STATEMENT OF ADDITIONAL INFORMATION
April 22, 1996
SELIGMAN HENDERSON INTERNATIONAL FUND
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
series of
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
100 Park Avenue
New York, New York 10017
New York City Telephone (212) 850-1864
Toll Free Telephone: (800) 221-2450 - all continental United States
For Retirement Plan Information - Toll-Free Telephone: (800) 445-1777
This Statement of Additional Information expands upon and supplements
the information contained in the current Prospectus, dated April 22, 1996, which
includes the Seligman Henderson International Fund (the "International Fund"),
the Seligman Henderson Global Growth Opportunities Fund (the "Global Growth
Opportunities Fund"), the Seligman Henderson Global Smaller Companies Fund (the
"Global Smaller Companies Fund") and the Seligman Henderson Global Technology
Fund (the "Global Technology Fund"), each a separate series (individually, a
"Series") of Seligman Henderson Global Fund Series, Inc. (the "Fund"). It should
be read in conjunction with the Fund's Prospectus, which may be obtained by
writing or calling the Fund at the above address or telephone numbers. This
Statement of Additional Information, although not in itself a Prospectus, is
incorporated by reference into the Prospectus in its entirety.
Each Series of the Fund offers three classes of shares. Class A shares
may be purchased at net asset value plus a sales load of up to 4.75%. Class B
shares may be purchased at net asset value and are subject to a contingent
deferred sales load ("CDSL"), if applicable, in the following amount (as a
percentage of the current net asset value or the original purchase price,
whichever is less, if redemption occurs within the indicated number of years of
purchase of such shares: 5% (less than 1 year), 4% (1 year but less than 2
years), 3% (2 but less than 4 years), 2% (4 but less that 5 years), 1% (5 but
less than 6 years), and 0% (6 or more years). Class B shares automatically
convert to Class A shares after approximately eight years resulting in lower
ongoing fees. Shares purchased through reinvestment of dividends and
distributions on Class B shares also will convert automatically to Class A
shares along with the underlying shares on which they were earned. Class D
shares may be purchased at net asset value and are subject to a CDSL of 1% if
redeemed within one year of purchase.
Each Series' Class A, Class B and Class D shares represent an identical
legal interest in the investment portfolio of such Series and have the same
rights except for certain class expenses and except that Class B and Class D
shares bear a higher distribution fee that generally will cause the Class B and
Class D shares to have a higher expense ratio and pay lower dividends than Class
A shares. Each Class has exclusive voting rights with respect to its
distribution plan. Although holders of Class A, Class B and Class D shares have
identical legal rights, the different expenses borne by each Class will result
in different net asset values and dividends. The three classes also have
different exchange privileges.
TABLE OF CONTENTS
Page
Investment Objectives, Policies and Risks......... 2
Investment Limitations............................ 4
Directors and Officers............................ 5
Management and Expenses........................... 10
Administration, Shareholder Services
And Distribution Plans.......................... 12
Portfolio Transactions............................ 12
Purchase And Redemption Of Series Shares.......... 13
Distribution Services............................. 15
Valuation......................................... 16
Taxes............................................. 17
Performance....................................... 19
General Information............................... 21
Financial Statements.............................. 21
Appendix A........................................ 21
Appendix B........................................ 25
Appendix C........................................ 25
Appendix D........................................ 28
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INVESTMENT OBJECTIVES, POLICIES AND RISKS
The International Fund, the Global Growth Opportunities Fund, the
Global Smaller Companies Fund and the Global Technology Fund are each separate
Series of Seligman Henderson Global Fund Series, Inc. The International Fund
seeks to achieve long-term capital appreciation primarily by making investments
in securities of non-U.S. issuers. The Global Growth Opportunities Fund seeks
long-term capital appreciation primarily by investing in equity securities of
companies that have the potential to benefit from global economic or social
trends. The Global Smaller Companies Fund seeks to achieve long-term capital
appreciation primarily by making global investments in securities of emerging
companies, i.e., companies with small-to medium-market capitalization. The
Global Technology Fund seeks to achieve long-term capital appreciation by making
global investments of at least 65% of its assets in securities of companies with
business operations in technology and technology-related industries. There can
be no assurance that a Series will achieve its investment objective. The
following information regarding the Series' investment policies supplements the
information contained in the Prospectus.
Purchasing Put Options on Securities. A Series may purchase put options to
protect its portfolio holdings in an underlying security against a decline in
market value. This hedge protection is provided during the life of the put
option since a Series, 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 Series 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 Series would let the put option expire
resulting in a reduced profit on the underlying security equal to the cost of
the put option. The cost of the put option is limited to the premium plus
commission paid. A Series' maximum financial exposure will be limited to these
costs.
A Series may purchase options listed on public exchanges as well as
over-the-counter. Options listed on an exchange are generally considered very
liquid. OTC options are considered less liquid, and therefore, will only be
considered where there is not a comparable listed option. Because options will
be used solely for hedging, and due to their relatively low cost and short
duration, liquidity is not a significant concern.
A Series' ability to engage in option transactions may be limited by
tax considerations.
Foreign Currency Transactions. A forward foreign currency exchange contract is
an agreement to purchase or sell a specific currency at a future date and at a
price set at the time the contract is entered into. A Series will generally
enter into forward foreign currency exchange contracts to fix the U.S. dollar
value of a security it has agreed to buy or sell for the period between the date
the trade was entered into and the date the security is delivered and paid for,
or, to hedge the U.S. dollar value of securities it owns.
A Series may enter into a forward contract to sell or buy the amount of
a foreign currency it believes may experience a substantial movement against
another currency (including the U.S. dollar). In this case the contract would
approximate the value of some or all of a Series' portfolio securities
denominated in such foreign currency. If appropriate, a Series may hedge all or
part of its foreign currency exposure through the use of a basket of currencies
or a proxy currency where such currencies or proxy currency act as an effective
proxy for other currencies. In these circumstances, a Series may enter into a
forward contract where the amount of the foreign currency to be sold exceeds the
value of the securities denominated in such currency. The use of this basket
hedging technique may be more efficient and economical than entering into
separate forward contracts for each currency held in a Series. The precise
matching of the forward contract amounts and the value of the 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
Series may commit a substantial portion or the entire value of its assets to the
consummation of these contracts. The Subadviser will consider the effect a
substantial commitment of its assets to forward contracts would have on the
investment program of each Series and its ability to purchase additional
securities.
Except as set forth above and immediately below, a Series will also not
enter into such forward contracts or maintain a net exposure to such contracts
where the consummation of the contracts would oblige a Series to deliver an
amount of foreign currency in excess of the value of such Series' portfolio
securities or other assets denominated in that currency. A Series, in order to
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avoid excess transactions and transaction costs, may nonetheless maintain a net
exposure to forward contracts in excess of the value of its portfolio securities
or other assets denominated in that currency provided the excess amount is
"covered" by cash 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 Subadviser
believes that it is important to have the flexibility to enter into such forward
contracts when it determines that the best interests of a Series will be served.
At the maturity of a forward contract, a Series may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract obligating it to purchase, on
the same maturity date, the same amount of the foreign currency.
As indicated above, it is impossible to forecast with absolute
precision the market value of portfolio securities at the expiration of the
forward contract. Accordingly, it may be necessary for a Series 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 such Series 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 Series is obligated to deliver. However, a Series 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 Series retains the portfolio security and engages in an offsetting
transaction, such Series will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If a Series
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 a Series' 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, such Series 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, a Series
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.
The Series' dealing in forward foreign currency exchange contracts will
generally be limited to the transactions described above. However, each Series
reserves the right to enter into forward foreign currency contracts for
different purposes and under different circumstances. Of course, a Series is not
required to enter into forward contracts with regard to its foreign
currency-denominated securities and will not do so unless deemed appropriate by
the Subadviser. It also should be realized that this method of hedging against a
decline in the value of a currency does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate of exchange at
a future date. Additionally, although such contracts tend to minimize the risk
of loss due to a decline in the value of the 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.
Investors 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 Series at one rate, while offering a lesser rate of
exchange should such Series desire to resell that currency to the dealer.
Borrowing. A Series may from time to time borrow money for temporary,
extraordinary or emergency purposes in an amount up to 5% of its total assets
from banks at prevailing interest rates and invest the funds in additional
securities. A Series' borrowings are limited so that immediately after such
borrowing the value of the Series' assets (including borrowings) less its
liabilities (not including borrowings) is at least three times the amount of the
borrowings. Should a Series, for any reason, have borrowings that do not meet
the above test, then within three business days, such Series must reduce such
borrowings so as to meet the foregoing test. Under these circumstances, a Series
may have to liquidate portfolio securities at a time when it is disadvantageous
to do so. Gains made with additional funds borrowed will generally cause the net
asset value of a Series' shares to rise faster than could be the case without
borrowings. Conversely, if investment results fail to cover the cost of
borrowings, the net asset value of a Series could decrease faster than if there
had been no borrowings.
Lending of Portfolio Securities. A Series may lend portfolio securities to
certain institutional borrowers of securities and may invest the cash collateral
and obtain additional income or receive an agreed upon amount of interest from
the borrower. Loans made by a Series will generally be short-term. Loans are
subject to termination at the option of each Series or the borrower. A Series
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may pay reasonable administrative and custodial fees in connection with a loan
and may pay a negotiated portion of the interest earned on the cash or
equivalent collateral to the borrower or placing broker. A Series 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.
Illiquid Securities. A Series may invest up to 15% of its net assets in illiquid
securities, including restricted securities (i.e., securities not readily
marketable without registration under the Securities Act of 1933 (the "1933
Act")) and other securities that are not readily marketable. Each Series does
not currently expect to invest more than 5% of its assets in such securities. A
Series may purchase restricted securities that can be offered and sold to
"qualified institutional buyers" under Rule 144A of the 1933 Act, and the
Manager, acting pursuant to procedures approved by the Fund's Board of
Directors, may determine, when appropriate, that specific Rule 144A securities
are liquid and not subject to the 15% limitation on illiquid securities. Should
this determination be made, the Manager, acting pursuant to such procedures,
will carefully monitor the security (focusing on such factors, among others, as
trading activity and availability of information) to determine that the Rule
144A security continues to be liquid. It is not possible to predict with
assurance exactly how the market for restricted securities sold and offered
under Rule 144A will develop. This investment practice could have the effect of
increasing the level of illiquidity in the Series to the extent that qualified
institutional buyers become for a time uninterested in purchasing Rule 144A
securities.
Except as otherwise specifically noted above and below, the Series'
investment policies are not fundamental and the Board of Directors of the Fund
may change such policies without the vote of a majority of a Series' outstanding
voting securities (as defined below).
Portfolio Turnover. A Series may generally change its portfolio investments at
any time in accordance with the Subadviser's appraisal of factors affecting any
particular issuer or the market or economy in general. Each Series anticipates
that its annual rate of portfolio turnover will not exceed 100%. The portfolio
turnover rates for the International Fund for the fiscal years ended October 31,
1994 and 1995 were 39.59% and 60.70%, respectively. The portfolio turnover rate
for the Global Growth Opportunities Fund for the three month period from
November 1, 1995 (commencement of operations) through January 31, 1996 was
2.50%. The portfolio turnover rates for the Global Smaller Companies Fund for
the fiscal years ended October 31, 1994 and 1995 were 62.47% and 63.05%,
respectively. The portfolio turnover rates for the Global Technology Fund for
the period from May 23, 1994 (commencement of operations) through October 31,
1994 and the fiscal year ended October 31, 1995 were 29.20% and 87.42%,
respectively.
INVESTMENT LIMITATIONS
Under each Series' fundamental policies, which cannot be changed except
by vote of a majority of the outstanding voting securities of each Series, each
Series may not:
1. As to 75% of the value of its total assets, invest more than 5% of its
total assets, at market value, in the securities of any one issuer (except
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities).
2. Invest more than 25% of its total assets, at market value, in the
securities of issuers principally engaged in the same industry (except
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities).
3. Own more than 10% of the outstanding voting securities of any issuer, or
more than 10% of any class of securities of one issuer.
4. Invest more than 5% of the value of its total assets, at market value, in
the securities of issuers which, with their predecessors, have been in
business less than three years; provided, however, that securities
guaranteed by a company that (including predecessors) has been in operation
at least three continuous years shall be excluded from this limitation.
5. Purchase securities of open-end or closed-end investment companies, except
as permitted by the Investment Company Act of 1940, as amended (the "1940
Act"), and other applicable law.
6. Invest in warrants if, at the time of acquisition, the investment in
warrants, valued at the lower of cost or market value, would exceed 5% of
such Series net assets. For purposes of this restriction, warrants acquired
by a Series in units or attached to securities may be deemed to have been
purchased without cost.
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7. Make loans of money or securities other than (a) through the purchase of
securities in accordance with a Series' investment objective, (b) through
repurchase agreements and (c) by lending portfolio securities in an amount
not to exceed 33 1/3% of any Series' total assets.
8. Issue senior securities or borrow money except from banks and then in
amounts not in excess of 5% of its total assets, as described in the
Prospectus and on page 3 herein.
9. Buy any securities or other property on margin (except for such short-term
credits as are necessary for the clearance of transactions).
10. Invest in companies for the purpose of exercising control or management.
11. Underwrite securities of other issuers except to the extent that a Series
may be deemed an underwriter when purchasing or selling portfolio
securities.
12. Purchase or retain securities of any issuer (other than the shares of the
Series) if to the Fund's knowledge, those officers and directors of the
Fund and the officers and directors of the Manager or Subadviser, who
individually own beneficially more than 1/2 of 1% of the outstanding
securities of such issuer, together own beneficially more than 5% of such
outstanding securities.
13. Purchase or sell real estate (although it may purchase securities secured
by real estate or interests therein, or issued by companies or investment
trusts that invest in real estate or interests therein).
14. Make short sales except short sales against-the-box.
Although not fundamental policies subject to shareholder vote, as long
as a Series' shares are registered in certain states, it shall not (i) invest in
interests in oil, gas or other mineral exploration or development programs or in
mineral leases, (ii) invest more than 2% of its assets in warrants not listed on
the New York or American Stock Exchange, (iii) invest in real estate limited
partnerships or (iv) invest in commodities except for commodity futures
contracts and options as permitted pursuant to Regulation 4.5 under the
Commodities Exchange Act.
Under the 1940 Act, a "vote of a majority of the outstanding voting
securities" of a Series means the affirmative vote of the lesser of (l) more
than 50% of the outstanding shares of the Series or (2) 67% or more of the
shares present at a shareholders' meeting if more than 50% of the outstanding
shares of the Series are represented at the meeting in person or by proxy.
DIRECTORS AND OFFICERS
Directors and officers of the Fund, together with information as to their
principal business occupations during the past five years are shown below. Each
Director who is an "interested person" of the Fund, as defined in the 1940 Act,
is indicated by an asterisk. Unless otherwise indicated, their addresses are 100
Park Avenue, New York, NY 10017.
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief
(57) Executive Officer and Chairman of the Executive
Committee
Managing Director, Chairman and President, J. &
W. Seligman & Co. Incorporated, investment
managers and advisers; and Seligman Advisors,
Inc., advisers; Chairman and Chief Executive
Officer, the Seligman Group of Investment
Companies; Chairman, Seligman Financial
Services, Inc., broker/dealer; Seligman
Holdings, Inc., holding company; Seligman
Services, Inc., broker/dealer; and Carbo
Ceramics Inc., ceramic proppants for oil and
gas industry; Director or Trustee, Seligman
Data Corp., shareholder service agent;
Kerr-McGee Corporation, diversified energy
company; and Sarah Lawrence College; and a
Member of the Board of Governors of the
Investment Company Institute; formerly,
Chairman, Seligman Securities, Inc.,
broker/dealer and J. & W. Seligman Trust
Company, trust company.
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BRIAN T. ZINO* Director, President and Member of the Executive
(43) Committee
Director and Managing Director (formerly, Chief
Administrative and Financial Officer), J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; and Seligman Advisors,
Inc., advisers; Director or Trustee, the
Seligman Group of Investment Companies;
President, the Seligman Group of Investment
Companies, except Seligman Quality Municipal
Fund, Inc. and Seligman Select Municipal Fund,
Inc.; Chairman, Seligman Data Corp.,
shareholder service agent; Director, Seligman
Financial Services, Inc., broker/dealer;
Seligman Services, Inc., broker/dealer; and
Senior Vice President, Seligman Henderson Co.,
advisers; formerly, Director and Secretary,
Chuo Trust - JWS Advisors, Inc., advisers; and
Director, Seligman Securities, Inc.,
broker/dealer and J. & W. Seligman Trust
Company, trust company.
FRED E. BROWN* Director
(82)
Director and Consultant, J. & W. Seligman & Co.
Incorporated, investment managers and advisers;
and Seligman Advisors, Inc., advisers; Director
or Trustee, the Seligman Group of Investment
Companies; Seligman Financial Services, Inc.,
broker/dealer; Seligman Services, Inc.,
broker/dealer; Trudeau Institute, Inc.,
nonprofit biomedical research organization;
Lake Placid Center for the Arts, cultural
organization; and Lake Placid Education
Foundation, education foundation; formerly,
Director, Seligman Securities, Inc.,
broker/dealer and J. & W. Seligman Trust
Company, trust company.
JOHN R. GALVIN Director
(66)
Dean, Fletcher School of Law and Diplomacy at
Tufts University; Director or Trustee, the
Seligman Group of Investment Companies;
Chairman of the American Council on Germany; a
Governor of the Center for Creative Leadership;
Director of USLIFE, insurance; National
Committee on U.S.-China Relations, National
Defense University; the Institute for Defense
Analysis; and Raytheon Co, electronics;
formerly, Ambassador, U.S. State Department;
Distinguished Policy Analyst at Ohio State
University and Olin Distinguished Professor of
National Security Studies at the United States
Military Academy. From June, 1987 to June,
1992, he was the Supreme Allied Commander,
Europe and the Commander-in-Chief, United
States European Command. Tufts University,
Packard Avenue, Medford, MA 02155
ALICE S. ILCHMAN Director
(60)
President, Sarah Lawrence College; Director or
Trustee, the Seligman Group of Investment
Companies; Chairman, The Rockefeller
Foundation, charitable foundation; and
Director, NYNEX, telephone company; and the
Committee for Economic Development; formerly,
Trustee, The Markle Foundation, philanthropic
organization; and Director, International
Research and Exchange Board, intellectual
exchanges. Sarah Lawrence College, Bronxville,
New York 10708
FRANK A. McPHERSON Director
(62)
Chairman of the Board and Chief Executive
Officer, Kerr-McGee Corporation, energy and
chemicals; Director or Trustee, the Seligman
Group of Investment Companies; Director,
Kimberly-Clark Corporation, consumer products,
Bank of Oklahoma Holding Company, American
Petroleum Institute, Oklahoma City Chamber of
Commerce, Baptist Medical Center, Oklahoma
Chapter of the Nature Conservancy, Oklahoma
Medical Research Foundation and United Way
Advisory Board; Chairman, Oklahoma City Public
Schools Foundation; and Member of the Business
Roundtable and National Petroleum Council. 123
Robert S. Kerr Avenue, Oklahoma City, OK 73102
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JOHN E. MEROW* Director
(66)
Chairman and Senior Partner, Sullivan &
Cromwell, law firm; Director or Trustee, the
Seligman Group of Investment Companies; The
Municipal Art Society of New York, Commonwealth
Aluminum Corporation, the U.S. Council for
International Business and the U.S.-New Zealand
Council; Chairman, American Australian
Association; Member of the American Law
Institute and Council on Foreign Relations;
Member of the Board of Governors of Foreign
Policy Association and New York Hospital. 125
Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(53)
Attorney; Director or Trustee, the Seligman
Group of Investment Companies; and Chairman of
the Board of Trustees of St. George's School
(Newport, RI); formerly, Director, the National
Association of Independent Schools (Washington,
D.C.). St. Bernard's Road, Gladstone, NJ 07934
JAMES C. PITNEY Director
(69)
Partner, Pitney, Hardin, Kipp & Szuch, law
firm; Director or Trustee, the Seligman Group
of Investment Companies and Public Service
Enterprise Group, public utility. Park Avenue
at Morris County, P.O. Box 1945, Morristown, NJ
07962-1945
JAMES Q. RIORDAN Director
(68)
Director, Various Corporations; Director or
Trustee, the Seligman Group of Investment
Companies; The Brooklyn Museum; The Brooklyn
Union Gas Company; the Committee for Economic
Development; Dow Jones & Co. Inc. and Public
Broadcasting Service; formerly, Co-Chairman of
the Policy Council of the Tax Foundation;
Director and Vice Chairman, Mobil Corporation;
Director, Tesoro Petroleum Companies, Inc.; and
Director and President, Bekaert Corporation.
675 Third Avenue, Suite 3004, New York, NY
10017
RONALD T. SCHROEDER* Director and Member of the Executive Committee
(48)
Director, Managing Director and Chief
Investment Officer, Institutional, J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; and Seligman Advisors,
Inc., advisers; Director or Trustee, the
Seligman Group of Investment Companies;
Director, Seligman Holdings, Inc., holding
company; Seligman Financial Services, Inc.,
broker/dealer; Seligman Henderson Co.,
advisers; and Seligman Services, Inc.,
broker/dealer; formerly, President, the
Seligman Group of Investment Companies, except
Seligman Quality Municipal Fund, Inc. and
Seligman Select Municipal Fund, Inc.; and
Director, J. & W. Seligman Trust Company, trust
company; Seligman Data Corp., shareholder
service agent; and Seligman Securities, Inc.,
broker/dealer.
ROBERT L. SHAFER Director
(63)
Director, Various Corporations; Director or
Trustee, the Seligman Group of Investment
Companies and USLIFE Corporation, life
insurance.
230 Park Avenue, New York, NY 10169 -0079
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JAMES N. WHITSON Director
(60)
Executive Vice President, Chief Operating
Officer and Director, Sammons Enterprises,
Inc., Director or Trustee, the Seligman Group
of Investment Companies, Red Man Pipe and
Supply Company,piping and other materials; and
C-SPAN. 300 Crescent Court, Suite 700, Dallas,
TX 75202
PAUL H. WICK Vice President and Portfolio Manager
(33)
Managing Director (formerly, Vice President,
Investment Officer), J. & W. Seligman & Co.
Incorporated, investment managers and advisers;
Vice President and Portfolio Manager, two other
open-end investment companies with the Seligman
Group of Investment Companies; Portfolio
Manager, Seligman Henderson Co., advisers;
Senior Vice President and Portfolio Manager,
Chuo Trust-JWS Advisors, Inc., advisers.
ARSEN MRAKOVCIC Vice President and Portfolio Manager
(31)
Managing Director (formerly, Vice President,
Investment Officer), J. & W. Seligman & Co.
Incorporated, investment managers and advisers;
Vice President and Portfolio Manager, one other
open-end investment company with the Seligman
Group of Investment Companies; formerly,
Portfolio Assistant, J. & W. Seligman & Co.
Incorporated.
LAWRENCE P. VOGEL Vice President
(39)
Senior Vice President, Finance, J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; Seligman Financial
Services, Inc., broker/dealer; and Seligman
Advisors, Inc., advisers; Vice President, the
Seligman Group of Investment Companies; Senior
Vice President, Finance (formerly, Treasurer),
Seligman Data Corp., shareholder service agent;
Treasurer, Seligman Holdings, Inc., holding
company; and Seligman Henderson Co., advisers;
formerly, Senior Vice President, Seligman
Securities, Inc., broker/dealer; and Vice
President, Finance, J. & W. Seligman Trust
Company, trust company.
FRANK J. NASTA Secretary
(31)
Senior Vice President, Law and Regulation and
Corporate Secretary, J. & W. Seligman & Co.
Incorporated, investment managers and advisers;
Corporate Secretary, the Seligman Group of
Investment Companies, Seligman Advisors, Inc.,
advisers; Seligman Financial Services, Inc.,
broker/dealer; Seligman Henderson Co.,
advisers; Seligman Services, Inc.,
broker/dealer; Chuo Trust - JWS Advisors, Inc.,
advisers; and Seligman Data Corp., shareholder
service agent; formerly, Secretary, J. & S.
Seligman Trust Company, trust company and
attorney, Seward & Kissel, law firm.
THOMAS G. ROSE Treasurer
(38)
Treasurer, the Seligman Group of Investment
Companies and Seligman Data Corp., shareholder
service agent; formerly, Treasurer, American
Investors Advisors, Inc. and the American
Investors Family of Funds.
The Executive Committee of the Board of Directors of the Fund acts on
behalf of the Board between meetings to determine the value of securities and
assets owned by the Series of 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.
8
<PAGE>
<TABLE>
<CAPTION>
Compensation Table
Pension or Total Compensation
Aggregate Retirement Benefits from Registrant and
Compensation Accrued as part of Fund Complex Paid
Position with Registrant from Registrant (1) Fund Expenses to Directors (2)
------------------------ ------------------- ------------- ----------------
<S> <C> <C> <C>
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President N/A N/A N/A
Ronald T. Schroeder, Director N/A N/A N/A
Fred E. Brown, Director N/A N/A N/A
John R. Galvin, Director $1,782.50 N/A $41,252.75
Alice S. Ilchman, Director 2,926.56 N/A 68,000.00
Frank A. McPherson, Director 1,782.50 N/A 41,252.75
John E. Merow, Director 2,855.12(d) N/A 66,000.00(d)
Betsy S. Michel, Director 2,819.40 N/A 67,000.00
Douglas R. Nichols, Jr., Director* 1,072.62 N/A 24,747.25
James C. Pitney, Director 2,926.56 N/A 68,000.00
James Q. Riordan, Director 2,926.56 N/A 70,000.00
Herman J. Schmidt, Director* 1,072.62 N/A 24,747.25
Robert L. Shafer, Director 2,926.56 N/A 70,000.00
James N. Whitson, Director 2,855.12(d) N/A 68,000.00(d)
</TABLE>
- -----------------------
(1) Based on remunerations received by the Directors for the Fund's Series for
the year ended October 31, 1995.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of seventeen investment companies.
* Retired May 18, 1995.
(d) Deferred. The total amounts of deferred compensation (including interest)
payable to Messrs. Merow, Pitney and Whitson as of October 31, 1995 were
$8,765, $1,607 and $6,457, respectively. Mr. Pitney no longer defers
current compensation.
The Fund has a compensation arrangement under which outside directors
may elect to defer receiving their fees. Under this arrangement, interest will
be accrued on the deferred balances. The annual cost of such interest will be
included in the Directors' fees and expenses, and the accumulated balance
thereof will be included in other liabilities in the Series' financial
statements. Directors and officers of the Fund are also directors and officers
of some or all of the other investment companies in the Seligman Group.
As of March 29, 1996, directors and officers of the Fund as a group
owned directly or indirectly 33,094,684 Class A shares, or 1.2% of the
outstanding shares of the Class A capital stock of the International Fund; less
than 1% of the outstanding shares of the Class A capital stock of the Global
Growth Opportunities Fund; less than 1% of the outstanding shares of the Class A
capital stock of the Global Smaller Companies Fund; and less than 1% of the
outstanding shares of the Class A capital stock of the Global Technology Fund.
No directors or officers owned Class D shares of any Series of the Fund as of
such date.
As of March 29, 1996, 520,083 Class A shares of the International Fund
were registered in the name of Verely & Co., c/o U.S. Trust Company of New York,
P.O. Box 456, Wall Street Station, New York, NY 10005, which represented 9.4% of
such Series' capital stock and 17.4% of such Series' Class A capital stock then
outstanding. As of the same date, 5,385,486 Class A shares of the Global Growth
Opportunities Fund, which represented 43.7% of such Series' capital stock and
31.4% of Series' Class A capital stock then outstanding; 3,516,987 Class A
shares of the Global Smaller Companies Fund, which represented 14.9% of such
Series' capital stock and 26.9% of such Series' Class A capital stock then
outstanding; and 10,055,944 Class A shares of the Global Technology Fund, which
represented 15.7% of such Series' capital stock and 21.8% of such Series' Class
A capital stock then outstanding were registered in the name of Merrill Lynch
Pierce Fenner & Smith, P.O. Box 45286, Jacksonville, FL 32232-5286.
9
<PAGE>
As of March 29, 1996, 1,184,778 Class D shares of the International
Fund, which represented 21.4% of such Series' capital stock and 46.5% of such
Series' Class D capital stock then outstanding;. 2,528,520 Class D shares of the
Global Growth Opportunities Fund, which represented 15.0% of such Series'
capital stock and 52.4% of Series' Class D capital stock then outstanding;
5,098,189 Class D shares of the Global Smaller Companies Fund, which represented
21.6% of such Series' capital stock and 48.2% of such Series' Class D capital
stock then outstanding; and 5,353,841 Class D shares of the Global Technology
Fund, which represented 8.4% of such Series' capital stock and 29.9% of such
Series' D capital stock then outstanding were registered in the name of Merrill
Lynch Pierce Fenner & Smith, P.O. Box 45286, Jacksonville, FL 32232-5286.
MANAGEMENT AND EXPENSES
Under the Management Agreement dated March 19, 1992, subject to the
control of the Board of Directors, J. & W. Seligman & Co. Incorporated (the
"Manager") administers the business and other affairs of each Series. The
Manager provides the Fund with such office space, administrative and other
services and executive and other personnel as are necessary for Fund operations.
The Manager pays all of the compensation of Directors of the Fund who are
employees, consultants and/or directors of the Manager and of the officers and
employees of the Fund. The Manager also provides senior management for Seligman
Data Corp., the Fund's shareholder service agent. Each Series pays the Manager a
management fee for its services, calculated daily and payable monthly, equal to
1.00% per annum of the average daily net assets of such Series, of which .90% is
paid to Seligman Henderson Co. (the "Subadviser"). The following chart indicates
the management fees paid by each Series as well as the percentage such fee
represents of a Series' average daily net assets for fiscal 1995, 1994 and 1993
or for such periods that a Series has been operational.
<TABLE>
<CAPTION>
Annualized % of
Management Fee Paid Average Daily Net Assets
International Fund
<S> <C> <C>
Year ended 10/31/95 $ 796,849** .96%**
Year ended 10/31/94 599,767** .97**
Year ended 10/31/93 85,133** .45**
Global Growth Opportunities Fund
11/1/95* - 1/31/96 $ 174,945 1.00%
Global Smaller Companies Fund
Year ended 10/31/95 $ 1,148,074 1.00%
Year ended 10/31/94 618,841 1.00
Year ended 10/31/93 --** --**
Global Technology Fund
Year ended 10/31/95 $ 2,127,260 1.00%
5/23/94* - 10/31/94 102,235** .78**
</TABLE>
- --------------------------------
* Commencement of operations.
** During the year/period, the Manager and Subadviser, at their discretion,
elected to waive all or a portion of their fees.
Each Series of the Fund pays all its expenses other than those assumed
by the Manager, or the Subadviser, including brokerage commissions;
administration, shareholder services and distribution fees; fees and expenses of
independent attorneys and auditors; taxes and governmental fees, including fees
and expenses of qualifying the Series' shares under federal and state securities
laws; cost of stock certificates and expenses of repurchase or redemption of
shares; 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 custodians;
expenses of disbursing dividends and distributions; fees and expenses of
Directors of the Fund not employed by (or serving as a Director of) the Manager
or its affiliates; insurance premiums; and extraordinary expenses such as
litigation expenses. The Fund's expenses are allocated between the Series in a
manner determined by the Directors to be fair and equitable.
10
<PAGE>
The Fund will be subject to certain state expense limitations, the most
stringent of which currently requires reimbursement of total expenses (including
the management fee, but excluding interest, taxes, brokerage commissions,
distribution fees and extraordinary expenses) in any year that they exceed 2
1/2% of the first $30 million of average net assets, 2% of the next $70 million
of average net assets and 1 1/2% thereafter. Any such reimbursement will be
allocated between the Series in proportion to the relative expenses of each
Series.
The Management Agreement provides that the Manager 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 its duties under
the Agreement, except for willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations and duties under the Agreement.
The Management Agreement was initially approved by the Board of
Directors of the Fund at a meeting held on March 19, 1992 and by the
shareholders on May 20, 1993. The Management Agreement will continue in effect
until December 31 of each year if (1) such continuance is approved in the manner
required by the 1940 Act (i.e., by a vote of a majority of the Board of
Directors or of the outstanding voting securities of the Series and by a vote of
a majority of the Directors who are not parties to the Management Agreement or
interested persons of any such party) and (2) if the Manager has not notified
the Fund at least 60 days prior to December 31 of any year that it does not
desire such continuance. The Management Agreement may be terminated by the Fund,
without penalty, on 60 days' written notice to the Manager and will terminate
automatically in the event of its assignment. The Fund has agreed to change its
name upon termination of the Management Agreement if continued use of the name
would cause confusion in the context of the Manager's business.
The Manager is a successor firm to an investment banking business
founded in 1864 which has thereafter provided investment services to
individuals, families, institutions and corporations. See Appendix B for further
history of the Manager.
Under the Subadvisory Agreement dated March 19, 1992, the Subadviser
supervises and directs the investment of the assets of the Fund's Series,
including making purchases and sales of portfolio securities consistent with
each Series' investment objective and policies. For these services the
Subadviser is paid, by the Manager, a fee as described above. The Subadvisory
Agreement was approved by the Board of Directors of the Fund at a meeting held
on March 19, 1992 and by shareholders of the Fund on May 20, 1993. The
Subadvisory Agreement will continue in effect until December 31 of each year 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 Series and by a vote of a majority of the Directors who are not parties
to the Subadvisory Agreement or interested persons of any such party) and (2) if
the Subadviser shall not have notified the Manager in writing at least 60 days
prior to December 31 of any year 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 the Subadviser. The Subadvisory Agreement will terminate
automatically in the event of its assignment or upon the termination of the
Management Agreement.
The Subadviser is a New York general partnership formed by the Manager
and Henderson International, Inc., a controlled affiliate of Henderson
Administration Group plc. Henderson Administration Group plc, headquartered in
London, is one of the largest independent money managers in Europe. The firm,
which is recognized as a specialist in global equity investing, currently
manages approximately $19 billion in assets.
Officers, directors and employees of the Manager are permitted to engage in
personal securities transactions, subject to the Manager's Code of Ethics (the
"Ethics Code"). The Ethics Code proscribes certain practices with regard to
personal securities transactions and personal dealings, provides a framework for
the reporting and monitoring of personal securities transactions by the
Manager's Director of Compliance, and sets forth a procedure of identifying, for
disciplinary action, those individuals who violate the Ethics Code. The Ethics
Code prohibits each of the officers, directors and employees (including all
portfolio managers) of the Manager from purchasing or selling any security that
the officer, director or employee knows or believes (i) was recommended by the
Manager for purchase or sale by any client, including the Fund, within the
preceding two weeks, (ii) has been reviewed by the Manager for possible purchase
or sale within the preceding two weeks, (iii) is being purchased or sold by any
client, (iv) is being considered by a research analyst, (v) is being acquired in
a private placement, unless prior approval has been obtained from the Manager's
Director of Compliance, or (vi) is being acquired during an initial or secondary
public offering. The Ethics Code also imposes a strict standard of
confidentiality and requires portfolio managers to disclose any interest they
may have in the securities or issuers that they recommend for purchase by any
client.
The Ethics Code also prohibits (i) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
11
<PAGE>
investment company accounts) for which the portfolio manager or investment team
manages and (ii) each employee from engaging in short-term trading (a purchase
and sale or vice-versa within 60 days). Any profit realized pursuant to either
of these prohibitions must be disgorged.
Officers, directors and employees are required, except under very limited
circumstances, to engage in personal securities transactions through the
Manager's order desk. 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.
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLANS
Each Series of the Fund has adopted an Administration, Shareholder
Services and Distribution Plan for each Class (the "Plan") in accordance with
Section 12(b) of the 1940 Act and Rule 12b-1 thereunder.
The Plan with respect to the International Fund was originally approved
on July 15, 1993 by the Board of Directors of the Fund, including a majority of
the Directors who are not "interested persons" (as defined in the 1940 Act) and
who have no direct or indirect financial interest in the operation of the Fund
("Qualified Directors") and by the shareholders of such Series on September 21,
1993. The Plan with respect to the Global Growth Opportunities Fund was
originally approved on September 21, 1995 by the Board of Directors of the Fund,
including a majority of the Qualified Directors, and by the sole shareholder of
such Series on October 30, 1995. The Plan with respect to the Global Smaller
Companies Fund was originally approved on July 16, 1992 by the Board of
Directors of the Fund, including a majority of the Qualified Directors.
Amendments to the Plan in respect of Class D shares of the Global Smaller
Companies Fund were approved by the Board of Directors of the Fund, including a
majority of the Qualified Directors, on March 18, 1993 and the amended Plan was
approved by the shareholders of the Global Smaller Companies Fund on May 20,
1993. The Plan with respect to the Global Technology Fund was originally
approved on March 17, 1994 by the Board of Directors of the Fund, including a
majority of the Qualified Directors and by the sole shareholder of such Series
on that date. The Plans were approved in respect of the Class B shares of each
Series on March 21, 1996 by the Board of Directors of the Fund, including a
majority of the Qualified Directors, and became effective in respect of the
Class B shares on April 22,1996. The Plans will continue in effect through
December 31 of each year so long as such continuance is approved annually by a
majority vote of both the Directors and the Qualified Directors of the Fund,
cast in person at a meeting called for the purpose of voting on such approval.
The Plans may not be amended to increase materially the amounts payable to
Service Organizations (as defined in the Fund's Prospectus) with respect to a
Class without the approval of a majority of the outstanding voting securities of
such Class. If the amount payable in respect of Class A shares under the Plans
is proposed to be increased materially, the Fund will either (i) permit holders
of Class B shares to vote as a separate class on the proposed increase or (ii)
establish a new class of shares subject to the same payment under the Plans as
existing Class A shares, in which case Class B shares will thereafter convert
into the new class instead of into Class A shares. No material amendment to the
Plans may be made except by a majority of both the Directors and Qualified
Directors.
The Plans require that the Treasurer of the Fund shall provide to the
Directors and the Directors shall review, at least quarterly, a written report
of the amounts expended (and purposes therefor) under the Plans. Rule 12b-1 also
requires that the selection and nomination of Directors who are not "interested
persons" of the Fund be made by such disinterested Directors.
PORTFOLIO TRANSACTIONS
The Management Agreement recognizes that in the purchase and sale of
portfolio securities of the Series, the Manager and the Subadviser will seek the
most favorable price and execution, and consistent with that policy, may give
consideration to the research, statistical and other services furnished by
brokers or dealers to the Manager and the Subadviser for their use. Such
services include supplemental investment research, analysis and reports
concerning issuers, industries and securities deemed by the Manager and
Subadviser to be beneficial to the Fund. In addition, the Manager and the
Subadviser are authorized to place orders with brokers who provide supplemental
investment and market research and statistical and economic analysis through the
use of such brokers selected solely on the basis of seeking the most favorable
price and execution, although such research and analysis may be useful to the
Manager and the Subadviser in connection with their services to clients other
than the Fund.
In over-the-counter markets, the Fund deals with responsible primary
market-makers unless a more favorable execution or price is believed to be
obtainable. The Fund may buy securities from or sell securities to dealers
acting as principal, except dealers with which its directors and/or officers are
affiliated.
12
<PAGE>
The Board of Directors of the Fund adopted procedures pursuant to which
Seligman Securities, Inc., was available to the Global Smaller Companies Fund as
broker for approximately one-half of agency transactions in listed securities
(exclusive of option and option-related transactions) at commission rates
believed in accordance with applicable regulations to be fair and reasonable. As
of March 31, 1993, Seligman Securities, Inc. ceased functioning as broker for
the Fund and its other clients.
When two or more of the investment companies in the Seligman Group or
other investment advisory clients of the Manager or the Subadviser desire to buy
or sell the same security at the same time, the securities purchased or sold are
allocated by the Manager and the Subadviser in a manner believed to be equitable
to each. There may be possible advantages or disadvantages of such transactions
with respect to price or the size of positions readily obtainable or saleable.
Total brokerage commissions paid to others for the execution, research
and statistical services for the International Fund for the fiscal years ended
October 31, 1995, 1994, and 1993 were $230,997, $204,308, and $84,349,
respectively; for the Global Growth Opportunities Fund for the three month
period from November 1, 1995 (commencement of operations) through January 31,
1996 was $285,901; for the Global Smaller Companies Fund for the fiscal years
ended October 31, 1995, 1994, and 1993 were $359,655, $170,773, and $75,087 (of
which Seligman Securities, Inc. received $680), respectively; and for the Global
Technology Fund for the fiscal year ended October 31, 1995 and for the period
from May 23, 1994 through October 31, 1994 were $735,490, and $76,206,
respectively.
PURCHASE AND REDEMPTION OF SERIES SHARES
Each Series issues three classes of shares: Class A shares may be
purchased at a price equal to the next determined net asset value per share,
plus a sales load. Class B shares may be purchased at a price equal to the next
determined net asset value without an initial sales load, but a CDSL may be
charged on redemptions within 6 years of purchase. Class D shares may be
purchased at a price equal to the next determined net asset value without an
initial sales load, but a CDSL may be charged on redemptions within one year of
purchase. See "Alternative Distribution System," "Purchase Of Shares," and
"Redemption Of Shares" in the Prospectus.
Specimen Price Make-Up
Under the current distribution arrangements between the Fund and the
Distributor, Class A shares are sold subject to a sales load of up to 4.75% and
Class B and Class D shares * are sold at net asset value. Using each Series' net
asset value at October 31, 1995 (January 31, 1996 for the Global Growth
Opportunities Fund), the maximum offering prices of each Series' shares are as
follows:
<TABLE>
<CAPTION>
CLASS A SHARES
Net Asset Maximum Sales Load Maximum Offering
Series Value Per Share (4.75% of Offering Price) Price Per Share
------ --------------- ------------------------- ---------------
<S> <C> <C> <C>
International Fund $ 16.71 $ .83 $ 17.54
Global Growth Opportunities Fund 7.58 .38 7.96
Global Smaller Companies Fund 13.90 .69 14.59
Global Technology Fund 13.05 .65 13.70
</TABLE>
<TABLE>
<CAPTION>
CLASS B AND CLASS D SHARES
Net Asset Value and Maximum
Series Offering Price Per Share*
------ ---------------------------
<S> <C>
International Fund $ 16.43
Global Growth Opportunities Fund 7.57
Global Smaller Companies Fund 13.63
Global Technology Fund 12.89
</TABLE>
- ----------
* Class B shares are subject to a CDSL declining from 5% in the first year
after purchase to 0% after six years. Class D shares are subject to a CDSL
of 1% on redemptions within one year of purchase. See "Redemption Of
Shares" in the Fund's Prospectus.
13
<PAGE>
Class A Shares - Reduced Front-End Sales Loads
Reductions Available. Shares of any Seligman Mutual Fund sold with a
front-end sales load in a continuous offering will be eligible for the following
reductions:
Volume Discounts are provided if the total amount being invested in
Class A shares of a Series alone, or in any combination of Class A shares of the
other mutual funds in the Seligman Group which are sold with a front-end sales
load, reaches levels indicated in the sales load schedule set forth in the
Prospectus.
The Right of Accumulation allows an investor to combine the amount
being invested in Class A shares of a Series of the Fund and shares of the other
mutual funds in the Seligman Group sold with a front-end sales load with the
total net asset value of shares of those mutual munds already owned that were
sold with a front-end sales load and the total net asset value of shares of
Seligman Cash Management Fund which were acquired through an exchange of shares
of another mutual fund in the Seligman Group on which there was a front-end
sales load at the time of purchase, to determine reduced sales loads in
accordance with the schedule in the Prospectus. The value of the shares owned,
including the value of shares of Seligman Cash Management Fund acquired in an
exchange of shares of another mutual fund in the Seligman Group on which there
was a front-end sales load at the time of purchase will be taken into account in
orders placed through a dealer, however, only if Seligman Financial Services,
Inc. ("SFSI") is notified by the investor or the dealer of the amount owned at
the time the purchase is made and is furnished sufficient information to permit
confirmation.
A Letter of Intent allows an investor to purchase Class A shares over a
13-month period at reduced sales loads in accordance with the schedule in the
Prospectus, based on the total amount of Class A shares of the Fund that the
letter states the investor intends to purchase plus the total net asset value of
shares that were sold with a front-end sales load of the other mutual funds in
the Seligman Group already owned and the total net asset value of shares of
Seligman Cash Management Fund, Inc. which were acquired through an exchange of
shares of another mutual fund in the Seligman Group on which there was a
front-end sales load at the time of purchase. Reduced sales loads also may apply
to purchases made within a 13-month period starting up to 90 days before the
date of execution of a letter of intent. For more information concerning the
terms of the letter of intent see "Terms and Conditions - Letter of Intent -
Class A Shares Only" in the back of the Prospectus.
Persons Entitled To Reductions. Reductions in sales loads apply to
purchases of Class A shares by a "single person," including an individual;
members of a family unit comprising husband, wife and minor children; or a
trustee or other fiduciary purchasing for a single fiduciary account. Employee
benefit plans qualified under Section 401 of the Internal Revenue Code, of 1986,
as amended, organizations tax exempt under Section 501 (c)(3) or (13), and
non-qualified employee benefit plans that satisfy uniform criteria are
considered "single persons" for this purpose. The uniform criteria are as
follows:
1. Employees must authorize the employer, if requested by the Series,
to receive in bulk and to distribute to each participant on a timely basis the
Fund's Prospectus, reports and other shareholder communications.
2. Employees participating in a plan will be expected to make regular
periodic investments (at least annually). A participant who fails to make such
investments may be dropped from the plan by the employer or the Series 12 months
and 30 days after the last regular investment in his account. In such event, the
dropped participant would lose the discount on share purchases to which the plan
might then be entitled.
3. The employer must solicit its employees for participation in such an
employee benefit plan or authorize and assist an investment dealer in making
enrollment solicitations.
Eligible Employee Benefit Plans. The table of sales loads in the
Prospectus applies to sales to "eligible employee benefit plans" (as defined in
the Prospectus), except that each Series may sell shares at net asset value to
"eligible employee benefit plans," (i) which have at least $1 million invested
in the Seligman Group of Mutual Funds or (ii) of employers who have at least 50
eligible employees to whom such plan is made available or, regardless of the
number of employees, if such plan is established or maintained by any dealer
which has a sales agreement with SFSI. Such sales must be made in connection
with a payroll deduction system of plan funding or other systems acceptable to
Seligman Data Corp. Such sales are believed to require limited sales effort and
sales-related expenses and therefore are made at net asset value. Contributions
or account information for plan participation also should be transmitted to
Seligman Data Corp. by methods which it accepts. Additional information about
"eligible employee benefit plans" is available from investment dealers or SFSI.
14
<PAGE>
Payment in Securities. In addition to cash, the Series may accept
securities in payment for Series shares sold at the applicable public offering
price (net asset value plus any applicable sales load), although the Series does
not presently intend to accept securities in payment for Series shares.
Generally, a Series will only consider accepting securities (l) to increase its
holdings in a portfolio security, or (2) if the Manager determines that the
offered securities are a suitable investment in a sufficient amount for
efficient management. Although no minimum has been established, it is expected
that the Series would not accept securities with a value of less than $100,000
per issue in payment for shares. A Series may reject in whole or in part offers
to pay for shares with securities, may require partial payment in cash for
applicable sales loads, and may discontinue accepting securities as payment for
shares at any time without notice. A Series will not accept restricted
securities in payment for shares. A Series will value accepted securities in the
manner provided for valuing portfolio securities of the Series. Any securities
accepted by the Series in payment for Series shares will have an active and
substantial market and have a value which is readily ascertainable (See
"Valuation"). In accordance with Texas securities regulations, should a Series
accept securities in payment for shares, such transactions would be limited to a
bona-fide reorganization, statutory merger, or to other acquisitions of
portfolio securities (except for municipal debt securities issued by state
political subdivisions or their agencies or instrumentalities) which meet the
investment objectives and policies of a Series; are acquired for investment and
not for resale; are liquid securities which are not restricted as to transfer
either by law or liquidity of market; and have a value which is readily
ascertainable (and not established only by evaluation procedures) as evidenced
by a listing on the American Stock Exchange, the New York Stock Exchange
("NYSE") or NASDAQ.
Further Types of Reductions. Class A shares of each Series may be
issued without a sales load in connection with the acquisition of cash and
securities owned by other investment companies and other personal holding
companies to financial institution trust departments, to registered investment
advisers exercising investment discretionary authority with respect to the
purchase of Series shares, or pursuant to sponsored arrangements with
organizations which make recommendations to, or permit group solicitation of,
its employees, members or participants in connection with the purchase of shares
of the Series, to separate accounts established and maintained by an insurance
company which are exempt from registration under Section 3(c)(11) of the 1940
Act, to registered representatives and employees (and their spouses and minor
children) of any dealer that has a sales agreement with SFSI and shareholders of
mutual funds with investment objectives and policies similar to the Series who
purchase shares with redemption proceeds of such funds and to certain unit
investment trusts as described in the Prospectus.
Class A shares may be issued without a sales load to present and
retired directors, trustees, officers, employees (and their family members, as
defined in the Prospectus) of the Funds, the other investment companies in the
Seligman Group, the Manager and other companies affiliated with the Manager.
Such sales may also be made to employee benefit plans and thrift plans for such
persons and to any investment advisory, custodial, trust or other fiduciary
account managed or advised by the Manager or any affiliate. The sales may be
made for investment purposes only, and shares may be resold only to the Fund.
Class A shares may be sold at net asset value to these persons since
such shares require less sales effort and lower sales related expenses as
compared with sales to the general public.
More About Redemptions. The procedures for redemption of Series' shares
under ordinary circumstances are set forth in the Prospectus. In unusual
circumstances, payment may be postponed, or the right of redemption postponed
for more than seven days, if the orderly liquidation of portfolio securities is
prevented by the closing of, or restricted trading on, the NYSE during periods
of emergency, or such other periods as ordered by the Securities and Exchange
Commission. Under these circumstances, redemption proceeds may be made in
securities, subject to the review of some state securities commissions. If
payment is made in securities, a shareholder may incur brokerage expenses in
converting these securities to cash.
DISTRIBUTION SERVICES
SFSI, an affiliate of the Manager, acts as general distributor of the
shares of the Series of the Fund and of the other mutual funds in the Seligman
Group. The Fund and SFSI are parties to a Distributing Agreement dated January
1, 1993. As general distributor of the Fund's capital stock, SFSI allows
comissions to all dealers, as indicated in the Prospectus, up to 4.25% on
purchases to which the 4.75% maximum sales load applies. SFSI receives the
balance of sales loads and any CDSLs paid by investors.
15
<PAGE>
Total sales loads paid by the Series and CDSLs retained by SFSI for
fiscal 1995, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
Fiscal 1995
SFSI Dealer Total CDSL
Series Concessions Commissions Commissions Retained +
- ------ ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
International Fund $ 24,712 $ 340,375 $ 365,087 $ 9,926
Global Growth Opportunities Fund*70,114 3,119,458 3,189,572 2,125
Global Smaller Companies Fund 149,478 1,581,277 1,730,755 20,784
Global Technology Fund 1,452,931 13,763,930 15,216,861 47,859
</TABLE>
<TABLE>
<CAPTION>
Fiscal 1994
SFSI Dealer Total CDSL
Series Concessions Commissions Commissions Retained +
- ------ ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
International Fund $ 24,205 $ 274,339 $ 298,544 $ 5,313
Global Smaller Companies Fund 58,459 652,019 710,478 22,864
Global Technology Fund** 170,518 1,699,610 1,870,128 366
</TABLE>
<TABLE>
<CAPTION>
Fiscal 1993
SFSI Dealer Total CDSL
Series Concessions Commissions Commissions Retained +
- ------ ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
International Fund $ -- $104,059 $104,059 $ 52
Global Smaller Companies Fund 48,938 615,114 664,052 983
</TABLE>
- ----------------------------
* For the period 11/1/95 to 1/31/96.
** For the period 5/23/94 to 10/31/94.
+ No Class B shares were outstanding throughout the 3 year period ended
December 31, 1995 and as a result no CDSL charges from Class B shares were
retained by SFSI.
Effective April 1, 1995, Seligman Services, Inc., an affiliate of the
Manager, became eligible to receive commissions from certain sales of Series
shares, as well as distribution and service fees pursuant to the Plans. For the
period ended October 31, 1995 (January 31, 1996, for the Global Growth
Opportunities Fund), Seligman Services, Inc. received commissions from sales of
the Series of the Fund and distribution and service fees, pursuant to the Plans,
as follows:
<TABLE>
<CAPTION>
Distribution and
Series Commissions Service fees
<S> <C> <C>
International Fund $ 1,843 $10,799
Global Growth Opportunities Fund 3,253 267
Global Smaller Companies Fund 16,474 4,833
Global Technology Fund 240,079 6,303
</TABLE>
Class A shares may be sold at net asset value to present and retired
Directors, trustees, officers, employees (and their family members, as defined
in the Prospectus) of the Fund, the other investment companies in the Seligman
Group, the Manager and other companies affiliated with the Manager and the
Subadviser. Such sales also may be made to employee benefit plans for such
persons and to any investment advisory, custodial, trust or other fiduciary
account managed or advised by the Manager or any affiliate. These sales may be
made for investment purposes only, and shares may be resold only to the Series.
VALUATION
The net asset value per share of each class of a Series of the Fund is
determined as of the close of the NYSE (normally, 4:00 p.m. Eastern time), on
each day that the NYSE is open. The Fund and the NYSE are currently closed on
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. The Fund will also determine net
asset value for each class of a Series on each day in which there is a
sufficient degree of trading in a Series' portfolio securities that the net
asset value of Series shares might be materially affected. Net asset value per
share for a class of a Series is computed by dividing that class' share of the
value of the net assets of such Series (i.e., the value of its assets less
liabilities) by the total number of outstanding shares of such class. All
expenses of a Series, including the Manager's fee, are accrued daily and taken
into account for the purpose of determining net asset value. The net asset value
of Class B and Class D shares of a Series will generally be lower than the net
asset value of Class A shares of such Series as a result of the higher
distribution fee with respect to such shares.
16
<PAGE>
Portfolio securities, including open short positions and options
written, 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 maker in
such securities. Other securities not listed on an exchange or securities
market, or securities in which there were no transactions, are valued at the
average of the most recent bid and asked price, except in the case of open short
positions where the asked price is available. Any securities for which recent
market quotations are not readily available are valued at fair value determined
in accordance with procedures approved by the Board of Directors. Short-term
obligations with less than sixty days remaining to maturity are generally valued
at amortized cost. Short-term obligations with more than sixty days remaining to
maturity will be valued at current market value until the sixtieth day prior to
maturity, and will then be valued on an amortized cost basis based on the value
on such date unless the Board determines that this amortized cost value does not
represent fair market value.
Generally, trading in foreign securities, as well as U.S. Government
securities, money market instruments and repurchase agreements, is substantially
completed each day at various times prior to the close of the NYSE. The values
of such securities used in computing the net asset value of the Series shares
are determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the value of such securities and such exchange rates may occur between
the times at which they are determined and the close of the NYSE, 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 a Series,
all assets and liabilities initially expressed in foreign currencies will be
converted into U.S. dollars at the mean between the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank that is a regular
participant in the foreign exchange market or on the basis of a pricing service
that takes into account the quotes provided by a number of such major banks.
TAXES
Foreign Income Taxes. Investment income received by the Series from sources
within foreign countries may be subject to foreign income taxes withheld at
source. The United States has entered into tax treaties with many foreign
countries which entitle the Series to a reduced rate of such taxes or exemption
from taxes on such income. It is impossible to determine the effective rate of
foreign tax in advance since the amount of each Series' assets to be invested
within various countries is not known.
U.S. Federal Income Taxes. Each Series intends for each taxable year to qualify
for tax treatment as a "regulated investment company" under the Code.
Qualification relieves a Series of Federal income tax liability on that part of
its net ordinary income and net realized capital gains which it pays out to its
shareholders. Such qualification does not, of course, involve governmental
supervision of management or investment practices or policies. Investors should
consult their own counsel for a complete understanding of the requirements a
Series must meet to qualify for such treatment. The information set forth in the
Prospectus and the following discussion relate solely to the U.S. Federal income
taxes on dividends and distributions by a Series and assumes that each Series
qualifies as a regulated investment company. Investors should consult their own
counsel for further details, including their possible entitlement to foreign tax
credits that might be "passed through" to them under the rules described below,
and the application of state and local tax laws to his or her particular
situation.
Each Series intends to declare and distribute dividends in the amounts
and at the times necessary to avoid the application of the 4% Federal excise tax
imposed on certain undistributed income of regulated investment companies. Each
Series will be required to pay the 4% excise tax to the extent it does not
distribute to its shareholders during any calendar year at least 98% of its
ordinary income for the calendar year plus 98% of its capital gain net income
for the twelve months ended October 31 of such year. Certain distributions of
the Series which are paid in January of a given year but are declared in the
prior October, November or December to shareholders of record as of a specified
date during such a month will be treated as having been distributed to
shareholders and will be taxable to shareholders as if received in December.
Dividends of net ordinary income and distributions of any net realized
short-term capital gain are taxable to shareholders as ordinary income. Since
each Series expects to derive a substantial portion of its gross income
(exclusive of capital gains) from sources other than qualifying dividends, it is
expected that only a portion of each Series' dividends or distributions will
qualify for the dividends received deduction for corporations.
17
<PAGE>
The excess of net long-term capital gains over the net short-term
capital losses realized and distributed by each Series to its shareholders will
be taxable to the shareholders as long-term capital gains, irrespective of the
length of time a shareholder may have held Series shares. Any dividend or
distribution received by a shareholder on shares of a Series shortly after the
purchase of such shares will have the effect of reducing the net asset value of
such shares by the amount of such dividend or distribution. Furthermore, such
dividend or distribution, although in effect a return of capital, would be
taxable to the shareholder as described above. If a shareholder has held shares
in a Series for six months or less and during that period has received a
distribution taxable to the shareholder as a long-term capital gain, any loss
recognized by the shareholder on the sale of those shares during that period
will be treated as a long-term capital loss to the extent of the distribution.
Dividends and distributions are taxable in the manner discussed
regardless of whether they are paid to the shareholder in cash or are reinvested
in additional shares of a Series' common stock.
Each Series generally will be required to withhold tax at the rate of
31% with respect to a portion of distributions and other reportable payments to
noncorporate shareholder unless the shareholder certifies on his Account
Application that the social security or taxpayer identification number provided
is correct and that the shareholder has not been notified by the Internal
Revenue Service that he is subject to backup withholding.
Income received by a Series from sources within various foreign
countries may be subject to foreign income tax. If more than 50% of the value of
a Series' total assets at the close of its taxable year consists of the stock or
securities of foreign corporations, such Series may elect to "pass through" to
its shareholders the amount of foreign income taxes paid by such Series.
Pursuant to such election, shareholders would be required: (i) to include in
gross income, even though not actually received, their respective pro-rata
shares of a Series' gross income from foreign sources; and (ii) either to deduct
their pro-rata share of foreign taxes in computing their taxable income, or to
use such share as a foreign tax credit against Federal income tax (but not
both). No deduction for foreign taxes could be claimed by a shareholder who does
not itemize deductions.
Shareholders who choose to utilize a credit (rather than a deduction)
for foreign taxes will be subject to the limitation that the credit may not
exceed the shareholder's U.S. tax (determined without regard to the availability
of the credit) attributable to his or her total foreign source taxable income.
For this purpose, the portion of dividends and distributions paid by a Series
from its foreign source income will be treated as foreign source income. Each
Series' gains from the sale of securities will generally be treated as derived
from U.S. sources, however, and certain foreign currency gains and losses
likewise will be treated as derived from U.S. sources. The limitation on the
foreign tax credit is applied separately to foreign source "passive income,"
such as the portion of dividends received from a Series which qualifies as
foreign source income. In addition, the foreign tax credit is allowed to offset
only 90% of the alternative minimum tax imposed on corporations and individuals.
Because of these limitations, shareholders may be unable to claim a credit for
the full amount of their proportionate shares of the foreign income taxes paid
by a Series.
Each Series intends for each taxable year to meet the requirements of
the Code to "pass through" to its shareholders foreign income taxes paid, but
there can be no assurance that a Series will be able to do so. Each shareholder
will be notified within 60 days after the close of each taxable year of each
Series whether the foreign taxes paid by such Series will "pass through" for
that year, and, if so, the amount of each shareholder's pro-rata share (by
country) of (i) the foreign taxes paid, and (ii) such Series' gross income from
foreign sources. Of course, shareholders who are not liable for Federal income
taxes, such as retirement plans qualified under Section 401 of the Code, will
not be affected by any such "pass through" of foreign tax credits.
Investments in Passive Foreign Investment Companies. If a Series purchases
shares in certain foreign investment entities, referred to as "passive foreign
investment companies," the Series itself may be subject to U.S. Federal income
tax, and an additional charge in the nature of interest, on a portion of any
"excess distribution" from such company or gain from the disposition of such
shares, even if the distribution or gain is paid by such Series as a dividend to
its shareholders. If a Series were able and elected to treat a passive foreign
investment company as a "qualified electing fund," in lieu of the treatment
described above, such Series would be required each year to include in income,
and distribute to shareholders in accordance with the distribution requirements
set forth above, its pro rata share of the ordinary earnings and net capital
gains of the company, whether or not distributed to such Series.
Certain Foreign Currency Transactions. Gains or losses attributable to foreign
currency contracts, or to fluctuations in exchange rates that occur between the
time a Series accrues interest or other receivables or accrues expenses or other
liabilities denominated in a foreign currency and the time the Fund actually
collects such receivables or pays such liabilities are treated as ordinary
income or ordinary loss. Similarly, gains or losses on disposition of debt
securities denominated in a foreign currency attributable to fluctuations in the
value of the foreign currency between the date of acquisition of the security
and the date of disposition also are treated as ordinary gain or loss. These
gains or losses increase or decrease the amount of a Series' net investment
income available to be distributed to its shareholders as ordinary income.
18
<PAGE>
Options Transactions. A special "marked-to-market" system governs the taxation
of "section 1256 contracts," which include certain listed options. Each Series
may invest in such section 1256 contracts. In general, gain or loss on section
1256 contracts will be taken into account for tax purposes when actually
realized. In addition, any section 1256 contracts held at the end of a taxable
year will be treated as sold at fair market value (that is, marked-to-market),
and the resulting gain or loss will be recognized for tax purposes. In general,
gain or loss recognized by a Series on the actual or deemed disposition of a
section 1256 contract will be treated as 60% long-term and 40% short-term
capital gain or loss, regardless of the period of time the section 1256 contract
is actually held by such Series. Each Series can elect to exempt its section
1256 contracts which are part of a "mixed" straddle from the application of
section 1256.
PERFORMANCE
The average annual total returns for the one-year period ended October 31,
1995 for the Class A shares of the International Fund, the Global Smaller
Companies Fund and the Global Technology Fund were (5.92)%, 14.44%, and 49.79%,
respectively; and since inception through the period ended October 31, 1995 for
the International Fund, the Global Smaller Companies Fund, and the Global
Technology Fund were 10.28%, 23.20%, and 47.78%, respectively. The total return
for the period from November 1, 1995 (commencement of operations) through
January 31, 1996 for the Class A shares of the Global Growth Opportunities Fund
was 1.07%. These returns were computed by assuming a hypothetical initial
investment of $1,000 in Class A shares of each Series. From this $1,000, the
maximum sales load of $47.50 (4.75% of public offering price) was deducted. It
was then assumed that all of the dividends and distributions paid by the Series'
Class A shares over the relevant time period, were reinvested. It was then
assumed that at the end of these periods, the entire amounts were redeemed. The
average annual total return was then calculated by calculating the annual rate
required for the initial payment to grow to the amount which would have been
received upon redemption (i.e., the average annual compound rate of return).
The average annual total returns for the one-year period ended October 31,
1995 for the Class D shares of the International Fund, the Global Smaller
Companies Fund and the Global Technology Fund were (3.02)%, 18.11%, and 54.95%,
respectively; and since inception through the period ended October 31, 1995 for
the International Fund, the Global Smaller Companies Fund and the Global
Technology Fund were 6.83%, 22.51%, and 51.61%, respectively. The total return
for the period from November 1, 1995 through January 31, 1996 for the Class D
shares of the Global Growth Opportunities Fund was 5.02%. These returns were
computed by assuming a hypothetical initial investment of $1,000 in Class D
shares of each Series and that all of the dividends and distributions paid by
the Series' Class D shares over the relevant time period, were reinvested. It
was then assumed that at the end of these periods, the entire amount was
redeemed, subtracting the 1% CDSL, if applicable.
Performance information is not provided for class B shares because no Class B
shares were outstanding prior to April 22, 1996.
The tables below illustrate the total returns on a $1,000 investment in each
of the Series' Class A and Class D shares from the commencement of a Series'
operations through October 31, 1995 (January 31, 1996 for the Global Growth
Opportunities Fund), assuming investment of all dividends and capital gain
distributions.
<TABLE>
<CAPTION>
CLASS A SHARES
Year/ Value of Capital Value Total Value
Period Initial Gain of of Total
Ended 1 Investment 2 Distributions Dividends Investment2 Return1,3
- ------- ------------ ------------- --------- ----------- ---------
INTERNATIONAL FUND
<C> <C> <C> <C> <C> <C>
10/31/92 $ 944 $ -- $ -- $ 944
10/31/93 1,268 -- 4 1,272
10/31/95 1,326 87 5 1,418 41.75%
10/31/94 1,402 28 5 1,435
GLOBAL GROWTH OPPORTUNITIES FUND
1/31/96 $ 1,011 $ -- $ -- $ 1,011 1.07%
GLOBAL SMALLER COMPANIES FUND
10/31/92 $ 953 $ -- $ -- $ 953
10/31/93 1,331 -- 2 1,333
10/31/94 1,591 10 3 1,604
10/31/95 1,853 69 4 1,926 92.60%
GLOBAL TECHNOLOGY FUND
10/31/94 $ 1,116 $ -- $ -- $ 1,116
10/31/95 1,740 16 -- 1,756 75.56%
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES
Value of
Year/ Value of Capital Value Total Value
Period Initial Gain of of Total
Ended 1 Investment 2 Distributions Dividends Investment2 Return1,3
- ------- ------------ ------------- --------- ----------- ---------
INTERNATIONAL FUND
<S> <C> <C> <C> <C> <C>
10/31/93 $ 1,048 $ -- $ -- $ 1,048
10/31/94 1,151 23 -- 1,174
10/31/95 1,079 71 -- 1,150 14.96%
GLOBAL GROWTH OPPORTUNITIES FUND
1/31/96 $ 1,050 $ -- $ -- $ 1,050 5.02%
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
GLOBAL SMALLER COMPANIES FUND
<S> <C> <C> <C> <C> <C>
10/31/93 $ 1,167 $ -- $ -- $ 1,167
10/31/94 1,385 9 -- 1,394
10/31/95 1,600 60 -- 1,660 65.98%
GLOBAL TECHNOLOGY FUND
10/31/94 $ 1,158 $ -- $ -- $ 1,158
10/31/95 1,806 16 -- 1,822 82.16%
</TABLE>
- -----------------------
1 From commencement of operations on:
Class A Shares Class D Shares
-------------- --------------
International Fund 4/7/92 9/21/93
Global Growth Opportunities Fund 11/1/95 11/1/95
Global Smaller Companies Fund 9/9/92 5/3/93
Global Technology Fund 5/23/94 5/23/94
2 The "Value of Initial Investment" as of the date indicated reflects the
effect of the maximum sales load or CDSL, if applicable, assumes that all
dividends and capital gain distributions were taken in cash and reflects
changes in the net asset value of the shares purchased with the
hypothetical initial investment. "Total Value of Investment" assumes
investment of all dividends and capital gain distributions.
3 "Total Return" for each class of shares of a Series is calculated by
assuming a hypothetical initial investment of $1,000 at the beginning of
the period specified; subtracting the maximum sales load for Class A
shares; determining total value of all dividends and distributions that
would have been paid during the period on such shares assuming that each
dividend or distribution was invested in additional shares at net asset
value; calculating the total value of the investment at the end of the
period; subtracting the CDSL on Class D shares, if applicable; and
finally, by dividing the difference between the amount of the hypothetical
initial investment at the beginning of the period and its total value at
the end of the period by the amount of the hypothetical initial
investment. The International Fund's total return and average annual total
return quoted from time to time through September 21, 1993 for Class A
shares does not reflect the deduction of the administration, shareholder
services and distribution fee effective on that date, which fee if
reflected would reduce the performance quoted.
20
<PAGE>
No adjustments have been made for any income taxes payable by investors
on dividends invested or gain distributions taken in shares.
Waiver by the Manager and Subadviser of a portion of their fees during
the period (as set forth under "Management and Expenses" herein and "Financial
Highlights" in the Prospectus) positively affected the performance results
provided in this section.
GENERAL INFORMATION
Capital Stock. The Board of Directors is authorized to classify or reclassify
and issue any unissued capital stock of the Fund into any number of series or
classes without further action by shareholders. To date, shares of four series
have been authorized, which shares constitute interests in the International
Fund, the Global Growth Opportunities Fund, the Global Smaller Companies Fund
and the Global Technology Fund. The 1940 Act requires that where more than one
series or class exists, each series or class must be preferred over all other
series or classes in respect of assets specifically allocated to such series or
class.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted by the provisions of the 1940 Act or applicable state law, or
otherwise, to the holders of the outstanding voting securities of an investment
company such as the Fund shall not be deemed to have been effectively acted upon
unless approved by the holders of a majority of the outstanding shares of each
class or series affected by such matter. Rule 18f-2 further provides that a
class or series shall be deemed to be affected by a matter unless it is clear
that the interests of each class or Series in the matter are substantially
identical or that the matter does not affect any interest of such class or
series. However, the Rule exempts the selection of independent public
accountants, the approval of principal distributing contracts and the election
of directors from the separate voting requirements of the Rule.
Custodian and Record keeping Agent. Morgan Stanley Trust Company (NY), One
Pierrepont Plaza, Brooklyn, New York 11201, serves as custodian for the Fund.
Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City, Missouri
64105, maintains, under the general supervision of the Manager, certain
accounting records and determines the net asset value for the each Series.
Accountants. Deloitte & Touche LLP, independent auditors, have been selected as
auditors of the Fund. Their address is Two World Financial Center, New York, NY
10281.
FINANCIAL STATEMENTS
The Annual Report to Shareholders for the Fund for the fiscal year
ended October 31, 1995 is incorporated by reference into this Statement of
Additional Information. The Annual Report contains a schedule of the investments
of each Series as of October 31, 1995 (with the exception of the Global Growth
Opportunities Fund, which did not commence operations until November 1, 1995),
as well as certain other financial information as of that date. The Annual
Report will be furnished, without charge, to investors who request copies of
this Statement of Additional Information. Financial information with respect to
the Global Growth Opportunities Fund as of January 31, 1996 is provided in
Appendix D.
21
<PAGE>
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 a
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
Ca: Bonds which are rated Ca represent obligations which are
speculative in high degree. Such issues are often in default or have other
marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies numerical modifiers (1, 2 and 3) in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; modifier 2 indicates a mid-range ranking; and modifier 3
indicates that the issuer ranks in the lower end of its generic rating category.
Commercial Paper
Moody's Commercial Paper Ratings are opinions of the ability of issuers
to repay punctually promissory senior debt obligations not having an original
maturity in excess of one year. Issuers rated "Prime-1" or "P-1" indicate 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.
22
<PAGE>
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 Corporation ("S&P")
Debt Securities
AAA: Debt issues rated AAA are highest grade obligations. Capacity to
pay interest and repay principal is extremely strong.
AA: Debt issues rated AA have a very high degree of safety and 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 degree of safety and capacity to pay interest and repay principal
although it is somewhat more susceptible in the long term 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 a satisfactory degree
of safety and capacity to pay interest and re-pay principal. Whereas they
normally exhibit adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to pay
interest and re-pay principal for bonds in this category than for bonds in
higher rated categories.
BB, B, CCC, CC: Debt issues rated BB, B, CCC and CC are regarded on
balance, as predominantly speculative with respect to capacity to pay interest
and pre-pay principal in accordance with the terms of the bond. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposure to adverse
conditions.
C: The rating C is reserved for income bonds on which no interest is
being paid.
D: Debt issues rated D are in default, and payment of interest and/or
repayment of principal is in arrears.
NR: Indicates that no rating has been requested, that there is
insufficient information on which to base a rating or that S&P does not rate a
particular type of bond as a matter of policy.
Commercial Paper
S&P Commercial Paper ratings are current assessments of the likelihood of timely
payment of debts having an original maturity of no more than 365 days.
A-1: The A-1 designation indicates that the degree of safety regarding
timely payment is very strong.
A-2: Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."
A-3: Issues carrying this designation have adequate capacity for timely
payment. They are, however, more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.
B: Issues rated "B" are regarded as having only a speculative capacity
for timely payment.
C: This rating is assigned to short-term debt obligations with a
doubtful capacity of payment.
23
<PAGE>
D: Debt rated "D" is in payment default.
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.
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.
24
<PAGE>
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.
25
<PAGE>
...1940s
o Helps shape the Investment Company Act of 1940. Leads in the purchase and
subsequent sale to the public of Newport News
o Shipbuilding and Dry Dock Company, a prototype transaction for the
investment banking industry.
o Assumes management of National Investors Corporation, today Seligman Growth
Fund, Inc.
o Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
...1950-1989
o Develops new open-end investment companies. Today, manages more than 40
mutual fund portfolios.
o Helps pioneer state-specific, tax-exempt municipal bond funds, today
managing a national and 18 state-specific tax-exempt funds.
o Establishes J. & W. Seligman Trust Company and J. & W. Seligman Valuations
Corporation.
o Establishes Seligman Portfolios, Inc., an investment vehicle offered
through variable annuity products.
...1990s
o Introduces Seligman Select Municipal Fund, Inc. and Seligman Quality
Municipal Fund, Inc. two closed-end funds that invest in high quality
municipal bonds.
o In 1991 establishes a joint venture with Henderson Administration Group
plc, of London, known as Seligman Henderson Co., to offer global and
international investment products.
o Introduces Seligman Frontier Fund, Inc., a small capitalization mutual
fund.
o Launches Seligman Henderson Global Fund Series, Inc., which today offers
four separate series: Seligman Henderson International Fund, Seligman
Henderson Global Smaller Companies Fund, Seligman Henderson Global
Technology Fund and Seligman Henderson Global Growth Opportunities Fund.
26
<PAGE>
APPENDIX C
The Global Technology Fund's investments are managed by Seligman Henderson
Co., a joint venture that combines the unique experience of two of the world's
foremost money managers: J. & W. Seligman & Co. and Henderson Administration
Group plc, with combined assets under management of $30 billion and 187 years of
investment experience. Together, they manage more than $5 billion in technology
assets.
As illustrated below, the technology market now represents a staggering 20% of
world market capitalization, as derived from the Morgan Stanley Capital
International Indices as of December 31, 1995.*
[The printed document contains a bar chart
depicting the global technology market
by major national market segment]
* These indices do not represent the full market capitalization of the selected
countries. Global Technology includes: Aerospace & Military Technology; Data
Processing & Reproduction; Electronics; Electronic Components, Health & Personal
Care; Broadcasting & Publishing; and Telecommunications.
The use of existing developing technologies is an increasingly important
component of human societies throughout the civilized world. Historically,
technologies have been developed and utilized first in the U.S. and then spread
to the rest of the world. The Manager believes that this wave of technology
offers from the trends in the information and technology fields:
Telecommunications privatization, deregulation, and infrastructure spending;
mobile communications; multimedia; and mobile computing.
-27-
<PAGE>
APPENDIX D
Seligman Henderson Global Growth Opportunities Fund
Portfolio of Investments (unaudited) January 31, 1996
- --------------------------------------------------------------------------------
Shares Value
------------ ------------
Common Stocks--94.8%
Aerospace --2.3%
Boeing 16,100 $1,248,756
Rolls-Royce PLC 409,100 1,262,695
------------
2,511,451
------------
Automotive and Related --1.1%
Autoliv (ADRs)*+ 24,675 1,192,363
------------
Business Goods and Services--2.3%
First Data 17,300 1,222,894
Interpublic Group of Companies 30,000 1,273,125
------------
2,496,019
------------
Chemicals--3.0%
Metacorp Berhad 370,000 1,069,531
Richter Gedeon 79,000 2,245,970
------------
3,315,501
------------
Communications--4.3%
DDI 230 1,690,323
L.M. Ericsson (Series B) 71,750 1,439,489
Telebras (ADRs) 6,000 335,550
WorldCom * 36,000 1,314,000
------------
4,779,362
------------
Computers and Technology Related--7.0%
Clarify * 15,000 442,500
Intel* 19,600 1,081,675
Microsoft * 13,700 1,266,394
Objective Systems Integrators* 27,000 1,069,875
Olivetti 2,362,265 1,483,474
Singapore Technologies 541,000 1,295,808
Sterling Software 17,900 1,059,456
------------
7,699,182
------------
-28-
<PAGE>
Seligman Henderson Global Growth Opportunities Fund
Portfolio of Investments (unaudited) January 31, 1996
- --------------------------------------------------------------------------------
Shares Value
------------ ------------
Consumer Goods and Services--14.4%
Adidas 27,080 $1,543,010
Apcoa Parking* 15,500 1,208,130
Coca-Cola Amatil 148,000 1,396,193
LVMH Moet-Hennessy 6,310 1,407,977
Oakley * 33,700 1,240,581
PepsiCo 21,500 1,280,594
Procter and Gamble 13,900 1,166,731
H M Sampoerna 102,000 1,263,599
Sern Suk 66,700 1,474,033
South African Breweries 39,150 1,458,940
Television Broadcasting 317,000 1,139,742
Yue Yuen Industrial Holdings 4,936,000 1,251,220
------------
15,830,750
------------
Distributors--2.7%
Ryoyo Electron 80,000 1,884,993
Wickaksana Overseas International* 406,000 1,100,229
------------
2,985,222
------------
Diversified--2.9%
Citic Pacific * 337,000 1,305,357
Domnick Hunter Group 150,000 744,396
Siebe 100,000 1,199,809
------------
3,249,562
------------
Drugs and Health Care--9.4%
Amgen * 21,300 1,279,331
Columbia/HCA Healthcare 23,500 1,305,719
Guidant 32,800 1,506,750
Hokuriku Seiyaku 26,000 405,984
Pfizer 20,700 1,421,831
Pharmacia & UpJohn 38,000 1,543,882
Roussel 8,435 1,566,520
United Healthcare 20,600 1,293,938
------------
10,323,955
------------
-29-
<PAGE>
Seligman Henderson Global Growth Opportunities Fund
Portfolio of Investments (unaudited) January 31, 1996
- --------------------------------------------------------------------------------
Shares Value
------------ ------------
Electric and Gas Utilities--0.7%
Huaneng Power International* 45,000 $781,875
------------
Electronics--4.9%
Keyence 17,500 1,881,720
Kyocera 25,000 1,774,194
Secom 27,000 1,757,083
------------
5,412,997
------------
Entertainment and Leisure--6.0%
Disney (Walt) 19,700 1,264,494
Granada Group 128,800 1,393,352
HIS 22,000 1,141,655
Indian Hotels* 70,000 1,575,000
Viacom (Class B) 30,700 1,243,350
------------
6,617,851
------------
Financial Services--5.9%
American International Group 13,300 1,288,438
Donaldson, Lufkin & Jenrette 38,400 1,176,000
Manhattan Card 2,440,000 1,167,600
MBNA 30,900 1,259,175
Sanyo Shinpan 21,000 1,584,572
------------
6,475,785
------------
Industrial Goods and Services-1.4%
BBC Brown Boveri 1,345 1,548,976
------------
Manufacturing and Industrial Equipment--3.6
Asahi Diamond Industries 130,000 1,798,971
Kalmar Industries 57,600 927,796
Larsen & Toubro 76,000 1,282,120
------------
4,008,887
------------
-30-
<PAGE>
Seligman Henderson Global Growth Opportunities Fund
Portfolio of Investments (unaudited) January 31, 1996
- --------------------------------------------------------------------------------
Shares Value
------------ ------------
Media--3.9%
Capital Radio 85,000 $788,349
IBC Group 170,000 735,621
Nippon Television Network 6,200 1,785,507
Sisten Televisyen of Malaysia 10,000 943,477
------------
4,252,954
------------
Paper and Packaging--0.7%
Wace Group 200,000 786,760
------------
Publishing--3.6%
Reed Elsevier 104,750 1,458,266
Singapore Press Holding 60,000 1,166,608
WPP Group 500,000 1,301,180
------------
3,926,054
------------
Resources--2.6%
Gencor 367,000 1,518,482
Western Mining 215,500 1,327,457
------------
2,845,939
------------
Restaurants--0.8%
Pizza Express 220,000 872,093
------------
Retail Trade--6.5%
Home Depot 27,200 1,249,500
Joshin Denki 140,000 1,754,091
Lojas Americanas 12,000 276,938
Office Depot 25,600 484,800
Shimachu 50,000 1,556,802
Tsutsumi Jewelry 32,800 1,833,979
------------
7,156,110
------------
Support Services--1.1%
Rentokil 230,000 1,211,005
------------
-31-
<PAGE>
Seligman Henderson Global Growth Opportunities Fund
Portfolio of Investments (unaudited) January 31, 1996
- --------------------------------------------------------------------------------
Shares Value
------------ ------------
Transportation--3.7%
Kobenhauns Lufthavne 18,000 $1,390,866
Lufthansa 10,080 1,507,005
SITA 6,700 1,218,051
------------
4,115,922
------------
Total Common Stocks
(Cost $98,621,507 ) 104,396,575
------------
Preferred Stocks-1.2%
(Cost $1,641,834)
Communications--1.2%
Nokia 35,330 1,376,277
------------
Total Investments--96.0%
(Cost $100,263,341 ) 105,772,852
Other Assets Less Liabilities--4.0% 4,366,867
------------
Net Assets--100.0% $110,139,719
============
- -------------
* Non-income producing security
+ Rule 144A security.
See notes to financial statements.
-32-
<PAGE>
Seligman Henderson Global Growth Opportunities Fund
Statement of Assets and Liabilities (unaudited) January 31, 1996
- --------------------------------------------------------------------------------
Assets:
Investments, at value:
Common stocks (cost $98,621,507) $104,396,575
Preferred stocks (cost $1,641,834) 1,376,277 $105,772,852
------------
Cash 8,373,306
Receivable for Capital Stock sold 1,987,572
Net unrealized appreciation on
forward currency contracts 454,593
Receivable for securities sold 447,688
Receivable for dividends and interest 49,869
Expenses prepaid to shareholder service agent 37,144
------------
Total Assets 117,123,024
------------
Liabilities:
Payable for securities purchased 6,787,431
Payable for Capital Stock Stock repurchased 49,434
Accrued expenses, taxes, and other 146,440
------------
Total Liabilities 6,983,305
------------
Net Assets $110,139,719
============
Composition of Net Assets:
Capital Stock, at par ($.001 par value;
500,000,000 shares authorized;
14,529,084 shares outstanding):
Class A $10,876
Class D 3,653
Additional paid-in capital 104,766,278
Accumulated net investment loss (262,715)
Accumulated net realized loss on investments (337,421)
Net unrealized appreciation (depreciation)
of investments 7,350,685
Net unrealized depreciation on translation
of assets and liabilities denominated
in foreign currencies and forward
currency contracts (1,391,637)
------------
Net Assets $110,139,719
============
Net Asset Value per share:
Class A ($82,488,824/10,875,874 shares) $7.58
Class D ($27,650,895/3,653,210 shares) $7.57
- ------------------
See notes to financial statements.
-33-
<PAGE>
Seligman Henderson Global Growth Opportunities Fund
Statement of Operations (unaudited) For the period 11/1/95*
to 1/31/96
- --------------------------------------------------------------------------------
Investment income:
Dividends (net of foreign taxes
withheld of $5,516) $71,143
Interest 58,543
----------
Total investment income $129,686
Expenses:
Management fee 174,945
Distribution and service fees 72,906
Shareholder account services 68,506
Custody and related fees 22,644
Auditing and legal fees 12,323
Registration 11,317
Shareholder reports and
communications 5,100
Directors' fees and expenses 1,530
Miscellaneous 480
----------
Total expenses 369,751
----------
Net investment loss (240,065)
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions:
Net realized loss on investments (306,961)
Net realized loss from foreign
currency transactions (53,110)
Net change in unrealized appreciation
of investments 7,350,685
Net change in unrealized appreciation
on translation of assets and liabilities
denominated in foreign currencies
and forward currency contracts (1,391,637)
----------
Net gain on investments and foreign currency
transactions 5,598,977
----------
Increase in net assets from operations $5,358,912
==========
- ---------------------
* Commencement of operations.
See notes to financial statements.
-34-
<PAGE>
Seligman Henderson Global Growth Opportunities Fund
Statement of Changes in Net Assets (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
11/1/95 *
to
1/31/96
------------------
<S> <C> <C>
Operations:
Net investment loss ($240,065)
Net realized loss on investments (306,961)
Net realized loss from foreign currency transactions (53,110)
Net change in unrealized appreciation of
investments 7,350,685
Net change in unrealized appreciation on
translation of assets and liabilities denominated in
foreign currencies and forward currency contracts (1,391,637)
------------------
Increase in net assets from operations 5,358,912
------------------
Capital share transactions: Shares
------------------
11/1/95 *
to 1/31/96
------------------
Net proceeds from sale of shares:
Class A 10,440,234 75,201,264
Class D 3,254,873 23,537,524
Exchanged from associated Funds:
Class A 908,305 6,596,525
Class D 487,015 3,556,340
---------------------------------------
Total 15,090,427 108,891,653
---------------------------------------
Cost of shares repurchased:
Class A (153,085) (1,117,018)
Class D (38,229) (278,601)
Exchanged into associated Funds:
Class A (319,580) (2,343,245)
Class D (50,449) (371,982)
---------------------------------------
Total (561,343) (4,110,846)
---------------------------------------
Increase in net investment assets from capital
share transactions 14,529,084 104,780,807
==============-------------------------
Increase in net assets 110,139,719
Net Assets:
Beginning of period --
------------------
End of period $110,139,719
==================
</TABLE>
- -----------------
* Commencement of operations.
See notes to financial statements.
-35-
<PAGE>
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS (unaudited)
1. Seligman Henderson Global Growth Opportunities Fund (the "Series") is one of
four separate series of the Seligman Henderson Global Fund Series, Inc. (the
"Fund"). The other series are the "International Fund," the "Global Smaller
Companies Fund," and the "Global Technology Fund." The Series offers two classes
of shares-- Class A shares and Class D shares; and had no operations prior to
its commencement on November 1, 1995, other than those relating to
organizational matters.
Class A shares are sold with an initial sales charge of up to 4.75% and a
continuing service fee of up to 0.25% on an annual basis. Class D shares are
sold without an initial sales charge but are subject to a distribution fee of up
to 0.75% and a service fee of up to 0.25% on an annual basis, and contingent
deferred sales load ("CDSL") of 1% imposed on certain redemptions made within
one year of purchase. The two classes of shares for the Series represent
interests in the same portfolio of investments, have the same rights and are
generally identical in all respects except that each class bears its separate
distribution and certain class expenses and has exclusive voting rights with
respect to any matter to which a separate vote of any class is required.
2. Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:
a. Securities traded on a foreign exchange or over-the-counter market are valued
at the last sales price on the primary exchange or market on which they are
traded. United Kingdom securities and securities for which there are no recent
sales transactions are valued based on quotations provided by primary market
makers in such securities. Any securities for which recent market quotations are
not readily available are valued at fair value determined in accordance with
procedures approved by the Board of Directors. Short-term holdings which mature
in more than 60 days are valued at current market quotations. Short-term
holdings maturing in 60 days or less are valued at amortized cost.
b. Investments in foreign securities will usually be denominated in foreign
currency, and the Series may temporarily hold funds in foreign currencies. The
books and records of the Series are maintained in U.S. dollars. Foreign currency
amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets, and liabilities,
at the closing daily rate of exchange as reported by a pricing service; (ii)
purchases and sales of investment securities, income, and expenses, at the rate
of exchange prevailing on the respective dates of such transactions.
The Series' net asset values 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
sales of securities and net investment income and gains, if any, to be
distributed to shareholders of the Series. The rate of exchange between the U.S.
dollar and other currencies is determined by the forces of supply and demand in
the foreign exchange markets.
-36-
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
Net realized foreign exchange gains and losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Series' books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
value of portfolio securities and other foreign currency denominated assets and
liabilities at period end, resulting from changes in exchange rates.
The Series separates that portion of the results of operations resulting
from changes in the foreign exchange rates from the fluctuations arising from
changes in the market prices of securities held in the portfolio. Similarly, the
Series separates the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of portfolio securities
sold during the period.
c. The Series may enter into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings, or other amounts receivable or payable in foreign currency. A forward
contract is a commitment to purchase or sell a foreign currency at a future date
at a negotiated forward rate. Certain risks may arise upon entering into these
contracts from the potential inability of counterparties to meet the terms of
their contracts. The contracts are valued daily at current exchange rates and
any unrealized gain or loss is included in net unrealized appreciation or
depreciation on translation of assets and liabilities denominated in foreign
currencies and forward currency contracts.
The gain or loss, if any, arising from the difference between the
settlement value of the forward contract and the closing of such contract, is
included in net realized gain or loss from foreign currency transactions.
d. There is no provision for federal income or excise tax. The Series will elect
to be taxed as a regulated investment company and intends to distribute
substantially all taxable net income and net gain realized, if any, annually.
Withholding taxes on foreign dividends and interest have been provided for in
accordance with the Series' understanding of the applicable country's tax rules
and rates.
e. The treatment for financial statement purposes of distributions made during
the year from net investment income or net realized gains may differ from their
ultimate treatment for federal income tax purposes. These differences primarily
are caused by: differences in the timing of the recognition of certain
components of income, expense or capital gain and the recharacterization of
foreign exchange gains or losses to either ordinary income or realized capital
gain for federal income tax purposes. Where such differences are permanent in
nature, they are reclassified in the components of net assets based on their
ultimate characterization for federal income tax purposes. Any such
reclassifications will have no effect on net assets, results of operations, or
net asset value per share of the Series.
f. Investment transactions are recorded on trade dates. Identified cost of
investments sold is used for both financial statement and federal income tax
purposes. Dividends receivable and payable are recorded on ex-dividend dates.
Interest income is recorded on an accrual basis.
-37-
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
g. All income, expenses (other than class-specific expenses), and realized and
unrealized gains or losses are allocated daily to each class of shares based
upon the relative value of shares of each class. Classspecific expenses, which
include distribution and service fees and any other items that can be
specifically attributed to a particular class, are charged directly to such
class.
3. Purchases and sales of portfolio securities, excluding short-term
investments, for the period ended January 31, 1996, amounted to $102,592,755 and
$1,991,993, respectively.
At January 31, 1996, the cost of investments of the Series for federal income
tax purposes was substantially the same as the cost for financial reporting
purposes, and the tax basis gross unrealized appreciation and depreciation of
portfolio securities, including the effects of foreign currency translations,
amounted to $7,662,942 and $2,113,431, respectively.
4. J. & W. Seligman & Co. Incorporated (the "Manager") manages the affairs
of the Fund and provides the necessary personnel and facilities. Compensation
of all officers of the Fund, all directors of the Fund who are employees
or consultants of the Manager, and all personnel of the Fund and the
Manager is paid by the Manager. The Manager receives a fee, calculated daily
and payable monthly, equal to 1.00% per annum of the Series' average daily net
assets, of which 0.90% is paid to Seligman Henderson Co. (the "Subadviser"),
a 50% owned affiliate of the Manager.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the Series' shares and an affiliate of the Manager, received
concessions of $70,114 after commissions of $3,119,458 were paid to dealers for
sale of Class A shares.
The Series has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to Class A shares under which service organizations
can enter into agreements with the Distributor and receive a continuing fee of
up to 0.25% on an annual basis, payable quarterly, of the average daily net
assets of the Class A shares attributable to the particular service
organizations for providing personal services and/or the maintenance of
shareholder accounts. The Distributor charges such fees to the Series pursuant
to the Plan. For the period ended January 31, 1996, fees incurred by the Series
aggregated $34,013, or 0.25% per annum of the average daily net assets of Class
A shares.
The Series has a Plan with respect to Class D shares under which service
organizations can enter into agreements with the Distributor and receive a
continuing fee for providing personal services and/or the maintenance of
shareholder accounts of up to 0.25% on an annual basis of the average daily net
assets of the Class D shares for which the organizations are responsible, and
fees for providing other distribution assistance of up to 0.75% on an annual
basis of such average daily net assets. Such fees are paid monthly by the Series
to the Distributor pursuant to the Plan. For the period ended January 31, 1996,
fees incurred by the Series aggregated $38,893 or 1% per annum of the average
daily net assets of Class D shares.
-38-
<PAGE>
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
The Distributor is entitled to retain any CDSL imposed on certain
redemptions of Class D shares occuring within one year of purchase. For the
period ended January 31, 1996, such charges amounted to $2,125 for the Series.
Seligman Services, Inc., an affiliate of Manager is eligible to receive
commissions from certain sales of the Series' shares, as well as distribution
and fees pursuant to the Plan. For the period ended January 31, 1996, Seligman
Services, Inc. received commissions of $3,253 from sales of the Series and
distribution and service fees of $267, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged the Series at cost $68,506 for shareholder account services.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Subadviser, the Distributor, Seligman Services, Inc. and/or
Seligman Data Corp.
Fees of $20,000 were incurred by the Fund for the period ended January 31,
1996 for the legal services of Sullivan & Cromwell, a member of which firm is a
director of the Fund.
The Series has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. Deferred fees and the related accrued interest are not deductible for
federal income tax purposes until such amounts are paid. The cost of such fees
and interest is included in directors' fees and expenses, and the accumulated
balance thereof at January 31, 1996 of $226, is included in other liabilities.
5. At January 31, 1996, the Series had outstanding forward exchange currency
contracts to buy/sell foreign currency as follows:
<TABLE>
<CAPTION>
Unrealized
Settlement Contract Contract In Exchange Appreciation
Date to Receive to Deliver For (Depreciation)
---- ---------- ---------- -------------------------- ---------------
<S> <C> <C> <C> <C>
1/31/96 $290,404 GBP 192,908 $ 1,466
1/31/96 509,332 HKD 3,938,566 46
1/31/96 136,535 ITL 218,524,477 1,385
1/31/96 331,489 SGD 470,250 (210)
1/31/96 189,156 JPY 52,017,894 (1,780)
2/2/96 542,431 AUD 731,039 2,741
2/13/96 $2,000,000 JPY 201,870,000 111,092
2/13/96 2,000,000 JPY 201,460,000 114,929
2/13/96 2,500,000 JPY 250,040,000 160,364
2/13/96 3,500,000 JPY 367,150,000 64,560
--------
$454,593
========
</TABLE>
- -----------------
AUD Austrailian dollar
GFP British pounds
HKD Hongkong dollars
ITL Italian lira
SGD Singapore
JPY Japanese yen
-39-
<PAGE>
Seligman Henderson Global Growth Opportunities Fund (unaudited)
Financial Highlights
The Series' financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from the Series' beginning net asset value to
the ending net asset value so that they may understand what effect the
individual items have on their investment assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item as disclosed in the financial statements
to their equivalent per share amounts, based on average shares outstanding.
The total return based on net asset value measures the Series' performance
assuming investors purchased shares at net asset value as of the beginning of
the period, reinvested dividends and capital gains paid at net asset value, and
then sold their shares at the net asset value per share on the last day of the
period. The total return computations do not reflect any sales charges investors
may incur in purchasing or selling shares of the Series. The total returns for
periods of less than one year are not annualized.
11/1/95* to 1/31/96
------------------------
Per Share Operating Expense: CLASS A CLASS D
------- -------
Net investment loss $(0.02) $(0.03)
Net realized and unrealized investment gain 0.58 0.58
Net realized and unrealized investment loss
from foreign currency transactions (0.12) (0.12)
----- -----
Net increase in net asset value 0.44 0.43
Net asset value:
Beginning of period 7.14 7.14
------- -------
End of period $7.58 $7.57
===== =====
Total return based upon net asset value 6.16% 6.02%
Ratios/Supplemental Data:
Total expenses to average net assets 1.94% ** 2.69% **
Net investment loss to average net assets -1.20% ** -1.95% **
Portfolio turnover 2.50% 2.50%
Net assets, end of period (000's omitted) $82,489 $27,651
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*Commencement of operations.
**Annualized.
See notes to financial statements.
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