Supplement, dated December 15, 1999, to the
Prospectus, dated May 1, 1999,
of Seligman Portfolios, Inc. (the "Fund")
The following supersedes (1) the second, third and fourth full paragraphs
of page P-1; (2) the first, second and third full paragraphs of page P-41, under
the Section "Pricing of Fund Shares"; (3) the first and second full paragraphs
of page P-41, under the Section "How to Purchase and Sell Shares", and (4) the
first and second full paragraphs of page P-41, under the Section "Taxes", of the
Fund's Prospectus.
(1) Page P-1:
"The Fund's Portfolios are offering their shares only to separate accounts
(the "Accounts") of participating insurance companies to fund benefits of
variable annuity contracts (the "Contracts"). The Accounts may invest in
shares of the Portfolios in accordance with allocation instructions
received from the owners of the Contracts. Such allocations rights and
information on how to purchase or surrender a Contract, as well as sales
charges and other expenses imposed by the Contracts on their owners, are
further described in the separate prospectuses and disclosure documents
issued by the participating insurance companies and accompanying this
Prospectus. The Fund reserves the right to reject any order for the
purchase of shares of the Fund's Portfolios."
(2) Page P-41: PRICING OF FUND SHARES
"When you buy or sell shares, you do so at the applicable Portfolio's net
asset value (NAV) next calculated after your request is received by
participating insurance companies. If your purchase or sell request is
received by participating insurance companies by the close of regular
trading on the New York Stock Exchange (NYSE) (normally 4:00 p.m. Eastern
time), it will be executed at the applicable Portfolio's NAV calculated as
of the close of regular trading on the NYSE on that day.
If your purchase or sell request is received by participating insurance
companies after the close of regular trading on the NYSE, your request will
be executed at the applicable Portfolio's NAV calculated as of the close of
regular trading on the next NYSE trading day. Because certain Portfolios
have securities that are primarily listed on foreign exchanges that may
trade on weekends or other days when the Portfolios do not price their
securities, the value of a Portfolio's securities may change on days when
you may not be able to buy or sell your Portfolio's shares.
<PAGE>
The NAV of each Portfolio is computed each day, Monday through Friday, on
days that the NYSE is open for trading. Securities owned by each Portfolio
are valued at current market prices. If reliable market prices are
unavailable, securities are valued in accordance with procedures approved
by the Fund's Board of Directors."
(3) Page P-41: HOW TO PURCHASE AND SELL SHARES
"The Fund's Portfolios are offering their shares only to Accounts of
participating insurance companies to fund benefits of the Contracts. The
Accounts may invest in shares of the Portfolios in accordance with
allocation instructions received from the owners of the Contracts. Such
allocations rights and information on how to purchase or surrender a
Contract, as well as sales charges and other expenses imposed by the
Contracts on their owners, are further described in the separate
prospectuses and disclosure documents issued by the participating insurance
companies and accompanying this Prospectus. The Fund reserves the right to
reject any order for the purchase of shares of the Fund's Portfolios.
An Account may sell all or any portion of the Portfolio shares that it
holds at any time at the next computed net asset value per share, as
described above. Portfolio shares that are sold are entitled to any
dividends that have been declared as payable to record owners up to an
including the day the sale is effected. There is not charge. Payment of the
sale price will normally be made within seven days after receipt of such
sale. In addition, the right to sell your shares may be suspended and the
date of payment of the sale price may be postponed for any period during
which the NYSE is closed (other than customary weekend and holiday
closings) or during which the Securities and Exchange Commission (SEC)
determines that trading thereon is restricted, or for any period during
which an emergency (as determined by the SEC) exists as a result of which
the sale of Portfolio shares is not reasonably practicable or as a result
of which it is not reasonably practicable for the Portfolio to fairly
determine the value of its net assets, or for such other periods as the SEC
may be order permit for the protection of shareholders."
(4) Page P-41: TAXES
"Further information regarding the tax consequences of an investment in the
Portfolios is contained in the separate prospectuses and disclosure
documents issued by the participating insurance companies."
<PAGE>
SELIGMAN PORTFOLIOS, INC.
Statement of Additional Information
May 1, 1999, as Supplemented on December 15, 1999
100 Park Avenue
New York, New York 10017
(212) 850-1864
Toll Free Telephone: (800) 221-2450
For Retirement Plan Information - Toll-Free Telephone: (800) 445-1777
This Statement of Additional Information (SAI) expands upon and supplements the
information contained in the current Prospectus of Seligman Portfolios, Inc.
(the "Fund"), dated May 1, 1999, as supplemented on December 15, 1999. This SAI,
although not in itself a prospectus, is incorporated by reference into the
Prospectus in its entirety. It should be read in conjunction with the
Prospectus, which you may obtain by writing or calling the Fund at the above
address or telephone numbers.
The financial statements and notes included in the Fund's Annual Report, and the
Independent Auditors' Report thereon, are incorporated herein by reference. The
Annual Report will be furnished to you without charge if you request a copy of
this SAI.
Table of Contents
Fund History .................................................. 2
Description of the Fund and its Investments and Risks ......... 2
Management of the Fund ........................................ 14
Investment Advisory and Other Services ........................ 20
Brokerage Allocation and Other Practices....................... 24
Capital Stock and Other Securities ............................ 25
Purchase, Redemption, and Pricing of Shares ................... 26
Taxation of the Fund .......................................... 27
Financial Statements .......................................... 28
General Information ........................................... 28
Appendix A .................................................... 29
Appendix B .................................................... 32
<PAGE>
Fund History
The Fund was 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.
Description of the Fund and its Investments and Risks
Classification
The Fund is a diversified open-end management investment company, or mutual
fund. The Fund consists of the following fifteen separate and independent
Portfolios:
<TABLE>
<CAPTION>
<S> <C>
Seligman Bond Portfolio Seligman Henderson Global Technology Portfolio
Seligman Capital Portfolio Seligman Henderson International Portfolio
Seligman Cash Management Portfolio Seligman High-Yield Bond Portfolio
Seligman Common Stock Portfolio Seligman Income Portfolio
Seligman Communications and Information Portfolio Seligman Large-Cap Growth Portfolio
Seligman Frontier Portfolio Seligman Large-Cap Value Portfolio
Seligman Henderson Global Growth Opportunities Portfolio Seligman Small-Cap Value Portfolio
Seligman Henderson Global Smaller Companies Portfolio
</TABLE>
The Fund's Portfolios are offering their shares only to separate accounts (the
"Accounts") of participating insurance companies to fund benefits of variable
annuity contracts (the "Contracts"). The Accounts may invest in shares of the
Portfolios in accordance with allocation instructions received from the owners
of the Contracts. Such allocations rights and information on how to purchase or
surrender a Contract, as well as sales charges and other expenses imposed by the
Contracts on their owners, are further described in the separate prospectuses
and disclosure documents issued by the participating insurance companies and
accompanying this Prospectus. The Fund reserves the right to reject any order
for the purchase of shares of the Fund's Portfolios.
Investment Strategies and Risks
The Prospectus discusses the investment objectives of each of the Fund's
Portfolios and the policies each Portfolio employs to achieve its objectives.
The following information regarding the Fund's Portfolios' investment policies
supplements the information contained in the Prospectus.
Convertible Bonds
Each Portfolio, other than the Seligman Cash Management Portfolio, may purchase
convertible bonds. 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 a Portfolio, the investment 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
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<PAGE>
management. In evaluating a convertible security, the investment manager gives
emphasis to the attractiveness of the underlying common stock and the capital
appreciation opportunities that the convertible security presents. Convertible
securities can be callable or redeemable at the issuer's discretion, in which
case the investment 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 Standard & Poor's Rating Service (S&P) or Ca by Moody's
Investors Service, Inc. (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 Appendix A to
this Prospectus. The investment 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.
Derivatives
Each of the Portfolios, other than the Seligman Cash Management Portfolio and
Seligman Bond Portfolio, 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, as described more fully below, are
forward currency exchange contracts, put options, and rights and warrants.
Forward Foreign Currency Exchange Contracts
Each of 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) will generally enter into
forward foreign currency exchange contracts to fix the US dollar value of a
security it has agreed to buy or sell for the period between the date the trade
was entered into and the date the security is delivered and paid for, or, to
hedge the US dollar value of securities it owns. 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.
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
US 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 investment 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 Fund's 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 Fund's 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.
3
<PAGE>
Except as set forth above and immediately below, each Portfolio will not enter
into 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 parities will
be incorporated into the longer-term investment decisions made with regard to
overall diversification strategies. However, the Fund's 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.
Each Portfolio's dealing in forward foreign currency exchange contracts will be
limited to the transactions described above. 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 Fund's
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.
Put Options
Each Portfolio, other than the Seligman Cash Management Portfolio, the Seligman
Bond Portfolio, and the Seligman High-Yield Bond Portfolio, may purchase put
options in an attempt to provide a hedge against a
4
<PAGE>
decrease in the market price of an underlying security held by a 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.
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 option expire
resulting in a reduced profit on the underlying security equal to the cost of
the put option premium and transaction costs.
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 a 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. 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 both listed and over-the-counter put options. A
Portfolio will be exposed to the risk of counterparty nonperformance in the case
of over-the-counter put options.
A Portfolio's ability to engage in option transactions may be limited by tax
considerations.
Rights and Warrants
Each Portfolio, other than the Seligman Cash Management Portfolio, Seligman Bond
Portfolio and Seligman High-Yield Bond Portfolio, may invest in common stock
rights and warrants believed by the investment manager to provide capital
appreciation opportunities. Common stock rights and warrants received as part of
a unit or attached to securities purchased (i.e., not separately purchased) are
not included in each Portfolio's investment restrictions regarding such
securities.
Each 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 of each Portfolio, other than the Seligman Large-Cap
Growth Portfolio, Seligman Large-Cap Value Portfolio and Seligman Small-Cap
Value Portfolio, may be invested in warrants not listed on the New York or
American Stock Exchanges. For purposes of this restriction, rights and warrants
acquired by each Portfolio in units or attached to securities may be deemed to
have been purchased without cost.
Foreign Securities
Each of the Portfolios may invest up to 10% of its total assets in foreign
securities (except the Seligman Henderson Portfolios, 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 Depositary Receipts which are
traded in the United States or to commercial paper and certificates of deposit
issued by foreign banks. 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 US
company, and foreign companies may not be subject to reporting standards and
requirements comparable to those applicable to US companies. Foreign securities
may not be as liquid as US securities. Securities of foreign companies may
involve greater market risk than securities of US companies, and foreign
brokerage commissions and custody fees are generally higher than in the US.
Investments in foreign securities may also be subject to local economic or
political risks, political instability and possible nationalization of issuers.
5
<PAGE>
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 United States.
The Fund's 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.
Investments in securities of foreign issuers may involve risks that are not
associated with domestic investments, and there can be no assurance that 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 US issuers. Governmental regulation and supervision of foreign stock
exchanges, brokers and listed companies may be less pervasive than is customary
in the US. 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 US markets and far fewer traded issues. Fixed brokerage
commissions on foreign securities exchanges are generally higher than in the
United States, 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 United States.
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 US 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.
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
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<PAGE>
foreign currencies may be affected, favorably or unfavorably, by the relative
strength of the US dollar, changes in foreign currency and US 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 US 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).
Depositary Receipts
Depositary Receipts are instruments generally issued by domestic banks or trust
companies that represent the deposits of a security of a foreign issuer.
American Depositary Receipts (ADRs), which are traded in dollars on US Exchanges
or over-the-counter, are issued by domestic banks and evidence ownership of
securities issued by foreign corporations. European Depositary Receipts (EDRs)
are typically traded in Europe. Global Depositary Receipts (GDRs) are typically
traded in both Europe and the United States. Depositary Receipts may be issued
as sponsored or unsponsored programs. In sponsored programs, the issuer has made
arrangements to have its securities trade in the form of Depositary Receipts. 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
Depositary Receipts are not obligated to disclose material information in the
US, and therefore, the import of such information may not be reflected in the
market value of such instruments.
IIliquid Securities
Each Portfolio, other than the Seligman Cash Management 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 (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 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 Rule 144A securities will further evolve. This investment practice
could have the effect of increasing the level of illiquidity in a Portfolio, if
and to the extent that qualified institutional buyers become for a time
uninterested in purchasing Rule 144A securities.
Money Market Instruments
Each of the Portfolios, other than the Seligman Cash Management Portfolio, which
intends to invest primarily in the money market instruments described below, may
invest a portion of their assets in the following money market instruments.
US Government Obligations
US Government Obligations are obligations issued or guaranteed as to both
principal and interest by the US Government or backed by the full faith and
credit of the United States, such as US Treasury Bills, securities issued or
guaranteed by a US Government agency or instrumentality, and securities
supported by the right of the issuer to borrow from the US Treasury.
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<PAGE>
Bank Obligations
Bank obligations include US 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 US 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
Commercial paper and short-term 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 US bank holding companies in terms of assets.
Mortgage Related Securities
Mortgage Pass-Through Securities. Each Portfolio may invest in mortgage
pass-through securities. Mortgage pass-through securities 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.
The Government National Mortgage Association (GNMA) is a US Government
corporation within the Department of Housing and Urban Development, authorized
to guarantee, with the full faith and credit of the US 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 the Federal National Mortgage Association
(FNMA), a government-sponsored corporation subject to general regulation by the
Secretary of Housing and Urban Development but owned entirely by private
stockholders, and the Federal Home Loan Mortgage Corporation (FHLMC), a
corporate instrumentality of the US 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 US 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 US 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
8
<PAGE>
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.
Collateralized Mortgage Obligations. The Seligman Income Portfolio may invest in
Collateralized Mortgage Obligations (CMOs), including certain CMOs that have
elected to be treated as Real Estate Mortgage Investment Conduits (REMICs). CMOs
are fixed-income securities collateralized by pooled mortgages and separated
into short-, medium-, and long-term positions (called tranches). Tranches pay
different rates of interest depending upon their maturity. CMOs may be
collateralized by (a) pass through securities issued or guaranteed by GNMA, FNMA
or FHLMC, (b) unsecuritized mortgage loans insured by the Federal Housing
Administration or guaranteed by the Department of Veteran's Affairs, (c)
unsecuritized conventional Mortgages, (d) other mortgage related securities or
(e) any combination thereof.
Each tranche of a CMO is issued at a specific coupon rate and has a stated
maturity. As the payments on the underlying mortgage loans are collected, the
CMO issuer generally pays the coupon rate of interest to the holders of each
tranche. In a common structure referred to as a "Pay" CMO, all scheduled and
unscheduled principal payments generated by the collateral, as loans are repaid
or prepaid, go initially to investors in the first tranches. Investors in later
tranches do not start receiving principal payments until the prior tranches are
paid in full. Sometimes, CMOs are structured so that the prepayment and/or
market risks are transferred from one tranche to another.
Most CMOs are issued by Federal agencies. However, the only CMOs backed by the
full faith and credit of the US Government are CMOs collateralized by pass
through securities guaranteed by GNMA. All CMOs are subject to reinvestment
risk; that is, as prepayments on the underlying pool of mortgages increase, the
maturity of the tranches in the CMO will decrease. As a result, the Portfolio
may have to invest the proceeds that were invested in such CMOs in securities
with lower yields. Factors affecting reinvestment risk include the level of
interest rates, general economic and social conditions and the location and age
of the mortgages.
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 US
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.
9
<PAGE>
When-Issued and Forward Commitment Securities
The Seligman Bond Portfolio and the Seligman High-Yield Bond Portfolio may
purchase securities on a when-issued or forward commitment 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 or forward commitment 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 and
forward commitment 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 or forward commitment 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 or forward commitment obligations; 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 or forward commitment obligations increase. When the time
comes to pay for when-issued or forward commitment 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 or forward commitment securities themselves (which may
have a value greater or less than a Portfolio's payment obligations). Sale of
securities to meet when-issued and forward commitment obligations carries with
it a greater potential for the realization of capital gain or loss.
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.
Lending of Portfolio Securities
Other than the Seligman Cash Management Portfolio, each of the Portfolios may
lend portfolio securities to broker/dealers, banks or other institutional
borrowers, provided that securities loaned by each of the Seligman Henderson
Portfolios may not exceed 33 1/3% of the Portfolios' total assets taken at
market value. The 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 pays the lending Portfolio an amount equal to any
dividends or interest paid on the securities. The lending Portfolio may invest
the collateral and earn additional income or receive an agreed upon amount of
interest income from the borrower. Loans made by the Portfolios will generally
be short-term. Loans are subject to termination at the option of the lending
Portfolio 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 collateral to the borrower or
placing broker. The lending Portfolio does not have the right to vote securities
on loan, but would terminate the loan and regain the right to vote if that were
considered important with respect to the investment. The lending Portfolio may
lose money if a borrower defaults on its obligation to return securities and the
value of the collateral held by the lending Portfolio is insufficient to replace
the loaned securities. In addition, the lending Portfolio is responsible for any
loss that might result from its investment of the borrower's collateral.
10
<PAGE>
Borrowing
Except as noted below, a Portfolio may borrow money only 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, the Seligman High-Yield
Bond Portfolio, the Seligman Large-Cap Growth Portfolio, the Seligman Large-Cap
Value Portfolio, and the Seligman Small-Cap Value Portfolio will not purchase
additional portfolio securities if such Portfolios have outstanding borrowings
in excess of 5% of the value of their total assets.
The Seligman Capital Portfolio, the Seligman Common Stock Portfolio, the
Seligman Communications and Information Portfolio, the Seligman Large-Cap Growth
Portfolio, Seligman Large-Cap Value Portfolio, and the Seligman Small-Cap Value
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% (15% for the
Seligman Large-Cap Growth Portfolio, the Seligman Large-Cap Value Portfolio, and
the Seligman Small-Cap Value Portfolio) 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.
Except as otherwise specifically noted above, each of the Fund's Portfolios'
investment strategies are not fundamental and the Fund, with the approval of the
Board of Directors, may change such strategies without the vote of a majority of
a Portfolio's outstanding voting securities.
Fund Policies
The Fund is subject to fundamental policies that place restrictions on certain
types of investments. 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 without such a vote.
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%
(15% for the Seligman Large-Cap Growth Portfolio, the Seligman Large-Cap
Value Portfolio, and the Seligman Small-Cap Value Portfolio) of the value
of the total assets of the Portfolio; except that the Seligman Capital
Portfolio, Seligman Common Stock Portfolio, Seligman Communications and
Information Portfolio, Seligman Large-Cap Growth Portfolio, Seligman
Large-Cap Value Portfolio, and Seligman Small-Cap Value 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% (15% for the
Seligman Large-Cap Growth Portfolio, the Seligman Large-Cap Value
Portfolio, and the Seligman Small-Cap Value Portfolio) of such assets
(taken at cost); except that the Seligman Frontier Portfolio, the Seligman
High-Yield Bond Portfolio, the Seligman Large-Cap Growth Portfolio, the
Seligman Large-Cap Value Portfolio and the Seligman Small-Cap Value
Portfolio will not purchase additional portfolio securities if it has
outstanding borrowings in excess of 5% of the value of its total assets;
11
<PAGE>
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.
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 US
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 US 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,
the Seligman Large-Cap Growth Portfolio, the Seligman Large-Cap Value
Portfolio, the Seligman Small-Cap Value 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.
12
<PAGE>
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 its investment objective, (b) through repurchase agreements
and (c) by lending portfolio securities in an amount not to exceed 33 1/3%
of its total assets.
10. Purchase illiquid securities for any Portfolio including repurchase
agreements maturing in more than seven days and securities that cannot be
sold without registration or the filing of a notification under Federal or
state securities laws, if, as a result, such investment would exceed 15% of
the value of such Portfolio's net assets.
11. Invest in oil, gas or other mineral exploration or development programs;
provided, however, that this investment restriction shall not prohibit a
Portfolio from purchasing publicly-traded securities of companies engaging
in whole or in part in such activities.
12. Purchase securities of any other investment company, except in connection
with a merger, consolidation, acquisition or reorganization or for the
purpose of hedging the Portfolio's obligations under the Deferred
Compensation Plan for Directors, and except to the extent permitted by
Section 12 of 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. This restriction does not
apply to the Seligman Large-Cap Growth Portfolio, the Seligman Large-Cap
Value Portfolio or the Seligman Small-Cap Value Portfolio.
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 separate account prospectuses or
disclosure documents of the participating insurance companies, as applicable.
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
13
<PAGE>
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.
Temporary Defensive Position
Each Portfolio may, from time to time, take a temporary defensive position in
seeking to minimize extreme volatility caused by adverse market, economic, or
other conditions, or in anticipation of significant withdrawals.
When the investment manager believes that market conditions warrant a temporary
defensive position, a Portfolio may invest up to 100% of its assets in cash or
cash equivalents, including, but not limited to, prime commercial paper, bank
certificates of deposit, bankers' acceptances, or repurchase agreements for such
securities, and securities of the US Government and its agencies and
instrumentalities, as well as cash and cash equivalents denominated in foreign
currencies. A Portfolio's investments in foreign cash equivalents will be
limited to those that, in the opinion of the investment manager, equate
generally to the standards established for US cash equivalents. 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 US 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. In addition, the High-Yield Bond Portfolio may
also invest in high-yield, medium and lower quality corporate notes.
Portfolio Turnover
The portfolio turnover rates for each Portfolio are calculated by dividing the
lesser of purchases or sales of portfolio securities for the year by the monthly
average of the value of the portfolio securities owned during the 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 ended December 31, 1998 and 1997 for each Portfolio (except the
Seligman Cash Management Portfolio; the Seligman Large-Cap Growth Portfolio,
which commenced operations on May 1, 1999; and the Seligman Large-Cap Value
Portfolio and Seligman Small-Cap Value Portfolio for the period May 1, 1998,
commencement of operations, to December 31, 1998) were as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Seligman Bond Portfolio 73.31% 170.12%
Seligman Capital Portfolio 130.86 93.97
Seligman Common Stock Portfolio 55.55 80.13
Seligman Communications and Information Portfolio 132.57 277.14
Seligman Frontier Portfolio 86.52 101.68
Seligman Henderson Global Growth Opportunities Portfolio 48.99 77.85
Seligman Henderson Global Smaller Companies Portfolio 66.40 64.81
Seligman Henderson Global Technology Portfolio 82.27 167.36
Seligman Henderson International Portfolio 75.81 89.43
Seligman High-Yield Bond Portfolio 43.13 74.54
Seligman Income Portfolio 70.45 96.99
Seligman Large-Cap Value Portfolio 65.82 --
Seligman Small-Cap Value Portfolio 73.87 --
</TABLE>
Management of the Fund
Board of Directors
The Board of Directors provides broad supervision over the affairs of the Fund.
14
<PAGE>
Management Information
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, NY 10017.
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address with Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
William C. Morris* Director, Chairman of the Chairman, J. & W. Seligman & Co. Incorporated,
(61) Board, Chief Executive Chairman and Chief Executive Officer, the Seligman
Officer and Chairman of the Group of investment companies; Chairman, Seligman
Executive Committee Advisors, Inc., Seligman Services, Inc., and Carbo
Ceramics Inc., ceramic proppants for oil and gas
industry; Director, Seligman Data Corp., Kerr-McGee
Corporation, diversified energy company; and Sarah
Lawrence College. Formerly, Director, Daniel
Industries Inc., manufacturer of oil and gas metering
equipment.
Brian T. Zino* Director, President and Director and President, J. & W. Seligman & Co.
(47) Member of the Executive Incorporated; President (with the exception of
Committee Seligman Quality Municipal Fund, Inc. and Seligman
Select Municipal Fund, Inc.) and Director or Trustee,
the Seligman Group of investment companies; Chairman,
Seligman Data Corp.; Member of the Board of Governors
of the Investment Company Institute; and Director,
ICI Mutual Insurance Company, Seligman Advisors,
Inc., and Seligman Services, Inc.
Richard R. Schmaltz* Director and Member of the Director and Managing Director, Director of
(59) Executive Committee Investments, J. & W. Seligman & Co. Incorporated;
Director or Trustee, the Seligman Group of investment
companies (except Seligman Cash Management Fund,
Inc.); Director, Seligman Henderson Co., and Trustee
Emeritus of Colby College. Formerly, Director,
Investment Research at Neuberger & Berman from May
1993 to September 1996.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address with Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
John R. Galvin Director Dean, Fletcher School of Law and Diplomacy at Tufts
(70) University; Director or Trustee, the Seligman Group
Tufts University of investment companies; Chairman Emeritus, American
Packard Avenue, Council on Germany; a Governor of the Center for
Medford, MA 02155 Creative Leadership; Director; Raytheon Co.,
electronics; National Defense University; and the
Institute for Defense Analyses. Formerly, Director,
USLIFE Corporation; 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.
Alice S. Ilchman Director Retired President, Sarah Lawrence College; Director
(64) or Trustee, the Seligman Group of investment
18 Highland Circle, companies; Trustee, the Committee for Economic
Bronxville, NY 10708 Development; and Chairman, The Rockefeller
Foundation, charitable foundation.
Formerly, Trustee, The Markle Foundation,philanthropic
organization; and Director, New York Telephone
Company; and International Research and
Exchange Board, intellectual exchanges.
Frank A. McPherson Director Retired Chairman and Chief Executive Officer of
(66) Kerr-McGee Corporation; Director or Trustee, the
2601 Northwest Expressway, Suite Seligman Group of investment companies; Director,
805E Kimberly-Clark Corporation, consumer products; Bank
Oklahoma City, OK 73112 of Oklahoma Holding Company; Baptist Medical Center;
Oklahoma Chapter of the Nature Conservancy; Oklahoma
Medical Research Foundation; and National Boys and
Girls Clubs of America; and Member of the Business
Roundtable and National Petroleum Council. Formerly,
Chairman, Oklahoma City Public Schools Foundation;
and Director, Federal Reserve System's Kansas City
Reserve Bank and the Oklahoma City Chamber of
Commerce.
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address with Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
John E. Merow Director Retired Chairman and Senior Partner, Sullivan &
(69) Cromwell, law firm; Director or Trustee, the Seligman
125 Broad Street, Group of investment companies; Director, Commonwealth
New York, NY 10004 Industries, Inc., manufacturers of aluminum sheet
products; the Foreign Policy Association; Municipal Art
Society of New York; the U.S. Council for International
Business; and New York Presbyterian Hospital; Chairman,
- New York Presbyterian Healthcare Network, Inc.;
Vice-Chairman, the US-New Zealand Council; and Member
of the American Law Institute and Council on Foreign
Relations.
Betsy S. Michel Director Attorney; Director or Trustee, the Seligman Group of
(57) investment companies; Trustee, The Geraldine R. Dodge
P.O. Box 449, Foundation, charitable foundation. Formerly, Chairman of the
Gladstone, NJ 07934 Board of Trustees of St. George's School (Newport, RI) and,
Director, the National Association of Independent Schools
(Washington, DC).
James C. Pitney Director Retired Partner, Pitney, Hardin, Kipp & Szuch, law
(73) firm; Director or Trustee, the Seligman Group of
Park Avenue at Morris County, investment companies. and, Director, Public
P.O. Box 1945, Morristown, NJ Service Enterprise Group, public utility.
07962
James Q. Riordan Director Director or Trustee, the Seligman Group of investment
(72) companies; Director, The Houston Exploration Company;
675 Third Avenue, The Brooklyn Museum, KeySpan Energy Corporation; and
Suite 3004 Public Broadcasting Service; and Trustee, the
New York, NY 10017 Committee for Economic Development. Formerly,
Co-Chairman of the Policy Council of the Tax
Foundation; Director, Tesoro Petroleum Companies,
Inc. and Dow Jones & Company, Inc.; Director and
President, Bekaert Corporation; and Co-Chairman,
Mobil Corporation.
Robert L. Shafer Director Retired Vice President, Pfizer Inc.; Director or
(67) Trustee, the Seligman Group of investment companies.
96 Evergreen Avenue, Formerly, Director, USLIFE Corporation.
Rye, NY 10580
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address With Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
James N. Whitson Director Director and Consultant, Sammons Enterprises, Inc.;
(64) Director or Trustee, the Seligman Group of investment
6606 Forestshire Drive, companies; Director, C-SPAN and CommScope, Inc.,
Dallas, TX 75230 manufacturer of coaxial cables. Formerly, Executive
Vice President, Chief Operating Officer, Sammons
Enterprises, Inc.; and Director, Red Man Pipe and
Supply Company, piping and other materials.
Brian Ashford-Russell Vice President and Portfolio Portfolio Manager, Henderson Investment Management
(40) Manager Limited. He has been a Portfolio Manager at
Henderson plc since February 1993. Formerly, Vice President
and Portfolio Manager, one other open-end
investment company in the Seligman Group
of investment companies.
Daniel J. Charleston Vice President and Portfolio Managing Director (formerly, Vice President,
(40) Manager Investment Officer), J. & W. Seligman & Co.
Incorporated; 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 Chief Investment Officer, Henderson Investment
(49) Manager Management Limited since April 1992. He has been a
Director at Henderson Internationa Limited and
Senior Portfolio Manager at Henderson plc,
respectively, since April 1995.
Neil T. Eigen Vice President and Portfolio Managing Director, J. & W. Seligman & Co.
(56) Manager Incorporated; Vice President and Portfolio Manager,
two other open-end investment companies in the
Seligman Group of investment companies.
Nitin Mehta Vice President and Portfolio Portfolio Manager, Henderson Investment Management
(39) Manager Limited. He has been a portfolio manager at
Henderson plc since September 1994. From May
1993 to September 1994, has was Head of
Currency Management and Derivatives at
Quorum Capital Management.
Arsen Mrakovcic Vice President and Portfolio Managing Director, J. & W. Seligman & Co.
(34) Manager Incorporated; Vice President and Portfolio Manager,
two other open-end investment companies in the
Seligman Group of investment companies. Formerly,
Vice President, Investment Officer,
J. & W. Seligman & Co. Incorporated from January 1995
to January 1996 and Portfolio Assistant,
J. & W. Seligman & Co. Incorporated from June 1992 to
January 1995.
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address With Fund Past 5 Years
------- --------- ------------
<S> <C> <C>
Marion S. Schultheis Vice President and Portfolio Managing Director, J. & W. Seligman & Co.
(53) Manager Incorporated since May 1998; Vice President and
Portfolio Manager, three other open-end
investment companies in the Seligman
Group of investment companies.
Formerly, Managing Director at Chancellor LGT
from October 1997 until May 1998; and
Senior Portfolio Manager at IDS Advisory Group
Inc. from August 1987 until October 1997.
Charles C. Smith, Jr. Vice President and Portfolio Managing Director (formerly, Senior Vice President
(43) Manager and Senior Investment Officer), J. & W. Seligman &
Co. Incorporated; Vice President and Portfolio
Manager, two other open-end investment companies in the Seligman
Group of investment companies and Tri-Continental Corporation, a
closed-end investment company.
Paul H. Wick Vice President and Portfolio Director and Managing Director, J. & W. Seligman &
(36) Manager Co. Incorporated since January 1995 and November
1997, respectively; Vice President and Portfolio
Manager, two other open-end investment companies in
the Seligman Group of investment companies; and
Portfolio Manager, Henderson Investment Management
Limited. He joined J. & W. Seligman & Co.
Incorporated in 1987 as an Associate, Investment
Research.
Gary S. Zeltzer Vice President and Portfolio Senior Vice President, J. & W. Seligman & Co.
(48) Manager Incorporated; Vice President and Portfolio Manager,
two other open-end investment companies in the
Seligman Group of investment companies.
Lawrence P. Vogel Vice President Senior Vice President, Finance, J. & W. Seligman &
(43) Co. Incorporated, Seligman Advisors, Inc., and
Seligman Data Corp.; Vice President, the Seligman
Group of investment companies, and Seligman Services,
Inc.; Vice President and Treasurer, Seligman
International, Inc.; and Treasurer, Seligman
Henderson Co.
Frank J. Nasta Secretary General Counsel, Senior Vice President, Law and
(35) Regulation and Corporate Secretary, J. & W. Seligman
& Co. Incorporated; Secretary, the Seligman Group of
investment companies, Seligman Advisors, Inc.,
Seligman Henderson Co., Seligman Services, Inc.,
Seligman International, Inc. and Seligman Data Corp.
Thomas G. Rose Treasurer Treasurer, the Seligman Group of investment companies
(42) and Seligman Data Corp.
</TABLE>
19
<PAGE>
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.
Directors and officers of the Fund are also directors and officers of some or
all of the other investment companies in the Seligman Group.
Compensation
<TABLE>
<CAPTION>
Pension or Total Compensation
Aggregate Retirement Benefits from Fund
Name and Compensation Accrued as part of and Fund Complex
Position with Fund From Fund (1) Fund Expenses Paid to Directors (1)(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
Richard R. Schmaltz, Director N/A N/A N/A
John R. Galvin, Director $7,608.99 N/A $79,000
Alice S. Ilchman, Director 6,752.04 N/A 73,000
Frank A. McPherson, Director 7,608.99 N/A 79,000
John E. Merow, Director 7,323.34 N/A 77,000
Betsy S. Michel, Director 7,608.99 N/A 79,000
James C. Pitney, Director 7,037.69 N/A 75,000
James Q. Riordan, Director 7,037.69 N/A 75,000
Robert L. Shafer, Director 7,037.69 N/A 75,000
James N. Whitson, Director 7,608.99(d) N/A 79,000(d)
</TABLE>
- ----------
(1) For the Fund's year ended December 31, 1998. Effective January 16, 1998,
the per meeting fee for Directors was increased by $1,000, which is
allocated among all Funds in the Fund Complex.
(2) The Seligman Group of investment companies consists of eighteen investment
companies.
(d) Deferred.
The Fund has a compensation arrangement under which outside directors may elect
to defer receiving their fees. The Fund has adopted a Deferred Compensation Plan
under which a director who has elected deferral of his or her fees may choose a
rate of return equal to either (1) the interest rate on short-term Treasury
Bills, or (2) the rate of return on the shares of certain of the investment
companies advised by J. & W. Seligman & Co. Incorporated, as designated by the
director. The cost of such fees and earnings is included in the directors' fees
and expenses, and the accumulated balance thereof is included in other
liabilities in the Fund's financial statements. The total amount of deferred
compensation (including earnings) payable in respect of the Fund to Mr. Whitson
as of December 31, 1998 was $24,881. Messrs. Merow and Pitney no longer defer
current compensation; however, they have accrued deferred compensation
(including earnings) in the amounts of $14,591 and $3,298, respectively, as of
December 31, 1998.
The Fund may, but is not obligated to, purchase shares of the Seligman Group of
investment companies to hedge its obligations in connection with the Fund's
Deferred Compensation Plan (except Seligman Cash Management Portfolio, which is
obligated to purchase shares of the Seligman Group of investment companies).
Investment Advisory and Other Services
The Investment Manager
J. & W. Seligman & Co. Incorporated (Seligman) manages the Fund. Seligman 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 Seligman was purchased by Mr. William C. Morris and a simultaneous
recapitalization of Seligman occurred. See Appendix B for further history of
Seligman.
20
<PAGE>
All of the officers of the Fund listed above are officers or employees of
Seligman or Henderson Investment Management Limited. Their affiliations with the
Fund and with Seligman and Henderson are provided under their principal business
occupations.
The Seligman Bond Portfolio, Seligman Capital Portfolio, Seligman Cash
Management Portfolio, Seligman Common Stock Portfolio and Seligman Income
Portfolio each pays Seligman a management fee for its services, calculated daily
and payable monthly, equal to an annual rate of .40% of the average daily net
assets of each such Portfolio. The Seligman High-Yield Bond Portfolio pays
Seligman a management fee for its services, calculated daily and payable
monthly, equal to an annual rate of .50% of the average daily net assets of such
Portfolio. The Seligman Communications and Information Portfolio and Seligman
Frontier Portfolio each pay Seligman a management fee for its services,
calculated daily and payable monthly, equal to an annual rate of .75% of the
average daily net assets of each such Portfolio. The Seligman Large-Cap Value
Portfolio pays Seligman a management fee for its services, calculated daily and
payable monthly, equal to an annual rate of .80% of the Portfolio's average
daily net assets on the first $500 million of net assets, .70% of the
Portfolio's average daily net assets on the next $500 million of net assets and
.60% of the Portfolio's average daily net assets in excess of $1 billion. The
Seligman Small-Cap Value Portfolio pays Seligman a management fee for its
services, calculated daily and payable monthly, equal to an annual rate of 1% of
the Portfolio's average daily net assets on the first $500 million of net
assets, .90% of the Portfolio's average daily net assets on the next $500
million of net assets, and .80% of the Portfolio's average daily net assets in
excess of $1 billion. The Seligman Large-Cap Growth Portfolio pays Seligman a
management fee for its services, calculated daily and payable monthly, equal to
an annual rate of .70% of the Portfolio's average daily net assets on the first
$1 billion of net assets, .65% of the Portfolio's average daily net assets on
the next $1 billion of net assets and .60% of the Portfolio's average daily net
assets in excess of $2 billion. Each of the Seligman Henderson Portfolios pays
Seligman a management fee for its services, calculated daily and payable
monthly, equal to an annual rate of 1% of the average daily net assets of each
such Portfolio.
The following table indicates the management fees paid for the years 1998, 1997,
and 1996 for each Portfolio (except the Seligman Large-Cap Growth Portfolio
which commenced operations on May 1, 1999):
<TABLE>
<CAPTION>
Fund 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Seligman Bond Portfolio $ 27,438* $ 23,150* $ 18,034
Seligman Capital Portfolio 86,101 70,147* 48,339
Seligman Cash Management Portfolio 40,831* 38,042* 36,532
Seligman Common Stock Portfolio 224,301 178,662 134,264
Seligman Communications and Information Portfolio 748,401 574,370 373,337
Seligman Frontier Portfolio 323,502 282,248 165,050
Seligman Henderson Global Growth Opportunities Portfolio 73,741* 38,358* 4,098**
Seligman Henderson Global Smaller Companies Portfolio 215,796* 200,415* 110,169
Seligman Henderson Global Technology Portfolio 49,036* 26,504* 4,920**
Seligman Henderson International Portfolio 100,225* 88,212* 57,323
Seligman High-Yield Bond Portfolio 142,265* 84,740* 35,858
Seligman Income Portfolio 57,362* 54,451* 49,574
Seligman Large-Cap Value Portfolio 9,139*** -- --
Seligman Small-Cap Value Portfolio 7,951*** -- --
</TABLE>
- ----------
* Seligman, at its discretion, waived all or a portion of its fees.
** Fees paid from May 1, 1996 (commencement of operations) to December 31,
1996.
*** Fees paid from May 1, 1998 (commencement of operations) to December 31,
1998.
Under a Subadvisory Agreement dated July 1, 1998, Henderson Investment
Management Limited (HIML) furnishes investment advice, research and assistance
with respect to each of the Seligman Henderson Portfolio's non-US investments.
21
<PAGE>
HIML, headquartered in the United Kingdom, was incorporated in 1984 and is a
registered investment adviser under the Investment Advisers Act of 1940. HIML is
a wholly owned subsidiary of Henderson plc. Henderson plc is a subsidiary of AMP
Limited, an Australian life insurance and financial services company. Henderson
plc, headquartered in London, is one of the largest money managers in Europe.
HIML receives a fee from Seligman, equal to an annual rate of .50% of each of
the Seligman Henderson Portfolio's average daily net assets under the
supervision of HIML. The Subadvisory Agreement will continue until December 31,
1999 and from year to year thereafter (1) if such continuance is approved in the
manner required by the 1940 Act (by a vote of a majority of the Board of
Directors or of the outstanding voting securities of the Portfolios and by a
vote of a majority of the Directors who are not parties to the Subadvisory
Agreement or interested persons of any such party) and (2) HIML shall not have
notified Seligman 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 Agreement may be terminated at any time by the Fund, on 60 days
written notice to HIML. The Subadvisory Agreement will terminate automatically
in the event of its assignment or upon the termination of the relevant
Management Agreement.
The Management Agreements (and Subadvisory Agreement, in the case of the
Seligman Henderson Portfolios) provide that Seligman (and HIML, in the case 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
Agreements (or Subadvisory Agreement), except for willful misfeasance, bad
faith, gross negligence, or reckless disregard of their obligations and duties
under the Management Agreements (or Subadvisory Agreement).
The Fund pays all its expenses other than those assumed by Seligman or HIML,
including brokerage commissions, fees and expenses of independent attorneys and
auditors, taxes and governmental fees, including fees and expenses of qualifying
the Fund and its shares under Federal 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,
expenses of shareholders' meetings, expenses of corporate data processing and
related services, shareholder record keeping and shareholder account services,
fees and disbursements of transfer agents and custodians, fees and expenses of
directors of the Fund not employed by or serving as a Director of Seligman or
its affiliates, insurance premiums and extraordinary expenses such as litigation
expenses.
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 Agreement with respect to the Seligman Large-Cap Value Portfolio
and the Seligman Small-Cap Value Portfolio was approved by the Board of
Directors on March 19, 1998 and by the sole shareholder of each Portfolio on
April 30, 1998. The Management Agreement with respect to the Seligman Large-Cap
Growth Portfolio was approved by the Board of Directors on March 18, 1999. The
Management Agreements will continue in effect until December 31 of each year,
with respect to each Portfolio (except the Seligman Large-Cap Growth Portfolio,
for which the Management Agreement is in effect until December 31, 2000, and
then each December 31 thereafter) if (1) such continuance is approved in the
manner required by the 1940 Act (by a vote of a majority of the Board of
Directors or of the outstanding voting securities of the 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) Seligman 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
22
<PAGE>
any or all Portfolios, by the Fund, without penalty, on 60 days written notice
to Seligman. Seligman 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 Seligman's business.
The Code of Ethics
Officers, directors and employees of Seligman are permitted to engage in
personal securities transactions, subject to Seligman's Code of Ethics. The Code
of Ethics 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 Seligman's Compliance Officer,
and sets forth a procedure of identifying, for disciplinary action, those
individuals who violate the Code of Ethics. The Code of Ethics prohibits each of
the officers, directors and employees (including all portfolio managers) of
Seligman from purchasing or selling any security that the officer, director, or
employee knows or believes (1) was recommended by Seligman for purchase or sale
by any client, including the Fund, within the preceding two weeks, (2) has been
reviewed by Seligman for possible purchase or sale within the preceding two
weeks, (3) is being purchased or sold by any client, (4) is being considered by
a research analyst, (5) is being acquired in a private placement, unless prior
approval has been obtained from Seligman's Compliance Officer, or (6) is being
acquired during an initial or secondary public offering. The Code of Ethics also
imposes a strict standard of confidentiality and requires portfolio managers to
disclose any interest they may have in the securities or issuers that they
recommend for purchase by any client.
The Code of Ethics also prohibits (1) 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 (2) 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 Seligman's
order desk. 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.
Services Provided by the Investment Manager
Pursuant to management agreements between the Fund and Seligman in respect of
the Portfolios and subject to the control of the Board of Directors, Seligman
manages the investment of the assets of the Fund's Portfolios, including making
purchases and sales of portfolio securities consistent with each Portfolio's
investment objectives and policies, and administers the Fund's business and
other affairs. Seligman provides the Fund with such office space, administrative
and other services and executive and other personnel as are necessary for Fund
operations. Seligman pays all of the compensation of directors and/or officers
of the Fund who are employees or consultants of Seligman except as otherwise
provided by HIML.
Service Agreements
There are no other management-related service contracts under which services are
provided to the Fund.
Other Investment Advice
No person or persons, other than directors, officers, or employees of Seligman
or HIML, regularly advise the Fund's Portfolios with respect to their
investments.
23
<PAGE>
Brokerage Allocation and Other Practices
Portfolio Transactions
In directing transactions involving exchange-listed securities, Seligman (or in
the case of the Seligman Henderson Portfolios, Seligman or HIML) 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 Seligman or HIML for its use. In addition, Seligman and
HIML 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 Seligman or HIML 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 Seligman or HIML to dealers
in the over-the-counter market acting as principal, except dealers with which
their directors or officers are affiliated.
Brokerage commissions of each Portfolio (except the Seligman Bond Portfolio,
Seligman Cash Management Portfolio and Seligman High-Yield Bond Portfolio; and
the Seligman Large-Cap Growth Portfolio which commenced operations on May 1,
1999) for the years 1998, and if applicable, 1997 and 1996, are set forth in the
following table:
<TABLE>
<CAPTION>
Total Brokerage Commissions Paid for
Execution and Statistical Services(1)
-------------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Seligman Capital Portfolio $ 74,776 $ 35,821 $ 19,283
Seligman Common Stock Portfolio 68,974 74,489 37,709
Seligman Communications and Information Portfolio 177,132 235,341 82,832
Seligman Frontier Portfolio 85,207 69,951 43,065
Seligman Henderson Global Growth Opportunities Portfolio 14,141 15,812 4,056
Seligman Henderson Global Smaller Companies Portfolio 40,386 42,231 39,649
Seligman Henderson Global Technology Portfolio 10,211 6,589 2,037
Seligman Henderson International Portfolio 37,779 36,291 20,495
Seligman Income Portfolio 9,505 11,228 1,483
Seligman Large-Cap Value Portfolio 6,315* -- --
Seligman Small-Cap Value Portfolio 7,028* -- --
</TABLE>
- ----------
(1) Not including any spreads on principal transactions on a net basis.
* Commissions paid from May 1, 1998 (commencement of operations).
The amount of brokerage commissions paid by the Seligman Capital Portfolio has
increased materially from 1996 due to the Portfolio's increase in portfolio
turnover and the Portfolio's increase in portfolio transactions on public
exchanges as opposed to over-the-counter markets. The amount of brokerage
commissions paid by the Seligman Income Portfolio has increased materially from
1996 due to both a realignment of the Portfolio which decreased its convertible
debt holdings and increased its equity holdings and the Portfolio's sale of
international securities. The amount of brokerage commissions paid by the
Seligman Common Stock Portfolio has increased materially from 1996 due to an
increase in portfolio turnover. The increase in portfolio turnover was due to a
realignment of the Portfolio which decreased its convertible debt holdings and
increased its holdings in common stock. The amount of brokerage commissions paid
by the Seligman Frontier Portfolio has increased materially from 1996 due to an
increase in portfolio turnover. The amount of brokerage commissions paid by the
Seligman Communications and Information Portfolio has increased materially from
1996 due to the Portfolio's increase in new assets under management.
24
<PAGE>
Commissions
For the years ended December 31, 1998, 1997 and 1996, the Fund did not execute
any portfolio transactions with, and therefore did not pay any commissions to,
any broker affiliated with either the Fund, Seligman, HIML, or Seligman
Advisors.
Brokerage Selection
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, Seligman or HIML may
consider sales of theAccounts 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.
Directed Brokerage
During the Fund's year ended December 31, 1998, neither the Fund, Seligman, nor
HIML directed any of the Fund's brokerage transactions to a broker because of
research services provided.
Regular Broker-Dealers
During the Fund's year ended December 31, 1998, the Fund did not acquire
securities of any of its regular brokers or dealers (as defined in Rule 10b-1
under the 1940 Act) or of their parents.
Capital Stock and Other Securities
Capital Stock
The Fund is authorized to issue a total of 1,000,000,000 shares, each with a par
value of $.001. The Fund presently has fifteen 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, Seligman Income
Portfolio, Seligman Large-Cap Growth Portfolio, Seligman Large-Cap Value
Portfolio, and Seligman Small-Cap Value 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 Securities and Exchange
Commission (SEC), holders of the Accounts have the right to instruct the
applicable participating insurance companies as to voting of Fund shares held by
such Accounts 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 Accounts of participating insurance companies are more
fully set forth in the prospectuses or disclosure documents relating to those
Aaccounts, which should be read together with the Fund's 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.
Other Securities
The Fund has no authorized securities other than common stock.
25
<PAGE>
Purchase, Redemption, and Pricing of Shares
Purchase of Shares
The Fund's Portfolios are offering their shares only to the Accounts of
participating insurance companies to fund benefits of the Contracts. The
Accounts may invest in shares of the Portfolios in accordance with allocation
instructions received from the owners of the Contracts. Such allocations rights
and information on how to purchase or surrender a Contract, as well as sales
charges and other expenses imposed by the Contracts on their owners, are further
described in the separate prospectuses and disclosure documents issued by the
participating insurance companies and accompanying this Prospectus. The Fund
reserves the right to reject any order for the purchase of shares of the Fund's
Portfolios.
Offering Price
The net asset value per share of each Portfolio is determined as of the close of
regular 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, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
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 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 397 days 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 Portfolios, portfolio securities, including open
short positions, are valued at the last sale price on the securities exchange or
securities market on which such securities primarily are traded. Securities
traded on a foreign exchange or over-the-counter market are valued at the last
sales price on the primary exchange or market on which they are traded. United
Kingdom securities and securities for which there are not recent sales
transactions are valued based on quotations provided by primary market makers in
such securities. Any securities for which recent market quotations are not
readily available, including restricted securities, are valued at fair value
determined in accordance with procedures approved by the Board of Directors.
Short-term obligations with less than 60 days remaining to maturity are
generally
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valued at amortized cost. Short-term obligations with more than 60 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 US Government securities,
money market instruments and repurchase agreements, is substantially completed
each day at various times prior to the close of regular trading on 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
regular trading on 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 regular trading on 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 US dollars at the mean between the bid and offer prices of such
currencies against US 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.
Purchase or redemption requests received by participating insurance companies by
the close of regular trading on the New York Stock Exchange (normally, 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.
Redemption in Kind
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 Accounts 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 Accounts in converting such
securities into cash.
Taxation of the Fund
Each Portfolio of the Fund intends to continue to qualify as a "regulated
investment company" under certain provisions of the Internal Revenue Code of
1986, as amended. 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 capital gain distribution. Information regarding the tax
consequences of an investment in the Fund's Portfolios is contained in the
separate prospectuses or disclosure documents of the Accounts, which should be
read together with this SAI.
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Financial Statements
The Annual Report to shareholders for the year ended December 31, 1998 for the
Fund's Portfolios contains a schedule of the investments of each Portfolio as of
December 31, 1998, as well as certain other financial information as of that
date. The financial statements and notes included in the Annual Report, and the
Independent Auditors' Report thereon, are incorporated herein by reference. The
Annual Report will be furnished without charge to investors who request copies
of this SAI.
General Information
Custodians
With the exception of each of the Seligman Henderson Portfolios, Investors
Fiduciary Trust Company, 801 Pennsylvania, 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.
Chase Manhattan Bank, 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.
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APPENDIX A
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.
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COMMERCIAL PAPER
Moody's Commercial Paper Ratings are opinions of the ability of issuers to repay
punctually promissory senior debt obligations not having an original maturity in
excess of one year. Issuers rated "Prime-1" or "P-1" indicates the highest
quality repayment ability of the rated issue.
The designation "Prime-2" or "P-2" indicates that the issuer has a strong
ability for repayment of senior short-term promissory obligations. Earnings
trends and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternative liquidity is maintained.
The designation "Prime-3" or "P-3" indicates that the issuer has an acceptable
capacity for repayment of short-term promissory obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.
Issues rated "Not Prime" do not fall within any of the Prime rating categories.
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.
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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.
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Appendix B
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 underwritings.
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.
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...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 50
mutual fund portfolios.
o Helps pioneer state-specific municipal bond funds, today managing a
national and 18 state-specific municipal 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 plc, of London, known as
Seligman Henderson Co., to offer global 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.
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