares required for action in respect of such other
matter or matters.
SECTION 6. VOTING AND INSPECTORS. All elections shall be had and all
questions decided by a majority of the votes cast, without regard to Class, at a
duly constituted meeting, except as otherwise provided by law or by the Articles
of Incorporation or by these By-Laws and except that with respect to a question
as to which the holders of Shares of any Class or Classes are entitled or
required to vote as a Separate Class or a Combined Class, as the case may be,
such question shall be decided as to such Separate Class or such Combined Class,
as the case may be, by a majority (except as otherwise provided by law, by the
Articles of Incorporation or by these By-Laws) of the votes cast by Shares of
such Separate Class or such Combined Class, as the case may be.
With respect to all Shares having voting rights (a) a shareholder may
vote the Shares owned of record by him either in person or by proxy executed in
writing by the shareholder or by his duly authorized attorney-in-fact, provided
that no proxy shall be valid after eleven months
2
<PAGE>
from its date unless otherwise provided in the proxy and (b) in all elections
for directors every shareholder shall have the right to vote, in person or by
proxy, the Shares owned of record by him, for as many persons as there are
directors to be elected and for whose election he has a right to vote.
At any election of Directors, the Chairman of the meeting may, and upon
the request of the holders of ten percent (10%) of the Shares entitled to vote
at such election shall, appoint two inspectors of election who shall first
subscribe an oath or affirmation to execute faithfully the duties of inspectors
at such election with strict impartiality and according to the best of their
ability, and shall after the election make a certificate of the result of the
vote taken. No candidate for the office of Director shall be appointed such
inspector.
SECTION 7. CONDUCT OF SHAREHOLDERS' MEETINGS. Each meeting of
shareholders shall be presided over by the Chairman of the Board, or if he is
not present, by the President or a Vice-President of the Corporation designated
by the Chairman of the Board to act as chairman of the meeting, or if none of
the forgoing is present, by a chairman to be elected at the meeting. The
Secretary of the Corporation, or if he is not present, an Assistant Secretary,
or if neither is present, a secretary to be named at the meeting, shall act as
secretary of the meeting.
At every meeting of the shareholders, all proxies shall be required and
taken in charge of and all ballots shall be required and canvassed by the
Secretary of the meeting, who shall decide all questions touching the
qualification of votes, the validity of the proxies and the acceptance or
rejection of votes, unless inspectors of election shall have been appointed by
the Chairman of the meeting, in which event such inspectors of election shall
decide all such questions.
SECTION 8. ACTION WITHOUT MEETINGS. Except as otherwise provided by
law, the provisions of these By-Laws relating to notices and meetings to the
contrary not withstanding, any action required or permitted to be taken at any
meeting of shareholders may be taken without a meeting if the following are
filed with the records of the shareholders' meetings: (1) a unanimous written
consent which sets forth the action and is signed by each shareholder entitled
to vote on the matter; and (2) a written waiver of any right to dissent signed
by each shareholder entitled to notice of the meeting but not entitled to vote
at it.
ARTICLE II
DIRECTORS
---------
SECTION 1. NUMBER; TERM. The business and affairs of the Corporation
shall be managed under the direction of not less than two (2) and not more than
twenty (20) directors, as may from time to time be fixed by vote of a majority
of the entire Board of Directors, the initial number of such directors to be two
(2); provided that the tenure of office of a director shall not be affected by
any change in the number of directors so made by the Board.
3
<PAGE>
At any annual meeting of shareholders of the shareholders shall elect
directors to hold office until the next annual meeting or until their successors
are elected and qualify, subject to the right of removal granted by law.
Directors need not be shareholders.
SECTION 2. VACANCIES. Subject to Section 5 of this Article II, any
vacancy occurring in the Board of Directors for any cause other than by reason
of an increase in the number of directors may be filled by the vote of a
majority of the remaining directors, although such majority is less than a
quorum. Any vacancy occurring by reason of an increase in the number of
directors may be filled by action of a majority of the entire Board of
Directors. A director elected by the Board of Directors to fill a vacancy shall
be elected to hold office until the next annual meeting of shareholders or until
his successor is elected and qualifies.
SECTION 3. MEETINGS. Meetings of the Board of Directors, regular or
special, may be held at any place in or out of the State of Maryland as the
Board may from time to time determine or as shall be specified or filed in the
respective notices or waivers of notice thereof.
Regular meetings of the Board shall be held at such time as the Board
may from time to time determine. No notice need be given of regular meetings of
the Board.
Special meetings of the Board may be held at any time upon call of the
Chairman of the Board, the Secretary or two or more of the directors, by oral,
telegraphic or written notice duly served on or sent or mailed to each director
not less than two days before such meeting. Such notice need not include a
statement of the business to be transacted at, or the purpose of, such special
meeting. A written waiver of notice, signed by the director entitled to such
notice and filed with the records of the meeting, whether before or after the
holding thereof, or actual attendance at the meeting, shall be deemed equivalent
to the giving of notice to such director.
At all meetings of the Board, one third of the entire Board, but not
less than two directors, shall constitute a quorum for the transaction of
business. If there be less than a quorum present at any meeting of the Board, a
majority of those present may adjourn the meeting from time to time.
The action of a majority of the directors present at a meeting at which
a quorum is present shall be the action of the Board unless the concurrence of a
greater proportion is required for such action by statute, the Articles of
Incorporation or these By-Laws.
SECTION 4. AUDIT COMMITTEE. The Board of Directors may by the
affirmative vote of a majority of the entire Board appoint from its members an
Audit Committee composed of two or more directors, who are not "interested
persons" (as defined in the Investment Company Act of 1940) of the Corporation,
as the Board may from time to time determine. The Audit Committee, if so
appointed, shall (a) recommend independent public accountants for selection by
the Board, (b) review the scope of audit, accounting and financial internal
controls and the quality and adequacy of the Corporation's accounting staff with
the independent public accountants and such other persons as may be deemed
appropriate, (c) review with the accounting staff and the independent public
accounts the compliance of transactions of the
4
<PAGE>
Corporation with J. & W. Seligman & Co. Incorporated or any other manager of the
affairs of the Corporation and with any affiliate of such firm or manager with
the financial terms of applicable agreements, (d) review reports of the
independent public accountants and comment to the Board when warranted, (e)
report to the Board at least once each year and at such other times as the
committee deems desirable, and (f) be directly available at all times to the
independent public accountants and responsible officers of the Corporation for
consultation on audit, accounting and related financial matters.
SECTION 5. DIRECTOR NOMINATING COMMITTEE. The Board of Directors may by
the affirmative vote of a majority of the entire Board appoint from its members
a Director Nominating Committee composed of two or more directors. The Director
Nominating Committee, if so appointed, shall recommend to the Board a slate of
persons to be nominated for election as directors by the shareholders at any
annual meeting of shareholders and a person to be elected to fill any vacancy
occurring for any reason in the Board.
SECTION 6. PORTFOLIO TRANSACTIONS COMMITTEE. The Board of Directors may
by the affirmative vote of a majority of the entire Board appoint from its
members a Portfolio Transactions Committee composed of two or more directors who
are not "interested persons" of the Corporation as the Board may from time to
time determine. The Portfolio Transactions Committee, if so appointed, shall
maintain familiarity with, report to the Board concerning, and make such
recommendations to the Board as it may deem appropriate with respect to, the
procedures and practices followed in the handling of orders to buy and sell
portfolio securities for the Corporation and the commissions or other
compensation paid in respect of portfolio transactions.
SECTION 7. EXECUTIVE COMMITTEE. The Board of Directors may appoint from
its members an Executive Committee composed of two or more directors, as the
Board may from time to time determine, of which committee the Chairman of the
Board shall be a member. In the intervals between meetings of the Board, the
Executive committee, if so appointed, shall have the power of the Board to (a)
determine the value of securities and assets owned by the Corporation, (b) elect
or appoint officers of the Corporation to serve until the next meeting of the
Board and (c) take such action as may be necessary to manage the portfolio
security loan business of the Corporation.
All action by the Executive Committee shall be recorded and reported to
the Board at its meeting next succeeding such action.
SECTION 8. OTHER COMMITTEES. The Board of Directors may appoint from
among its members other committees composed of two or more of its directors
which shall have such powers as may be delegated or authorized by the resolution
appointing them.
SECTION 9. COMMITTEE PROCEDURES. The Board of Directors may at any time
change the members of any committee, fill vacancies or discharge any committee.
5
<PAGE>
In the absence of any member of any committee, the member or members
thereof present at any meeting, whether or not they constitute a quorum, may
appoint to act in the place of such absent member a member of the Board who,
except in the case of the Executive Committee, is not an "interested person" of
the Corporation.
Each committee may fix its own rules of procedure and may meet as and
when provided by those rules.
Two or more members of any committee shall constitute a quorum unless
the Board shall otherwise provide.
Copies of the minutes of all meetings of committees other than the
Nominating Committee and the Executive Committee shall be distributed to the
Board unless the Board shall otherwise provide.
SECTION 10. TELEPHONE MEETINGS. Members of the Board of Directors or a
committee of the Board of Directors may participate in a meeting by means of a
conference telephone or similar communications equipment if all persons
participating in the meeting can hear each other at the same time. Participation
in a meeting by these means constitutes presence in person at the meeting.
SECTION 11. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if a written consent to such action is signed by
all members of the Board or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or
committee.
SECTION 12. COMPENSATION OF DIRECTORS. The Board of Directors shall
have the authority to fix the compensation of directors for services in any
capacity.
ARTICLE III
OFFICERS
--------
SECTION 1. OFFICERS. The executive officers of the Corporation shall be
elected by the Board of Directors and shall be a Chairman of the Board, who
shall be the chief executive officer of the Corporation, a President, one or
more Vice-Presidents, a Secretary and a Treasurer. The Chairman of the Board
shall be selected from among the directors. The Board may also appoint such
other officers, employees and agents as it may deem appropriate. Any two or more
offices, except those of President and Vice-President, may be held by the same
person but no person shall execute, acknowledge or verify any instrument in more
than one capacity, if such instrument is required by law, the Articles of
Incorporation or these By-laws to be executed, acknowledged or verified by two
or more officers.
6
<PAGE>
SECTION 2. TERM. Officers shall serve for one year until their
successors are elected and shall qualify, but any officer may be removed (except
as a director) by action of a majority of the entire Board of Directors
whenever, in the judgment of the Board, the best interests of the Corporation
will be served thereby, but such removal shall be without prejudice to the
contractual rights, if any, of the person so removed.
SECTION 3. AUTHORITY AND DUTIES. All officers and agents of the
Corporation shall have such authority and perform such duties in the management
of the property and affairs of the Corporation as generally pertain to their
respective offices, as well as such authority and duties as may be determined by
resolution of the Board of Directors.
Without limiting the generality of the foregoing and subject to the
provisions of the Articles of Incorporation of the Corporation and to the order
of the Board of Directors, the Treasurer shall be the chief financial and
accounting officer of the Corporation and as such shall receive, or cause to be
received, and give, or cause to be given, receipts for all funds and securities
paid or delivered to, or for the account of the Corporation; shall cause such
funds and securities to be deposited for the account of the Corporation with
such custodians as may be designated by the Board of Directors; shall pay or
cause to be paid out of the funds of the Corporation all just debts of the
Corporation upon their maturity; shall maintain, or cause to be maintained,
accurate records of all receipts, disbursements, assets, liabilities and
transaction of the Corporation; shall see that adequate audits thereof are
regularly made; and shall, when required by the Board of Directors, render
accurate statements of the condition of the Corporation.
SECTION 4. COMPENSATION OF OFFICERS. The Board of Directors may
determine what, if any, compensation shall be paid to officers of the
Corporation.
ARTICLE IV
INDEMNIFICATION
---------------
The Corporation shall indemnify directors, officers, employees and
agents of the Corporation against judgments, fines, settlements, penalties and
expenses to the fullest extent authorized, and in the manner permitted by
applicable federal and state law, as set forth in the Articles of Incorporation
of the Corporation.
ARTICLE V
Capital Stock
-------------
SECTION 1. CERTIFICATES OF STOCK. Shareholders shall not be entitled to
receive certificates evidencing their share ownership in any class or classes,
unless the Directors shall by resolution otherwise determine. At the time of
issue or transfer of shares without certificates, the Corporation shall send the
shareholder a written statement of the information required on certificates by
Section 2-211 of the Maryland Corporations and Associations Law.
7
<PAGE>
SECTION 2. TRANSFER OF SHARES. Shares of the Corporation shall be
transferable on the register of the Corporation by the holder thereof in person
or by his agent duly authorized in writing, upon delivery to the Directors or
the Transfer Agent of a duly executed instrument of transfer, together with such
evidence of the genuineness of each such execution and authorization of such
other matters as the Corporation or its agents may reasonably require.
SECTION 3. RECORD DATES; CLOSING OF TRANSFER BOOKS. The Board of
Directors may fix, in advance, a date as the record date for the purpose of
determining shareholders of any Class entitled to notice of, or to vote at, any
meeting of shareholders of any Class or shareholders entitled to receive payment
of any dividend or the allotment of any rights to that Class or in order to make
a determination of shareholders of any Class for any other proper purpose. Such
date in any case shall be not more than ninety days, and in case of a meeting of
shareholders, not less than ten days, prior to the date on which the particular
action, requiring such determination of shareholders, is to be taken.
SECTION 4. STOCK LEDGER. An original or duplicate stock ledger
containing the names and addresses of all shareholders and the number of Shares
of each Class held by each shareholder, shall be kept by the Secretary at the
office of the Corporation in the City of New York, or in Kansas City, Missouri,
or at such other office or agency of the Corporation in The City of New York and
Kansas City, as the Board of Directors may from time to time by resolution
determine.
ARTICLE VI
CHECKS, NOTES, ETC.
-------------------
All checks and drafts on the Corporation's bank accounts and all bills
of exchange and promissory notes, and all acceptances, obligations and other
instruments for the payment of money, shall be signed by such officer or
officers, or agent or agents, as shall be thereunto authorized from time to time
by the Board of Directors.
ARTICLE VII
BOOKS AND RECORDS
-----------------
The books of the Corporation other than the original or duplicate stock
ledger may be kept at such place or places in or out of the State of Maryland as
the Board of Directors may from time to time determine.
ARTICLE VIII
SEAL
----
8
<PAGE>
The Board of Directors shall provide a suitable corporate Seal, in such
form and bearing such inscriptions as it may determine.
9
<PAGE>
ARTICLE IX
FISCAL YEAR
-----------
The fiscal year of the Corporation shall begin on the first day of
January and shall end on the last day of December in each year, subject,
however, to change from time to time by the Board of Directors.
ARTICLE X
CUSTODIAN
---------
All securities and funds of the Corporation shall be held by one or
more custodians each of which shall be a bank or trust company having not less
than $2,500,000 aggregate capital, surplus and undivided profits, as shown by
its last published report, provided profits, as shown by its last published
report, provided any such custodian can be found ready and willing to act.
The terms of custody of such securities and funds shall include
provisions to the effect that the custodian shall deliver securities owned by
the Corporation only (a) upon sales of such securities for the account of the
Corporation and receipt by the custodian of payment therefore, (b) when such
securities are called, redeemed or retired or otherwise become payable, (c) in
exchange for or upon conversion into other securities alone or other securities
and cash whether pursuant to any plan or merger, consolidation, reorganization,
recapitalization or readjustment, or otherwise, (d) upon conversion of such
securities pursuant to their terms into other securities, (e) upon exercise of
subscription, purchase or other similar rights represented by such securities,
(f) for the purpose of exchanging interim receipt or temporary securities for
definitive securities, (g) for the purpose of redeeming in kind Shares of the
Corporation, (h) for loans of securities by the Corporation, or (i) for other
proper corporate purposes.
Such terms of custody shall also include provisions to the effect that
the custodian shall deliver funds of the Corporation only (a) upon the purchase
of securities for the portfolio of the Corporation and the delivery of such
securities to the custodian, (b) for the repurchase or redemption of Shares of
the Corporation, (c) for the payment of dividends, taxes, management or
supervisory fees or operating expenses, (d) for payments in connection with the
conversion, exchange or surrender of securities owned by the Corporation, (e)
for payments in connection with the return of securities loaned by the
Corporation or the reduction of cash collateral, or (f) for other proper
corporate purposes.
Upon the resignation or inability of any such custodian to serve, the
Corporation shall (a) use its best efforts to obtain a successor custodian, (b)
require the funds and securities of the Corporation held by the custodian to be
delivered to the successor custodian, and (c) in the event that no successor
custodian can be found, submit to the shareholders of the Corporation, before
permitting delivery of such funds and securities to anyone other than a
successor custodian, the question whether the Corporation shall be dissolved or
shall function without a custodian;
10
<PAGE>
provided, however, that noting herein contained shall prevent the termination of
any agreement between the Corporation and any such custodian with respect to any
Class of the Corporation's Shares (and with respect to the assets and
liabilities belonging to such Class) by the affirmative vote of the holders of a
majority of the outstanding Shares of such Class or Classes (voting as a single
class) entitled to vote.
Such terms of custody shall further provide that, pending appointment
of a successor custodian or a vote of the shareholders of the affected Class or
Classes to function without a custodian, a custodian shall not deliver funds and
other property of the Corporation to the Corporation, but may deliver them to a
bank or trust company of its own selection having not less than $2,500,000
aggregate capital, surplus, and undivided profits, as shown by its last
published report, as custodian for the Corporation to be held under terms
similar to those under which such funds and other property were held by the
retiring custodian.
Subject to such rules, regulations and orders as the Securities and
Exchange Commission may adopt, the Corporation may authorize or direct a
custodian to deposit all or any part of the securities owned by the Corporation
in a system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, or
such other person as may be permitted by the Commission, pursuant to which
system all securities of any particular class or series of any issuer deposited
within the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities, provided that
all such deposits shall be subject to withdrawal only upon the order of the
custodian or duly authorized sub-custodian.
The Corporation may also have such transfer agents and registrars of
its Shares as the Board of Directors shall from time to time determine. The
Board of Directors may employ and fix the powers, rights, duties,
responsibilities, privileges, immunities, and compensation of any such
custodian, transfer agent, or registrar, subject, however, to the foregoing
provisions of this Article.
As used herein, the term "receipt by the custodian of payment" shall
include the receipt of (a) a certified or official bank check, (b) an advice
that funds have been or will be credited to the account of the custodian at a
clearing agency registered under the Securities Exchange Act of 1934, or (c) a
bank wire from a correspondent bank of the custodian. As used herein, the term
"delivery of such securities to the custodian" shall include the receipt of (a)
securities in bearer form or in proper form for transfer, or (b) an advice that
securities have been credited to the account of the custodian at a clearing
agency registered under the Securities Exchange Act of 1934, or at the Federal
Reserve Bank of New York.
The Corporation may make such other arrangements for the custody of its
assets (including deposit arrangements) as may be required by any applicable
law, rule or regulation.
11
<PAGE>
ARTICLE XI
AMENDMENTS
----------
The Board of Directors is authorized and empowered to make, alter or
repeal the By-Laws of the Corporation, in any manner not inconsistent with the
laws of the State of Maryland or the Articles of Incorporation of the
Corporation.
12
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights" and "Custodians and Independent Auditors" and to the incorporation
by reference of our report dated February 4, 1997 in this Registration Statement
(Form N-1A No. 811-5221) of Seligman Portfolios, Inc.
/s/ ERNST & YOUNG LLP
---------------------------
ERNST & YOUNG LLP
New York, New York
April 10, 1997
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<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.69
<EXPENSE-RATIO> .87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 02
<NAME> SELIGMAN CASH MANAGEMENT PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 9835
<INVESTMENTS-AT-VALUE> 9835
<RECEIVABLES> 8
<ASSETS-OTHER> 32
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 9875
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 120
<TOTAL-LIABILITIES> 120
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9755
<SHARES-COMMON-STOCK> 9755
<SHARES-COMMON-PRIOR> 7800
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 9755
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 484
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 484
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 484
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (484)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 16950
<NUMBER-OF-SHARES-REDEEMED> (15479)
<SHARES-REINVESTED> 484
<NET-CHANGE-IN-ASSETS> 1955
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 36
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 58
<AVERAGE-NET-ASSETS> 9130
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .053
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.053)
<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> 03
<NAME> SELIGMAN COMMON STOCK PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 29237
<INVESTMENTS-AT-VALUE> 36966
<RECEIVABLES> 183
<ASSETS-OTHER> 61
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 37210
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 42
<TOTAL-LIABILITIES> 42
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29434
<SHARES-COMMON-STOCK> 2335
<SHARES-COMMON-PRIOR> 1868
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7729
<NET-ASSETS> 37168
<DIVIDEND-INCOME> 596
<INTEREST-INCOME> 249
<OTHER-INCOME> 0
<EXPENSES-NET> (178)
<NET-INVESTMENT-INCOME> 667
<REALIZED-GAINS-CURRENT> 4385
<APPREC-INCREASE-CURRENT> 1040
<NET-CHANGE-FROM-OPS> 6092
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 676
<NUMBER-OF-SHARES-REDEEMED> (537)
<SHARES-REINVESTED> 328
<NET-CHANGE-IN-ASSETS> 8332
<ACCUMULATED-NII-PRIOR> 3
<ACCUMULATED-GAINS-PRIOR> 219
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 134
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 178
<AVERAGE-NET-ASSETS> 33494
<PER-SHARE-NAV-BEGIN> 15.44
<PER-SHARE-NII> .334
<PER-SHARE-GAIN-APPREC> 2.789
<PER-SHARE-DIVIDEND> (.336)
<PER-SHARE-DISTRIBUTIONS> (2.307)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.92
<EXPENSE-RATIO> .53
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 08
<NAME> SELIGMAN FRONTIER PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 30395
<INVESTMENTS-AT-VALUE> 31579
<RECEIVABLES> 125
<ASSETS-OTHER> 58
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 31762
<PAYABLE-FOR-SECURITIES> 46
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 44
<TOTAL-LIABILITIES> 90
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 30489
<SHARES-COMMON-STOCK> 2114
<SHARES-COMMON-PRIOR> 920
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (1)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1184
<NET-ASSETS> 31672
<DIVIDEND-INCOME> 36
<INTEREST-INCOME> 86
<OTHER-INCOME> 0
<EXPENSES-NET> (203)
<NET-INVESTMENT-INCOME> (81)
<REALIZED-GAINS-CURRENT> 3411
<APPREC-INCREASE-CURRENT> 694
<NET-CHANGE-FROM-OPS> 4024
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1142
<NUMBER-OF-SHARES-REDEEMED> (177)
<SHARES-REINVESTED> 229
<NET-CHANGE-IN-ASSETS> 19196
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 6
<OVERDISTRIB-NII-PRIOR> (1)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 165
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 203
<AVERAGE-NET-ASSETS> 22147
<PER-SHARE-NAV-BEGIN> 13.56
<PER-SHARE-NII> .001
<PER-SHARE-GAIN-APPREC> 3.220
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.801)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.98
<EXPENSE-RATIO> .92
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> SELIGMAN HENDERSON GLOBAL GROWTH OPP PORT
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 8-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> MAY-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 1362
<INVESTMENTS-AT-VALUE> 1385
<RECEIVABLES> 72
<ASSETS-OTHER> 317
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1774
<PAYABLE-FOR-SECURITIES> 174
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 10
<TOTAL-LIABILITIES> 184
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1577
<SHARES-COMMON-STOCK> 160
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (10)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 23
<NET-ASSETS> 1590
<DIVIDEND-INCOME> 2
<INTEREST-INCOME> 5
<OTHER-INCOME> 1
<EXPENSES-NET> (6)
<NET-INVESTMENT-INCOME> 2
<REALIZED-GAINS-CURRENT> (10)
<APPREC-INCREASE-CURRENT> 23
<NET-CHANGE-FROM-OPS> 15
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 174
<NUMBER-OF-SHARES-REDEEMED> (14)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1590
<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> 25
<AVERAGE-NET-ASSETS> 631
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .008
<PER-SHARE-GAIN-APPREC> (.086)
<PER-SHARE-DIVIDEND> (.012)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.91
<EXPENSE-RATIO> 1.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 09
<NAME> SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 15985
<INVESTMENTS-AT-VALUE> 16211
<RECEIVABLES> 363
<ASSETS-OTHER> 441
<OTHER-ITEMS-ASSETS> 2
<TOTAL-ASSETS> 17017
<PAYABLE-FOR-SECURITIES> 101
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 40
<TOTAL-LIABILITIES> 141
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 16616
<SHARES-COMMON-STOCK> 1312
<SHARES-COMMON-PRIOR> 414
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 32
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 228
<NET-ASSETS> 16876
<DIVIDEND-INCOME> 132
<INTEREST-INCOME> 47
<OTHER-INCOME> 37
<EXPENSES-NET> (154)
<NET-INVESTMENT-INCOME> 62
<REALIZED-GAINS-CURRENT> 1144
<APPREC-INCREASE-CURRENT> 63
<NET-CHANGE-FROM-OPS> 1269
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 878
<NUMBER-OF-SHARES-REDEEMED> (72)
<SHARES-REINVESTED> 92
<NET-CHANGE-IN-ASSETS> 12040
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (1)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 110
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 209
<AVERAGE-NET-ASSETS> 11064
<PER-SHARE-NAV-BEGIN> 11.67
<PER-SHARE-NII> .022
<PER-SHARE-GAIN-APPREC> 2.147
<PER-SHARE-DIVIDEND> (.018)
<PER-SHARE-DISTRIBUTIONS> (.951)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.87
<EXPENSE-RATIO> 1.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 12
<NAME> SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 8-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> MAY-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 1353
<INVESTMENTS-AT-VALUE> 1422
<RECEIVABLES> 19
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1441
<PAYABLE-FOR-SECURITIES> 62
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15
<TOTAL-LIABILITIES> 77
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1295
<SHARES-COMMON-STOCK> 132
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 69
<NET-ASSETS> 1364
<DIVIDEND-INCOME> 1
<INTEREST-INCOME> 3
<OTHER-INCOME> 0
<EXPENSES-NET> (7)
<NET-INVESTMENT-INCOME> (3)
<REALIZED-GAINS-CURRENT> 9
<APPREC-INCREASE-CURRENT> 69
<NET-CHANGE-FROM-OPS> 75
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 151
<NUMBER-OF-SHARES-REDEEMED> (20)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 1364
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 23
<AVERAGE-NET-ASSETS> 722
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.004)
<PER-SHARE-GAIN-APPREC> .404
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.080)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.32
<EXPENSE-RATIO> 1.40
<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> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 10509
<INVESTMENTS-AT-VALUE> 10774
<RECEIVABLES> 419
<ASSETS-OTHER> 2
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 11195
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 19
<TOTAL-LIABILITIES> 19
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 10912
<SHARES-COMMON-STOCK> 999
<SHARES-COMMON-PRIOR> 287
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (1)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 265
<NET-ASSETS> 11176
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 750
<OTHER-INCOME> 0
<EXPENSES-NET> (50)
<NET-INVESTMENT-INCOME> 700
<REALIZED-GAINS-CURRENT> 71
<APPREC-INCREASE-CURRENT> 208
<NET-CHANGE-FROM-OPS> 979
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 886
<NUMBER-OF-SHARES-REDEEMED> (243)
<SHARES-REINVESTED> 69
<NET-CHANGE-IN-ASSETS> 8167
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 36
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 63
<AVERAGE-NET-ASSETS> 7147
<PER-SHARE-NAV-BEGIN> 10.50
<PER-SHARE-NII> .768
<PER-SHARE-GAIN-APPREC> .766
<PER-SHARE-DIVIDEND> (.766)
<PER-SHARE-DISTRIBUTIONS> (.078)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.19
<EXPENSE-RATIO> .70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 05
<NAME> SELIGMAN INCOME PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 13011
<INVESTMENTS-AT-VALUE> 13436
<RECEIVABLES> 233
<ASSETS-OTHER> 72
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 13741
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 24
<TOTAL-LIABILITIES> 24
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13296
<SHARES-COMMON-STOCK> 1304
<SHARES-COMMON-PRIOR> 1194
<ACCUMULATED-NII-CURRENT> (4)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 425
<NET-ASSETS> 13717
<DIVIDEND-INCOME> 253
<INTEREST-INCOME> 485
<OTHER-INCOME> 0
<EXPENSES-NET> (73)
<NET-INVESTMENT-INCOME> 665
<REALIZED-GAINS-CURRENT> 189
<APPREC-INCREASE-CURRENT> (68)
<NET-CHANGE-FROM-OPS> 786
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 468
<NUMBER-OF-SHARES-REDEEMED> (443)
<SHARES-REINVESTED> 85
<NET-CHANGE-IN-ASSETS> 1097
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (3)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 50
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 73
<AVERAGE-NET-ASSETS> 12474
<PER-SHARE-NAV-BEGIN> 10.56
<PER-SHARE-NII> .579
<PER-SHARE-GAIN-APPREC> .126
<PER-SHARE-DIVIDEND> (.579)
<PER-SHARE-DISTRIBUTIONS> (.166)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.52
<EXPENSE-RATIO> .59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 06
<NAME> SELIGMAN HENDERSON INTERNATIONAL (FORMERLY GLOBAL) PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 5825
<INVESTMENTS-AT-VALUE> 6301
<RECEIVABLES> 66
<ASSETS-OTHER> 943
<OTHER-ITEMS-ASSETS> 2
<TOTAL-ASSETS> 7312
<PAYABLE-FOR-SECURITIES> 47
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 23
<TOTAL-LIABILITIES> 70
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6761
<SHARES-COMMON-STOCK> 559
<SHARES-COMMON-PRIOR> 338
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (1)
<ACCUMULATED-NET-GAINS> 3
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 479
<NET-ASSETS> 7242
<DIVIDEND-INCOME> 97
<INTEREST-INCOME> 23
<OTHER-INCOME> 48
<EXPENSES-NET> (80)
<NET-INVESTMENT-INCOME> 88
<REALIZED-GAINS-CURRENT> 81
<APPREC-INCREASE-CURRENT> 225
<NET-CHANGE-FROM-OPS> 394
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 316
<NUMBER-OF-SHARES-REDEEMED> (108)
<SHARES-REINVESTED> 13
<NET-CHANGE-IN-ASSETS> 3059
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (2)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 57
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 132
<AVERAGE-NET-ASSETS> 5747
<PER-SHARE-NAV-BEGIN> 12.39
<PER-SHARE-NII> .074
<PER-SHARE-GAIN-APPREC> .801
<PER-SHARE-DIVIDEND> (.068)
<PER-SHARE-DISTRIBUTIONS> (.237)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.96
<EXPENSE-RATIO> 1.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
PORTFOLIOS, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ John R. Galvin (L.S.)
--------------------------------
John R. Galvin
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
PORTFOLIOS, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
her attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in her name and stead, in her capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ Alice S. Ilchman (L.S.)
--------------------------------
Alice S. Ilchman
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
PORTFOLIOS, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ Frank A. McPherson (L.S.)
--------------------------------
Frank A. McPherson
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
PORTFOLIOS, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ John E. Merow (L.S.)
--------------------------------
John E. Merow
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
PORTFOLIOS, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
her attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in her name and stead, in her capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ Betsy S. Michel (L.S.)
--------------------------------
Betsy S. Michel
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
PORTFOLIOS, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 1st day of April, 1997.
/s/ William C. Morris (L.S.)
--------------------------------
William C. Morris
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
PORTFOLIOS, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 31st day of March, 1997.
/s/ James C. Pitney (L.S.)
--------------------------------
James C. Pitney
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
PORTFOLIOS, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ James Q. Riordan (L.S.)
--------------------------------
James Q. Riordan
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
PORTFOLIOS, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 1st day of April, 1997.
/s/ Ronald T. Schroeder (L.S.)
--------------------------------
Ronald T. Schroeder
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
PORTFOLIOS, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ Robert L. Shafer (L.S.)
--------------------------------
Robert L. Shafer
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
PORTFOLIOS, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 20th day of March, 1997.
/s/ James N. Whitson (L.S.)
--------------------------------
James N. Whitson
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of SELIGMAN
PORTFOLIOS, INC., a Maryland corporation, which proposes to file with the
Securities and Exchange Commission an Amendment to Registration Statement on
Form N-1A and further amendments thereto, as necessary, under the Securities Act
of 1933 and the Investment Company Act of 1940, as amended, hereby constitutes
and appoints William C. Morris and Brian T. Zino, and each of them individually,
his attorneys-in-fact and agent, with full power of substitution and
resubstitution, for in his name and stead, in his capacity as such director, to
sign and file such Amendment to Registration Statement or further amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power and
authority to do and perform all acts and things requisite and necessary to be
done on the premises.
Executed this 1st day of April, 1997.
/s/ Brian T. Zino (L.S.)
--------------------------------
Brian T. Zino
